[FoCHAT] SB740 $3 billion price tag is a 7000-times exaggeration but Finance Comm. awaiting LRA or Fiscal Office correction

Mon May 19 22:03:22 PDT 2008

CHAT Meeting This Wed.: see bottom of the webpage at http://chatushome.com for details

  Contact Members of the Senate Finance Committee today, Wed., please, as described below, to support Senate Bill SB740 and put on a real price tag, not one inflated 7000 times higher.

  See report on SB740 on ABC26 via the weblink below.

  Dear Concerned Citizen,

  In this and subsequent newsletters, I will just use "LRA" to refer to the state agency responsible for oversight of the Road Home Program (RH) because OCD has merged with it.

  The Senate Bill SB470, the Road Home Applicants' Bill of Rights,

  http://www.legis.state.la.us/billdata/streamdocument.asp?did=486620

   had an estimated price tag (fiscal note) attached to it by the Legislative Fiscal Office based mostly on LRA's numbers. Their number was $3 billion.

    http://www.legis.state.la.us/billdata/streamdocument.asp?did=488434

  That overall number should have been only less than a million dollars of state money (see below) but LRA is sticking to their individual numbers and out-of-sight total so far: 

  even though $1.5 billion of their $3 billion price tag is for something that will not cost anyone an extra penny because it is just a stipulation about how any extra money should be used to help those who need help the most to repair and extends this help further into the middle class;

  even though almost all the money in the fiscal note (see the rebuttal below) should not even have been listed because the items involve Road Home money and not the State General Fund.

  Besides my profound gratitude to lawyer and clever CHAT Co-Chairman Frank Silvestri, I am extremely grateful to the three sharp lawyers (pro bono for CHAT and the applicants) who have been providing invaluable help and advice with the legislation last week and went to the Finance Comm. Mtg. today.:

  Davida Finger, head of the Katrina Clinic at Loyola Law Clinic,

  Don Massey, corporate partner of Adams and Reese,

  Louis LaCour, corporate partner of Adams and Reese.

  Nonetheless, three of the four of us who gave up important hours from work today to go to BR were not given a chance to speak and LRA was not asked to publicly justify its numbers yet to the Financial Committee. There is a chance that the committee will correct these glaring LRA errors on Thursday.

  Please email or call members of the Finance Committee today, WEDNESDAY, and tell them your thoughts about the Fiscal Note described below.

  In addition, please summarize for them in one paragraph any ongoing probem you have with:

  an appeals deadline that you missed or an appeal that was unfairly decided, 

  a dispute resolution that got buried and you don't even know if ICF recorded it, getting a copy of your file,  

  obtaining dispute resolution or appeals outcomes in writing,

  obtaining a copy of your fie,

  obtaining your grant,

  worries about being asked to pay back money to RH through no fault of your own.

  The Senate Finance Committee:

    lasen23 at legis.state.la.us, jacksonl at legis.state.la.us, donahuej at legis.state.la.us,
  alarioj at legis.state.la.us, lasen15 at legis.state.la.us, smithcheek at legis.state.la.us,
  gautreauxn at legis.state.la.us, lafleure at legis.state.la.us, murraye at legis.state.la.us
  smithj at legis.state.la.us, walsworthm at legis.state.la.us,  longg at legis.state.la.us 
  lasen27 at legis.state.la.us, thompsof at legis.state.la.us

  (see below for phone numbers)

  Stay tuned and come to our CHAT meeting this Wed. if you are in the NO area and available. 

  Speaking of staying tuned, ABC covered the SB740 this evening (Mary Dake did a great job!) and reporter Cyndi Nguyen tells me they will follow up with the outcome of the bill:

  http://abc26.trb.com/news/local/special2/

  Some Friends of CHAT (FoCHAT) members (almost 800 total) have been asking me how to access COX10 showings of complete CHAT meetings (five have been filmed). Here is the answer from COX about the ability to see any of the meeting not currently being aired (the first four filmed meetings), which get archived.

     "Cable subscribers with digital boxes can find old programs on ON Demand under local programming."

  If you have any questions about this, I cannot help you because we don't own a TV.

  More contact information for members of the Senate Finance Committee:

                                      Committee Members
      Senator Michael J. "Mike" Michot (Chairman)
P.O. Box 80372
Lafayette, LA 70598 

(337) 262-1332
lasen23 at legis.state.la.us 
      Senator Lydia P. Jackson (Vice-Chairman)
610 Texas Street
Suite 201
Shreveport, LA 71101 

(318) 676-7029
jacksonl at legis.state.la.us 
      Senator John A. Alario, Jr.
1063 Muller Parkway
Westwego, LA 70094 

(504) 340-2221
alarioj at legis.state.la.us 
      Senator Sharon Weston Broome
P. O. Box 52783
Baton Rouge, LA 70892 

(225) 359-9352
lasen15 at legis.state.la.us 
      Senator Sherri Smith Cheek
9973 Mansfield Road
Keithville, LA 71047 

(318) 687-4820
smithcheek at legis.state.la.us 
      Senator Jack Donahue
3840 Hwy. 22
Suite 200
Mandeville, LA 70471 

(985) 727-7949
donahuej at legis.state.la.us 
      Senator "Nick" Gautreaux
209 E. St. Victor Street
Abbeville, LA 70510 

(337) 740-NICK
gautreauxn at legis.state.la.us 
      Senator Eric LaFleur
P.O. Box 617
Ville Platte, LA 70586 

