[Senate Hearing 110-302]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-302
 
               BEYOND TRAILERS: CREATING A MORE FLEXIBLE,
                 EFFICIENT, AND COST-EFFECTIVE FEDERAL
                        DISASTER HOUSING PROGRAM

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

                                HEARING

                               before the

                AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 24, 2007

                               __________

        Available via http://www.access.gpo.gov/congress/senate

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


                    U.S. GOVERNMENT PRINTING OFFICE
35-527                      WASHINGTON : 2008
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092104 Mail: Stop IDCC, Washington, DC 20402ï¿½090001

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


                AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                 MARY L. LANDRIEU, Louisiana, Chairman
THOMAS R. CARPER, Delaware           TED STEVENS, Alaska
MARK L. PRYOR, Arkansas              PETE V. DOMENICI, New Mexico

                     Donny Williams, Staff Director
                Chip Abernathy, Minority Staff Director
                        Amanda Fox, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Landrieu.............................................     1
    Senator Stevens..............................................     5
    Senator Pryor................................................     6

                               WITNESSES
                        Tuesday, April 24, 2007

David E. Garratt, Acting Assistant Administrator, Disaster 
  Assistance Directorate, Federal Emergency Management Agency, 
  U.S. Department of Homeland Security...........................     8
Robert P. Hebert, Director of Hurrican Recovery, Charlotte 
  County, Florida................................................    10
Sheila Crowley, Ph.D., President and Chief Executive Officer, 
  National Low Income Housing Coalition..........................    12
William J. Croft, Director of Response and Recovery, The Shaw 
  Group, Inc.....................................................    15
Matthew A. Jadacki, Deputy Inspector General for Disaster 
  Assistance Oversight, U.S. Department of Homeland Security.....    24
Gil H. Jamieson, Associate Deputy Administrator, Gulf Coast 
  Recovery, Federal Emergency Management Agency, U.S. Department 
  of Homeland Security...........................................    26
Major General John R. D'Araujo, Jr., (U.S. Army-Retired), Former 
  Primary Selecting Official, Alternative Housing Pilot Program, 
  Federal Emergency Management Agency, U.S. Department of 
  Homeland Security..............................................    27
Andres Duany, Founding Principal, Duany Plater-Zyberk and Company    29
John Badman III, Founder and Chief Executive Officer, RE: Formed 
  Systems, Inc...................................................    32

                     Alphabetical List of Witnesses

Badman, John III:
    Testimony....................................................    32
    Prepared statement with an attachment........................   103
Croft, William J.:
    Testimony....................................................    15
    Prepared statement...........................................    88
Crowley, Sheila, Ph.D.:
    Testimony....................................................    12
    Prepared statement with attachments..........................    56
D'Araujo, Major General John R., Jr.:
    Testimony....................................................    27
    Prepared statement...........................................    99
Duany, Andres:
    Testimony....................................................    29
    Prepared statement...........................................   102
Garratt, David E.:
    Testimony....................................................     8
    Joint prepared statement with Gil Jamieson...................    41
Hebert, Robert P.:
    Testimony....................................................    10
    Prepared statement...........................................    50
Jadacki, Matthew A.:
    Testimony....................................................    24
    Prepared statement...........................................    92
Jamieson, Gil H.:
    Testimony....................................................    26
    Joint prepared statement with David Garratt..................    41

                                APPENDIX

Letters submitted for the Record from:
    The National Association of Realtors.........................   114
    Henry J. Rodriguez, President, St. Bernard Parish............   117
    Maria Foscarinis, Executive Director, National Law Center on 
      Homelessness and Poverty...................................   124
    Jonathan T.M. Reckford, CEO, Habitat for Humanity 
      International..............................................   129
    Barbara R. Arnwine, Executive Director, Lawyers' Committee 
      for Civil Rights Under Law.................................   132
    Clovice Lewis, CEO, Advanced Housing Technologies, LLC.......   144
Questions and responses for the Record from:
    Mr. Garratt..................................................   147


                    BEYOND TRAILERS: CREATING A MORE
                FLEXIBLE, EFFICIENT, AND COST-EFFECTIVE
                    FEDERAL DISASTER HOUSING PROGRAM

                              ----------                              


                        TUESDAY, APRIL 24, 2007

                                     U.S. Senate,  
                 Ad Hoc Subcommittee on Disaster Recovery  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:30 a.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Mary 
Landrieu, Chairman of the Subcommittee, presiding.
    Present: Senators Landrieu, Pryor, and Stevens.

             OPENING STATEMENT OF CHAIRMAN LANDRIEU

    Chairman Landrieu. Good morning. The Subcommittee on 
Disaster Recovery will come to order. I thank my colleagues 
Senator Stevens and Senator Pryor for joining us this morning, 
and I thank the panels for being available.
    We have two excellent panels to talk about a very important 
aspect of the recovery, which is housing, but transitional and 
temporary housing, some of the problems associated with 
trailers and some of the options that we have for moving to a 
more effective procedure.
    Before we start, I will give a brief opening statement and 
then ask my colleagues to join me, and then I would be happy to 
hear the testimony from the panelists assembled.
    One of the quotes that I came across which was stirring to 
me was one by Mary Comerio, a professor of architecture at the 
University of California, Berkeley, who studied disaster 
recovery agrees, noting, ``The U.S. is facing a situation 
similar to what many developing countries have faced after 
massive disasters: How to house large displaced populations. 
The solution is often to lay down as many units of housing in a 
grid as quickly as possible. This is great for politicians and 
terrible for the people who end up living there.''
    Another quote that caught my attention was, ``Katrina 
taught us much about ourselves, but for all that New Orleans 
lays claim to eccentric ways and a special place in our 
culture, it is at heart an American city--a great American city 
now testing the greatness of America to save it for and from 
itself.''
    As I have said many times, this disaster did not affect 
just New Orleans. It just happens to be the largest city that 
was affected, a city that once had 460,000 people that today is 
housing less than 200,000.
    The Federal Disaster Housing Program, in my view, is 
inflexible, wasteful, and unimaginative. It is a program full 
of inefficient provisions that cause difficulties to disaster 
victims and cost taxpayers millions of dollars. In Hurricane 
Katrina, 205,000 homes were completely destroyed in Louisiana 
and 68,729 in Mississippi, displacing nearly 605,000 people. 
Estimates show as much as $82 billion in property damage, with 
insured losses exceeding $40 billion. Then 4 weeks later, 
Hurricane Rita made landfall near Texas and Louisiana, causing 
approximately $10 billion in estimated damage, destroyed 23,600 
homes.
    The Trailer Program makes trailers available to eligible 
applicants as soon as they are shipped and installed. The 
program is designed to last 18 months, but that time period is 
allowed to be extended if the President decides to do so. In 
February, the 18-month deadline passed. President Bush extended 
it for 6 months. That obviously may be too short to deal with 
the situation that we are dealing with now.
    Disaster assistance is delivered through provisions in 
Section 408 of the Stafford Act, which addresses intermediate 
or transitional housing. Obviously, there are many problems, 
one of which is it is capped at $26,000 per family, regardless 
of whether you are a family of one or a family of ten, which 
makes virtually no sense.
    Today there are 9,412 people in Louisiana and 557 people in 
Mississippi receiving direct assistance and rentals. There are 
56,000 people in Louisiana in trailers and 27,000 in 
Mississippi in trailers. There have been significant problems 
with the management of this program, which range from site 
locations to multiple trailer parks to the situation in 
Arkansas, which I am sure my colleague, Senator Pryor, will 
address, trailers deteriorating in an open field at a great 
waste to taxpayers, and frustrating to all those trying to find 
appropriate housing and shelter for people in such desperate 
need. It is obvious to me that this transitional housing 
program is grossly flawed. It needs to be basically completely 
rewritten.
    So the first panel will address the current program. On the 
second panel, we will hear from former Federal officials 
associated with the program that we asked to test out some new 
and alternative models and what happened when this directive 
went to the Executive Branch.
    I will submit the rest of my statement for the record, and 
I will just end with, we have got a popular saying in the 
South: ``You can put lipstick on a pig, but it is still a 
pig.'' You can put porches or air conditioning in a trailer, 
but if it is still on wheels, it is still a trailer, and we 
need to talk about how to get a better system of temporary and 
transitional housing for the hundreds of thousands of people 
that are desperate for us to get it right.
    [The prepared statement of Chairman Landrieu follows:]

                  PREPARED STATEMENT SENATOR LANDRIEU

    Today we will talk about perhaps one of the most pressing of 
disaster recovery issues: Disaster housing. The 2005 hurricane season 
exposed our methods and approaches as narrow-minded and uncreative. It 
became clear--quickly--that America has not taken the time to truly 
consider what can happen when an even larger catastrophe strikes and 
millions of individuals are forced from their homes indefinitely.
    In Hurricane Katrina, 205,330 homes were destroyed in Louisiana and 
68,729 in Mississippi, displacing nearly 605,000 people. Estimates show 
as many as $82 billion in property damage with insured losses exceeding 
$40 billion. Then, to add insult to injury, Hurricane Rita displaced 
many of those same people again. Hurricane Rita made landfall near the 
Texas and Louisiana Border causing approximately $10 billion in 
estimated property damage. Hurricane Rita created and caused 
significant damage from Alabama to eastern Texas and caused flooding in 
some areas of Louisiana that had seen flooding from Hurricane Katrina 
about a month earlier. Hurricane Rita severely damaged or destroyed 
more than 23,600 housing units in Southwest Louisiana and Southeast 
Texas. The storms of the 2005 hurricane season brought about perhaps 
the greatest housing challenge faced in this country's history.
    As the levees broke and our communities filled with water, people 
had to wade out of their homes, taking whatever belongings they could 
physically carry with their hands, and loading their elderly relatives 
on makeshift rafts. As these people tried to reestablish their lives, 
they made their homes temporarily with relatives, with friends, in 
hotels, and on cruise ships. Then, they were told, they would be given 
FEMA trailers. The trailer program makes trailers available to eligible 
applicants as soon as they are shipped and installed. The program is 
designed to last 18 months, but that time period is allowed to be 
extended if the President decides to do so. In February, the 18 month 
deadline passed and President Bush extended it for 6 months--a 
ridiculously short amount of time for a disaster recover expected to 
last another 10 years.
    Disaster housing assistance is delivered through provisions in 
Section 408 of the Stafford Act, which addresses intermediate- to long-
term housing needs. Section 408 assistance is referred to as the 
Individual and Households Program (IHP), which provides both financial 
and direct assistance to approved applicants.

