[FoCHAT] 6/2/07 Detailed Updates on the RHP from CHAT

[Melanie Ehrlich]

Members of CHAT and FoCHAT,
   
  Please do not forget to send letters to Senators Landrieu and Stevens of the Senate Disaster Recovery Subcommittee this weekend. Contact information for them and a form letter (or write your own if you like) at http://chat.thinknola.com
   
  This is a long communication about progress with the RHP problems.
   
  Short Version: The major state divisions working on the RHP and a top official at ICF are working with CHAT to improve the RHP.  
   
  1. Representatives from CHAT (and the Jeremiah Group) will start meeting with officials from the Office of Community Development (OCD, which has the closest oversight function over the contractor ICF) once a month starting on June 15.This was their suggestion.
   
  2. CHAT members KC King, Shawn Antee, Peg Case, and myself are part of the newly formed Working Group of the LRA's Housing Task Force meeting by conference call weekly with Adam Knapp (Deputy Director of the LRA), and Walter Leger (on the LRA Bd. of Directors and Chairman of the LRA Housing Task Force). Four people from the Jeremiah Group, including Nell Bolton, are also on this Wkg. Gp. We have been having productive conversations starting three weeks ago. Some of the topics covered led to the CHAT-sponsored resolution passed by the Housing Task Force (HTF) as described below. 
   
  3. CHAT members KC King and myself as well as Judge David Gorbaty and Nell Bolton are new members of the HTF. The first meeting in which we could take part was last Thursday in Baton Rouge from 9-1:30 PM.
   
  Here are my notes from the meeting.
   
    22,000 closings so far
   
  5.1 B for Miss. homeowner program vs. 7.5 B for LA’s even though we have 3 times more damage. 
   
  A White House source leaked on Wed. that the shortfall was due to including wind victims. LRA had hoped that the hearing would focus on the needs of the RHP. Instead, they were diverted with this wind vs. water issue.
   
  Nowhere in the program description to the government are there restrictions that wind damage will not be covered.
   
  David Bowman for LRA: shortfall predictions
  His analysis: $74,173 for average grant but another analysis gave $78,000.
  620 sq ft of damage, 1 ft of water, or major structural damage are the criteria for eligible damage.
  About 1000 letters about ineligibility will be sent next month.
  More applicants than expected: 123,000 applying for the program x 95% eligible
  FEMA estimated entire blocks at a time for damage estimates: their extent of damage in homes and their total number of damaged homes differ from those of the RHP.
   
  Tod Richardson from HUD is doing the analysis for Powell of projected wind damage compensation with NOAA geo-coded data
   
  51% as severely damaged by HUD; 76% by ICF
   
  If there is any indication of flood, they put flood down as per Elkins’ discussion with Richardson
   
  Leger (LRA Board, Chairman of Housing Task Force of LRA): LRA did not want to get into the business of being insurance adjusters. That is why they could not make a distinction of wind vs. flood damage. What would you call it, wind or flood, if the house is raised and the foundation is damaged or ducts are damaged?
   
  Office of Community Development (OCD, LA department which has direct oversight on RHP) Spletto: 
  There was no withholding of info about the shortfall. Dashboard is a report shared with govt. agencies every week: HUD OIG LRA etc. It had the total projected payout as number of applicants times the payout per applicant. This info also was on the RHP internet web site.
  Nov. 20 estimated that they would get 120,000 applicants and that the RHP would cost $9.3 B based upon about 9000 applicants
  Jan. 22. est $9.5B including $7,500 additional mitigation
  Apr. 23 est. $9.2 B.
  We are not reducing anyone’s general compensation but since Apr. 26, no elevation assistance. HUD did not like what LRA is doing with elevations; had to be a construction program. HUD won’t approve the paperwork.
   
  $1.2 B FEMA that was promised but not yet given and is part of the promised $7.5 B. FEMA wants a separate program for elevation which would require 9 to 18 months for FEMA approval of each application, including  environmental reviews and cost-benefit analyses.
   
  First Action Plan for the RHP (first Louisiana legislation establishing the program) states that Hurricane Katrina & Rita damage covered without reference to the cause of hurricane damage.
   
   
  Elkins (Head of OCD): Underpayment of insurance does not break down private as opposed to NFIP payouts of benefits and does not distinguish underestimate of insurance coverage by applicants: 60% gap (coverage by insurance of RHP applicant damage) as opposed to 76% 
   
  Leger: Potential source of revenue for the RHP in the future is the recovery of insurance benefits that should have been paid to homeowners but was not.
   
