[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.
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    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.
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    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.
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    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.
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    \1\ The prepared statement of Mayor Ramsey appears in the Appendix 
on page 75.
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    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\
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    \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.
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    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?
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    \1\ Table 4 appears in the Appendix on page 74.
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    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.]


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