    [Senate Hearing 109-962]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 109-962

             FEMA'S MANUFACTURED HOUSING PROGRAM: HASTE MAKES WASTE

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                   __________

                        FIELD HEARING IN HOPE, ARKANSAS

                                   __________

                                 APRIL 21, 2006

                                   __________

                           Printed for the use of the
            Committee on Homeland Security and Governmental Affairs

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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       SUSAN M. COLLINS, Maine, Chairman
    TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
    GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
    NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
    TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
    LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
    ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
    PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
    JOHN W. WARNER, Virginia

               Michael D. Bopp, Staff Director and Chief Counsel
                Jennifer A. Hemingway, Professional Staff Member
                            Jay W. Maroney, Counsel
          Joyce A. Rechtschaffen, Minority Staff Director and Counsel
             A. Patricia Rojas, Minority Professional Staff Member
                      Trina Driessnack Tyrer, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Collins..............................................     1
        Senator Pryor................................................     3

                                   WITNESSES
                             Friday, April 21, 2006

    Hon. Mike Ross, a Representative in Congress from the State of
      Arkansas.......................................................     5
    David Garratt, Acting Director of Recovery Efforts, Federal
      Emergency Management Agency, U.S. Department of Homeland
      Security.......................................................     8
    Richard L. Skinner, Inspector General, U.S. Department of
      Homeland Security..............................................    12
    Hon. Dennis Ramsey, Mayor, City of Hope..........................    29
    J.D. Harper, Executive Director, Arkansas Manufactured Housing
      Association....................................................    31

                         Alphabetical List of Witnesses

    Garratt, David:
        Testimony....................................................     8
        Prepared statement...........................................    47
    Harper, J.D.:
        Testimony....................................................    31
        Prepared statement...........................................    88
    Ramsey, Hon. Dennis:
        Testimony....................................................    29
        Prepared statement with attachments..........................    75
    Ross, Hon. Ross:
        Testimony....................................................     5
        Prepared statement...........................................    43
    Skinner, Richard L.:
        Testimony....................................................    12
        Prepared statement with attachments..........................    57

             FEMA'S MANUFACTURED HOUSING PROGRAM: HASTE MAKES WASTE

                                  ----------

                             FRIDAY, APRIL 21, 2006

                                           U.S. Senate,
                               Committee on Homeland Security
                                      and Governmental Affairs,
                                                         Hope, Arkansas
        The Committee met, pursuant to notice, at 10:30 a.m., in
    the Johnny Rapart Auditorium, University of Arkansas Community
    College at Hope, 2500 South Main, Hope, Arkansas, Hon. Susan
    Collins, Chairman of the Committee, presiding.
        Present: Senators Collins and Pryor.

                 OPENING STATEMENT OF CHAIRMAN COLLINS

        Chairman Collins. I am Susan Collins, Senator from Maine,
    and I am Chairman of the Senate Homeland Security and
    Governmental Affairs Committee. I'm very pleased to be here
    today with my colleague from Arkansas, a very valued Member of
    the Committee, Senator Mark Pryor.
        Today, the Senate Homeland Security and Governmental
    Affairs Committee continues its investigation into the
    preparation for and response to Hurricane Katrina by examining
    the purchase of manufactured homes by FEMA to assist the Gulf
    Coast region residents displaced by the hurricanes. Instead,
    however, thousands of these homes are being stored, unused, at
    the Hope Municipal Airport at a tremendous cost while people
    remain in dire need of housing.
        Let me begin by thanking my distinguished colleague,
    Senator Pryor, for his diligence in pursuing this important
    matter and for proposing that I come to Hope in order to
    conduct this hearing. I also want to thank our very gracious
    host, the University of Arkansas Community College at Hope, and
    I want to extend a special welcome to the many students that I
    see have joined us today. I hope this will give you a greater
    understanding of how the Senate conducts its oversight
    hearings, and we welcome you here today. We're very pleased to
    have you here.
        Our Committee's investigation into the preparation for and
    response to Hurricane Katrina is now approaching its eighth
    month, and this is our 22nd hearing. I anticipate that it will
    be the last hearing that we hold as part of our investigation.
        During our investigation, we have found failures of
    planning, preparation, execution, and above all, of leadership
    that span all levels of government, local, State, and Federal.
    No aspect of these failures is more infuriating, however, than
    the waste of scarce resources that should be going to relieve
    the suffering of hundreds of thousands of Americans following
    the greatest natural disaster in our Nation's history.
        An early example of this waste surfaced at one of our
    Committee's very first hearings on Hurricane Katrina last
    September, and that was the infamous ice shipments to nowhere.
    Believe it or not, ice that was designated for the victims of
    Hurricane Katrina ended up in my home State of Maine. Now,
    bringing ice to Maine is a little bit like bring coal to
    Newcastle, and this was an early indication to us of the
    logistics and planning failures that our investigation
    subsequently went on to verify. As the details of the waste and
    mismanagement emerged during our investigation, I expressed
    concern that the ice example was just the tip of the iceberg.
    We have now found a great deal more of that iceberg: It is
    right here in Hope, Arkansas.
        In order to provide transitional housing for the victims of
    the Gulf Coast hurricanes, FEMA purchased nearly 25,000
    manufactured homes at a cost of more than $850 million. Due to
    the large number of homes purchased and the need to prepare
    sites before distributing them, FEMA assigned the U.S. Forest
    Service the mission of setting up multiple storage sites,
    including the one here in Hope.
        Today, fewer than half of these homes have been put into
    service. The rest remain in storage, including 10,000 here in
    Hope. Meanwhile, just a few hundred miles away on the Gulf
    Coast and nearly 8 months after Hurricane Katrina devastated
    entire communities, many people still lack safe, temporary
    housing.
        Even more infuriating than the waste itself is the reason
    it occurred. It turns out that FEMA's own regulations prohibit
    placing these manufactured homes in floodplains. Yet FEMA went
    ahead with these purchases, knowing that virtually the entire
    affected region sits in a floodplain.
        I want to commend the work of the Department of Homeland
    Security's Inspector General, who first brought this matter to
    the Committee's attention. I'm also told by my colleague that
    the initial exposure was the result of some very diligent
    reporting right here in Hope. It is only by shining the bright
    light of day on fraud, waste, and abuse that we can root it out
    and ensure that taxpayers' money is spent wisely and
    appropriately.
        I think all of us want to make sure that we're generous
    with our tax dollars and our private donations in helping the
    people of the Gulf Region rebuild their lives and their
    communities, but it is infuriating to all of us when we learn
    that hundreds of millions of dollars are lost to wasteful
    spending, fraudulent practices, and inappropriate contracts. I
    also want to commend the officials and the residents of the
    City of Hope for all of their efforts to aid in the relief of
    individuals who evacuated to this area prior to Hurricane
    Katrina's landfall. I learned also from my colleague, Senator
    Pryor, that Arkansas took in more people on a per capita basis
    than virtually any other State.
        The wasteful expenditures that we will explore and examine
    today should prompt a thorough review of FEMA's procurement
    process and logistics planning. The fact that the 2006
    hurricane season begins just a little over a month from now
    adds special urgency to our task, with forecasters predicting a
    year even more brutal than last. It is simply unacceptable
    that, as we prepare for a new round of disasters, the suffering
    from a catastrophe 8 months ago persists surrounded by mounting
    evidence of wasteful spending and missed opportunities. I look
    forward to hearing all of the testimony from our witnesses
    today.
        Finally, I want to express special thanks to two members of
    my staff, Trina Tyrer and Jenny Gagnon, who arrived here at 2
    a.m. this morning to set up for this hearing. We were in Rhode
    Island yesterday for another field hearing, and they made
    tremendous efforts to get here and set up before we arrived. So
    I just want to thank them publicly for their tremendous efforts
    as well. Thank you.
        It's now my pleasure to call upon Arkansas's own Senator, a
    wonderful member of our community who contributes greatly to
    our work, Senator Pryor.

                   OPENING STATEMENT OF SENATOR PRYOR

        Senator Pryor. Thank you, Senator Collins, and it's great
    to have you here in Arkansas. Let's give her a round of
    applause.
        (Applause.)
        Senator Pryor. This is her first time in the State, and
    she's not disappointed. The hospitality has been wonderful, and
    she has given a special thank you to this campus, the students,
    and Chuck Welch. Chuck, wherever you are, thank you for doing
    all that you do here on this campus. We appreciate your
    leadership and all that you do. And of course, Congressman
    Ross, thank you for being here. And as people in this room
    know, Congressman Ross, a very pro-active, very effective
    Congressman in Washington, is a great advocate for the 4th
    District, so it's great to have you here and have you lead off
    this morning. And of course, my staff has been fantastic, just
    working overtime to try to make this work.
        But for those of you in the audience today, please
    understand it's a big deal for the Chairman of this Committee
    to come all the way to Arkansas to have a hearing on the mobile
    homes that are in Hope. Obviously, it's an issue of national
    importance, and we understand that, but for her to travel here
    and to come here and to have a full Committee hearing here in
    Hope we think is a first. We'd have to look back at the record
    and see if any other committees of the Senate have ever met
    here.
        But she's been a great leader on this issue and a number of
    other issues in the Senate and on the Committee. In fact, a few
    months ago we traveled down to New Orleans together, again a
    Committee trip, and also went to the Gulf Coast of Mississippi.
        And I think she mentioned this is the 22nd hearing we have
    had on Hurricane Katrina, so sometimes people back home ask,
    ``What in the world are you doing in Washington about Katrina
    and all the aftermath, all the mess, after Katrina? '' Well,
    this Senator right here, Senator Susan Collins of Maine, is
    really taking the leadership role in Washington on that, and
    she needs to be commended on that.
        One of the things that we both talked about today was when
    we went to New Orleans--we've seen the devastation there.
    Certainly here in this area we've seen tornados come through,
    and we know what devastation is like, but if you go to the Gulf
    Coast of Mississippi, you see city blocks that are no longer
    there, you see some neighborhoods that have some serious
    damage. When you go down to New Orleans, what you see is, you
    see not just block after block, even neighborhood after
    neighborhood, but you really see section after section of town
    that's been devastated by the hurricane.
        I know that Hope and this community really want to play a
    role in that recovery, and I know that when the Mayor and other
    leaders here worked out the contract with FEMA for the airport
    it was a win-win for everybody. Certainly it was good for the
    city and good for the community, but it was going to be great
    for the victims of the hurricane. And then, as we all know, not
    very many of those mobile homes left here after they got here.
        And so that's why we're here, to talk about that and to try
    to make sure that we're better prepared for this upcoming
    hurricane season. As the Chairman said, it looks like the 2006
    hurricane season could be worse than 2005. That's what many
    experts are predicting. So we have our hands full.
        The Rand Corporation has estimated that in the Gulf Coast
    area, after the two hurricanes went through, there were about
    300,000 homes that were destroyed. That's an enormous number of
    homes that were destroyed as part of the hurricane, and
    certainly FEMA should be there to help as best they can. We
    have people all over that part of the country that need
    housing, and we have houses right here in Hope that need
    people. So we're trying to put those two things together and
    trying to make sure that we're better prepared for the next
    time.
        Some of the things that we've learned in the Committee
    hearings that we've had in the aftermath of Hurricane Katrina
    include the lack of planning and the lack of preparedness.
    We've talked about how the old FEMA operated when James Lee
    Witt was running FEMA, versus the FEMA in the last year or two.
        That's one of the things that we tried very hard to do on
    the Committee--and actually this Committee is exemplary for
    being very non-partisan. We don't get into the blame game; we
    don't come just to point fingers and say, ``It's all your
    fault,'' or, ``We could have done better.'' That is real easy
    to do. The hard thing is to get up and to look at the
    challenges that are before us and try to come up with solutions
    that make sense. And so we're trying to do that here, and I
    want to thank all the people who showed up today, and most of
    all, I want to thank Senator Collins for taking a day out of
    her very busy schedule to come to Hope to have this hearing
    today. Thank you.
        Chairman Collins. Thank you. I am very pleased to welcome
    our first witness for the hearing, Congressman Mike Ross.
    Congressman, we are pleased you could be here. I know you have
    worked very hard on this issue, and I appreciate your sharing
    your insights with the Committee. Please proceed with your
    statement.