      IHP's financial assistance provides up to $26,200 for 
home repair, home replacement, and
      ``Other Needs Assistance,'' which includes replacing 
clothes, TV's, furniture etc.

    That $26,200 cap also includes rental payments for individuals 
unable to remain in their homes following a disaster. IHP's direct 
assistance program enables the President to provide dwellings for 
individuals and has traditionally used trailers and mobile homes as the 
model.
    According to a March 25th FEMA document:

      Rental assistance is being provided to:
        9,412 people in Louisiana and
        557 in Mississippi.
      Direct assistance in the form of trailers and mobile 
homes is being provided to:
        56,668 people in Louisiana and
        27,198 in Mississippi.

These are still huge numbers nearly 2 years away from the storms.
    There have been significant problems with the management of FEMA's 
trailer program, which range from problems locating sites for multi-
trailer ``parks'' for large groups of disaster victims, to problems 
maintaining the parks, to issues with utility hook ups, and as in 
Arkansas, problems with FEMA's storage of thousands of trailers which 
are wasting away.
    To be sure, FEMA housed a historic number of individuals through 
its trailer program. Because of Hurricane Katrina's devastation, FEMA 
made the decision on August 31, 2005, to procure 20,000 manufactured 
housing units, for approximately $1 billion, to address anticipated 
housing needs and planned to purchase over 100,000 units. By September 
6, 2005, FEMA's priority issues in Louisiana were stabilizing shelter 
operations and food distribution; in Mississippi it was supporting 
shelters and the relocating of evacuees as well as identifying 
emergency group sites for travel trailers; and in Alabama it was 
coordinating the installation of travel trailers on individual private 
sites and developing group sites. FEMA began moving approximately 5,000 
manufactured homes from its inventory to staging areas, had 60,000 
travel trailers being produced at the rate of approximately 120 per 
day, and awarded a contract for 1,500 modular structures. The first 
family to be placed in a travel trailer occurred 12 days after the 
disaster was declared, but it would be hundreds of days before large 
numbers began to be moved.
    FEMA experienced difficulty in identifying acceptable sites to 
place units and was slow in identifying applicants to occupy units. For 
example, several sites initially identified by FEMA in Louisiana to 
place multiple units were not well coordinated with local officials, 
and local officials determined placement was not acceptable. Because of 
their lack of planning and preparation, FEMA over purchased 
manufactured homes and they also purchased the wrong type of homes. 
FEMA regulations prohibit using manufactured homes in flood plains; 
therefore, the manufactured homes and modular homes cannot be used 
where most needed, i.e., in parts of Louisiana and Mississippi. In the 
most famous case, due to FEMA's failure to procure the proper types of 
manufactured homes, thousands were left in a lot in Arkansas to rot and 
waste away. Many remain in that same spot as we speak.
    Before Hurricanes Katrina and Rita, housing 40,000 individuals in 
trailers was a record number and had pushed FEMA to its limits. 
However, after the storms of 2005, over 120,000 were needed.
    We have invited Dave Garratt, the acting FEMA official in charge of 
this program. We will ask him to address some of the concerns that have 
become apparent through press articles and other reports of issues and 
concerns facing the program participants. We will also ask that he 
provide a report on the progress of the development and implementation 
of the National Disaster Housing Strategy and the Individuals and 
Households Pilot Program, both created as part of the Homeland Security 
Appropriations Act of 2007 enacted late last year. We will hear from 
Henry ``Junior'' Rodriguez, President of St. Bernard Parish, who will 
provide a State perspective. He will talk about his experiences with 
FEMA and the program, specifically as it relates to trailers. We will 
also hear from Sheila Crowley of the National Low Income Housing 
Coalition (NLIHC) who has been an advocate for disaster victims 
receiving this assistance. The NLIHC worked hand and hand with the 
Lawyers Committee on Civil Rights, who brought a suite against FEMA 
that resulted in FEMA restarting benefits to some of the individuals 
who lost their assistance in the transfer from Section 403 to Section 
408 assistance. Lastly, we will hear from Bill Croft of the Shaw group 
who will talk about trailer management from the industry/contractor 
point of view.
    After the storms, Congress began to look for ways to provide more 
flexibility for disaster housing. In an attempt to explore new models 
for transitional housing, in the fourth emergency supplemental 
appropriations bill last year, the Congress created the Alternative 
Housing Pilot Program (AHPP). This program was created with the 
specific purpose to better serve the housing needs of homeowners 
displaced by Hurricanes Katrina and Rita and, at the same time, to spur 
new alternatives to the trailer housing traditionally deployed by FEMA 
following such disasters. The program received $400 million which was 
to go to the ``hardest hit areas'' from the 2005 hurricanes with the 
goal both to provide immediate housing for victims of Hurricanes 
Katrina and Rita and to allow FEMA to look beyond its existing model, 
which only allows for temporary housing projects.
    The program was created with these goals in mind and was given a 
sizable amount of funding with which to fully explore innovative and 
different ways to move away from the standard FEMA approaches. 
Unfortunately, it is not clear that this has been the result. That is 
why we are holding this hearing today--to see if the goals Congress set 
have been met, to ensure that FEMA is utilizing the taxpayers' funds 
effectively, to encourage FEMA to fully explore the best new ways to 
provide immediate housing to provide significant benefits and immediate 
housing for our Gulf Coast residents.
    At this point, let me state for the record that I believe FEMA 
failed miserably in effectively utilizing this $400 million and this 
one-time exemption from Stafford Act regulations. FEMA was consistently 
contacted by Members of Congress to ensure that the AHPP was not a 
wasted opportunity and I submit for the Record six letters to FEMA from 
the Louisiana Congressional delegation on this issue. I should note 
that the first of these letters was sent on July 7, 2006--at least 3 
months before FEMA issued its guidelines for the program. I would also 
like to submit for the record three letters from FEMA.
    FEMA took an opportunity to ``think outside the box'' and instead 
created a program that was flawed from the start. First, FEMA created 
the AHPP as a competitive grant program, which under normal 
circumstances should allow the best proposals to win out. However, FEMA 
did not cap individual awards for the program, allowing for the 
possibility, however remote it might have seemed at the time, of a 
``winner-take-all'' program. Second, with very vague guidelines, the 
agency gave States 35 days to develop as many project proposals as they 
wanted to submit by October 25, 2006 deadline. For a massive $400 
million program, and the fact that they were asking for new, innovative 
proposals this seems to many, including myself, as a very short 
timeframe in which to fully develop substantive proposals. I am aware 
that the State of Louisiana requested an extension of this short 
deadline, but was declined by FEMA.
    Next, after all the States submitted their proposals, 29 in total, 
FEMA convened an AHPP Review Panel in Denver, Colorado in November 2006 
to review and rank the various proposals. I am pleased that Mr. Duany 
is here today because when I think of someone who should have been on 
this panel, I think of experts like him who can really ``think outside 
the box'' and bring a wealth of expertise to the table. Not to sell 
FEMA or DHS staff short, but when I think of new and innovative 
housing, I do not picture FEMA as being at the cutting edge of new 
housing alternatives. However, on this panel in Denver, FEMA and DHS 
comprised seven of the eight Federal panelists, with only three outside 
experts. To be fair, the outside experts were a State government 
housing official and experts in architecture and construction from the 
private industry but the panel was clearly weighted towards Federal 
officials. This begs the inevitable question--``If you are looking for 
ways to move beyond FEMA trailers, why in the world would you have most 
of the people who create and use FEMA trailers score proposals?''
    Lastly, as I have indicated this panel, compromised of mostly 
Federal officials, ranked and scored the 29 proposals. In the final 
rankings of these new and different proposals, it just so happens that 
the panel ranked a proposal No. 2, a proposal which by FEMA's own 
documents is described as:

        ``Similar to FEMA's travel trailers with enhancements such as 
        an air conditioned attic for additional storage, Energy Star 
        HVAC system, no roof penetrations, rot/mold/moisture resistant 
        materials, and a front porch. . . . Similar to travel trailers 
        the Park Model will remain on wheels permanently.''

    I would like to submit this document for the Record. We have a very 
popular Southern saying that ``You can put lipstick on a pig, but it is 
still a pig.'' Well, this ``pig'' just happened to request $400 
million--the entire allocation for AHPP! So you have a panel comprised 
mostly of Federal officials and few outside experts, it is not 
surprising they liked a proposal to put air conditioners or porches on 
FEMA trailers! However, I believe that does not meet the intent of 
Congress for this program and, in the end, the decision to fund five of 
the top six competitive proposals, including $275 million for this one 
project, limited the ability to fully explore more competitive 
proposals. This decision, made by one official alone, led to over 70 
percent of the funds going mostly to two proposals when another option 
on the table would have funded 10 total proposals. It effectively 
sucked up all the funds which could have gone to an additional five 
proposals in the competitive range.
    So from the start, this program was flawed and I believe that the 
end result, the final allocations of funding is in itself flawed. There 
was not enough time to truly come up with innovative proposals, FEMA 
did not have enough outside expertise on the panel to critically judge 
the new alternatives on the table, and one person was allowed to make a 
critical $275 million decision. I am hopeful that, out of the five 
``winning'' proposals, some great new alternative housing models will 
come out. The residents of the Gulf Coast, as well as those impacted by 
future disasters, deserve nothing less.
    With that, I turn to my colleagues for their opening statements.