  The Governor is actively talking to the LA Congressional delegation and Powell’s office and the State legislators about how to cover the shortfall.
   
  Knapp (Deputy Director of the LRA, organization with overall oversight on the RHP): All agencies say that something has to be done quickly.
  Every source of CDBG (Community Development Block Grant, federal dollars for housing and other community needs that have many fewer restrictions than other sources of fed. money; this is the current source of the $6.3 billion for the RHP; 1.3 billion were supposed to be added from FEMA funds) where a commitment can be changed is being looked at for covering the shortfall in the event that more money from Congress is not allocated. 
   
  Leger: Why fed funding of Miss and Texas if the RHP was created only for levee failure? Why is their federal immunity from lawsuits for the funding if the RHP was created to compensate victims for faulty levees? Why is there not adequate compensation for levee-failure victims?
   
  By law, 15% of LRA funds must be spent on rental housing.
   
  Public Comments: President of New Orleans City Council, Oliver Thomas- We have to be careful not to divide among ourselves about programs. Every expert who dealt with disaster recovery said that the cost for LA is $250 – 300 B which is similar to Sen. Landrieu’s initial request of $250 B to Congress. Many of homeowners of lower economic means will not get enough to rebuild from the RHP. After the hurricanes, we have not yet gone from the equivalent of ICU’s intensive care to recovery.
   
  Resolution by Melanie Ehrlich that passed unanimously by the Housing Task Force:
  1. The Statement of Road Home Principles should be posted at the RHP website within one week of this meeting.
  2. The parts of this Statement that pertain to ICF should be incorporated into the pipeline reports (reports that ICF regularly gives to OCD) as deliverable metrics (they have to quantify how well they are perform with respect to these principles).
  3. The Housing Task Force recommends that part of the funds from ICF’s contract be used to pay for an in-flight review of the Road Home Program by a contractor chosen by LRA (the in-flight review would use experts on large-scale programs to help with problem-solving for making the program work better). 

   
    http://www.2theadvocate.com/news/7778607.html?showAll=y&c=y
   
   
  LRA wants U.S. to fully fund storm programs
   
     By JOE GYAN JR.
  Advocate New Orleans bureau 
  Published: Jun 1, 2007 - Page: 1a 
   
  With the state considering pulling money from other hurricane aid projects — including one for small rental property owners — to plug an estimated $3 billion hole in its recovery program for homeowners, a Louisiana Recovery Authority panel called on the federal government Thursday to fully fund all storm recovery programs in the state.
   
  Both the homeowner and rental repair portions of the “Road Home’’ program are financed by the federal government.
   
  The LRA Housing Task Force also urged the governor’s office and full LRA board to keep intact the funding for both programs.
   
  Congress sent Louisiana about $10.4 billion in flexible recovery aid dollars, called Community Development Block Grant money, after hurricanes Katrina and Rita devastated the New Orleans area and the state’s coast in August and September 2005.
   
  Most of the money was set aside for homeowner aid, but some has been targeted for business loans and grants, rental property repair, workforce training, college education and research programs, and state and local building repairs.
   
  State officials earmarked $7.5 billion in CDBG funds to pay for Road Home homeowner grants, but more people applied than expected (140,000-plus as of Monday compared to an original estimate of 123,000), the extent of damage was higher than anticipated, repair and rebuild costs are higher than projected, and insurance payments have been smaller than expected.
   
  The small rental property program is an $869 million program.
   
  ICF International, the private contractor running the Road Home, has calculated benefits for 83,182 homeowners totaling $6.25 billion. Some 22,174 homeowners have received grants that average $75,177. The state’s Office of Community Development is overseeing the program.
   
  David Bowman, director of research and special projects for the LRA, told the housing task force — which met at the in Baton Rouge — that $1.5 billion has been paid out to homeowners so far.
   
  Road Home officials announced this week that Louisiana homeowners with damage from the hurricanes have until July 31 to apply for aid through the program.
   
  The program gives out grants of up to $150,000 per homeowner.
   
  Insurance proceeds and federal disaster aid are counted against the grant award, and homeowners who lived in a flood plain and did not have flood insurance receive a 30 percent penalty on their award. A 40 percent penalty (which is waived for elderly and certain military) is applied to homeowners who choose to leave the state.
   
  Nearly 2,700 rental property owners have been conditionally awarded $202 million under the rental program’s first round, which ended in mid-March and targeted properties with one to four units.
   
  Calvin Parker, the Office of Community Development’s rental program manager, told the LRA task force that the second round will kick off Tuesday and run through July 5. Some $300 million in aid is up for grabs. Round two is targeting rental properties with 21 to 100 units, he said.
   