     TESTIMONY OF HON. MIKE ROSS,\1\ A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF ARKANSAS

        Representative Ross. Thank you, Senator Collins, Senator
    Pryor. I want to thank the Committee and Committee staff for
    coming to Hope, Arkansas, one of my home towns. I am a 1979
    graduate of Hope High School. You drove by it on the way out
    here today. And this is a community where I grew up and where I
    still have a lot of family and friends, and I live just 16
    miles down the road now in Prescott, Arkansas.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Representative Ross appears in the
    Appendix on page 43.
    ---------------------------------------------------------------------------
        And quite frankly, up until about--what was it, Mayor?--
    October of last year, we were known as the birthplace of
    President Clinton, and since then we've become known as the
    mobile home capital of America. The Mayor was telling me a few
    weeks ago he hadn't done this many national press interviews
    since Bill Clinton won the presidency. And I have certainly
    become known in Arkansas, as well as among my colleagues in
    Washington, as the mobile home congressman.
        I have to tell you that I have been surprised at the way
    this has brought Hope to the national stage. I have been here
    at the Hope airport with CNN and Fox News and NPR and Senator
    Harry Reid, and now you, Senator Collins, in the Senate hearing
    today, and yet, FEMA continues to drag its feet, and they
    continue to perform in ways that I believe are inadequate, and
    certainly, they need to be held accountable for what they are
    not doing here at this so-called FEMA staging area in Hope.
        Basically, Hope was selected--and the Mayor will talk more
    about this--as a FEMA staging area primarily because it is an
    old World War II era airport with all these old inactive
    runways and tarmacs and taxiways, with the theory being that
    FEMA would be bringing these manufactured homes in and then
    taking them out, and they would come in and they would go out,
    and they would utilize those old tarmacs and old taxiways and
    old runways for that purpose.
        Well, they all came and none of them went, until recently,
    at least. And so now we find ourselves with well over 10,000
    brand-new, fully furnished manufactured homes, 25 percent of
    which are sitting on these inactive tarmacs, runways, and
    taxiways, 75 percent of which are sitting in an adjoining hay
    meadow. I used to call it a cow pasture, and the Mayor got onto
    me and said, ``Mike, there have not been cows out there in a
    hundred years.'' But the point is, they are just sitting there
    on the grass. I promised him I would stop calling it that, and
    now I call it the hay meadow. And the point is that we've got
    75 percent of the brand-new, fully furnished manufactured homes
    just sitting there in a pasture.
        I know at one time the Inspector General had been in an
    interview on national TV saying they were beginning to sink,
    and, thank goodness, that's not true. They have not started to
    sink. But they eventually will if we do not do something.
        I always thought the definition of doing something was
    moving them to the homeless, but FEMA's definition of doing
    something is spending $4.2 million throwing gravel into the hay
    meadow. They are literally in the process right now--and you
    can go out there and look; the gravel trucks are running
    today--they are spending $4.2 million of our tax money putting
    gravel on 170 acres.
        Now, we have heard a lot of excuses about how we ended up
    with well over 10,000 brand-new, fully furnished manufactured
    homes just sitting here at the airport in Hope, Arkansas. FEMA
    first said, ``Well, the parishes in Louisiana do not want
    them.'' That was the first excuse that we heard.
        Well, there are at least eight parishes in Louisiana that
    do want them. And I understand that no community wants 10,000
    manufactured homes in their backyard, but over eight parishes
    do, and it should not be a problem getting them to the people
    that need them. But it is. It is because those eight parishes
    are located in a floodplain, and FEMA has decided that they
    will not place manufactured homes in a floodplain. They will
    tell you that was the rule before they went out and purchased
    over 20,000 brand-new, fully furnished manufactured homes.
        And why did they purchase them? They purchased them to
    house temporarily, up to 8 months, the storm victims from
    Hurricane Katrina. Well, didn't FEMA have enough sense to
    understand that everybody that lost their home in Hurricane
    Katrina lived in a floodplain? And yet, they went out and
    purchased all of these, knowing full well that they could not
    locate them in a floodplain, and now that is their excuse for
    having 10,000 brand-new, fully furnished manufactured homes
    sitting here at the airport in Hope, Arkansas. It makes no
    sense.
        And what about Mississippi? Just recently there were 100
    families living in military-style tents in Mississippi. They
    would love to live in one of these brand-new, fully furnished
    manufactured homes. Over 10,000 families, at my last count, are
    living in hotel rooms across the country. Taxpayers are paying
    for that, and yet we have over 10,000 brand-new, fully
    furnished manufactured homes sitting out at the airport in
    Hope, Arkansas.
        Senator Pryor and I have legislation filed in the Congress
    that basically tells FEMA, ``You know, if we can put tents in
    floodplains, if we can put over 70,000 camper trailers in
    floodplains, it may not be ideal, but you know what? It will
    probably be OK to locate these brand-new, fully furnished
    manufactured homes temporarily, for up to 18 months, in a
    floodplain.''
        The President talked about this at a press conference a
    couple of weeks ago. It is real simple. We do not even need the
    legislation Senator Pryor and I have filed. The President can
    actually type out one sentence. It does not even need to be two
    sentences. One sentence, sign his name, at the top you put the
    words, ``Executive Order,'' and we can start moving these more
    than 10,000 brand-new, fully furnished manufactured homes from
    Hope to the people who so desperately need them today.
        Now, to me, this is a symbol of what is wrong with FEMA. I
    mean, you just go out to the airport and see more than 10,000
    brand-new, fully furnished manufactured homes just sitting
    there. That is the symbol of what is wrong with FEMA, and here
    is what I mean by that: We had a devastating series of tornados
    in Arkansas just a few weeks ago. The community, the town, the
    small town of Marmaduke, was basically wiped off the map.
        It has taken U.S. Senators, U.S. Congressmen, you would not
    believe the resources of people that have gone in begging FEMA
    to move 25 out of these 10,000 brand-new, fully furnished
    manufactured homes just down the road in the same State to
    Marmaduke, where people are homeless. It took a minimum of 2
    weeks. It took a minimum of 2 weeks just to get 25 of these
    brand-new, fully furnished manufactured homes moved.
        My point is that when you think of a fire department, you
    think of immediate response. When you think of FEMA, as a
    Federal agency, it is one of the few Federal agencies that I
    always thought of as an immediate response. If it takes them 2
    weeks to move 25 mobile homes from Hope to Marmaduke, they
    still have not learned many of the painful lessons that a lot
    of us now understand and learned on August 29, 2005.
        And finally, let me just say that there has been about 300
    approved to be moved to Oklahoma for wildfire victims. I am not
    sure how many of those have gotten to the people that actually
    need them. We are still trying to get mobile homes to those
    that have recently found themselves victims of tornados.
        We are still trying to get them to the more than 10,000
    people living in hotel rooms all across this country. That is
    no way to raise a family. And it is not just those that were on
    government assistance before the hurricanes hit. I mean,
    Senator--I'm sorry, Congressman Gene Taylor from Mississippi
    lost his home and everything he owns in the hurricane down
    there. And he is one of the fortunate people. He's got a job,
    he's got an income, he has insurance. And yet, the contractor
    is telling him it will be at least 2 years before they can get
    around to rebuilding his home. So I mean, there are a lot of
    people homeless today who had resources, who have money and
    have insurance, but yet they remain homeless because of the
    magnitude of this storm.
        Now, FEMA is probably going to tell you that they are
    getting ready to move 3,000 to 5,000 of these manufactured
    homes. My question for FEMA will be, and will continue to be--I
    live just down the road, and I'm going to continue to stay on
    this until not a single manufactured home is left here, as long
    as we've got people homeless. Once we meet the needs of the
    homeless from the storms, then I will welcome FEMA using the
    Hope airport as a permanent staging area, a staging area to
    store the manufactured homes, refurbish these manufactured
    homes for future natural disasters. But I'm not going to be
    quiet about this as long as we've got one fully furnished
    manufactured home sitting at the airport in Hope, Arkansas,
    while people remain homeless from a hurricane that occurred
    last August 29.
        So the question for FEMA is when they start moving these
    3,000 to 5,000 homes, are they moving them to the homeless or
    are they moving them to other staging areas to basically get
    them out of my back yard? That is a question for FEMA that I am
    going to continue to ask until we know where these homes that
    are leaving this airport are actually going, are they going to
    people who so desperately need them.
        And finally, let me just say, I grew up here. I know these
    people. I know many of the people working for FEMA. It's been
    good for the economy here, there is no doubt about that. And I
    can tell you, the people I know that work for FEMA, they have
    to just kind of wink or nod or smile because they are afraid
    the bigshots at FEMA, if they come down, are going to fire them
    if they see them doing or saying the wrong things. But I can
    tell you, I know these people that work for FEMA in Hope,
    Arkansas, and they are good people. They are like the people in
    this community. They have a big heart, and they want to help
    people.
        And these folks didn't go to work for FEMA--including the
    ones that were transferred in here--they did not go to work for
    FEMA to babysit 10,000 brand-new, fully furnished manufactured
    homes sitting in a hay meadow at the Hope airport. They went to
    work for FEMA because they really want to help people. And
    that's what the people in this community want to do. They want
    to be our government's partners, and we want to help people. We
    do not want to babysit over 10,000 brand-new, fully furnished
    manufactured homes that are sitting out at the airport, but we
    want to help people. And we want to help get these homes to the
    people who remain homeless since August 29 and who so
    desperately need them.
        And with that, I thank you, Senator, for allowing me the
    opportunity to come and appear before this Senate Committee--I
    think it's a first for me. I don't think I've ever testified
    before a Senate committee. Thank you for allowing me the
    opportunity.
        Chairman Collins. Thank you, Congressman. You have raised a
    number of important questions that we will get to with our next
    panel. I am going to withhold my questions for the next panel,
    and Senator Pryor will do the same. Thank you.
        I would now like to call forward our second panel of
    witnesses. David Garratt presently serves as the Acting
    Director of Recovery for FEMA. The Recovery Division is
    responsible for planning and providing policy and oversight of
    the Federal Government's recovery efforts, including providing
    temporary housing. I would note that Mr. Garratt has served in
    key positions in more than 30 presidentially declared disasters
    or emergency operations.
        Richard Skinner is the Inspector General of the Department
    of Homeland Security and has been with that office since it was
    established in 2003. Our Committee had the honor of confirming
    him for this position, and we work very closely with him. I
    would note that he also served in the office of Inspector
    General of FEMA for several years.
        Thank you both for appearing today. We will begin with Mr.
    Garratt.

      TESTIMONY OF DAVID GARRATT,\1\ ACTING DIRECTOR OF RECOVERY
     EFFORTS, FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT
                          OF HOMELAND SECURITY

        Mr. Garratt. Good morning, Madam Chairman and Senator
    Pryor. My name is David Garratt. I am the Acting Director of
    Recovery at FEMA. I am joined by Patricia English, FEMA's chief
    procurement officer, and Ron Goins, a senior FEMA logistics
    official. Today we will address the concerns raised regarding
    the mobile homes that FEMA has staged at this site, as well as
    discuss the role that these mobile homes will play in support
    of both ongoing and future disaster support requirements.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Garratt appears in the Appendix
    on page 47.
    ---------------------------------------------------------------------------
        I fully appreciate the compelling visual image and
    intuitive concerns raised by the Hope manufactured housing
    storage site. Thousands of unused mobile homes sit vacant in
    Arkansas, even as many Louisiana and Mississippi victims of
    Hurricane Katrina continue to wait for temporary housing. My
    goal today is to explain the decisions behind use of this site,
    as well as to outline FEMA's strategy for making use of each
    mobile home situated at Hope. However, to place the explanation
    in context, I would like to briefly outline FEMA's housing
    program.
        FEMA provides housing assistance to disaster victims in
    accordance with the authorities and guidance in the Robert T.
    Stafford Disaster Relief and Emergency Assistance Act, as
    implemented in Agency regulations. The Stafford Act authorizes
    the Federal Government to provide two types of housing
    assistance: Financial assistance, in the form of rental
    subsidies, and direct assistance, in the form of housing units.
    Both types of assistance are, by law, temporary and generally
    limited to 18 months. The principal form of assistance to the
    vast majority of disaster victims, including victims of
    Hurricanes Katrina and Rita, is financial rental assistance. To
    date, FEMA has provided rental assistance to over 715,000
    Katrina and Rita households. The second form of assistance is
    direct housing, which FEMA provides when there is insufficient
    rental or housing stock in an affected area. Such was, and
    remains, the case along the Gulf Coast.
        FEMA recognized, even before Hurricane Katrina made
    landfall, that a proactive housing strategy would be required
    in its aftermath. Accordingly, FEMA established, prior to
    landfall and for the first time, a Housing Area Command,
    headquartered in Baton Rouge. The initial mission of the
    Housing Area Command was threefold: To begin identifying
    housing needs; to identify solutions, including all available
    candidate group site locations; and to begin mobilizing and
    moving temporary housing units into the affected areas as
    quickly as possible.
        FEMA established the Housing Area Command because we
    realized that, after landfall, disaster response efforts would
    be substantially--and rightly--focused on life-saving and
    sustaining operations--always our first priority. Nevertheless,
    recognizing that the scale of the housing mission was likely to
    be massive, we wanted a dedicated housing component actively
    pursuing housing options and solutions in parallel, but without
    pulling assets and resources from immediate response efforts.
        We asked the Housing Area Command to lean far forward, to
    begin aggressively addressing the needs of the victims as
    quickly as possible. The catastrophic scale of Hurricane
    Katrina had a devastating impact on housing and apartment stock
    in the Gulf Coast region, and hundreds of thousands of victims
    were evacuating to safe havens throughout the country. This
    greatly complicated the mission of the Housing Area Command as
    it began to tackle the short and the long-term housing needs
    and the most appropriate solutions for meeting those needs.
        Recognizing that so many evacuees had suffered the loss of
    their homes, the Housing Area Command ordered tens of thousands
    of travel trailers and mobile homes. The Housing Area Command
    also sought to identify other housing options, such as rental
    units, that may provide a more sustainable environment. Within
    weeks, FEMA began the process of receiving and installing these
    units throughout the Gulf Coast region, both on private
    property sites, as well as on group sites. As of today, this
    strategy has provided 100,000--and that actually should be
    115,000--manufactured housing units ready for occupancy
    throughout the affected area. We believe this to be quite a
    logistical feat, as it vastly outstrips any previous temporary
    housing response and recovery effort in the United States.
        These were the strategic considerations that guided our
    tactical response as we made our initial purchases of mobile
    homes and travel trailers. We purchased housing units as a
    temporary measure to replace the tens of thousands of damaged
    and destroyed homes and to rapidly provide a place for victims
    to return home.
        FEMA and DHS realized immediately that the road to recovery
    would be difficult. In the absence of detailed information on
    communities' specific housing needs and priorities, we were
    still faced with the challenge of how to jump-start housing
    recovery. One of our temporary housing strategies is to place a
    travel trailer or a mobile home on a victim's private property,
    next to their damaged or destroyed home, and thus support the
    rebuilding effort by allowing the homeowner to remain on his or
    her property.
        FEMA purchased manufactured housing of many types because
    the broad impact of Katrina had affected families of many sizes
    and circumstances. As Katrina hit, FEMA placed orders for
    thousands of manufactured housing units, knowing the housing
    needs would be unprecedented. Orders to maximize the number of
    travel trailer suppliers were complemented by orders to mobile
    home suppliers, though in smaller numbers--to be certain we
    could meet estimated needs of thousands of households and
    support State and local government recovery strategies.
        With that as a backdrop, let me explain the factors that
    led to our excess mobile home inventory at Hope, Arkansas.
    Three principal factors contributed to this situation.
        The first factor relates to our evolving temporary housing
    strategy. Initially, the Housing Area Command envisioned
    establishing mega group sites consisting of thousands of mobile
    homes as a rapid means of getting displaced evacuees back into
    their affected State. However, this strategy, while
    operationally defensible, was subsequently rejected, for
    several reasons. One, the sites were not necessarily going to
    be located in proximity to or populated by victims from nearby
    communities, and, two, large group sites present social
    management challenges, particularly at the local level. As a
    result, FEMA and DHS reoriented the temporary housing strategy
    to focus on smaller group sites in or in close proximity to
    communities.
        The second factor has been the reluctance of communities to
    accept mobile homes in group sites. Mobile homes, while larger
    and more spacious than travel trailers, are regarded with some
    degree of trepidation by communities and neighborhoods, who
    often view such temporary unit developments as potentially
    permanent fixtures. As a result, there has been widespread
    resistance to allowing such sites in many areas.
        The final factor is floodplain restrictions. Placing mobile
    homes in floodplains is prohibited by executive order and FEMA
    regulations, unless those units follow a rigorous eight-step
    mitigation process involving, among other requirements,
    elevation above the flood level. This process is both expensive
    and time-consuming, and has discouraged their use in many
    areas.
        While it would have been ideal to have a better
    understanding of these limiting factors earlier in the recovery
    effort and procurement process, prompt action did prevent
    supply shortages from emerging later in the recovery effort. As
    a result of these factors, FEMA has more mobile homes, here in
    Hope, Arkansas, than it expects to employ in the Gulf Region.
    While FEMA fully expects to draw down another 3,000 mobile
    homes from Hope for use in Louisiana, we will still have some
    excess, but we will seek to avoid waste. While all of the
    mobile homes that were ordered in response to Hurricane Katrina
    may not ultimately be used in the Gulf Region, many of these
    units will be used to support other disaster response
    operations. For example, units from Hope have been deployed to
    Texas to provide temporary housing to victims of the State's
    terrible wildfires, and other units will be used to support the
    victims of recent tornadoes in Arkansas and nearby States.
        Additionally, we will be redeploying a portion of this
    inventory to staging areas in the northern tier of our Nation,
    where their stability and increased protection from the cold
    make them a preferable housing alternative over travel
    trailers. Additional units are programmed to be moved farther
    west, in support of potential disasters in the Pacific States
    and our western States. Our goal is to relocate a total of
    3,000 units from Hope to other staging areas over the next 4
    months.
        However, the 2006 hurricane season is less than 2 months
    away, and a portion of the Hope inventory will play an
    important role in our readiness. While we intend to reduce the
    inventory through the uses I've just described, we intend to
    maintain, at this time, a residual inventory of 5,000 units at
    Hope to be ready for immediate deployment to the Gulf Region in
    the event of another hurricane catastrophe. We will re-evaluate
    the status of this inventory over time as the Gulf Coast
    rebuilds its supply of permanent housing stock.
        Finally, regardless of assertions to the contrary, the
    mobile homes at our Hope storage facility are being maintained
    in habitable condition and are ready for deployment. While it
    has been erroneously reported otherwise, the tires sinking into
    the mud resulting from a rainstorm does not damage a mobile
    home. Similarly, it has been suggested that FEMA is using jacks
    to prop up damaged units. In fact, using jacks is a required
    storage technique for 70- and 80-foot models to assure
    appropriate long-term staging and protection of the mobile
    home. There are approximately 1,500 of these extended models at
    the Hope site. Bottom line: Despite misinformation otherwise,
    all mobile homes at Hope are mission ready.
        All of us at FEMA and DHS appreciate the keen interest of
    the Committee in all phases of our disaster response and
    recovery efforts and stand ready to support you in this fact-
    finding mission. We are carefully reviewing the full range of
    reports and recommendations on our disaster housing efforts.
    FEMA is pursuing a number of initiatives that will incorporate
    appropriate lessons learned into our planning, guidance, and
    strategy for ongoing recovery and our response to future
    events.
        Thank you. I and my colleagues will be pleased to answer
    any questions you may have.
        Chairman Collins. Thank you. Inspector General Skinner.