              OPENING STATEMENT OF SENATOR STEVENS

    Senator Stevens. Thank you very much, Madam Chairman. I 
would ask to put my opening statement in the record, and I have 
two questions I would like to submit for the record. But I have 
a conflict at 10 o'clock in the Commerce Committee. That was 
set before this one. I will have to leave soon. I appreciate 
it.
    Chairman Landrieu. Correct.
    Senator Stevens. Thank you.
    [The prepared statement of Senator Stevens follows:]

                 PREPARED STATEMENT OF SENATOR STEVENS

    Hurricane Katrina is the largest natural disaster the United States 
has ever faced. Given both the extensive and intensive nature of the 
damage, our ability to provide emergency housing, among other services, 
was pushed to its limit.
    When a system is put under this kind of stress, one of the most 
useful things we as a Nation can do is to critically examine our 
response and to determine how we can better address our needs in the 
future. It is one of the things we do best. I hope we can begin that 
self-examination process here today by looking at our response to the 
Hurricane Katrina created housing needs throughout the Gulf Coast 
region and by beginning to identify where we need to change our 
response methodology.
    In particular, I want to hear more about the possible replacements 
to traditional FEMA trailers that are supposed to be developed through 
the Alternative Housing Pilot Program. I do not need to tell you that 
those trailers would not work in Alaska or any number of places in the 
lower 48 that experience severe winter conditions. Furthermore, we all 
know that trailers are useless where there are no roads, whether that 
location is bush Alaska where the nearest road may be hundreds of miles 
away, or a barrier island on the East Coast cut off by the destructive 
force of a hurricane. I want to know if these needs are being 
addressed.
    This Alternative Housing Pilot Program is our first attempt at 
making our overall disaster housing program more responsive to the 
actual needs of our fellow Americans and, even though the program has 
just started, we need to examine whether we are going to get a true 
alternative to trailers for our $400 million.
    I look forward to hearing from the Federal officials who administer 
both the current housing program and the new alternative program, but 
more importantly we need to hear from the beneficiaries of these 
programs as to what kind of real benefit they are actually receiving.
    In conclusion, I look forward to learning more about the problems 
we faced and are still facing after Hurricane Katrina and how we are 
changing our response system to ensure that FEMA will better provide 
for our housing needs both for this disaster and future ones.

    Senator Pryor.

               OPENING STATEMENT OF SENATOR PRYOR

    Senator Pryor. Thank you, Madam Chairman. It is an honor to 
serve on this Subcommittee with you. Like Senator Stevens, I 
have a conflict, and will not be able to stay for the duration 
of the hearing. But I do want to thank you and Senator Stevens 
for your leadership on this issue. I know that you have given 
me some flexibility here to make the opening statement, and I 
appreciate that.
    The aftermath of Hurricane Katrina revealed gaps in 
disaster response planning at all levels of government. I think 
this hearing is an important step in analyzing a way forward. 
Creating a more flexible emergency housing program will 
increase our ability to respond to catastrophic events in a 
timely and constructive manner.
    As you know, concerns have surfaced regarding FEMA's 
purchase of over 10,000 mobile homes and travel trailers in the 
wake of Hurricane Katrina. These homes were purchased at 
higher-than-market prices in a haphazard competitive bidding 
process. Since that time, they have been used inefficiently. 
Almost 8,000 of them are still sitting at the airport in Hope, 
Arkansas, nearly 2 years after the storm. Miscalculation on 
this scale must not be repeated.
    I believe we should closely examine the way the Federal 
Government surplus travel trailers and mobile homes are being 
used today. On February 24, an F3 tornado in Arkansas destroyed 
a large part of the city of Dumas in Desha County. In this 
small town of only 5,300 people, the level of damage was 
immense. Arkansans affected by the storm have already begun the 
process of rebuilding their community. The Federal, State, and 
local government have some responsibility to assist them to the 
extent necessary.
    However, on March 8, FEMA declined to declare a tornado-
ravaged area in Arkansas a Federal disaster area despite 
multiple phone calls and letters from myself, Governor Beebe, 
and the entire Arkansas delegation. This decision took FEMA 12 
days, and it revealed a troubling aspect of the organization's 
decisionmaking process. The fact is that FEMA does not have 
standardized criteria in place to determine when a region meets 
the requisite level of damage for an emergency declaration.
    When pressed by the Arkansas congressional delegation, FEMA 
released 30 mobile homes and travel trailers for use by 
residents in Dumas. This was a good first step, but it did not 
go far enough. Senator Lincoln, Congressman Ross, and I also 
called on the Small Business Administration to make a disaster 
declaration for the purpose of making long-term low-interest 
loans available to small businesses that sustained physical and 
economic losses from the tornadoes. The SBA met our request, 
and I commend the SBA for their support and their rapid 
response.
    Finally, excess travel trailers and mobile homes pose a 
serious risk to the mobile home market nationwide. My office 
has been given several different explanations as to what will 
happen to these trailers and mobile homes. I hope that the 
process of disposing of these homes can be explained. Any 
action that would, in effect, collapse the mobile home market 
and travel trailer market in any region is of concern.
    Now, unfortunately, I cannot stay today, but I am going to 
submit a number of questions for the record. More or less they 
focus on two broad areas: One is the disposal of surplus 
property and what our policy currently is and what the best 
public policy should be; and second is contracting problems. We 
saw a lot of contracting issues in the aftermath of Hurricanes 
Katrina and Rita and other natural disasters, and I have some 
questions I will submit for the record that relate to those.
    Thank you, Madam Chairman.
    Chairman Landrieu. I thank both of my colleagues for 
joining us this morning, and they will stay as long as they 
can. They both have conflicting meetings, which sometimes 
happens here, but they have both been excellent in their 
contributions thus far to this Subcommittee, which just started 
2 weeks ago.
    Our first panel is comprised of four expert witnesses. 
David Garratt is responsible for the Federal Government's Major 
Disaster Assistance Program and Policies, including the Public 
and Individual Assistance Program. Mr. Garratt, you are the one 
that runs this program that has come under such questioning by 
this Subcommittee and many others.
    Robert Hebert is the Director of Hurricane Recovery and 
Community Initiatives for Charlotte County, Florida. After 
being impacted by several of the 2004 hurricanes that swept 
across Florida, which sometimes gets left out in our 
discussions--which should not because Florida was extremely 
hard hit in the last several years--Charlotte County became 
home to thousands of FEMA trailers which housed victims of the 
disaster. A remote site near the airport became known as 
``FEMA-ville.'' It revealed many problems that can occur, but 
Mr. Hebert utilized his diverse background in disaster recovery 
and business development to help fill some critical gaps. He is 
here to tell his story.
    Sheila Crowley is a Ph.D., President and Executive Officer 
of the National Low Income Housing Coalition. Welcome. She is a 
trained social worker and adjunct faculty member, Virginia 
Commonwealth University. She teaches social policy and social 
justice. Currently, she is President of the National Low Income 
Housing Coalition, where she has helped lead the advocacy 
effort for people with low income who were displaced by the 
hurricane.
    And, finally, William Croft, Director of Response and 
Recovery for the Shaw Group, which is one of our largest 
contractors, served as Director of Hurricane Katrina Housing 
Task Force following actually for Hurricanes Katrina and Rita. 
Prior to that role, he served for decades in the U.S. Army and 
went on to become Assistant Director for the Louisiana Office 
of Emergency Preparedness. He is going to share his perspective 
from the Shaw Group.
    So why don't we begin with you, Mr. Garratt. We have asked 
you to keep your statement to about 3 to 5 minutes, if you 
would.

      TESTIMONY OF DAVID E. GARRATT,\1\ ACTING ASSISTANT 
    ADMINISTRATOR, DISASTER ASSISTANCE DIRECTORATE, FEDERAL 
   EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Garratt. Thank you. Good morning, Madam Chairman, 
Senator Stevens, and Senator Pryor. It is a pleasure to be here 
with you today to discuss the elements and responsibilities of 
FEMA's temporary housing mission, our progress in addressing 
the temporary housing challenges facing the Gulf Coast, and the 
status of some key housing initiatives.
---------------------------------------------------------------------------
    \1\ The joint prepared statement of Mr. Garratt and Mr. Jamieson 
appears in the Appendix on page 41.
---------------------------------------------------------------------------
    First, a brief overview of our housing authorities. Under 
Section 408 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, FEMA is authorized to provide 
individual and household assistance to the eligible victims and 
families of Presidentially declared emergencies and disasters. 
Broadly speaking, this assistance falls into two general 
categories: Housing assistance and other needs assistance. 
Housing assistance authorized under the Stafford Act includes 
financial rental assistance, home repair assistance, home 
replacement assistance, and direct housing assistance, the last 
usually provided in the form of transportable, manufactured 
housing. Direct housing is only provided as a last resort, when 
other forms of alternative housing are either unavailable or 
practically unworkable. Other Needs Assistance authorized under 
the Stafford Act includes financial assistance to address 
disaster-related medical and funeral expenses, replace eligible 
personal property items, provide transportation, help with 
moving and storage expenses, and meet other serious needs faced 
by eligible disaster victims.
    The Stafford Act as currently written caps the amount of 
financial assistance, but it allows that amount to be adjusted 
annually for inflation. Financial assistance for disasters 
declared during fiscal year 2007 is capped at $28,200; however, 
for victims of Hurricanes Katrina and Rita, which were declared 
in fiscal year 2005, that cap is $26,200. This is the maximum 
amount of non-direct assistance any eligible disaster victim, 
or household, can receive in a given disaster.
    In response to Hurricanes Katrina and Rita, FEMA has 
provided over $7.5 billion in financial assistance to over 1 
million households through its Individual Assistance programs. 
This includes over $5.3 billion in housing assistance and $1.7 
billion in other needs assistance. These numbers include: $2.3 
billion of rental assistance, distributed to over 870,000 
households. As of March 25, 2007, 32,885 households continue to 
receive some form of rental assistance payment.
    Provided over $436 million in home repair payments, helping 
make more than 185,000 Hurricane Katrina- or Hurricane Rita-
damaged homes habitable across the Gulf Region.
    Provided more than $339 million to over 33,000 households 
to assist them with the purchase of replacement housing.
    In Louisiana alone, approximately $5.5 billion has been 
provided to individuals and families under our Individual 
Assistance programs, with more than $270 million distributed 
since the 1-year anniversary of Hurricane Katrina.
    Under the authorities granted to us by the Stafford Act, 
FEMA can provide direct housing support to eligible victims and 
households either through the lease of existing housing 
resources, such as apartment buildings, or through the 
provision of manufactured housing units, such as travel 
trailers and mobile homes. Following Hurricanes Katrina and 
Rita, both options were employed. Direct leases were secured to 
provide housing to eligible evacuees outside the impacted area, 
and manufactured housing was provided within the most heavily 
damaged areas of Louisiana, Mississippi, Alabama, and Texas. 
While manufactured housing, particularly travel trailers, do 
not offer all the amenities of a fixed housing resource, they 
nevertheless allow disaster victims who lack alternative 
options to remain in their communities and close to their jobs, 
families, and schools, while they pursue a permanent housing 
solution.
    Over the course of the last 20 months, FEMA has housed more 
than 120,000 households in travel trailers and mobile homes. As 
of April 12, the total number of households currently living in 
temporary housing has decreased to 83,463, including 54,986 in 
Louisiana and 26,181 in Mississippi. Eighty-one percent of our 
temporary housing units are on private sites where individuals 
are rebuilding their homes.
    However, while we have made and continue to make progress, 
we are not there yet. Recognizing that many Hurricane Katrina 
and Rita victims and households have still not obtained 
permanent housing or achieved self-sufficiency, the President 
has directed FEMA to continue providing housing assistance to 
all eligible applicants until August 31, 2007. FEMA's financial 
and direct housing assistance must, by statute, end 18 months 
after a disaster declaration unless the President grants an 
extension. The President has recognized the need for an 
extension, and this extension gives both disaster victims and 
assistance providers, at every level of government and within 
the voluntary agency community, additional time to methodically 
and compassionately help challenged victims reach a state of 
enduring self-sufficiency.
    President Bush, Secretary Chertoff, Administrator Paulison, 
and the men and women of FEMA are dedicated to the mission of 
disaster and victim recovery and staunchly committed to 
improving the speed, efficiency, and accountability with which 
we perform that mission. That commitment is not only to the 
victims and communities of those disasters that we expect to 
face in the future, but to those victims and communities still 
struggling with the personal, professional, and social 
consequences and challenges of past disasters. Together, with 
our outstanding partners throughout the Federal, State, local, 
private, and voluntary agency communities, we will continue to 
advance ideas and pursue assistance solutions that will 
effectively, and compassionately, help individuals and 
communities recover, re-establish, and reclaim their 
neighborhoods and communities.
    Thank you. I look forward to discussing our recovery 
efforts with the Subcommittee.
    Chairman Landrieu. Thank you. Mr. Hebert.