  “We are prepared to go forward with that round,’’ Parker said when asked about the possible shifting of rental program funds to the homeowner program.
   
  Roughly 82,000 rental units were damaged in Louisiana by the hurricanes, Parker said, noting that 70 percent of the damage occurred in Orleans Parish. The small rental program is expected to help 18,000 units, he said.
   
  Mike Spletto, the Road Home senior housing manager at the Office of Community Development, told the task force that the number of eligible homeowner applicants is estimated to shake out at about 132,000. He said the projected funding shortfall will not stop the program.
   
  “We’re running the program as is,’’ he said. “We’re not reducing compensation. We’re not holding anybody back.’’
   
  Spletto said there were more than 10,000 grant closings in May.
   
  Despite the bad press it has received, ICF’s Isabel Reiff told the task force that the Road Home is “quite a successful program.’’
   
  “There are enormous accomplishments,’’ she said, including the fact that the program “didn’t miss a beat’’ when the state and U.S. Department of Housing and Urban Development reached a deal in March to allow for lump sum grant payments to homeowners without mortgages. Previously, the state was paying grants through bank escrow accounts.
   
  Spletto also defended the Road Home, saying the program has undergone 88 changes since its inception.
   
  “I think we’re to the point where we’re finally stable,’’ he said. “I think you’ll see improvement.’’
   
  Task force member Melanie Ehrlich, founder and co-chair of the grassroots Citizens’ Road Home Action Team, or CHAT, said she hopes so. Ehrlich told of homeowners who have been “stranded’’ at the same point in the Road Home process for seven months. Others have told her that their Road Home experience has been worse than the hurricane.
   
“We’ve got to fix that problem,’’ she said.
   
   
  4. I am getting quite much help from a VP of ICF, who met with me for 1.5 hours and has followed up with 3 phone calls and most importantly with research by ICF on the problem of stranded RHP applicants. He listens patiently to the problems with the RHP that I tell him about. He also has educated me a little bit about problems that ICF faces which are beyond their control but for which they get blamed. In our discussions, we understand each others constraints. I must say that I am impressed and surprised with the degree of openness that we have in our discussions despite these constraints . 
   
  CHAT's survey is giving ICF insight into how to get applications that were stalled two months or more at one major stage in the application at the time of our left-in-the-dust survey moving. I was called yesterday by this VP of ICF who is researching these problems to fix application flow at the RHP. I am not given info about individual applications in this pool of 171 survey respondants from our left in the dust survey which was taken in May.
   
  Of the 171 respondants to the survey (numbers are approximate because the file that I typed into got lost on the computer I was using):
  about 58 were in the undisclosed category 2 weeks ago and a few days ago there are about 20 fewer in that category
  10 applicants whose applications they are finding difficult to link to their name and email or phone number in the survey;  ICF will contact these applicants directly; these appl. might have duplicate applications or some other problem.
  As per CHAT's request, ICF will try to fast-track the uncomplicated applications in this pool once they enter the mainstream of applications. However ICF has the problem that they have to produce sufficient closings per month and so they have to process enough of the less complicated applications to meet this goal. 
   
  about 55 in the pre-closing category (up from about 20 two weeks ago)
   
  about 30 in the awaiting info or response from applicant; could include those who just received an award letter and have to choose option
   
  rest in category of more difficult problems incl about 25 with trailer homes
   
  He will call in two weeks to give another update. I urged him to look into two things: 
   
  providing applicants with a detailed list of pointers and URLs to help with building information and avoiding the bad problem of contractor fraud to which applicants are highly vulnerable 
   
  and how many of those in dispute resolution are delayed at that step because of having a LA certified appraisal, which they supplied that differs by more than 20% from the RHP's assessment of pre-storm value. 
   
  He said he would try to do both but any new information to be distributed depends on OCD approval and, as a company, they are forbidden to give specific names of other companies to use for building. Thanks to Peg Case of our Working Group & CHAT for this suggestion about pamphets at closing about construction problems.
   
  5. Our benefactor for the CHAT survey, Ken MacCarthy, is going to providing for updates of the survey with questions that will address some of the now official Road Home Program Statement of Principles for CHAT's own assessment of how well they are being followed. Stay tuned. Several of our hard-working CoreCHAT members are working on this. You might wait to update or take the survey until it has be modified. I will send an email when the survey has been updated.
   
  Best wishes,
   
  Melanie
   
  Melanie Ehrlich
  Founder and Co-Chairman, CHAT
   
   
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