      TESTIMONY OF RICHARD L. SKINNER,\1\ INSPECTOR GENERAL, U.S.
                    DEPARTMENT OF HOMELAND SECURITY

        Mr. Skinner. Thank you Senator Collins and Senator Pryor.
    It's great to be here this morning in the State of Arkansas. As
    I was saying earlier, this reminds me of my home State of West
    Virginia with the beautiful, rolling hills. I had the
    opportunity to drive here from Little Rock yesterday afternoon,
    and it's a beautiful State.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Skinner with attachments appears
    in the Appendix on page 57.
    ---------------------------------------------------------------------------
        Today, I'd like to focus my remarks on two questions I
    think that need to be answered and need to be addressed in the
    upcoming months. The first question is how did FEMA, the
    Federal Government, get itself in this predicament, and
    associated with that, what are we going to do to make sure this
    does not happen again in the future.
        The second question is, now that we are in this situation,
    what is our exit strategy? What do we need to do to make sure
    that we use these trailers or dispose of them in the best
    interest of the Federal taxpayer?
        We just initiated, a couple of weeks ago, a follow-up study
    to address those two questions. And hopefully, we will have a
    report, not only to the Secretary and to FEMA, but to the
    Committee sometime late summer or early fall of this year.
        What we are learning is that FEMA, in essence, is trying to
    use traditional solutions to address untraditional events or
    problems. That is, FEMA did not have, and has never had, a
    national catastrophic housing strategy or plan. This is not
    something that is new to FEMA or new to DHS. They were well
    aware that we never had such a plan, and they were well aware
    that they needed such a plan. In fact, in early 2003, FEMA
    actually included or asked for funding so that it can begin
    working with the States to develop a national catastrophic
    housing plan, recognizing that, if there was a major terrorist
    event, a major earthquake in Los Angeles, another earthquake
    like we had in 1906 in San Francisco where millions of people
    were displaced, or an event like what we had in New Orleans
    where we have 300,000 people that have been displaced and
    cannot go back home, it was not prepared to deal with a large
    scale displacement of people.
        Unfortunately, due to budget constraints and other
    priorities, the Department never approved FEMA's request to
    begin working on ways to develop a national housing plan, and
    that's very unfortunate. However, the Department, using lessons
    learned from Hurricane Katrina, is now reconsidering that
    decision. They have, in fact, established a policy group to
    study what went wrong and to develop action plans so that this
    will not happen in the future. In fact, our office has been
    asked to participate with that policy group and provide input
    as they go through their study.
        There's a lot of things that are going to need to be done.
    This is not something that Homeland Security or FEMA can fix by
    itself. It's going to require the collective efforts of other
    Federal Departments, such as VA and Agriculture, who have
    housing programs. It is also going to require the participation
    of the State governments, it is going to require participation
    from the local governments, it is going to require the
    participation from the private sector, and it is going to
    require participation from Congress.
        Congress needs to be actively involved in this whole
    process by looking at what type of legislation is needed, new
    legislation and revised legislation in regard to the Stafford
    Act, which gives FEMA the authority to respond to natural
    disasters after a Presidential declaration. These are not all-
    inclusive suggestions. These are the types of questions that we
    are asking. We are going to be working with Congress and
    working with FEMA. We will be talking with people throughout
    the country, State and local governments, and the private
    sector as well. I understand that there will be someone here
    representing the mobile home industry today, and I think that
    is wonderful. They need to be part of the solution.
        The first thing that Congress, I think, can do is lift the
    ceiling for minimal repairs. Right now, I think it's--David, is
    the ceiling established at about $5,000 right now?
        Mr. Garrat. Fifty-two hundred dollars.
        Mr. Skinner. Fifty-two hundred dollars for minimal repairs.
    That is not sufficient to do minimum repairs in today's market.
    And as a result, that is forcing people into temporary housing
    like trailers, mobile homes, or the hotels because they do not
    have sufficient resources to repair their homes so they can
    move back in. Fifty-two hundred dollars is not going to get you
    back in many of these homes.
        The second thing Congress might want to consider doing is
    reinstating the Mortgage and Rental Assistance Act, or program,
    I should say. That was a program that existed for years and was
    abolished, I believe in 2003, just subsequent to the September
    11 event in New York. That program allowed people who were
    economically impacted, that is, lost their jobs because of a
    disaster, to seek assistance to help pay their mortgages. We
    have a lot of people today, now, who are affected by this, who
    are unemployed, have large mortgages, and now are unable to
    make their mortgage payments.
        Other things that Congress can do, I think, is to take a
    look at the restrictions that have been placed on FEMA, HUD,
    VA, Agriculture, and others that have housing inventories
    throughout the country. Early on, one of the things that FEMA
    tried to do is to work with HUD, VA, and Agriculture,
    recognizing that they have housing inventories out there that
    we could put victims in; however, we could not use them because
    these homes would not pass inspection, and FEMA did not have
    the authority to repair the homes.
        Probably, and I think in many cases, if not most cases,
    FEMA could have repaired these homes at less cost than they are
    paying right now for temporary housing, for trailers or the
    mobile homes, something I'll get into later. I'll show you a
    chart of what it's actually costing us. These are FEMA figures,
    by the way.
        If they had that authority, there was a whole inventory of
    housing out there that they could have tapped into, and that's
    still sitting out there, as a matter of fact, which they could
    still tap into and get people out of trailers and mobiles
    homes.
        Another area that I think that Congress should look into is
    helping FEMA--or that is the Federal Government--to provide
    financial incentives to the private sector. There are a lot of
    landlords out there with a lot of apartment buildings and a
    large inventory of housing that is destroyed, and they do not
    have the resources to go back and repair these apartment
    buildings or to repair those homes that could be rented out.
        If FEMA had the authority, that is, if the Federal
    Government had the authority to provide incentives to these
    people, such as low-interest loans, tax credits, things of that
    nature, with a guarantee that, ``If you repair your apartment
    building we can guarantee you tenants,'' we could take people
    out of trailers and put them into apartments. Right now, the
    Federal Government does not have the authority to do that.
        The last thing is something we are going to study very
    carefully and work closely with the Department's housing policy
    group and with Congress, as well, with your staff, Senator
    Collins and Senator Pryor. And that is, redefining what we mean
    by temporary housing. I'm going to show you the costs later, in
    a couple of minutes.
        Regarding the issue of temporary housing versus permanent
    housing, we are paying hundreds of thousands of dollars to
    provide temporary housing to individuals when, in fact, we
    could probably build permanent structures at a lot less cost.
    But right now, everyone's hands are tied. This is something I
    think requires further study, further consideration.
        Then, of course, there is the obvious thing that we need to
    do in the future, which is to make sure this doesn't happen
    again. The use of mobile homes, the use of trailers, I think is
    a good thing to a certain degree. It should not be our primary
    method of placing or housing people. But we also could do a
    better job and do it in a more efficient, effective, and
    economical way as to how we go about buying trailers and
    modular homes.
        What we did was a knee-jerk reaction. After the disaster,
    we went out and bought everything on the market. I think we did
    get discounts from the manufacturers, but when we started
    buying off the lots, we did not get discounts. We were buying
    trailers that did not meet specifications, that we cannot use.
        After a disaster, we should have standing contracts with
    manufacturers and retailers in disaster-prone areas. They are
    what I call call-contracts. In other words, they are no-cost
    contracts that we can tap into when there is a disaster. We
    already know what our specifications are, and we do not have to
    be reacting in an uneconomical way, as we did this time. I
    think we were very wasteful, and we could have gotten a lot
    more trailers that we really needed at a lot less cost.
        Finally, FEMA, and I think that they are, in fact, doing
    this--and that is, they definitely need to develop a national
    catastrophic housing plan. And they need to do that in
    collaboration with the Federal, State, and private sector.
    That's one of the things they need to start working on, and
    they need to start working on it now.
        Now, I would like to turn very quickly--and I know I'm
    running out of time--to the situation we're in now. I brought
    some charts.\1\
    ---------------------------------------------------------------------------
        \1\ The chart referred to by Mr. Skinner appears in the Appenxix on
    page 71.
    ---------------------------------------------------------------------------
        This is where we are at right now, this is a FEMA chart. We
    now have 11 staging areas across the country. Our housing
    inventory, I think, is around 16,000--or it is actually about
    22,000 mobile homes, modular homes, and travel trailers.
        The next chart shows the cost that it is going to cost to
    maintain these 11 sites.\2\ And I understand there are also
    going to be new sites, for example, Edison, New Jersey, and Mr.
    Garratt mentioned earlier that we may be opening sites out
    west. But to maintain these FEMA sites, it is almost $47
    million a year. This does not include set-up costs. Marta
    Metelko, please put up the cost chart.\3\
    ---------------------------------------------------------------------------
        \2\ The chart referred to by Mr. Skinner appears in the Appenxix on
    page 72.
        \3\ The chart referred to by Mr. Skinner appears in the Appenxix on
    page 73.
    ---------------------------------------------------------------------------
        It is costing us, on an annual basis, just to maintain the
    Hope site, over $3 million a year. This does not include the
    $275,000 we have spent to pave the road; it does not include
    the $4 million for the gravel that we are laying right now. So,
    as you can see, it is very expensive to maintain these sites.
        It is also very expensive to maintain the travel trailers.
    I have one more chart, if I may.\4\ Marta Metelko, could you
    show the cost just to maintain a travel trailer for the life
    cycle of the travel? It costs well over $59,000 to maintain one
    travel trailer for 18 to 36 months.
    ---------------------------------------------------------------------------
        \4\ The chart referred to by Mr. Skinner appears in the Appenxix on
    page 74.
    ---------------------------------------------------------------------------
        Now, if you add all of these costs up, we could build
    permanent housing for these people. Right now our hands are
    tied, however. Here is where I think we can get Congressional
    help. By the way, these cossts are on the low end. It can cost
    as high as $75,000 per trailer. We did not break down the costs
    for the larger units and the manufactured houses. I suspect it
    is closer to $75,000 per trailer. It is a very expensive
    proposition to maintain these things.
        In summary, I would just like to say, I know FEMA may be
    redeploying the trailers to areas across the country, to move
    5,000 out of here. I understand they have a plan to reduce the
    inventory to about 10,000 or 11,000 by September 30.
        But my concern is that this is not a plan, it is an
    assumption. It is ironic. We are hoping we can use the trailers
    for disasters this summer. In essence, we are hoping for
    disasters so that we can deplete our inventory. I mean, that is
    how it sounds to me, and I find that discouraging.
        We have to have a better plan than that. If there are
    disasters, major disasters, fine--the assumption is that there
    will be. But if there are not, we are going to end up with
    about 16,000 of these things sitting out here for another year,
    paying the rates that I just showed you. And the traditional
    usage rate for travel trailers and mobile homes is at about
    2,000 a year, going into a regular, traditional year. If we
    have a big season, it is about 5,000.
        So with the inventory we have right now, it could take us
    anywhere from 3 to 8 years to deplete the inventory, at
    considerable cost. I think FEMA needs to sit down and really
    think this through. Do we want to maintain these trailers here
    or do we want to find alternative needs? And I am not
    suggesting that we flood the market with them, either, and sell
    them for pennies on the dollar. FEMA should consider working
    with Congress to obtain the authorization needed to use them
    elsewhere for the public good.
        That concludes my remarks, and I will be happy to answer
    any questions you may have.
        Chairman Collins. Thank you very much for your testimony.
    Mr. Garratt, in your statement you set forth three factors that
    have contributed to the over-supply and under-use of the
    manufactured homes at this site, and you said the final factor
    is floodplain restrictions. Placing mobile homes in floodplains
    is prohibited by Executive Order and FEMA's regulations unless
    there is express authority granted after an expensive,
    rigorous, eight-step mitigation process.
        To me, that is a puzzling answer because the same agency
    that purchased the manufactured homes is the same agency with
    these regulations. It is not as if these regulations are from
    another part of the Federal Government and FEMA was unaware of
    them. These are not new regulations, are they?
        Mr. Garratt. No, ma'am.
        Chairman Collins. In fact, haven't they been in effect
    since the late 1970s?
        Mr. Garratt. I am not sure of the exact date of that
    Executive Order, but it has been in place for some time.
        Chairman Collins. The Executive Order is dated May 24,
    1977, and the regulations, I am told, were issued within the
    next year or so. So we are talking about regulations that
    prohibit the use of this kind of housing in floodplains that
    have been in effect for more than 25 years. Was the person who
    ordered the manufactured homes unaware of those regulations?
        Mr. Garratt. Not at all, ma'am. And I would like to go back
    and talk about those three factors. Those three factors did not
    necessarily exist as factors at one time, but in fact, the
    factor regarding the use of mobile homes in a floodplain area
    is a factor now.
        Initially, the Housing Area Command, also as identified in
    the testimony, identified that there was going to be a huge and
    compelling need for temporary housing assistance, and the
    initial plan was that we were going to set up these very large
    mega mobile home communities, outside the floodplain and
    removed from the affected area, so that we could keep people in
    the State or bring people back into the State and then begin
    transitioning them from these large, mega mobile home
    communities back into the affected communities as rebuilding
    took place.
        That process was subsequently rejected, and we reoriented
    our strategy to much smaller group sites, much closer to the
    communities that were affected. These communities were in the
    floodplain area, or a great majority of these communities were
    in the floodplain area. As a result, because of that initial
    strategy, which was a plan to set up these large communities
    outside the floodplains, we had an excess.
        The factors that have come into play since then, which are
    the resistance to having large mobile home group sites in and
    around some communities, as well as the floodplain regulations,
    prevent us now from using that excess to the extent that we
    would like.
        Chairman Collins. Well, we have learned that virtually the
    entire region that was affected by Katrina is in a floodplain.
    I am curious about your comment and your testimony when you say
    that you anticipate a residual inventory of 5,000 units at Hope
    to be ready for immediate deployment to the Gulf Region in the
    event of another hurricane catastrophe. It is still a
    floodplain. I do not understand planning to use 5,000 homes for
    the Gulf Region when your own regulations continue to prohibit
    that kind of use.
        We are not talking about a small area that is the
    floodplain. It is an enormous area, and people want to be as
    close to their homes as possible, which was the failure of the
    first point that you made. So I do not understand your hope
    that you are going to be able to use some 5,000 units that
    would be stored here for immediate deployment to the Gulf
    Region in the event of another hurricane. It sounds to me like
    you are making the same miscalculation again.
        Mr. Garratt. Madam Chairman, we have already used, and we
    have people occupying, close to 6,000 mobile homes in the Gulf
    Coast region of the States of Louisiana and Mississippi right
    now. And while I will acknowledge that there are great tracts
    of both States that are within a floodplain, there are also
    areas within both States that are outside the floodplain. There
    are also fringe areas of the floodplain where the elevation
    requirements are extremely modest. It is one thing to elevate a
    mobile home six feet off the ground, and the costs and effort
    associated with that; it is another to elevate it one foot off
    the ground or less, so we have options to employ those mobile
    homes.
        And again, we have executed those options in response to
    Hurricane Katrina, so we would expect in another catastrophe
    there will be an opportunity to use those 5,000 mobile homes.