    TESTIMONY OF ROBERT P. HEBERT,\1\ DIRECTOR OF HURRICANE 
              RECOVERY, CHARLOTTE COUNTY, FLORIDA

    Mr. Hebert. Good morning, Madam Chairman, Senator Stevens. 
On behalf of Charlotte County, we would like to express our 
gratitude for the invitation to speak to you today. It is 
indeed a high honor and privilege to share our experiences and 
offer our input into the process, and we are hopeful that this 
will serve to improve the emergency response system that we 
have.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hebert appears in the Appendix on 
page 50.
---------------------------------------------------------------------------
    To put it in perspective, Charlotte County has about 
174,000 population residents. During the winter season, it 
expands significantly because of tourists, but at the time that 
the hurricanes hit, that was our base population. So when we 
talk about this, the magnitude of our problem is proportionally 
equally or maybe worse than some of the other cases that we 
have had. As you spoke in your opening remarks about Florida is 
kind of left out of some of the discussions at this point 
because Hurricane Katrina caused significantly higher levels of 
devastation, and I think in the future some issues that are 
going to come up that we do not have a clue are going to hit 
until they actually occur. But we have experienced some of that 
in Charlotte County, so I will just give you a brief summary of 
what we went through.
    Charlotte County with the temporary housing started out 
with 2,252 families in FEMA housing. That equated to about 
9,000 individuals that lived in trailers of different types. We 
had 551 mobile homes or manufactured homes in one county-owned 
site near the airport that was controlled by FEMA; 75 mobile 
homes and manufactured homes that were on two commercial mobile 
home parks in the county, in the community; 1,042 travel 
trailers on private sites--and on private sites, they were 
installed there so that the people that lived on those sites 
could rebuild or rehab their house after the hurricane damage 
that we had in 2004; and we had 584 travel trailers in 
commercial travel trailer parks that the families did not have 
a house to go back to.
    That was our beginning problem, but I think the importance 
of the program to us is absolutely critical to start up the 
recovery process in our community. As I said, our population is 
about 174,000. We had two neighboring counties that were much 
smaller than ours that were much more heavily devastated. Very 
low to moderate-income individuals to begin with, a lot of the 
rural migrant population lived in De Soto and Hardee County, 
which are our neighbors. So they are still recovering. At this 
point, we would estimate that in Charlotte County we are 
probably about 70, 75 complete, and now we are approaching 3 
years after Hurricane Charley, so it is a long-time process.
    Without the FEMA program or with the Temporary Housing 
Program as administered by FEMA, there would have been 
thousands more individuals that were homeless and had 
significant threats to life and limb and property damage 
because they just basically had nowhere to go after the storm. 
Most of them were mobile home population that lived in mobile 
homes in the community.
    I need to preface this by saying the partnership we have 
with FEMA was excellent. We had a lot different experience in 
the beginning. FEMA brought to bear, as well as our State 
Emergency Response Team through the Governor's office, brought 
resources to bear in the community we could have never brought 
here in any kind of a time frame. What we had to do is 
basically ask for it and it arrived, and it was helpful that 
way.
    The overall issues that we had--and I think some have been 
addressed already--there is significant lack of some of the 
controls in the trailer parks that we had. We had a high crime 
rate, and that we kind of attributed to there was no social 
structure within the trailer park, that there was no human 
services, there was no vent or release for the children, there 
were no playgrounds, no recreational activities, no community 
center. It basically was a parking lot with trailers about 10 
feet apart that housed all these folks.
    That became problematic because the people then had nowhere 
to go, and because of the size of it, in our community it was a 
rural installation. It was 10 miles away from the nearest store 
or anything else. That caused significant problems for the 
people that lived there in that in the middle of the night if 
they ran out of diapers for their child, for example, they 
would have to travel 10 miles to find them. So there was no 
retail operation that was available close enough for them to 
take care of it, and at some of the peak periods when we were 
paying $2.50 to $3 a gallon of gas and people were not able to 
feed their family, they were not going to get in the car to 
drive to go get diapers in the middle of the night. So that 
just added to the frustration.
    The park was justifiably closed by FEMA for confidentiality 
issues, and that became one of the problems. Social service 
agencies did not have access to these people to help them get 
housing until about 8 months before the lease was up. If we had 
been able to start that sooner and quicker, we probably could 
have placed people a lot quicker, because one of the things we 
found, once we started to have those folks in those 
communities, our social service agencies, faith-based groups, 
we placed over 450 families within 60 days. So our feeling was 
that if we had been earlier involved, we could have probably 
taken care of the problem sooner and been able to remove people 
quicker and put them into permanent housing solutions.
    One thing we have to remember in all of this process is 
that these are human beings. They are not just cattle that we 
are trying to herd. We are trying to find them some kind of a 
stable, secure housing environment, of which we had no 
inventory of rentals within the community.
    Chairman Landrieu. If you can wrap up in the next 30 
seconds.
    Mr. Hebert. OK. Very good. I will do kind of a summary 
thing.
    If the need arises again--and we truly hope and pray that 
we do not have this problem again in Charlotte County with 
another hurricane, coming into the new season--we would have 
the following recommendations. One is that the trailer 
complexes should be much smaller, 50 or less units, which is 
probably not possible in the bigger devastated areas. But the 
issue is because of our county and the way it is made up, if it 
is any bigger than that, it has to be remote. It has to be away 
from town because we do not have any sites with that kind of a 
land mass within a community, being a coastal community type 
area.
    We would also feel if we could put them closer to the 
neighborhoods where the people lived before the hurricane hit, 
they would then have some pride and some ownership in 
rebuilding that community instead of basically becoming what a 
lot of people called ``squatters.'' They just basically were in 
the trailers and were not going to move until they had to be 
moved out.
    We would look for stricter criteria for housing eligibility 
and continuance once the immediate concerns about the disaster 
have passed to do a real evaluation process and look at people 
and see where they are from. We had at one time about 30 
percent of the occupants of our travel trailers were not from 
the county or in a close community. They just basically came, 
established a residency in the county, and became housing--and 
most of those were homeless folks before or people that were 
just looking for free housing and got it for 2 years. That is 
an issue.
    There needs to be a stronger partnership earlier, as I 
said, with the local community and the faith-based groups and 
the people that can help train people into new jobs, train them 
into being able to go to work for somebody if they have not 
been employed before, or work out their legal issues, their 
financial issues, and help them find permanent housing 
someplace that is adequate to suit them.
    Chairman Landrieu. OK. Can you wrap up?
    Mr. Hebert. Yes, ma'am. I will.
    Our final opinion and point is that FEMA in our opinion is 
an excellent response agency for emergency response. They are 
not a housing corporation, not a financing corporation. That 
becomes the problem as we get further away from the disaster. 
Thank you.
    Chairman Landrieu. Thank you very much. Dr. Crowley.