(337) 363-5019
lafleure at legis.state.la.us 
      Senator Edwin R. Murray
1540 N. Broad St.
New Orleans, LA 70119 

(504) 945-0042
murraye at legis.state.la.us 
      Senator John R. Smith
611-B South 5th Street
Leesville, LA 71446 

(800) 259-2709
smithj at legis.state.la.us 
      Senator Mike Walsworth
4007 White's Ferry Rd
Suite A
West Monroe, LA 71291 

(318) 396-5499
walsworthm at legis.state.la.us 
      Senator Gerald Long (Interim Member)
P.O. Box 151
Winnfield, LA 71483 

(318) 628-5799
longg at legis.state.la.us 
      Senator Willie L. Mount (Interim Member)
P.O. Box 3004
Lake Charles, LA 70602 

(337) 491-2016
lasen27 at legis.state.la.us 
      Senator Francis Thompson (Interim Member)
P.O. Box 68
Delhi, LA 71232 

(318) 878-9408
thompsof at legis.state.la.us 

  Please contact especially:

  lasen23 at legis.state.la.us, jacksonl at legis.state.la.us, donahuej at legis.state.la.us,

  Errors in the Fiscal Note for SB740: $3 Billion Cost Corrected to $0.4 Million Cost from State General Funds and $169 Million from CDBG Road Home Funds

  TheAdditional Compensation Grant:LFO (Legislative Fiscal Office), $1.5 billion; corrected to 0.
  Apparently, SB740 was misread. There is no additionalexpense for this provision. It pertains only to “use of unobligated funds” fromthe Road Home Program (SB740, p. 16, line 1).

  Audit:LFO, $148 million;corrected to 0.
  A final audit is mandated by HUD and included in the CDBGfunds. As per a previous ICF RFP for this audit, “the goal is to have all of therecords inspected.” SB740 onlystipulates that it shall be under the auspices of the La. Legislative Auditorsand done by a firm previously unassociated with the program.

  Highestof Multiple Valuations (Pre-Storm Value of Home) as the Starting Point forCalculation of Road Home Grant:LFO, $1.3 billion; corrected to $ 0.13 billion of CDBG funds.
  Forappeals and dispute resolution, Road Home Policy Documents in 2007 and 2008state that Road Home “Provides the applicant with the highest availablepre-storm value” (p. 22/30) inhttp://road2la.org/Docs/policies/Homeowner_Program_Policies%20v5.2_5-6-08.pdf.
  It isimplausible that of the 141,705 grants closed, Road Home violated their ownpolicy in 65,000 cases or 46% of the total, as stated in the fiscal note. Areasonable estimate is 6,500 applicants appealing higher valuationsthat willincrease their grant for an average of $20,000 and a cost of $130million.

  RoadHome Inspector General:LFO, $1.9 million;corrected to $0.44 million of State funds but with the savings from the change in appeals’ staff, the netcost would be $0.
  The Road Home Inspector General (IG) would need 3 (not17) assistants. Passage of the SB740 into law would obviate the need for theproposed state panel of six staff members for appeals, which is to be paid fromLRA state funds. Instead, that savings of LRA funds could be used for staffingthe Road Home IG.

  De NovoReview:LFO, $248 million; corrected to $1.1million of CDBG funds
  For both SB636 and SB740, there are misleading numbers,including 185,106 applications. 10,000- 20,000 of these are just duplicateapplications encouraged by ICF staff for stalled applications sent by mail andnot removed electronically by ICF. Moreover, it is extremely unlikely that37,021 applicants will file in district court. More realistic would be 370separate court cases by applicants, especially with the availability of appealby adjudication by an administrative law judge, as per SB740. In addition, thecost of legal services should be borne by the contractor in the case of suitsagainst the contractor. Hence, for 370 applicants going to district court, theestimated cost is $3000 each for DRU staff hours.

  Protection from Overpayments:LFO, no value; new estimate,$29.3 million of CDBG funds
  LRA suggested that 500 - 5000 applicants could beresponsible for overpayments due to mistakes by ICF in calculation of awards.SB740 equitably provides that overpayments should be calculated based uponaudits conducted so that all policies, rules, and procedures of the Road HomeProgram are construed liberally in favor of the applicant (SB740, p.14).
  This provision will considerably decrease the number ofawards considered to be “overpayments.” It is estimated that 2000 applicantswill have overpayments with an average of $14,667 each(http://road2la.org/Docs/pipeline/Week_97_Combined_Report.pdf)to be covered by CDBG Road Homefunding.

  Division of Administrative Law:LFO, $8.4 million; same $8.4 million of CDBG funds, no change

  Notification to Applicants:LFO, no value; $ 0.4 million of CDBG funds for postage
  The procedures for written, rather than phone,notification of awards, dispute resolution outcomes, and appeals outcomes werealready supposed to be in effect as of Jan. 1, 2008. SB740 is needed precisely because these critical applicant-beneficial policies are often not followed by ICF.

  May 19, 2008: Dr. Melanie Ehrlich, Co-Chairman, Citizens’ Road Home Action Team and Member, LRA Housing Task Force; Davida Finger, Esq., Loyola Law Clinic; Don Massey, Esq. and Louis LaCour, Esq., law partners at Adams and Reese LLP

  Best wishes,

  Melanie Ehrlich
  CHAT Co-Chairman
  Member, LRA Housing Task Force (Public Meeting in NOLA on May 27, details to follow)

  http://chatushome.com
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