    And as mentioned in the testimony, we are still planning to use
    an additional 3,000 mobile homes in the State of Louisiana, and
    they are still proceeding to move mobile homes into the State
    of Mississippi.
        Chairman Collins. Well, Louisiana has not had its housing
    needs met, and that is a complaint that Senator Pryor and I
    have received every time we have talked with Louisiana
    officials. In that case, however, there are some complications
    which are not attributable to FEMA. I read just recently, for
    example, that a plan to locate some travel trailers and
    manufactured homes in the New Orleans area was approved at
    first by the Mayor, and then that approval was rescinded.
        That gets to, I think, the second point that you made, of
    dealing with the reluctance of communities to accept mobile
    homes in group sets. How big of a problem is that and how is
    FEMA taking that into account in its planning for the 2006
    hurricane season?
        Mr. Garratt. That is a very good question, Madam Chairman.
    It is enough of a problem that we still have individuals in
    hotels and motels in the State of Louisiana. I think we still
    have, in Louisiana and Mississippi combined, something over a
    thousand households that are still in hotels and motels. That
    is out of the tens of thousands that we had in hotels and
    motels several months ago. The only ones remaining are in Gulf
    Coast States, and the reason that they are still in hotels and
    motels is because we have run into some resistance with some of
    the group sites that we had planned and that we had hoped to
    have up and running by this time.
        We are working around those issues. We are continuing to
    press on some of those group sites, and we are looking for
    alternatives for group sites that we cannot pursue. In terms of
    the 2006 hurricane season, I participated in a couple of after-
    action and planning conferences very recently, both with the
    Corps and with our Federal partners. We recognize that this is
    a key issue and that up-front planning with the localities
    would go a long way toward helping us overcome these
    situational issues.
        So we will be redoubling our efforts this year, working
    principally through Gil Jamieson, who is our new Deputy
    Director for Gulf Coast Recovery, to work with those States to
    identify in advance those areas that they would establish as
    group site locations so that we do not need to negotiate these
    locations after the fact, but have in fact identified several
    of these locations that we can take immediate action to begin
    setting up following an event.
        Chairman Collins. Mr. Skinner, in the testimony that we
    will hear from Mr. Harper on the next panel, he makes the point
    that there was existing inventory of manufactured housing at
    retailers that could have been used to meet some of the needs
    of the hurricane's victims, but instead FEMA required
    manufacturers to interrupt their production and produce
    manufactured housing that met FEMA specifications.
        Typically, when the government requires an item to be built
    to different specifications than is common for the retail
    version of the item, it increases costs and it also delays
    delivery. Do you have any comments on that? Was it necessary to
    go for a unique product or could FEMA have used some of the
    already available inventory?
        Mr. Skinner. That's a good question. We have not looked at
    that, at least from that perspective. FEMA does have
    specifications. We want to be consistent. It creates problems,
    and I know we have observed this in our work. That is, if one
    trailer doesn't have the standard equipment and another does,
    that creates friction among those that want the trailers. And
    as far as applying for assistance, I think it would be better
    if we could be as consistent as possible when we do assign
    trailers to evacuees, or to the homeless, to those that need
    temporary housing. Did it cause delays? Did it increase
    manufacturing costs? We have not looked at that.
        Chairman Collins. OK, thank you. Mr. Garratt, before I
    yield to my colleague for his first round of questions, let me
    just ask you one final question for this round, and that is,
    who was the individual at FEMA who made the decision to
    purchase nearly $850 million of manufactured housing?
        Mr. Garratt. Madam Chairman, I approved that decision. I
    believe that the Director of Recovery, at that time Danny
    Craig, also approved that decision. And we communicated our
    approval of that decision to our procurement officials.
        Chairman Collins. Thank you. Senator Pryor.
        Senator Pryor. Thank you, Madam Chairman. Let me follow up
    on that. So you were involved in the decisionmaking process on
    the manufactured homes?
        Mr. Garratt. Yes, sir.
        Senator Pryor. And one thing, as I understood, that you
    said a few minutes ago, was that you set up the Housing Area
    Command. Did that system work pretty well and is that something
    you would replicate in future hurricanes?
        Mr. Garratt. I am not sure that we are going to replicate
    that plan in future hurricanes. We had a mixed response in
    terms of how well it worked. My personal opinion, Senator, is
    that the plan did a bang-up job, for the reasons that I talked
    about in my testimony, and that they could hit the ground
    running immediately after landfall without interfering with the
    immediate life-saving response and recovery efforts and begin
    scouting and finding candidate group site locations, as well as
    identifying what was available, so that we could start rolling
    in resources just as soon as possible. In that regard, I think
    they did a pretty good job.
        Senator Pryor. I want to ask about that. The Housing Area
    Command at some point ordered these homes, and you approved
    that. Who made that recommendation to you?
        Mr. Garratt. The Housing Area Commander.
        Senator Pryor. And who is that?
        Mr. Garratt. His name was Brad Gair.
        Senator Pryor. So he made that recommendation, and you
    approved it, and then you started ordering homes. If you can
    just walk the Committee through that process and whether you
    were working through a contractor or a middleman. Explain to us
    how that played out.
        Mr. Garratt. I am probably going to have to rely on my
    Chief Procurement Officer to help me out with this, but I can
    at least bring it from the field level. Brad Gair is the
    Housing Area Commander. We asked him to be very aggressive out
    in the field, to lean far forward to identify what those
    requirements were and to press hard to start getting the
    resources into the area to address what we knew was going to be
    a pretty compelling housing situation. He did begin to
    identify----
        Senator Pryor. Let me interrupt just for a second. In terms
    of timing, are we talking about before, during, or after
    Hurricane Katrina?
        Mr. Garratt. We set them up before Hurricane Katrina and
    gave him his marching orders before Hurricane Katrina ever hit.
    What I just described was his mission, essentially, to do that.
        So I'm not sure how long, how many days it was after
    Hurricane Katrina, but I am certain it was a very short period
    of time after landfall, if not during landfall, that he began
    communicating what the requirements were, in terms of travel
    trailers. And at one point, I think it was--said something to
    the effect of, ``We need to order these things, continue
    rolling these things down here and order them until I say
    stop.''
        Senator Pryor. And are we talking about travel trailers or
    are you talking about the mobile homes?
        Mr. Garratt. Both.
        Senator Pryor. OK.
        Mr. Garratt. Our strategy is always to maximize use of
    travel trailers rather than mobile homes. Travel trailers we
    can put with far more ease on an individual's private property.
    Mobile homes do not have that capability. Mobile homes are used
    for group site locations, large families, extended families,
    and for individuals with disabilities, for example. So travel
    trailers are our preferred mobile housing option.
        Senator Pryor. And not to get off track, but what I am
    really asking about is the process by which they were procured.
    Did you contact the manufacturers directly? Did you look for an
    independent contractor? Did you have a series of contractors
    who had expertise in this? That is what I am asking.
        Mr. Garratt. We worked that through our Chief Procurement
    Officer, sir. We communicated the requirements to our
    procurement office, and our procurement office has to use those
    requirements.
        Senator Pryor. And that procurement office is in
    Washington?
        Mr. Garratt. Yes, sir.
        Senator Pryor. And what did they do? I know you made the
    request or made the order, and then what happened? What did
    they do? I guess I am trying to get a handle on how much
    control FEMA had of what you received and what you purchased.
        Mr. Garratt. With the permission of the Chairman, I would
    like to ask Patricia English to join me at the table?
        Chairman Collins. Certainly.
        Mr. Garratt. Thank you.
        Chairman Collins. Just for the record, would you state your
    name and your position, please?
        Ms. English. My name is Patricia English, and I am Chief
    Procurement Officer for FEMA. At the time we received the
    request, we did a couple of things. We initially mobilized----
        Senator Pryor. Did you receive the request before, during,
    or after the storm?
        Ms. English. I think we received it--I'm not really sure.
        Mr. Garratt. I think it was immediately afterward.
        Ms. English. I think it was, too.
        Senator Pryor. All right. Go ahead. I'm sorry, I did not
    mean to interrupt.
        Ms. English. After we received the request, we did a couple
    of things. First of all, we mobilized the FEMA contract
    specialists to help procure these in a very fast manner.
        Senator Pryor. Now, are those government employees or are
    those contractors?
        Ms. English. No, government employees.
        Senator Pryor. OK.
        Ms. English. All FEMA officials, with the assistance from
    subcontracting officials from Department of Homeland Security
    Headquarters Procurement Office. We did two things: One, we had
    a group of folks that went directly to the manufacturers with
    our specifications, to secure bids so they could start
    manufacturing units as fast as possible. In the interim, we had
    another group of individuals who started calling the dealers to
    find out what was available on the lots. And dealers started
    faxing in their specifications, their estimated costs, and so
    forth.
        What we did at that point is we went for the lowest offer
    and just kept buying off the lot, to the extent that we could,
    as the manufactured units were coming on-line.
        Senator Pryor. Now, would you call that a competitive bid
    process?
        Ms. English. The manufactured units was clearly a
    competitive bid process.
        Senator Pryor. And how long were the manufacturers given to
    respond to your request?
        Ms. English. I don't know the exact time, but I can tell
    you it was probably around 5 days.
        Senator Pryor. OK.
        Ms. English. It was a very quick response.
        Senator Pryor. Keep going, I'm sorry.
        Ms. English. So the manufacturers clearly was a competitive
    bid. The off-the-lot, although it wasn't what you would call
    formal competition, we did seek prices, we did try to negotiate
    discounts, and we did award to vendors offering the lowest
    prices first.
        Senator Pryor. Maybe I am misunderstanding this, but my
    understanding is that there was a middleman or contractor or
    set of contractors involved in the purchasing of these homes.
    Is that not right?
        Ms. English. To my knowledge, I am not aware of a
    middleman. Now, there was a recent purchase that we had in the
    State of Louisiana where we worked through a middleman, but to
    my knowledge, we went straight to the manufacturers and to off-
    the-lot dealers.
        Senator Pryor. Are you familiar with how FEMA used to do
    its mobile home and trailer purchases under James Lee Witt? Are
    you familiar with how they did it then?
        Mr. Skinner. Yes.
        Senator Pryor. As I understand it, what they would do is
    they would solicit the industry long before any storm came, on
    a competitive basis, and sort of have an open contract. I don't
    know exactly what they call the process. And then, once the
    need was identified, they would then contact the manufacturers,
    is that correct? Do you know how they did it?
        Ms. English. No, we did not necessarily do it that way
    under James Lee Witt. What happened was we did do a full,
    competitive competition, but we did not have contracts sitting
    on the shelf waiting to use at the time of the hurricane.
        Senator Pryor. Well, how would you do the full, competitive
    bidding?
        Ms. English. Very quick, same way we did it this time.
        Senator Pryor. I may have had some wrong information there,
    and I'd like to get back to you on it.
        Let's see, I have another question. If I may, Mr. Garratt,
    on the question that Congressman Ross asked about the 3,000 or
    maybe 5,000 houses--where are they going and when will the
    people who need housing actually get the 3,000 to 5,000 houses
    over the next few months? Where are they going and what is the
    time frame on people actually using them?
        Mr. Garratt. Also a very good question, Senator. That is
    being worked up now between our Deputy Director for Gulf Coast
    Recovery working with the Joint Field Office in the State and
    locals to identify that. As I indicated, the plan is to bring
    these mobile homes into fringe areas within the floodplain
    where--following the eight-step process would require only a
    modest amount of elevation, and we can do that in a cost-
    effective way. What the Deputy Director is doing right now is
    working with them to identify those sites and locations where
    they would agree to support that.
        Based on initial indications from the field, we think that
    it can support up to an additional 3,000 mobile homes, but we
    don't have all of those sites identified at this point.
    Additionally, another couple of thousand, as indicated, will be
    rolling out of Hope, going to Edison, New Jersey, to a site we
    have there and to Cumberland, Maryland, to a site we have
    there, and hopefully to a site on the West Coast, to support
    potential disaster operations in different parts of the
    country.
        Senator Pryor. So as I understand it then, you have a plan
    to remove them from Hope, but not necessarily to deliver them
    to the people that need them?
        Mr. Garratt. We will be delivering them to the people that
    need them when they need them should a disaster occur in a part
    of the country that we have re-staged these units to. That is
    except for the 3,000 that we plan to push from Hope down to
    Louisiana.
        Senator Pryor. That is all I have at this time, Madam
    Chairman.
        Chairman Collins. Thank you. Mr. Garratt, I want to clear
    up an issue where your testimony seems to be in conflict with
    that of the Inspector General's at a previous hearing that we
    held which touched on this issue, and that is the condition of
    the manufactured homes that are being stored here. At a
    previous hearing, we saw some photographs which seemed to
    indicate that some of the homes were sinking in the mud in a
    way that is causing them to warp or causing some structural
    problems, but your testimony here this morning was very clear
    that you felt that those reports were erroneous, and you said
    that every home is ``mission ready.'' I want to try to clear up
    this issue by asking Mr. Skinner whether he has changed his
    judgment upon further investigation. Before I do that, if, in
    fact, the homes are in good shape being stored on this site,
    why is FEMA spending $4.2 million to lay down gravel?
        Mr. Garratt. A couple of reasons regarding the question we
    are on. Right now, when it does rain in Hope, we do get pooled
    water there. A crush and run surface will be more stable. We've
    got areas on the Hope compound where--to address, for example,
    the warping or bowing issue. We may have a mobile home that is
    perched on a rise, and it will, if you drive by that, appear to
    be bowed, and in fact, it is. It doesn't affect the efficacy of
    that unit, it is still completely usable, but because we've got
    an 80-foot unit that is perched on jack stands over that
    expanse that is uneven, you will see that sort of bowing.
        So what we are interested in doing is creating a more
    environmentally stable environment for those mobile homes since
    we may be keeping some of these mobile homes here for some
    period of time. As we have indicated, we want to maintain at
    least 5,000 of these mobile homes there for the 2006 hurricane
    season. My hope is that we have no opportunity to use those in
    the 2006 hurricane season. However, if that in fact does not
    happen and we have a catastrophe and a requirement to do that,
    we want those things to be stored in the best way possible. And
    our logistics folks have told us that providing this crush and
    run does provide surface stability for the long-term surface
    maintenance environment that we want these mobile homes to
    have.
        Chairman Collins. Mr. Skinner, is a bowed mobile home
    mission ready?
        Mr. Skinner. It is my understanding it can be made mission
    ready, but I am not an expert on the manufactured homes. You
    may want to ask the expert on the next panel. When we made our
    initial visit here--we made two visits, I think, in January and
    February, and it was right after a rainstorm. Like today, we
    did not plan for a rainstorm. We were out there again this
    morning. We did observe that they were sitting in open fields,
    and we took photos where some of the hitches on which the
    trailers were being stored were beginning to sink into the mud.
        We also observed that they were beginning to bow because
    they were not placed on jacks. If they just bow slightly, that
    is not going to create a problem. But if we do not store them
    properly, they could deteriorate and be damaged. That is what
    we were told.
        So we made recommendations: One, if you are going to
    maintain these things here, then you need to put them on a
    stable surface, and, two, if you are going to store them for an
    extended period, you need to store them as recommended by the
    manufacturer, and that is on jacks. We went out there this
    morning, and in fact, they are laying gravel as we speak, and
    they are putting in the jacks as we speak. Not all of them are
    complete, but they are in that process.
        Chairman Collins. Mr. Skinner, do you have any concerns
    about the monitoring of the project that you have just