  TESTIMONY OF SHEILA CROWLEY, PH.D.,\1\ PRESIDENT AND CHIEF 
    EXECUTIVE OFFICER, NATIONAL LOW INCOME HOUSING COALITION

    Ms. Crowley. Good morning, Senator Landrieu. Thank you very 
much for the invitation to testify today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Crowley with attachments appears 
in the Appendix on page 56.
---------------------------------------------------------------------------
    I would like to open by urging the Senate, urging you and 
your fellow Senators, to take up H.R. 1227, the Gulf Coast 
Hurricane Housing Recovery Act of 2007, as quickly as possible. 
As you know, this bill passed the House on March 21. We think 
it is quite a good bill, and many of the provisions in this 
bill will address some of the concerns that I raise today.
    Hurricanes Katrina and Rita damaged nearly a million homes; 
one-third of them were destroyed or severely damaged. And NLIHC 
estimates that over 70 percent of the most severely damaged 
homes were affordable to low-income families prior to the 
disaster. Given the slow pace of rebuilding, the vociferous 
opposition to development of affordable rental housing in many 
Gulf Coast communities, and the failure of the States to set 
aside adequate funds for replenishing the lost rental housing 
stock, we think there is little chance that the majority of the 
homes that once were affordable to low-income families will 
ever be replaced to pre-storm levels.
    Thus, it is important to understand that unlike less 
catastrophic disasters, when displacement from one's home is 
temporary, a large number of the people displaced by Hurricane 
Katrina will never return to their homes. Indeed, a significant 
percentage of people who were displaced now do not intend to 
return home. A February 2007 Zogby poll of all evacuees still 
in the Houston area found that 73 percent intend to make 
Houston their home, 14 percent do not, and 13 percent are 
unsure.
    It is past time for these people to be in permanent homes. 
But the loss of affordable housing stock caused by Hurricane 
Katrina added to an already acute shortage of housing in the 
United States that the lowest-income people can afford. 
Nationwide, there are 9 million extremely low-income renter 
households and only 6.2 million homes renting at prices that 
these households can afford, paying the standard of 30 percent 
of their income for their housing. Extremely low-income 
households are those with incomes at or below 30 percent of the 
area median. In Baton Rouge, that is income of $16,740 a year 
or less. These are elderly and disabled people on fixed incomes 
or people in the low-wage workforce. Whatever ways low-income 
families on the Gulf Coast coped in this housing market before 
the disaster are no longer available to them.
    In order to fully comprehend the complexity of what faces 
us, we must both distinguish between the temporary housing 
response and the housing rebuilding response and understand how 
they are interrelated. My written testimony goes into a great 
deal of detail on both, but I am just going to focus my few 
moments here on temporary housing.
    In the days immediately after the disaster, in response to 
the prospect of tens of thousands of trailers and trailer camps 
across the South, numerous voices from across the political 
spectrum called for housing assistance for displaced people to 
be in the form of Section 8 housing vouchers issued by HUD and 
managed by local public housing agencies. The Senate passed 
legislation to that effect on September 15, 2005, but the 
measure was rejected by the House and the Administration. 
Instead, on September 23, 2005, the Secretaries of DHS and HUD 
announced a bifurcated temporary rent assistance approach with 
approximately 32,000 previously assisted HUD households the 
responsibility of HUD and FEMA having responsibility for 
everybody else. Attached is a time line that describes the ups 
and downs of the temporary housing programs, and I have an 
updated version I would like to submit for the record.\1\
---------------------------------------------------------------------------
    \1\ The timeline list submitted by Ms. Crowley appears in the 
Appendix on page 66.
---------------------------------------------------------------------------
    Let me just say that in my 30 years as a social worker, I 
have seen my share of poorly conceived and poorly executed 
human service programs. Nothing comes close to the horrors of 
the FEMA rent assistance program. The very best description of 
the program is from U.S. District Court Judge Richard Leon who 
ordered FEMA to ``free these evacuees from the `Kafkaesque' 
application they have had to endure.'' Another lawsuit, Ridgely 
v. FEMA, was filed just last Thursday. The complaint includes 
equally vivid descriptions of what people have been put through 
by FEMA.
    It is impossible for me to know precisely how many low-
income households remain displaced because FEMA continues to 
withhold detailed and up-to-date information from the public. 
But my written testimony offers an analysis that gets us to 
what might be a rough estimate.
    We conclude that minimally 55,000 households--and these are 
households, not people, so it is a multiple of 2.5 to almost 3 
to get to the number of people--to potentially as many as 
132,000 total households remain displaced and in need of 
assistance. And we know that most of them are quite poor. The 
February 2007 Zogby poll found that 86 percent had household 
incomes of less than $25,000 a year, 69 percent with incomes 
less than $15,000 a year. Prior to their evacuation, 72 percent 
of these folks were employed. Now only 38 percent are employed.
    The disconnect between the reality of being poor and 
permanently displaced and the fiction that one's displacement 
is temporary dictating the terms of housing assistance creates 
considerable stress and anxiety.
    We offer several recommendations on temporary housing. I 
will close by highlighting three.
    First, transfer all income-eligible households still 
receiving FEMA rental assistance into the Section 8 housing 
voucher program. Congress must appropriate sufficient funds for 
these vouchers. We know that this will be less expensive than 
the FEMA rent assistance program.
    Further, offer all low-income households currently living 
in trailer camps the option of receiving a Section 8 housing 
voucher instead of the trailer. This will at least allow them 
the choice of moving elsewhere. H.R. 1227 takes care of both of 
these provisions.
    Second, require GAO to undertake a comprehensive review of 
all households whose temporary housing assistance from FEMA was 
terminated. This is also provided for in H.R. 1227. For all 
households who were wrongfully terminated, FEMA should 
reinstate them if they can demonstrate continuing eligibility 
and financial need, and these households should be moved into 
the Section 8 housing voucher program.
    And, third, develop and enact legislation that will make 
HUD responsible for all disaster housing aid needed for 30 days 
or more in future disasters. Thank you.
    Chairman Landrieu. Thank you, Doctor, and I am looking 
forward to the next testimony, but I am struck at the 
completely opposite testimony from both of you--you claiming 
that the program is the worst you have seen, and, Mr. Hebert, 
you are claiming that FEMA did an excellent program. So I am 
going to be interested in some questions to see if we can 
ferret out what might be the accurate view.
    Go ahead, Mr. Croft.

  TESTIMONY OF WILLIAM J. CROFT,\1\ DIRECTOR OF RESPONSE AND 
                 RECOVERY, THE SHAW GROUP, INC

    Mr. Croft. Thank you, Senator. Thanks for the invitation to 
be here today. I would like to set the record straight that I 
am not representing Shaw today. I am representing the 
Governor's Hurricane Housing Task Force and some of the 
processes we went through.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Croft appears in the Appendix on 
page 88.
---------------------------------------------------------------------------
    I joined the Governor's Housing Task Force shortly after 
Hurricane Katrina made landfall to assist with the Temporary 
Housing Program and served as the Director of the Governor's 
Housing Task Force from September 2005 to June 2006.
    The task force was formed to facilitate the delivery and 
management of shelter and transitional housing programs 
necessary to support the displaced disaster victims of 
Hurricane Katrina, and later Hurricane Rita, in Louisiana. 
There were a number of challenges but the priority was to 
provide temporary housing for those disaster victims who had no 
housing solution and for those who were living in shelters 
throughout the Nation.
    The primary goal was to provide temporary housing in or as 
close as we could to the evacuated family's pre-storm 
neighborhood. For the most part, this was an impossible task 
due to the magnitude of the devastation and the duration of 
effects of the storm on the infrastructure. The concept was to 
bring the disaster area back to life in a coordinated effort. 
Housing of the general population was not the only focus. We 
had to restart business and industry, government, health care, 
education as well as public safety.
    The task force devised a process flow chart which outlined 
the procedures FEMA contractors should follow for each site in 
order to ensure the local and State governments were included 
in the decisionmaking process as to size and site selection. We 
established the sites to be Private Sites, Commercial Sites, 
Group Sites, which included Emergency Group Sites and Exclusive 
Use Sites, and Industry Sites.
    Private Sites are defined as the placement of a travel 
trailer on the property of a homeowner or renter whose dwelling 
is uninhabitable which allows the family to expedite repairs 
and rebuilding.
    A Commercial Site is an existing RV or mobile home park 
with available pads that FEMA leases. This was an expedient way 
to move units, primarily mobile homes, with minimal site 
preparation.
    A Group Site is developed to temporarily house eligible 
FEMA registrants when there is a lack of feasible private sites 
and commercial sites. Group sites generally consist of 50 to 
200 trailers or mobile homes in a pre-planned location where 
the surrounding infrastructure can support such a development. 
There are three types: General population sites, emergency 
group sites, and exclusive use sites.
    An industry site program was intended to provide travel 
trailers to house displaced workers who were essential to the 
operation of business and industry. The State Department of 
Economic Development identified critical industrial operations 
such as petrochemical plants, distribution centers, and ports 
which FEMA provided trailers for. The industry was required to 
install the units and house disaster victims only. This 
restriction slowed the restart process by not allowing more 
flexibility for industry to house other critical workers. I 
applaud FEMA's ``out of the box'' approach to this industry 
program, but the program should be better designed for future 
disasters.
    Realizing the need for a large number of temporary housing 
units outside the disaster area, we began working with FEMA to 
identify sites throughout Louisiana and working with all of the 
host States for help. One of the major challenges in providing 
housing outside of the disaster area was the impact on the 
community where the temporary housing was to be located. Prior 
to Hurricane Katrina, major cites and rural communities were 
struggling to meet the infrastructure demands of their existing 
residents. It was not prudent to now overburden a community of 
1,000 families with another 200 or 300 families for which they 
were unprepared. Louisiana proposed that impact fees be 
provided by FEMA to assist local governments with the capacity 
to help, as is the usual case when a developer proposes new 
development in a community. This was considered, but never 
approved.
    Another important topic to consider is support of the 
residents of shelters and temporary housing. We continually 
focused on the need for wrap-around services, such as 
laundries, community facilities, playgrounds, postal 
facilities, and others, at each location where our citizens 
were located. To merely place hundreds of families in a group 
site and consider the mission accomplished is wrong and 
shortsighted. We made some progress, but it was not adequate. 
In some cases the hosting area provided services from existing 
strained resources. The FEMA program, through the Stafford Act 
changes or through policy changes, should address this 
inadequate approach.
    It is my opinion that we have an opportunity to create a 
more flexible, efficient, and cost-effective Federal disaster 
housing program by making a paradigm shift in the definition 
and execution of the mission. We should depart from the current 
concepts and move to a more definable and logical approach. The 
future program should be structured to provide emergency 
shelters which will provide immediate needs during the 
emergency phase and for 30 to 60 days. The extended shelters 
phase should include large congregate care facilities which can 
support sustained operations, which will include travel 
trailers and hotel/motel rooms, as well as large shelters. The 
transitional housing program should include mobile homes, 
apartments, prefabricated housing, USDA facilities, HUD 
facilities, and other types which would support a much longer-
term, even permanent housing. The final and ultimate program is 
permanent housing. The Federal Government role in all of this 
is paramount to the success of providing direct housing to 
disaster victims.
    Thank you for your time and attention to this very 
important topic. I look forward to answering your questions.
    Chairman Landrieu. Thank you very much, and I thank all of 
you for your testimony. It was well within the time and very 
specific and appropriate.
    Mr. Hebert, let me ask you this, if I could. Having lived 
through many hurricanes myself, remind me again when Hurricane 
Charley struck. What year was it?
    Mr. Hebert. It was in August 2004.
    Chairman Landrieu. And what category storm was it?
    Mr. Hebert. I think at its highest point it was a Category 
4 or 5. But I think the issue was more that we had 170 
tornadoes that spawned off the hurricane that did most of the 
damage.
    Chairman Landrieu. And one of the counties that it hit 
primarily were yours, Charlotte County?
    Mr. Hebert. Charlotte, De Soto, Hardee, some of Lee, and 
the tip of Sarasota.
    Chairman Landrieu. And how many people do you say are still 
in trailers after these 3 years?
    Mr. Hebert. At this point in our county we just have five 
units that are occupied in temporary trailers. The rest have 
been put into permanent housing, or we had a program where we 
purchased some of the trailers from FEMA and sold them 
immediately to the occupants and put them into permanent 
trailer parks and so forth.
    Chairman Landrieu. Do you know what percentage of your 
housing is in trailers in the county? Is it 10 percent or 15 
percent or less than that?
    Mr. Hebert. I do not have an exact number, Madam Chairman, 
but I think by nature of the community, we are probably about 
40 percent mobile homes.
    Chairman Landrieu. Forty percent mobile homes in the 
country?
    Mr. Hebert. Of the total population. Yes, we have a lot of 
retired folks in retirement villages that are mobile homes.
    Chairman Landrieu. Now, what is the evacuation plan if you 
face another Category 3, 4, or 5 where you have to evacuate? 
Because I do not think those trailers can sustain the new 
building codes for the coastal area. Do they?
    Mr. Hebert. The new trailers now have to meet post-
Hurricane Andrew specifications, which are 120-mile-an-hour, I 
think, or better impact. Certainly the county is about 70 
percent rebuilt on all the other structures, which are also 
built to new code, so we are hoping that they will sustain a 
higher level of wind and we will not have the problem we had 
with the initial Hurricane Charley hit.
    Chairman Landrieu. But you are testifying that you think 
that the trailers that are now built in your county--which is 
maybe 30 to 40 percent of the population, can sustain the 120- 
to 130-mile-an-hour wind?
    Mr. Hebert. Not all of them, but the ones that were 
replaced in recent years after Hurricane Andrew hit down in the 
Miami area. And the reason I say that is that we had trailer 
parks where we had some mobile homes that were completely wiped 
out right next to another one that withstood the storm. They 
might have lost their carport or storage shed, but the trailer 
withheld, and it was anchored properly and was strong enough to 
withhold the winds. So, yes, I think we will be in better shape 
after that.
    If I could offer one other comment to discuss the 
difference between Dr. Crowley's testimony and myself. In the 
testimony I submitted, about 80 to 85 percent of the original 
people that were in their trailers rotated out within 12 months 
because they either had the means to move into permanent 
housing or had insurance or had the ability to rebuild their 
houses. What ended up after that point was basically a housing 
project, and you ended up with low- to moderate-income people 
that do not have the means to rebuild, and they become much 
more troublesome. We had a higher crime rate. We had people 
that we were not able to place because they simply could not 
afford to be placed anywhere.
    My comments about the program was good, it was excellent in 
the first phases of it because it was absolutely essential to 
our recovery process. As we got further from the event date 
itself in August 2004, it got more and more onerous and more 
troublesome because we just had a much tougher population to 
then place and get into housing, and at that point we had no 
access because it was still being protected through the 
confidentiality issues.
    Chairman Landrieu. Has that confidentiality issue been 
addressed fully, in your view? Was it fixed?
    Mr. Hebert. No, ma'am. I do not think there has been any 
change.
    Chairman Landrieu. So what you are testifying for is the 
program that you have testified is excellent is actually 
excellent only relative to trailers being an option for 
families with financial means to stay there temporarily and 
move themselves out.
    Mr. Hebert. I think as an immediate solution----
    Chairman Landrieu. Would you testify that it is excellent 
for the other category of people who have limited financial 
means?
    Mr. Hebert. No, because then it just becomes a housing 
project. I think we need to look for some more permanent type 
of solution for that. And you need to understand that in our 
county, all of our public housing buildings were destroyed. It 
was almost 300 units, which we are just now starting to 
rebuild. So all those folks had to have housing in the 
meantime.
    I think to me there are absolute definite phases of 
recovery, and I think at some point you need to get on with the 
HUD and the Department of Labor and Department of Agriculture, 
the other Departments that have more expertise in these areas, 
because it is not an emergency response now 3 years after the 
storm. It is a stabilization issue.
    Chairman Landrieu. Well, I think you have hit on one of the 
important aspects that this Subcommittee is going to try to 
hone in on and force the Homeland Security Department to, 
either by statute or by Administration, to divide the emergency 
temporary housing, whether it is the 30- to 60-day sheltering 
and the transitional housing, which FEMA should coordinate as 
the premier emergency Federal response agency, to then shift it 
to the other agencies, whether it is HUD, Labor, Agriculture, 
depending on whether it is urban or rural, that could have a 
tremendous impact on getting adequate, more permanent shelter 
and housing for individuals, hopefully promoting homeownership 
and, of course, decent and affordable rental housing.
    Mr. Garratt, you are Acting Director, correct?
    Mr. Garratt. Actually, Acting Assistant Administrator. 
Would you just restate for the record your one or two most 
frustrating aspects of your job, what you would like to see 
changed that you just cannot seem to get either Congress or 
others to understand for you to accomplish your mission?
    Mr. Garratt. In terms of frustrations, I would have to say 
that it is the continuing situation that we face in the Gulf 
Coast. And it is not necessarily one or two areas; it is the 
comprehensive nature of what is a compelling social situation 
that we face and that we recognize that, unlike most of the 
disasters that we deal with, where the disaster victims can see 
the light at the end of the tunnel, 12 months away or 18 months 
away, most of the victims or many of the victims that we are 
still dealing with in this disaster cannot yet see that light 
at the end of the tunnel. And we are not able to shine that 
light in a way that they are able to see that.
    So we recognize and are, I think, institutionally 
frustrated by the fact that it is going to be a long time 
before we are able to help everyone who needs to be helped 
achieve self-sufficiency, and it is going to be a long time 
before the sorts of services and assistance that we are 
providing, that we are going to see the end of that. And I just 
mean that is frustrating not in the sense that we are not 
prepared to continue to provide that assistance. It is 
frustrating that we have to continue providing that assistance, 
that these folks are going to continue to be living in a less 
than perfect living environment--travel trailers, mobile 
homes--for an extended period of time.
    So just institutionally I would say those of us in the 
disaster assistance business, that is our biggest frustration.
    Chairman Landrieu. Well, let me ask you this. Do you think 
that providing a Section 8 voucher to give people a choice to 
move out of a trailer that is too cramped into something that 
might be--would give them some light at the end of the tunnel? 
And if so, is there some reason you cannot make that 
recommendation?
    Mr. Garratt. Well, first off, the Section 8 program is a 
HUD program, so in terms of answering if that is effective, I 
would have to leave that to HUD. In terms of a vouchering 
program, I am prepared to address that. Incidentally, we are 
working very closely with HUD to see what our options are for 
dealing with the existing population of individuals receiving 
both financial--or principally financial assistance and looking 
at what our options are for partnering with HUD to move in 
potentially a vouchering direction.
    However, handing someone a voucher who is in a travel 
trailer is only worthwhile if that individual has some place to 
take that voucher to. If there is no public housing, if there 
are no other forms of housing available at or near the fair 
market rent, then having a voucher in your hand is not worth a 
lot. What we need is the ability--what we need is housing--
housing for these individuals, public housing and more 
commercially developed housing to support the population that 
is still living in those group sites.
    Chairman Landrieu. Well, I know that you understand that 
part of the problem with New Orleans and South Louisiana is not 
just the lack of labor to build housing and the lack of 
resources to build it, but it is difficult to start building 
housing when you do not have flood elevations to know how high 
the houses have to be built off the ground or if the levees 
that protect the houses are going to hold.
    So instead of saying we cannot do anything because we need 
more housing, and the housing people saying we have to do 
something until we get housing, we might want to think about 
the uniqueness of this challenge that is before us and come up 
with some additional options.
    When we can try to get families back into the region or to 
give them options other than staying in a trailer for the next 
5 years or struggling to rebuild a house over the next 10 
years. Is there a formal conversation that happens between FEMA 
and HUD on a regular basis? And if so, who chairs that? Is it 
the Secretary of HUD, or is it Director Paulison?
    Mr. Garratt. Formal conversations take place between FEMA 
and HUD at all levels of the organization, both here at the 
national level between the leadership of the agencies and of 
the departments, as well as at the senior manager level. I talk 
with senior HUD officials on a weekly basis to discuss 
partnering and moving forward and addressing the issues, as 
well as at the field level, Gil Jamieson, the Director of our 
Gulf Coast Recovery Office, and his team deal with HUD 
representatives at their level on a regular basis.
    Chairman Landrieu. Have you all submitted to this 
Subcommittee or any committee any formal document of shared 
recommendations between HUD and FEMA? Or do you just do it in 
such an informal way that we would not see such a document like 
that?
    Mr. Garratt. We have not presented any formal documents 
that I am aware of to the Subcommittee yet, Senator, but I am 
reasonably certain that the current discussions taking place 
between FEMA and HUD will bear some fruit and that we will be 
submitting some documentation to this Subcommittee in the very 
near future.
    Chairman Landrieu. OK. Dr. Crowley, do you want to add 
anything?
    Ms. Crowley. A couple of things. One is that the issue of 
whether or not a voucher would do you any good if you are in a 
trailer is a really important issue because there is a lack of 
stock in the area for people to rent. It does give people the 
option of potentially taking the voucher and going someplace 
else, and so that is a choice. It is not the perfect answer.
    But the people who are receiving FEMA rental assistance, 
the 20,000 households that are still in Texas and then the 
other 15,000 or 17,000 households or so, moving them onto a 
Section 8 voucher right now makes absolute sense because it 
would be a seamless transition, and the voucher would continue 
as long as they were income eligible for that. And it would be 
administered locally by local housing authorities who know what 
is going on as opposed to--I mean, the descriptions that we 
have heard from people about their dealings with FEMA are 
absolutely bizarre. But most of the time, what happens is that 
you call an 800 number and you talk to a different person every 
single time. One of the advantages of using the Section 8 
voucher program is that you go to a local agency with human 
beings that you can talk to across the table, who can follow 
your case and have a much greater understanding about what is 
going on. So I think that there is a lot of advantages to 
moving to that program.
    I understand that there has been lots of discussions about 
what role HUD should play in this disaster and future 
disasters, and there certainly have been many recommendations 
that HUD should be the primary agency to deal with housing 
after the initial sheltering requirements are over. And, in 
fact, the President's own Lessons Learned report that came out 
in February 2006 recommended that.
    I think there is some kind of ambivalence about that, 
however, because this Administration has not been particularly 
friendly to the housing programs. And so one of the reasons 
that we think that the Section 8 voucher program was not used 
initially, as it had been successfully used in other disasters, 
most particularly the Northridge earthquake disaster, was 
because the voucher program had been under serious attack by 
the Bush Administration trying to ratchet it down, trying to 
change the rules, trying to block grant it. And so part of it 
is are we ready to acknowledge that HUD is an agency that is 
valued and that we can depend on housing programs for the kind 
of response that is needed in this kind of disaster? I think we 
can if we strengthen them, but I do not think that there has 
been a sense that HUD is the agency that is valued.
    Chairman Landrieu. Are you aware that there was a new 
aspect to the Section 8 program that--you are correct--has not 
been funded adequately by the Administration, but it has some 
broad-based support in Congress to turn Section 8 vouchers into 
potential mortgage payments to increase homeownership as sort 
of a ladder up for low-income and moderate-income families to 
actually move from renters to homeowners? Are you at all 
familiar with that program?
    Ms. Crowley. Sure. There is a program now where a very 
small number of people who are receiving Section 8 vouchers 
have been able to turn those into--use them to obtain a 
mortgage and then they can use that to make their payments for 
a relatively short period of time.
    We think that is a reasonable thing to do. It is not an 
answer for the vast majority of people who are on Section 8 
housing, receiving Section 8 housing vouchers, because their 
circumstances are such that homeownership is not the right 
answer at this point. Given what we see about the numbers of 
people who have been thrust prematurely into homeownership and 
under all of these exotic loans that have been made in the last 
couple of years and now the high foreclosure rate, we do think 
that it is--the pendulum is going to swing back to a more 
reasonable sense about what a good housing system is, both 
homeownership and rental housing.
    The key to why it is that housing assistance is so vital 
for people who are low income is that it provides for housing 
stability. It means that they can stay in the same place for a 
period of time. They can afford--they pay a certain percentage, 
30 percent of their income, for their housing. They are not 
subject to sort of constant pressures to keep moving because 
they are getting evicted. They can create a stable housing 
record. And that is necessary in order to move into being able 
to save enough money to move into homeownership in a more 
conventional fashion.
    Chairman Landrieu. Well, I am not going to disagree with 
you that not everyone that rents is a candidate to be a 
homeowner. But I will testify, as the Senator that represents 
the State and community, that many people aspire to 
homeownership.
    Ms. Crowley. Well, absolutely.
    Chairman Landrieu. And that homeowners usually do not pay 
30 percent of their income for housing. If you have equity in 
your house and you are moving up on the economic ladder, you 
can sometimes pay 20 percent or 25 percent or, depending on 
your income, some extremely wealthy people pay less than 1 
percent of their income to housing because their income is so 
high. But the poor, under the rules that we have, end up paying 
sometimes 30 percent, 40 percent of their income for housing, 
which makes it very difficult, particularly if you are not 
building any equity. So one of the goals of the Gulf Coast, at 
least for the State that I represent--I cannot speak for 
Mississippi--is to try through this transition to increase 
homeownership where possible.
    The other concern--and I am going to ask Mr. Croft to make 
a statement, and then call our next panel--is while I believe 
Section 8 is a real option here--and I think we need to pursue 
it--it should be a question as to what percentage of Section 8 
housing is natural or normal to a community that we would 
maintain that balance between non-subsidized and subsidized for 
the overall health of the community. So if Section 8 represents 
10 or 15 percent of normal rentals, it cannot then in a 
disaster area become 80 percent of the recovery. It needs to 
maintain its balance with regular, unsubsidized rental or 
housing. And that is a question that we have to really, as we 
pursue additional Section 8, think about doing it in balance 
with non-subsidized housing as well so that the community 
recovers in a balanced way.
    So be thinking through that issue and trying to resolve the 
feelings about HUD. I mean, we have got to choose. You are 
testifying that FEMA is not necessarily doing what it needs to 
do; HUD may not either. And do we need to create another 
agency----
    Ms. Crowley. No.
    Chairman Landrieu [continuing]. Or do we need to make HUD 
be better? Do we need to make FEMA be better?
    Mr. Croft.
    Mr. Croft. Well, I would like to just restate the fact that 
vouchers and money really do not provide housing, and we ran 
into that in New Orleans and throughout Louisiana, as well as 
Atlanta, New York, Houston, all the places our citizens were 
evacuated to. Just to say we are going to give you $2,000 and 
later more money, now go find a place to stay, it did not 
happen because there were no places to stay. A voucher does not 
create a house. And, I think the approach to FEMA being the 
housing coordinator is good. I think HUD should play a major 
role, and as I said in my testimony, I think it is time to 
bring all of those agencies together and develop a better 
strategy for future disasters.
    Chairman Landrieu. OK. Thank you all very much. Our second 
panel will consist of Matthew Jadacki, Gil Jamieson, General 
Jack D'Araujo, Andres Duany, and John Badman.
    Matthew Jadacki oversees the Department of Homeland 
Security Disaster Assistance Program on behalf of the Inspector 
General's office. In his role, he is responsible for ensuring 
that these disaster funds are wisely spent. He is a certified 
public accountant. His office conducted a review of the 
Alternative Housing Pilot Program, which I requested, and he 
will be giving us some information about that. I am 
particularly interested in one of your findings that you 
stated, ``As a consequence of FEMA decisions, the communities 
hardest hit by the 2005 hurricanes did not receive 
proportionate shares of the $400 million appropriated for the 
program. . . . The award amounts that were decided upon and the 
decision to award 71 percent of the available funds to one 
project . . . were solely the decision of [one] Primary 
Selecting Official.'' And we will go more into that report as 
this panel goes on.
    Gil Jamieson is the Deputy Director of Gulf Coast Recovery 
for FEMA. He has testified many times before a variety of 
different committees. He is the principal point of contact for 
the Federal Coordinator for Gulf Coast Rebuilding, Don Powell, 
and directly reports to Dave Paulison.
    General Jack D'Araujo served as Primary Selecting Officer 
for the program, so we will be talking with you specifically 
about that.
    Andres Duany is a renowned architect and urban planner who 
has pioneered the movement to end suburban sprawl and urban 
disinvestment, known as ``new urbanism.'' I have seen some of 
your work, and I am extremely impressed with your work, and I 
thank you for the focus that you have been spending on not just 
New Orleans and the region but the entire South Louisiana and 
the entire Gulf Coast, and I thank you for the new thought you 
are bringing to what we are attempting.
    Jack Badman is CEO of RE: Formed Systems, a structural 
engineering firm that has developed an innovative approach to 
disaster housing. It involves the construction of Force 5 
hurricane-proof accommodations for endurable-effective, cost-
effective concrete materials. He will be talking to us about 
alternative housing outside of trailers that may or may not 
stand up under hurricane force winds.
    Let's start with the Inspector General, if we could. Mr. 
Jadacki, I requested this report on alternative housing. Given 
the testimony of the first panel, I just want to stage this: 
That it became clear to many of us trying to oversee the 
recovery that what we were doing was not really working in a 
major disaster. So we scheduled some additional funding to come 
up with some alternatives. It was then designated in such a way 
that was really disappointing to those of us that had thought 
we were trying to pilot some new ideas. I have asked the 
Attorney General for a study, and it is prepared. I think it 
will be released today.
    If you will go ahead and begin with your testimony, Mr. 
Jadacki.