    described, laying the gravel bed?
        Mr. Skinner. The actual monitoring?
        Chairman Collins. Yes.
        Mr. Skinner. No one has brought any problems to our
    attention.
        Chairman Collins. Thank you. Finally, Mr. Skinner, the
    hurricane season, as I mentioned, begins June 1, 2006. How
    prepared do you think FEMA is for this year's hurricane season?
        Mr. Skinner. I really do not want to speculate. I can say
    that there is very aggressive action ongoing right now to put
    us in a position where we are better prepared than we were last
    year. For example, there is hiring of additional contracting
    officers and contracting technical representatives. There is
    some very intense training going on and many exercises going
    on--in the hurricane regions--so that people will better
    understand the national response plan, understand the role of
    the PFO, the Principal Federal Officer, and the FCO, the
    Federal Coordinating Officer. So there are steps that are being
    taken in a very fast and aggressive way to help us be better
    prepared.
        However, will we be better prepared to handle another
    Hurricane Katrina? I would not want to speculate. I can say
    also that the Department is working very well now with DOD, and
    that is very important, defining what their role will be if we
    have something that catastrophic.
        Chairman Collins. Thank you. Mr. Garratt, one final
    question for you. Part of being prepared, and part of keeping
    down costs, is to have in place prior to the hurricane season
    contracts that have been competitively awarded and that you can
    take off the shelf and use if need be. Initially, Secretary
    Chertoff assured me that there would be competitively awarded
    national individual assistance contracts in place prior to June
    1, 2006, the start of the hurricane season. Does FEMA still
    intend to meet that goal?
        Mr. Garratt. FEMA still intends to meet the goal of having
    individual assistance, technical assistance contracts, in place
    as soon as we can get those in place. I do not believe we are
    going to meet our target goal of June 1, 2006. The competitive
    bid process--we have encountered some delays in accelerating
    that process, and as a result, we are probably looking at some
    time after July 1 before we are able to award those contracts.
        However, in the interim, we recognize that we have a gap,
    in terms of being able to provide housing assistance or
    executing a housing mission, so we have coordinated with the
    U.S. Army Corps of Engineers. The U.S. Army Corps of Engineers
    has performed this mission for us in the past prior to the use
    of the IA TACs last year, and the Army Corps of Engineers is
    prepared to execute that mission and provide any housing
    support for us in that interim period while we work to complete
    the awarding of the new IA TAC contracts, which again, we
    expect to have completed certainly well before the end of the
    hurricane season, but probably, again, not by June 1, 2006.
        Chairman Collins. Thank you. Senator Pryor.
        Senator Pryor. Mr. Skinner, you mentioned in your testimony
    a few moments ago that you hope to have a report prepared by
    late summer or early fall?
        Mr. Skinner. Yes. In the September time frame is what I was
    looking at.
        Senator Pryor. And what is that, a set of recommendations?
        Mr. Skinner. We are doing an assessment right now of FEMA's
    housing plans and its policies and procedures with regard to
    Hurricane Katrina, Hurricane Rita, Hurricane Wilma, with the
    objective of identifying the gaps and problems, and making
    recommendations to address those problems.
        Senator Pryor. All right. Is it consistent or inconsistent
    in your mind that the Inspector General's office is in the
    process of doing this report, making recommendations, listing
    out your findings, but at the same time, and in an
    uncoordinated fashion it seems to me, FEMA is planning on
    moving many of these mobile homes from Hope to various parts
    around the country. Is that inconsistent in your mind or is----
        Mr. Skinner. Well, we have not drawn any conclusions yet,
    but that particular issue of how would we use some 16,000
    mobile homes that are currently in our inventory is something,
    I think, that requires further study. We have already made some
    recommendations informally.
        Senator Pryor. And I know that in a few minutes you are
    going to step down. I would like for you to keep chart 4
    handy,\1\ because I may use that with another witness here in a
    few minutes. Are you familiar with the process that was gone
    through on these mobile homes here in Hope, in terms of the
    purchase of them?
    ---------------------------------------------------------------------------
        \1\ The chart referred to by Mr. Skinner appears in the Appenxix on
    page 74.
    ---------------------------------------------------------------------------
        Mr. Skinner. Beforehand?
        Senator Pryor. Before they were purchased. To purchase the
    mobile homes here and deliver them here, are you familiar with
    that process?
        Mr. Skinner. Not in such detail as Ms. English.
        Senator Pryor. Let me ask about the jacks. You have
    identified that some of these need jacks. Are those only the
    units that are over 60 feet?
        Mr. Skinner. Yes.
        Senator Pryor. Just the shorter ones do not need those?
        Mr. Skinner. That is what I am told. That is correct.
        Senator Pryor. And as I understand it, some mobile home
    parks, etc., do not like these longer mobile homes. Do you know
    anything about that?
        Mr. Skinner. I'm sorry?
        Senator Pryor. They cannot accommodate the longer mobile
    homes?
        Mr. Skinner. Most of the traditional mobile home parks
    cannot accommodate them. We cannot place them on the pads
    because the cement pads on which they rest are too small.
        Senator Pryor. Right.
        Mr. Skinner. So that is the dilemma that we have, or that
    FEMA has, how do they place them on the pads, because they
    require larger pads.
        Senator Pryor. Do you know why FEMA ordered the longer
    homes that would not fit on the mobile home park pads?
        Mr. Skinner. It is my understanding that the order was
    given to buy all mobile homes, as many as you can buy. There
    were a lot of mobile homes, and a lot of travel trailers as
    well, that were delivered to FEMA that should not have been
    accepted. And we probably should not have bought those larger
    mobile homes.
        Senator Pryor. If I may, Mr. Garratt, let me ask you, you
    mentioned that some of these homes, these 3,000 homes are
    moving back out to various staging areas around the country.
    Did you mention some were going to Maryland?
        Mr. Garratt. Cumberland, Maryland.
        Senator Pryor. As I understand it, and maybe I am wrong on
    this, some of the homes were manufactured in that area and then
    transported to Hope. Do you know?
        Mr. Garratt. I can't verify that, Senator, but we can
    certainly find out and get that information to you.
        Senator Pryor. Let me ask this. Do you know how much FEMA
    pays per mile to move these homes?
        Mr. Garratt. Ask Ron Goins.
        Chairman Collins. Again, if you could identify yourself so
    the court reporter has your name, and also your position?
        Mr. Goins. I'm Ron Goins, and I am Chief of Support
    Services Section for Logistics.
        Senator Pryor. And do you know how much FEMA pays to move
    these homes--is it paid per mile, or how does that work?
        Mr. Goins. Well, a lot of the transportation costs are
    rolled up into the purchases, but when we do our own internal
    moves, or if we have a commercial hauler, it is approximately
    $1.50 per travel trailer per mile, and approximately $4.50 per
    mobile home.
        Senator Pryor. Per mile?
        Mr. Goins. Yes, sir.
        Senator Pryor. So if you move them to Maryland, that is
    about 1,000 miles. That is pretty pricey to move one mobile
    home that distance. Let me ask this, also, Mr. Garratt, if I
    may, and that is in your opening statement you mentioned that
    there are 115,000 manufactured homes, I think you said, that
    were ready for occupancy in the region already, provided by
    FEMA? Tell me what you said? What was that 115,000 figure I
    heard?
        Mr. Garratt. There were 115,000 travel trailers, mobile
    homes, total, that have been set up in the Gulf Region.
        Senator Pryor. How many are travel trailers and how many
    mobile homes?
        Mr. Garratt. Let me check and see if I have that.
        Senator Pryor. And people are occupying those right now?
        Mr. Garratt. I think the occupied figures for those are
    something less than that, in the neighborhood of 110,000.
        Mr. Skinner. We looked at this, at the status, this past
    Monday. For mobile homes, I think it was closer to 10,000, and
    I think it was about 79,000 travel trailers that are currently
    occupied, 17,000 that are ready to be occupied, and I don't
    have the exact figure, but I think it was 23,000, or something
    like that, trailers that are ready to be moved and are
    available for occupancy.
        Mr. Garratt. I'm sorry, Senator, your question to me again
    was?
        Senator Pryor. Well, I was asking about the 115,000 figure
    that you had----
        Mr. Garratt. Right.
        Senator Pryor [continuing]. And the question I had was how
    many are mobile homes and how many are the so-called travel
    trailers. And it sounds like Mr. Skinner has given me a rough
    breakdown. Is that consistent with what you have?
        Mr. Garratt. Yes, sir.
        Mr. Skinner. And those are the figures that FEMA gave me
    last Monday.
        Senator Pryor. But it still sounds like there is a
    percentage that are not--is that just because of paperwork or
    is that because we cannot find locations, or what is that?
        Mr. Garratt. It is a combination of issues, sir. For
    example, when a contractor is establishing a group site and
    making units available for occupancy on a group site, they may
    be available for occupancy, but we do not allow anyone on that
    group site to inhabit any of those trailers until they are all
    ready for occupancy because of the construction that is going
    on and because of the safety issues. So we may have multiple
    ready-for-occupancy units, but it may also be a question if it
    is being placed on an individual's private property that a
    contractor will say this is ready for occupancy, but it is
    awaiting a certification, the City of Hope to come on and make
    that certification, that it is OK. So a number of different
    reasons contribute to that, to that delta between ready for
    occupancy and occupancy.
        Senator Pryor. All right, Mr. Garratt, this is my last
    question--Congressman Ross and others have talked about how
    there are apparently many parishes down in Louisiana--I have
    heard eight, I have heard more--I do not know the exact number,
    that have done something on a local level to waive any sort of
    restrictions they might have on mobile homes to allow your FEMA
    mobile homes to be placed in those parishes. Senator Collins
    mentioned some of the issues in New Orleans. Let me ask this:
    In your opening statement you said that there was ``widespread
    resistance'' placing these mobile homes down in the Gulf Coast
    area, but isn't it true that many of the parishes have waived
    their restrictions and are allowing these to come in?
        Mr. Garratt. Sir, I am not aware that any parishes have
    waived the floodplain restrictions for any of the mobile homes.
        Senator Pryor. The floodplain restriction is your
    restriction.
        Mr. Garratt. That is correct.
        Senator Pryor. Well, I mean they cannot waive that; I am
    saying they have local ordinances or whatever they may call
    them in Louisiana, I do not know the State law, but they have
    ordinances that say no mobile homes in this part of the city or
    this part of the county, whatever that may be, and apparently,
    they have taken steps to waive those. Are you familiar with
    that?
        Mr. Garratt. In some instances, we have had some parishes
    that have indicated that they are willing to take some of these
    on. Those form part of that 3,000 that we expect to move from
    Hope down to Louisiana. In many cases, these are going to
    require some rather extensive site preparation, but yes, we
    have made some inroads in some cases. Again, we are also
    continuing to encounter some resistance in some cases, but that
    portion that you referred to is calculated into that 3,000
    figure that we are working.
        Senator Pryor. What about in the City of New Orleans
    itself? Are they--New Orleans Parish, are they resistant?
        Mr. Garratt. We have had some issues in New Orleans Parish.
        Senator Pryor. Are some of the homes going into New Orleans
    Parish?
        Mr. Garratt. Yes, sir. We have begun some site development
    there, and we have already spent, at least in the case of one
    site, over $1 million on the site development, and we are at
    the point of virtually beginning to occupy those trailers, and
    we have proceeded to do that.
        Senator Pryor. Do you know how many homes have made it into
    Orleans Parish?
        Mr. Garratt. I can get that number for you, sir. I do not
    have that.
        Senator Pryor. I believe that is all I have. Thank you,
    Madam Chairman.
        Chairman Collins. Thank you. Mr. Garratt, I know I promised
    that I had asked you the last question, but the question my
    colleague just asked you gives rise to another one in my mind.
    The Committee has been told that FEMA has met most of the
    requests for travel trailers in Mississippi and in Alabama, but
    that 60 percent of the requests in Louisiana have not been
    satisfied. Is that an accurate assessment?
        Mr. Garratt. Madam Chairman, I'm not sure what that 60
    percent represents. If it represents the number of individuals
    who are currently in Louisiana, for example, in hotels and
    motels, living with family and friends, and are waiting for a
    travel trailer there, I think that figure is probably very much
    in play there. It represents, perhaps, individuals who are
    across the United States, based on wherever they were evacuated
    to or where they've migrated to, and have indicated that they
    would like a travel trailer or mobile home. That may be after--
    --
        Senator Collins. I am trying to figure out why most of the
    requests from Mississippi have been satisfied and most of the
    requests from Louisiana, according to the data that I have,
    have not been. I am trying to determine whether that is the
    problem we discussed with local officials not allowing the
    placement of homes in certain areas. But if most of these we
    are talking about are travel trailers, which are different,
    obviously, from the manufactured homes, is there a disparity,
    and if so, why?
        Mr. Garratt. There is a disparity, ma'am, and that
    disparity is related just to the size of the population that
    requires housing. Alabama had a much smaller population that
    required housing than Mississippi, and Mississippi the same for
    Louisiana. Mississippi's projected needs total were 39,000
    travel trailers and mobile homes, and we are virtually there.
    We've got 39,000. Louisiana's projected total needs were
    approaching 100,000 travel trailers and mobile homes, so we are
    not quite there yet. There is still a delta between that, and
    that is what causes the difference between Louisiana and
    Mississippi.
        Senator Collins. I guess you can see our concern, even
    frustration, when we flew in today and see thousands of
    manufactured homes ready to go here in Hope and then we keep
    receiving the pleas for assistance for housing from individuals
    from Louisiana that FEMA cannot seem to meet. That is the
    frustration that we are seeing, when here you have the homes
    that are so desperately needed. What is the barrier?
        Mr. Garratt. The principal barriers right now, as
    indicated, in employing these mobile homes in Southern
    Louisiana are the issues of the floodplain restrictions and the
    issues we have been running into regarding the group sites. But
    we are attacking those. I mean, we recognize that is an issue.
    We recognize, as Mr. Skinner indicated, that we need to pursue
    some outside-the-box solutions to some of these issues, and we
    are actively doing that.
        We have the authority, or may have the authority, to donate
    these units to States and to locals, providing their use for
    disaster purposes. And we are actively working with the States
    to identify methods for potentially donating these mobile homes
    or--again, provided that they are used for a disaster purpose.
    That would enable these to be used for purposes other than we
    are constrained by under the Stafford Act.
        Our Deputy Director for Gulf Coast Recovery, Mr. Jamieson,
    is actively working with the States to determine if there are
    other potential solutions for the use of mobile homes in both
    Mississippi and in Louisiana. And we are expecting Mr. Jamieson
    to come back with some recommendations fairly soon on methods
    that--that I do not want to necessarily go into at this point
    because we just have not fleshed these out fully, but I have
    every reason to believe that we may have an opportunity in the
    very near future to begin using some of these mobile homes in
    an innovative way in the affected area.
        Chairman Collins. I thank you for your testimony and for
    being here today. I feel, however, as if we have come full
    circle. We are back to the floodplain regulations, which raises
    the question why they were purchased in the first place if they
    cannot be used in this area. It seems to me that we have to
    come up with better housing solutions that avoid that problem
    in the future. It is just a tragedy that nearly 8 months after
    people have been displaced, we cannot seem to match up victims
    in need of housing with housing that is here in Hope. We stand
    ready to work with you to help achieve a solution to this
    problem and also to ensure it does not happen again in the
    future.
        I would hope as you pursue these innovative approaches that
    you have alluded to that you will share your thoughts and
    advice with the Committee. Mr. Skinner, I would like you to do
    so as well.
        Again, I want to thank you both for being here today and
    for helping to advance our knowledge.
        I am now going to call forward our final panel of
    witnesses. Mayor Dennis Ramsey was first elected to the Board
    of Directors of the City of Hope in 1978 and has served as
    Mayor since 1993. J.D. Harper serves as the Executive Directive
    of the Arkansas Manufactured Housing Association.
        Mayor Ramsey, being an elected official has its privileges,
    and one is that you get to go first.
        Mayor Ramsey. Thank you, Madam Chairman.
        Chairman Collins. Thank you.