 TESTIMONY OF MATTHEW A. JADACKI,\1\ DEPUTY INSPECTOR GENERAL 
FOR DISASTER ASSISTANCE OVERSIGHT, U.S. DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Jadacki. Thank you, Madam Chairman. Good morning. My 
name is Matt Jadacki. I am the Deputy Inspector General for 
Disaster Assistance Oversight in the Office of Inspector 
General at the Department of Homeland Security. Thank you for 
the opportunity to discuss the Alternative Housing Pilot 
Program.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Jadacki appears in the Appendix 
on page 92.
---------------------------------------------------------------------------
    In 2006, $6 billion supplemental appropriations were 
designated for disaster relief, of which $400 million was made 
available to FEMA for an Alternative Housing Pilot Program in 
the areas hardest hit by Hurricane Katrina and other hurricanes 
of the 2005 season. In response, FEMA officials developed and 
implemented a grant competition to identify, develop, and 
evaluate alternatives to and alternative forms of disaster 
housing. The competition was limited to the State-designated 
agencies of the Gulf Coast States, including Alabama, Florida, 
Louisiana, Mississippi, and Texas. By awarding competitive 
grants, FEMA officials sought to identify the best alternatives 
for housing disaster victims. By restricting the competition to 
the five Gulf Coast States, FEMA officials sought to comply 
with the congressional intent that the areas hardest hit by 
Hurricane Katrina and the 2005 hurricanes receive the housing 
developed under these grants.
    When the Alternative Housing Pilot Program Guidance and 
Application Kit was issued by FEMA in September 2006, the 
designated agencies of the five Gulf Coast States were given 35 
days to develop as many project proposals as they wished to 
submit by an October 20, 2006, deadline. A total of 29 project 
proposals were received, consisting of several from each of the 
eligible States. Some of the proposals envisioned developing 
more than one type of innovative housing, but most were focused 
on a single proposed type of unit.
    Based on the results of the evaluation panel, three options 
were proposed for selecting and funding projects:
    First, fully fund the highest scoring projects, until money 
is exhausted. This would have funded two projects.
    Second option, optimize the number of housing alternatives 
funded within the competitive range. This would have funded 10 
projects.
    The third option, maximize the number of competitive States 
that receive funds. This would have funded five projects.
    The FEMA selecting official chose option three. Today I 
will address five issues regarding the Alternative Housing 
Pilot Program: Whether the $400 million appropriated by 
Congress was proportionately allocated to the hurricane-
affected communities, the decisions of the awards panel and the 
FEMA officials that led to the funding of innovative and 
creative emergency housing solutions; whether the panel reached 
fair and balanced decisions; whether the panel review process 
meet the basic requirements of openness and transparency 
required of all Federal advisory committees; and whether there 
were any violations of law in the manner in which the grant 
selections and awards were conducted.
    The communities hardest hit by the 2005 hurricanes did not 
receive proportionate shares of the $400 million appropriated 
for the program. The State of Mississippi's proposals were 
awarded a $281 million share or 73 percent of the available 
$388 million--a share greater than its proportion of the 
damages from the 2005 hurricanes. Consequently, the other Gulf 
States, which have to make do with the remaining 27 percent of 
funds among them, did not receive funds proportionate to the 
damages their communities sustained.
    A number of innovative and creative disaster housing 
solutions were not funded because the vast majority of the 
available funds--71 percent--was awarded to one project. Had 
option two been selected, 10 project proposals would have been 
funded and the grant funds would have been much more effective 
in exploring and testing innovative and creative alternative 
solutions to disaster housing. Doing so would have resulted in 
the State of Mississippi receiving about 40 percent of the 
available funds, Louisiana receiving 37 percent, Alabama 13 
percent, Texas 11 percent, and Florida 0 percent. Instead, only 
five project proposals received funding, half as many that 
could have been funded, and the majority of funds went to one 
State.
    We did not note any evidence of lack of fairness or balance 
in the panel deliberations or conclusions. Although the 
majority of the panel members were FEMA employees, there was no 
obvious bias in how they conducted their reviews. The reviews 
were possibly unbalanced in that every rating factor was given 
the same weight as all of the other factors rather than being 
weighted, as is often the case. It is unusual when some factors 
are not considered to be more important than other factors. But 
FEMA officials made the decision for each factor to have the 
same weight, not the panel members.
    FEMA officials concluded that the requirements of the 
Federal Advisory Committee Act (FACA), for openness, public 
access to records, and fairness did not apply to this awards 
panel review process. We concluded that FEMA's position was 
justified, given the facts of the situation. In addition, the 
panel process was not the key process that determined how many 
projects would be funded, what projects would be funded, or how 
much funding each of the selected projects would receive. Those 
decisions were the sole purview of the selecting official. More 
openness and transparency in the panel process would not 
necessarily have had any noticeable effect on the FEMA 
decisionmaking process.
    We did not find any violations of law in the grant process, 
although the grant awards could have been made to fund and 
assess a greater variety of alternative disaster housing 
options, and while doing so would have resulted in a more 
proportionate distribution of the funds to the States. 
Moreover, the projects that have now been funded should expand 
the alternatives available for disaster housing in the future 
and should provide improved interim housing for many residents 
of the hurricane-stricken areas of the Gulf Coast. FEMA 
officials said they intend to closely monitor the funded 
projects to ensure that these projects are carried out in 
compliance with applicable laws and the terms of the grant 
program.
    Madam Chairman, this concludes my prepared statement.
    Chairman Landrieu. Thank you. Mr. Jamieson.