      TESTIMONY OF THE HON. DENNIS RAMSEY,\1\ MAYOR, CITY OF HOPE

        Mayor Ramsey. Again, Madam Chairman, I'd like to welcome
    you and your staff to Arkansas, especially the City of Hope. It
    has been an honor to have you here.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mayor Ramsey appears in the Appendix
    on page 75.
    ---------------------------------------------------------------------------
        Chairman Collins. Thank you.
        Mayor Ramsey. Of course, Senator Pryor, it is always nice
    to have you back in Hope, Arkansas.
        Senator Pryor. Thank you, Mayor.
        Mayor Ramsey. Senator Pryor noted a while ago that no
    Senate hearings at this time have been held at Hope, and I
    think you are entirely correct. This is our first one, and
    maybe it will not be our last one, but it is a unique
    experience for our city. And we appreciate the opportunity to
    display our college and the work that they have done.
        Prior to Hurricane Katrina striking the Gulf Coast, several
    hundred people evacuated to Hope, Arkansas. When it became
    evident the devastation to the Coast Region would be
    significant, as a community we came to the realization that the
    stay for many of the evacuees would be prolonged. Our
    community, as many other communities across our State, began a
    grass roots effort to become a source of strength, both
    emotionally and financially, for these guests. Funds were
    raised and distributed; lodging provided; twice daily meals
    served; job fairs held; and friendships extended. All was done
    with no concern for reimbursement. It united us as a community
    and introduced us to many new friends with whom we still
    correspond. Of course, this continued weeks later with
    Hurricane Rita.
        On or about Saturday, September 24, I receive a phone call
    from Robert Hoban, who identified himself as a representative
    of FEMA. He stated that FEMA had let or was in the process of
    letting contracts to purchase upwards of 20,000 manufactured
    homes, or mobile homes. The staging and distribution point for
    these homes was to be Red River Army Depot in Texarkana.
    However, much of the affected acreage over there contained
    trees and other vegetation, so the cost of clearing and
    preparing to store them on this acreage was prohibitive. On
    this day, he and other individuals had already visited our
    airport property and thought it would be ideal to store several
    thousand mobile homes here at our airport temporarily. Mr.
    Hoban wanted to know how much acreage and if the City would
    lease the property to FEMA and also about the possibility of
    closing the entire airport.
        I told Mr. Hoban, as Mayor, I did not have that authority
    to make a decision, and there were several issues that would
    have to be addressed: Approval of the Federal Aviation
    Authority, since this is--and still is--an active airport; our
    visiting with the Arkansas Aeronautics Department; consulting
    with our Airport Advisory Board and local pilots; obviously,
    approval by a vote by the Hope City Board of Directors. Closing
    all runways was not an option as preservation of the airport
    functions was of primary importance. I contacted City Manager
    Catherine Cook and told her of our conversation.
        On Monday, September 26, 2005, I received a call from a
    representative of the Government Services Administration,
    Dorothy Keisler. She wanted to fax a lease for our
    consideration. I told her essentially the same conversation I
    had with Mr. Hoban and that it would be premature as I had no
    authority to negotiate a lease, but I felt confident the City
    would do all it could to accommodate the request.
        The City Manager began contacting our airport engineers,
    FAA, Arkansas Aeronautics, the City Board members, and local
    airport groups. We also had ongoing conversations with FEMA
    representatives, informing them we had approximately 453 acres.
    Per their calculations, they could place approximately 13,000
    mobile homes on the site.
        We informed them of the soil conditions present at the
    airport. This is an old army airport built in 1941 with three
    runways, two of which are still active. The third one has been
    closed permanently. The airport was constructed on what was
    then very fertile farmland. We informed FEMA that, when wet,
    this soil became very spongy, and during periods of rain,
    ingress and egress would be very limited, i.e., become stuck in
    the mud, but no one ever inferred that the mobile homes would
    sink in the ground.
        On Tuesday, October 4, 2005, Mr. Hoban addressed the Hope
    City Board of Directors and requested leasing the 453 acres of
    airport property for 2 years with an option to renew for two
    additional one-year periods. The reason for the two options is
    that when the units are recovered from the Gulf Coast area by
    FEMA, they will be returned to Hope for minor refurbishing. The
    Board recommended a lease price of $25,000 per month.\1\
    ---------------------------------------------------------------------------
        \1\ Supporting documents submitted by Mayor Ramsey appear in the
    Appendix on page 78.
    ---------------------------------------------------------------------------
        On October 7, 2005, the lease with the GSA on behalf of
    FEMA was signed.
        During the week of October 9, 2005, mobile homes actually
    began arriving at the Hope Airport.
        On October 21, 2005, at a special called board meeting, Mr.
    Hoban again addressed the City Board. He stated there were
    approximately 400 mobile homes housed at the airport on
    available runway space and that FEMA was interested in
    establishing a geotech fabric and gravel, called crush and run,
    in 50-acre parcels to stage additional mobile homes. The Board
    agreed to the proposal.
        By November 1, 2005, there were approximately 1,500 units
    at the airport, but no crush and run had been laid except for
    the road at the south end of the property.
        Mr. Hoban subsequently stated that FEMA desired to develop
    170 acres and possibly up to 290 total acres with Geotech
    fabric and four to six inches of SB-2/Class 7 crushed stone
    applied over the fabric. At the meeting, local FEMA personnel
    thought the amount would only include about 97 acres. The GSA
    amended this contract from the original 170 plus additional 120
    acres. The Board also asked if it would be possible for the
    crosswind runway to be reopened. This work, to my knowledge, is
    currently under construction.
        To my knowledge, the maximum number of mobile homes staged
    at the Hope Airport property was 10,777, and currently the
    number is around 10,000.
        FEMA has on several occasions told representatives of the
    City, as well as members of the House and Senate, on various
    occasions, there's a real possibility that this site may become
    a permanent staging area for FEMA.
        I'd just like to say in closing the local FEMA
    representatives, as well as Mr. Hoban, have been cooperative,
    responsive to our questions and concerns when voiced, and have
    responded to them promptly when asked.
        Thank you, Madam Chairman.
        Chairman Collins. Thank you. Mr. Harper.

       TESTIMONY OF J.D. HARPER,\2\ EXECUTIVE DIRECTOR, ARKANSAS
                    MANUFACTURED HOUSING ASSOCIATION

        Mr. Harper. Good afternoon, Madam Chairman, and welcome to
    Arkansas.
    ---------------------------------------------------------------------------
        \2\ The prepared statement of Mr. Harper appears in the Appendix on
    page 88.
    ---------------------------------------------------------------------------
        Chairman Collins. Thank you.
        Mr. Harper. Good to see you here. Senator Pryor, it is good
    to see you. It is a great honor to be invited to testify before
    this Committee at this hearing today.
        My name is J.D. Harper, and I am Executive Director of the
    Arkansas Manufactured Housing Association. Our trade
    association represents businesses with an interest in the
    manufactured home industry: Builders, retailers, transporters,
    installers, finance and insurance companies, and other
    businesses. Since our inception in 1967, it has been our goal
    to provide quality, affordable housing to the people of this
    State.
        At this time, I would like to make it clear that my
    testimony reflects the views of the Arkansas Manufactured
    Housing Association and should not be construed as a statement
    on behalf of the entire industry. The comments that I am going
    to pass on to you today are based solely upon the deliberations
    and discussions of our Board of Directors.
        It is my understanding I have been invited to testify on
    issues related to disaster housing, with manufactured housing
    units in the forefront, especially the homes staged here at
    Hope. And the invitation said the things that we were asked to
    look at were: Procurement, installation, maintenance, future
    use, and deactivation and/or disposal. I have arranged my
    comments in this order, and I will do my best to address each
    issue.
        Again, of course, I would like to say that our industry was
    deeply touched and our thoughts and prayers went out to the
    people whose lives were forever changed after Hurricane Katrina
    hit the Gulf Coast, and our thoughts and prayers are with them
    still today as recovery efforts continue. We also believe that
    another thing was forever changed; the relief and recovery
    efforts that you see from Federal, State, and local
    governments. And it is our sincere hope that the successes that
    have been seen and the failures that we have had since the
    recovery effort started are something we can all learn from,
    and we can create a better response mechanism in the future.
        Having said that, I will take a few minutes to talk about
    the procurement issue. FEMA has long viewed manufactured
    housing as a resource for emergency housing relief in the
    aftermath of disasters. Our industry believes that manufactured
    housing can continue to be a major source and an integral part
    of an emergency housing plan.
        I would like to recognize the efforts of our industry,
    particularly our manufacturers and our transporters for their
    efforts and their response to the demand for emergency housing
    in the wake of the storms. We responded immediately, fulfilling
    FEMA's requests for thousands of homes built to their exacting
    specifications and delivering those units to staging areas that
    were designated by FEMA in a very timely manner. In a number of
    cases, participating builders found it necessary to suspend
    their normal production of homes for retail inventory and
    custom-designed units for waiting home buyers in order to
    produce FEMA-approved units for disaster relief efforts,
    creating major disruptions in the normal course of business and
    in the normal supply of manufactured housing.
        In recent history, we believe that FEMA has greatly reduced
    or eliminated the inventory of manufactured home units being
    held for such use and has gone with their preference of
    ordering manufactured homes through GSE-approved third-party
    contractors or directly from manufacturers for use in disaster-
    stricken areas on an as-needed basis.
        According to Inspector General Skinner's testimony before
    this Committee on February 13, FEMA purchased 24,967
    manufactured homes and 1,295 modular homes for use as emergency
    disaster housing.
        Manufactured home units built for FEMA in 2005 were built
    to very strict specifications. In a Request for Quotes dated
    Thursday, September 8, 2005, producers were given structural
    design requirements for the houses, including the size--that
    they would be 60 feet long by 14 feet in width; the floor plan
    with the number of bedrooms, three, and the number of
    bathrooms, one; the appliances, all electric, range,
    refrigerator/freezer; furnishings, they would be fully
    furnished with a dinette set for six; interior and exterior
    requirements, including no carpet throughout the unit and vinyl
    siding on the exterior; roof load, thermal zone, and wind zone
    requirements; and a structural design requirement that was
    unique in that the homes were built for multiple installations
    and removals. Proposals from interested producers were required
    to be received no later than 3 p.m. the following day,
    September 9, 2005.
        It is our understanding that efforts are currently underway
    to revise and review the construction specifications that FEMA
    has used in the past. We support the review and revision of
    those specifications in order to simplify the procurement
    process. Our organization would encourage FEMA to revisit its
    former policy of using stand-by contracts for the purchase and
    procurement of emergency housing in future disasters.
        I have been asked on many occasions if FEMA paid too much
    for the homes which they ordered for hurricane relief. Most of
    these questions have included some sort of comparison between
    the average price of the stock unit that is held in inventory
    by retailers and average prices of FEMA units, based on
    dividing the total dollar amount that was spent, the $800 and
    some odd million, we were told, by the number of homes received
    by FEMA. I believe it is important to understand that units
    meeting the specifications that were released on September 8,
    2005, did not exist in Arkansas prior to that date. These homes
    were built specifically for this request, and any comparison to
    the price of stock units is an unfair comparison. I do believe
    that if the homes sitting on the airport runway here in Hope
    are not used for the purpose for which they were ordered or
    used in some other public interest, then any price paid by the
    government for these homes was too high.
        I also believe the question is not necessarily how much was
    paid for the homes, but how many homes were ordered. I believe
    if there were only 500 homes waiting we would not be having
    this hearing today. In the hours following the hurricanes,
    between 2004 Hurricane Charlie and 2005 Hurricanes Katrina,
    Rita, and Wilma, our industry, including my office, was asked
    to identify available inventory by the Department of Homeland
    Security and by FEMA for use in the disaster areas. In both
    instances, FEMA instead elected to order new manufactured
    houses built to their specifications, rather than purchase
    manufactured home inventories off the lot, except for a very
    small percentage of some homes that are here at Hope.
        A lot of the testimony you have heard talks about off-the-
    lot purchases. For the most part, those were travel trailer
    purchases, not manufactured homes. Inasmuch as I believe our
    business wants to help in the aftermath of disasters, I do not
    believe we are going to participate in future efforts to gather
    that inventory list from our retailers because we have not seen
    any real instance that FEMA is going to purchase retail
    inventory. We feel that FEMA is going to continue the process
    of ordering new product if it is needed.
        Federal and State authorities did work together, though, to
    work out the delivery of the FEMA units. State transportation
    authorities waived permit requirements and other restrictions
    to get homes moved very quickly, and we certainly feel like
    that was an example of a success with the States working
    together to make it happen. However, we found that when the
    waivers began to expire and enforcement mechanisms resumed,
    some of the out-of-state manufacturers were unaware and some of
    the transporters were unaware. We would encourage those
    entities to work together to better keep the lines of
    communication open with our transporters and manufacturers.
        The units began arriving at Hope within days. With the
    industry, the media, and the public focused on the delivery of
    emergency housing to those people left homeless in the Gulf
    Coast region, the number of homes delivered to the staging
    areas, specifically Hope, began to swell into the thousands,
    with relatively few ever moving on to displaced victims. The
    aerial photos of manufactured homes sitting on the runways here
    at Hope became synonymous with failures in FEMA's emergency
    housing program.
        As far as why some of these houses are still here, I think
    it comes into the installation of these homes, and I group the
    installation into three basic areas--local restrictions against
    the placement of manufactured homes, the floodplain issue, and
    the success of the travel trailer program. I think these have
    all impacted the reason that only a small number of
    manufactured homes have been used as emergency housing.
        FEMA's own policies state that travel trailers and
    manufactured homes are used only as a last resort, after all
    other rental housing options are exhausted. And in the case of
    manufactured homes, FEMA's policy states that occupancy permits
    must be obtained and local zoning and building codes must be
    followed.
        As far as local building codes go, and zoning ordinances,
    many cities use zoning ordinances to restrict the placement of
    manufactured homes in good times, not only in disaster times,
    or to limit their placement to mobile home parks within those
    communities. Before the 2005 hurricanes, FEMA had most recently
    utilized large numbers of manufactured homes as emergency
    housing in the aftermath of the Florida hurricanes. FEMA's
    method of operation there included the acquisition of large
    tracts of land, the development of streets, utilities, and
    other infrastructure, and the delivery of hundreds or even
    thousands of manufactured homes to centralized sites, which I
    believe Mr. Garratt called ``group sites,'' since known as
    ``Charleyvilles'' or ``FEMA towns.'' What had been envisioned
    as short-term emergency housing soon became longer-term housing
    solutions for displaced victims.
        FEMA's requirements for the development of such ``group
    sites'' often recognize that the process does take time. As a
    matter of fact, a press release on FEMA's website acknowledges
    such in saying, ``The creation of housing facilities is like
    building a small town from scratch. It may take months.''
        The scope and the nature of the development of such
    centralized sites, ``group sites'' as they have been called,
    often breeds public resistance, the ``not-in-my-back-yard''
    syndrome, or NIMBY syndrome, and such public resistance only
    reinforces the prejudices inherent to exclusive zoning
    ordinances that act as barriers to affordable housing.
        Our association would respectfully recommend that the
    Department of Housing and Urban Development, FEMA, and State
    and local governments review their existing policies, their
    guidelines, practices, and regulations with the intent of
    removing barriers that restrict affordable housing, especially
    in future disaster relief situations.
        We have talked a lot about the floodplain issue today. I
    think the floodplain issue has been a very convenient excuse
    for why these houses are sitting at Hope. Assertions that
    manufactured homes cannot be used in a floodplain can be
    refuted by FEMA's own guidelines. FEMA Publication 85 consists
    of 247 pages about installing manufactured homes in
    floodplains, for placement there. Our organization applauds the
    efforts of Congressman Ross and Senator Pryor for the
    introduction of the Hope Housing Act of 2006, and I understand
    it has been reintroduced, with a new bill number, a few days
    ago. Our organization respectfully encourages the immediate
    adoption of this much-needed legislation to provide assistance
    in hurricane areas.
        The use of the travel trailer program has also impacted the
    demand for manufactured homes. According, again, to Inspector
    General Skinner's report from February, FEMA purchased 114,341
    travel trailers. Some 27,000 of those units were purchased off
    the lot from over 300 retail locations, in many cases without
    regard to construction specifications. Only, again, a very
    small percentage of the manufactured homes that were purchased
    were purchased from retailers, and those were held to exacting
    specifications by FEMA.
        Travel trailers, yes, are more easily transported and
    installed on temporary sites than manufactured homes, due to
    their size and their self-contained nature in relation to
    utilities. Such temporary placement of this emergency housing
    is often overlooked by local zoning and building code officials
    because they are seen as temporary. However, also due to their
    size, travel trailers are less suited for long-term habitation
    by families. And I am not aware of any installation guidelines
    for travel trailers in the floodplain from FEMA, or any
    construction standards, that would mirror the specifications
    that are set for the manufactured home industry.
        As far as our organization's recommendations here, we would
    encourage FEMA to make better use of local resources, State
    governments, and State emergency management agencies to
    maintain open lines of communication with those entities and to
    identify potential sites, both group and individual sites, for
    the placement of temporary housing, access to transportation
    providers, qualified installers and other necessary
    technicians, and many resources that are here that could help
    facilitate a faster response.
        As far as the maintenance issue goes, our organization was
    deeply troubled by press accounts from Mr. Skinner's previous
    testimony before this Committee which characterized the homes
    as sinking in mud, their frames bending, and being cannibalized
    for parts.
        We certainly applaud FEMA's public affairs staff for
    opening the facility here to the interested media and quickly
    dispelling the myth that these homes have deteriorated to the
    point that they would be unusable even if they were able to be
    sent to the Gulf Coast.
        We understand that measures are being taken, as the Mayor
    talked about, to maybe look at a long-term facility here at
    Hope. And we certainly applaud that and fully support the idea
    of Hope being used as a permanent or semi-permanent
    distribution facility for FEMA aid.
        As far as the future use of those houses, that is probably
    our primary concern. We believe that if these homes are given
    the opportunity, they will fulfill the mission for which they
    were purchased, and that is temporary housing.
        We understand that a number of homes have been sent to
    Texas and Oklahoma for wildfire relief and that a number of
    homes are currently being sent to Marmaduke and to Fitzgerald
    Crossing in Cross County for relief from tornadoes that hit the
    State earlier this month. And I am certainly encouraged by Mr.
    Garratt's testimony earlier today about the use of housing in
    other areas and other disasters, the 3,000/3,000/5,000 numbers
    that he gave.
        Our organization has asked our Congressional Delegation and
    our Governor's office to seek an organized exit strategy for
    these houses here at Hope, including the following components:
    Expedited delivery of as many homes as possible to displaced
    residents in the affected areas of the Gulf Coast; the
    possibility for eligibility of temporary housing for displaced
    residents who choose to locate outside of the States
    immediately affected by last year's hurricanes; maintenance of
    a manageable number of homes in FEMA inventory for future
    disaster use; and finally, plans for disbursement and disposal
    of excess inventory through the Federal Surplus Property
    system, with the highest priority being given to other public
    uses, including public health facilities, police and fire
    departments, affordable housing applications, and other uses
    for the public good.
        As far as deactivation and disposal, that is probably our
    highest concern, and biggest fear, in that growing public
    pressure and political pressure could result in a wholesale
    auction of homes here at pennies on the dollar to any willing
    buyer. We feel that would cripple an already struggling market
    for manufactured housing in Arkansas and the surrounding
    States.
        A number of concerns arise for us if FEMA decides to
    dispose of these homes in that manner through a GSA auction.
    And in no particular order, these things relate to: The
    licensing of sellers; the auction of homes in Arkansas are
    regulated under State authority; the homes have to be anchored
    and installed in Arkansas under a cooperative agreement with
    HUD; they are subject to warranty requirements; they are
    subject to sales tax; and they are subject to lien and titling
    issues.
        These issues would certainly complicate the disposal of
    these houses in an open-market auction in Arkansas. We fail, as
    an industry and as an organization, to see how the Federal
    Government, if it is unable to override local requirements in
    Louisiana and other affected areas, will be able to dismiss
    Arkansas laws and regulations related to the sale and auction
    of these homes in Arkansas.
        And in conclusion, we certainly appreciate your having the
    hearing here, and your consideration of these issues is very
    important to our industry. It is our sincere hope that the
    majority of the homes purchased by FEMA and the ones here at
    the Hope airport will be used to provide decent, safe, and
    sanitary housing for victims of last year's storms and in
    future disasters.
        Again, we hope that all parties involved can learn from
    successes and failures experienced on all levels in this
    recovery effort. Our organization looks forward to being part
    of the solution.
        Madam Chairman, that concludes my prepared statement, and I
    will be glad to try to answer any questions that you or Senator
    Pryor may have to the best of my ability.
        Chairman Collins. Thank you, and thank you for your
    excellent testimony. I think your caution at the end about
    disposing of some of these manufactured homes is a really
    important one. Generally, the taxpayer recoups only pennies on
    the dollar when surplus property is sold, so it is not a very
    good deal from the taxpayers' perspective. You have also raised
    a very important point about the fairness to the industry
    because of the economic impact of flooding the market with
    these manufactured homes and what the impact would be on the
    manufacturers who participated in good faith, and I think that
    is a good caution for all of us.
        I just have one question that I want to follow up with you
    on, and that is the unique specification that FEMA required for
    the manufactured homes. You mentioned the September 8, 2005,
    solicitation and that the specifications were different from
    models provided for the retail marketplace. Given that
    manufactured homes built for FEMA are designed only for
    temporary use, would commercially available manufactured homes
    be a suitable alternative to meeting housing needs in future
    disasters? I am curious why FEMA came up with a unique set of
    specifications when you have testified that there was an
    inventory already available. What is the issue, from your
    perspective?
        Mr. Harper. And it would strictly be from my perspective.
        Chairman Collins. I understand.
        Mr. Harper. Our product is built to a Federal standard set
    and maintained by the U.S. Department of Housing and Urban
    Development, and within those standards there are thermal zones
    that are geographically scheduled across the country and wind
    standards, wind zones that are geographically scheduled, based
    on your proximity to the Gulf or to the Atlantic Ocean.
        In the requirements that FEMA set forth in the request on
    September 8, 2005, there were some enhancements as far as wind
    and thermal zones to make the houses--in my opinion this is
    what they might have been thinking--more suitable for placement
    within those areas, even though some of the areas where these
    houses would be placed were not in what HUD had designed as
    that specific thermal or wind zone, so there is a little bit of
    confusion--they are not exactly on the same page there, in my
    opinion.
        As far as amenities, I mean the houses that were built have
    no carpet throughout the unit, they are three bedrooms, one
    bath. They are something that you would not find in our market,
    something that we do not generally build, so of course, the
    factories had to go back and retool and get ready to do what
    they were able to do with these houses. But I do feel that
    existing inventory throughout the country could have been
    used--and again, in two instances we have been asked to survey
    for existing inventory. Oddly enough, the first two faxes, I
    believe, we got, or communications on that, had differing
    specifications that we were trying to find in retail inventory
    than what FEMA ended up ordering in the long run.
        So I do not think the communication was really there to
    locate the type of inventory needed. I do feel that something
    should be done in looking at using the existing inventory
    first, rather than purchasing new homes built to different
    specifications, and hopefully save money.
        Chairman Collins. Well, that is why we asked you about
    that. In a previous incarnation, in a previous job, I spent 5
    years in State government, and I was responsible for not only
    the regulations, insurance, banking, and securities, but a host
    of licensing boards, including the Manufactured Housing Board
    of the State of Maine, so I am aware of the standards. It is
    odd to me that FEMA came up with different specifications when
    we already have a department of the Federal Government that
    issues standards for manufactured housing. It seems yet another
    example of the right hand not knowing what the left is doing,
    and it is something that FEMA should take a look at.
        Also, in general, when you require a manufacturer to
    retool, it costs money. Even if the product that you are
    producing is a lesser product, if you will, in terms of the
    amenities that are included, the retooling of the manufacturing
    process is expensive. Stopping a line and making the necessary
    conversions is expensive. I think these are issues that we need
    to communicate further with FEMA on, to see whether this is
    like the infamous chocolate chip cookie many years ago, where
    the government had specifications that greatly increased the
    cost and finally switched to buying off-the-shelf chocolate
    chip cookies and found that they served just fine and were a
    much more efficient and cheaper way of doing business. So thank
    you for your testimony on that.
        Mayor, just one question for you. I have read a couple of
    press stories that reported that FEMA was either unable or
    unwilling to accept manufactured homes that were delivered to
    Hope that were either damaged en route or did not meet
    specifications. I would certainly understand why FEMA would not
    want to take delivery of damaged homes or homes that did not
    meet the specifications, but these reports have also indicated
    that in some cases the manufactured homes were stored in rest
    areas or beside highways until repairs or alterations could be
    made, clearly not a good situation for the communities
    involved. Has this been a problem for your community?
        Mayor Ramsey. That is a little bit out of my purview, but
    what I know about that, they would not accept them on the site
    until they are ``mission ready.'' And of course, some of these
    mobile homes came great distances, and coming down Interstates,
    they lost shingles and they lost siding, so it was the
    manufacturers that were basically leasing space from private
    individuals or companies to pre-stage these mobile homes to get
    them mission ready to accept them onto the site here at Hope.
    It sort of sprung up as a cottage industry, so to speak, for
    some of the landowners in about a 50-mile radius of Hope.
        Chairman Collins. Thank you. Senator Pryor.
        Senator Pryor. Thank you. Mayor, let me just say that I
    want to thank you for your public service, and I know that you
    have worked very hard, along with the City, to meet the needs
    of the Federal Government and FEMA, and you have accommodated
    them by modifying contracts and meeting them at odd hours and
    doing all the things that you have done, so we really
    appreciate that. And I know that the City of Hope and Hempstead
    County and its communities are very proud to help in the effort
    to bring relief to hurricane victims.
        And I also noticed, thanks to Mike Ross pointing out, a few
    faces in the crowd. Sheriff Jerry Crane has been here, County
    Judge Wallace Martin, and Supreme Court Justice Jim Gunter. And
    so we want to thank them for being here. And of course, Todd
    Burrow of the Hope Star, who kind of helped break this story
    statewide and nationally, I thank him for being here and
    covering this hearing as well.
        Let me ask, if I may, Mr. Harper, about the standby
    contracts? Does that ring a bell for you? Can you tell the
    Committee about standby contracts under the previous FEMA
    administration?
        Mr. Harper. Probably a question that could have been
    addressed by Mr. Garratt as well, but it is our understanding
    from our member manufacturers that under a previous
    Administration, and previously under FEMA, standby contracts
    would be solicited prior to the hurricane season coming about,
    in that FEMA would say, ``These are the type of units we want
    built,'' solicit the bids from the manufacturers, and hold
    those bids until such time as the homes were needed.
        Senator Pryor. Is it your understanding that in these
    hurricanes last year there were brokers and third parties that
    were being used to do this purchasing?
        Mr. Harper. It is my understanding that FEMA purchased the
    manufactured housing in two specific ways: Either directly from
    manufacturers or from the third parties that contracted with
    the manufacturers for the building of the homes.
        Senator Pryor. And also, do you know, do you have any
    knowledge of how long the industry was given to try to get
    information back to FEMA or respond to requests for proposals?
        Mr. Harper. The fax that I have that came from the FEMA
    purchasing office gave out the specifications for these homes
    on September 8, 2005, and required the bids to be back on
    September 9, 2005.
        Senator Pryor. Twenty-four hours?
        Mr. Harper. Less than.
        Senator Pryor. Let me ask, if I may, about the wind
    protection. I know that one of the FEMA requirements is to make
    these homes sturdier for wind protection. As I understand it,
    that is just a matter of adding straps or somehow in the
    manufacturing process just adding something fairly inexpensive
    to the homes. Is that right or not?
        Mr. Harper. To a degree, Senator. There is a full section
    under the HUD standards that deals with wind storm protection.
    It deals with not only the way that the walls and floors are
    affixed to each other, but in certain zones it will also bring
    out different types of exterior treatments, and also anchoring
    and installation requirements.
        Senator Pryor. Scott MacConomy, please put up Table 4,\1\
    which one of the previous witnesses had, and I am sure you saw
    it a few moments ago when they had this up. This is an
    estimated cost for the life cycle of a travel trailer. Now, I
    assume that travel trailer, is that a manufactured home or is
    that actually the trailer? That is the trailers, OK. Are these
    figures consistent with a mobile home in terms of how much it
    is to haul them and install them, how much it is to maintain a
    mobile home?
    ---------------------------------------------------------------------------
        \1\ Table 4 appears in the Appendix on page 74.
    ---------------------------------------------------------------------------
        Mr. Harper. This is the first time that I saw these
    figures, Senator, and I think they came from the Inspector
    General's office, so I think that question would probably be
    better posed to him.
        Senator Pryor. And let me ask if you know this. When a
    typical consumer buys a mobile home, how much does it cost him
    to have it installed--and I am not talking about the travel
    because I understand that is going to be a per-mile charge, but
    to get the site prepped, how much does that actually cost? On
    average. And I know it is different, but on average.
        Mr. Harper. It is different, based on different sites and
    based on different conditions and different types of financing
    that are going to be used. If the home is going to be
    permanently installed, with a permanent foundation, footings,
    and those sorts of things, but the average, industry average is
    going to run somewhere between $4,000 to $6,000.
        Senator Pryor. Per unit?
        Mr. Harper. Per unit.
        Senator Pryor. All right. My last question is just a
    general mop-up type question in that, you have sat through this
    entire hearing, heard a lot of things asked and heard a lot of
    things being said. Before we close here, is there anything you
    would like to address or you would like to follow up on or
    clarify from other witnesses' testimony or maybe a question
    that we missed?
        Mr. Harper. I tried to incorporate some of the things that
    I heard in the other witnesses' testimony in my review or
    summary of my comments, and I think everything was pretty well
    covered, Senator. Again, I did touch on Mr. Garratt's comments
    about site development, and I think that is something that
    certainly needs to be addressed in a disaster-preparedness
    mode. For instance, after the mass exodus of people from the
    hurricane areas came to Arkansas, we coordinated with the
    Governor's office here under their Katrina Assistance Relief
    Effort, or KARE program. And we surveyed our members in the
    State to find available individual sites in manufactured home
    communities and parks and available inventory for purchase
    here. We felt that was a good step in our direction for helping
    on the local level. We feel that needs to be expanded to other
    States and other regions. In my conversations with my
    counterparts in Louisiana, Mississippi, and Alabama, they feel
    the same, that there needs to be more coordination before the
    disaster in order to make a better response afterward.
        Senator Pryor. Thank you. Thank you, Madam Chairman.
        Chairman Collins. Thank you. I want to thank this panel of
    witnesses for their help today, and I want to thank all of our
    witnesses for giving us a better understanding of the situation
    with temporary housing. Our intent is not only to find out what
    went wrong with the response to and recovery from Hurricane
    Katrina, but also to ensure that we can put in place the
    necessary reforms as we go forward with the 2006 hurricane
    season, or respond to other disasters, whether they are natural
    or man made.
        This represents the 22nd hearing that the Committee has
    held. It has been a very valuable hearing. Our Committee has
    heard from 85 witnesses. We have formally interviewed 320 other
    individuals, and we have reviewed some 820,000 pages of
    documents. This has been a very comprehensive investigation,
    and I think it is appropriate that our last hearing is not in
    Washington, DC, but rather out where we can talk to people who
    have taken in the victims of the storm and who are seeking to
    assist them.
        I very much appreciate all of the cooperation, and I am
    grateful to Senator Pryor for suggesting this hearing, and I
    really want to thank our hosts here at the University of
    Arkansas Community College at Hope for being so gracious and
    helping us meet all of our many needs today. Thank you again,
    very much.
        This has been my first visit to Arkansas, but I certainly
    hope that it will not be my last. How appropriate that my first
    visit is to a city called Hope. Thank you very much for your
    hospitality. The hearing record will be held open for 5 days
    for the submission of additional questions or statements or any
    other materials. Senator Pryor, do you have any concluding
    comments?
        Senator Pryor. I do not, other than just to thank you again
    for being here and doing this hearing here. It means a lot to
    the folks in Hope, and hopefully it will help us be more
    prepared. Thank you.
        Chairman Collins. Thank you. This hearing is now adjourned.
        [Whereupon, at 1 p.m., the Committee was adjourned.]

                                A P P E N D I X

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