       TESTIMONY OF GIL H. JAMIESON,\1\ ASSOCIATE DEPUTY 
     ADMINISTRATOR, GULF COAST RECOVERY, FEDERAL EMERGENCY 
    MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Jamieson. Good morning, Chairman Landrieu. My name is 
Gil Jamieson, and I am the Associate Deputy Administrator for 
Gulf Coast Recovery in the Federal Emergency Management Agency 
and within the Department of Homeland Security. It is my 
pleasure to be here with you today to update you on the 
background and status of the Alternative Housing Pilot Program.
---------------------------------------------------------------------------
    \1\ The joint prepared statement of Mr. Jamieson and Mr. Garratt 
appears in the Appendix on page 41.
---------------------------------------------------------------------------
    Senator if I may, I know Junior Rodriguez, President of St. 
Bernard Parish, was due to testify in the first panel, and his 
wife fell ill. I wish for the record to state that the FEMA 
team wishes his wife, Evelyn, a speedy recovery.
    Chairman Landrieu. Thank you.
    Mr. Jamieson. In the 2006 emergency supplemental, Congress 
appropriated $400 million out of the Disaster Relief Fund for 
the pilot program that could identify and evaluate new 
alternatives for housing disaster victims. The appropriations 
language required that the pilot be conducted in those areas 
hardest hit by the hurricanes of 2005, which FEMA subsequently 
determined to be the States of Alabama, Florida, Louisiana, 
Mississippi, and Texas.
    The Alternative Housing Pilot Program Grant Guidance was 
released on September 15, 2006, and applications from the five 
eligible Gulf Coast States were requested by October 20, 2006. 
All of the five eligible States submitted applications that 
collectively contained 29 separate project proposals totaling 
almost $1.2 billion in requested grant funding.
    A Technical Review team composed of FEMA experts assessed 
the soundness of each project from a building science, 
engineering, historic preservation, logistics, and mitigation 
perspective. Subsequently, a National Evaluation Panel composed 
of experts from the Office of the Federal Coordinator for Gulf 
Coast Rebuilding, HUD, American Institute for Architects, FEMA, 
DHS Preparedness, and the National Emergency Management 
Association, as well as a representative from the private 
sector--these folks met in seclusion for one week to review 
each proposal. After a period of review, discussion, and 
assessment, each panelist on the National Evaluation Panel 
individually and independently rated each submission, based on 
pre-established grant guidance criteria. Panelists were 
prohibited from sharing these final scores with one other. 
Panelists were also invited to provide written comments on each 
project. All of this information was provided to the Primary 
Selecting Official.
    The following projects were selected for Alternative 
Housing Pilot Project grants: Mississippi Green Mobile project, 
the Mississippi Park Model, and Mississippi Cottage projects; 
Louisiana Cypress Cottage Partners; Texas Heston Group; and 
Alabama City of Bayou La Batre. These successful projects were 
announced on December 22, 2006. Since then, the FEMA Grants 
Office and Gulf Coast Recovery Office have been working with 
the States to clarify and resolve issues prior to the actual 
award. Upon award of the grant, the grantees may access up to 
50 percent of the grant funds. The remainder of the grant funds 
will be accessible when the grantee successfully completes all 
pre-construction activities.
    On April 11, FEMA awarded the State of Mississippi 
approximately $275 million for the Park Model and Mississippi 
Cottage Project. We expect the other States with successful 
projects will receive funding in the very near future.
    The evaluation of pilot projects will be led and managed by 
HUD and supported by FEMA. We are very encouraged and 
optimistic about the outcome of this process and believe there 
are real opportunities to improve the housing alternatives that 
FEMA can draw upon in future disasters.
    Thank you, and I look forward to your questions and 
discussing FEMA's Alternative Housing Pilot Program with the 
Subcommittee.
    Chairman Landrieu. General D'Araujo.

  TESTIMONY OF MAJOR GENERAL JOHN R. D'ARAUJO, JR.,\1\ (U.S. 
 ARMY-RETIRED), FORMER PRIMARY SELECTING OFFICIAL, ALTERNATIVE 
  HOUSING PILOT PROGRAM, FEDERAL EMERGENCY MANAGEMENT AGENCY, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    General D'Araujo. Good morning, Chairman Landrieu. I am 
John R. D'Araujo, Jr., and it is an honor to appear before this 
Committee to discuss my role as the Primary Selecting Official 
for the Alternative Housing Program.
---------------------------------------------------------------------------
    \1\ The prepared statement of General D'Araujo appears in the 
Appendix on page 99.
---------------------------------------------------------------------------
    From July 2006 until January 2007, I was the Director of 
the Recovery Division within the Department of Homeland 
Security's Federal Emergency Management Agency. Additionally, 
from July 2002 to March 2003, I served as the Assistant 
Director of what was then known as the Readiness, Response, and 
Recovery Directorate of FEMA. In that capacity, I coordinated 
the Federal response for all-hazard disasters, directing the 
activities of more than 22 Federal agencies under the previous 
Federal Response Plan. I recently retired and am testifying 
today as a private citizen.
    During my time with FEMA, I had the privilege to serve as 
the Primary Selecting Official for the Alternative Housing 
Pilot Program, authorized by Congress in the 2006 Emergency 
Supplemental Appropriations Act. Though I served as the Primary 
Selecting Official, it is important to note that I was not 
responsible for the decisions creating the program or the 
general course that it took. As a result, I would defer 
questions on that issue to my colleagues from FEMA.
    As the Primary Selecting Official, my role in the process 
was to take the results and recommendations from the Evaluation 
Panel and make the final decision about the award of funding 
under this competitive grant. I was not involved in any way in 
their deliberations or scoring of the projects, though I did 
receive periodic updates as to their progress but not the 
substance of their deliberations. To the best of my ability, I 
carried out my responsibility in accordance with established 
grantmaking procedures. In accordance with those competitive 
grant procedures, as the Primary Selecting Official, I 
considered the ranking, comments, and recommendations from the 
independent reviewers, as well as my own thoughts on the 
projects, before deciding which applications to approve and 
their order of approval. I made my selection based on the 
projects deemed most meritorious. Also, in accordance with 
established competitive grant procedures, as the Primary 
Selecting Official, I put in writing my reasons for each 
deviation from the ranking determined by the National 
Evaluation Panel, as well as my reasons for disapproval of a 
recommendation. I indicated in writing why I did not choose the 
third Mississippi project, Modular townhouse, which fell within 
the top-scored projects. My disapproval of projects was based 
on their ranking, and thus required no special explanation.
    In early December 2006, Gil Jamieson, the Deputy Director 
for Gulf Coast Recovery, sent me a memorandum that summarized 
the comments of the National Evaluation Panel for each project 
and presented the overall ranking of each project. Three 
funding options were outlined in this memorandum: First, fully 
fund the eligible projects in the order that they were ranked 
by the panel; second, provide a minimal amount of funding to 
all eligible projects, dividing the funds between as many as 10 
projects; or, third, provide significant funding to the top 
project from each eligible State, and then use the remainder of 
the funding to fund projects based on their relative rankings.
    Under a funding scheme that stuck to traditional 
competitive grant processes and fully funded projects based 
solely on their ranking, the second highest-ranked project 
would have consumed the entire amount of funding. However, 
because I considered it important that there be a diversity of 
competitive projects funded, I selected and recommended 
partial--85 percent--funding for the top project from each 
competitive State. With the remainder of the funding, the 
second project--ranked second overall--was funded at 66 percent 
of this request.
    By funding the top project from each State, FEMA is able to 
test emergency, interim, and permanent housing solutions. While 
I am aware that the Inspector General does not agree with this 
decision, it was my opinion that providing a minimal amount of 
funding to many projects would not have been consistent with 
the competitive grant process and could jeopardize the overall 
program by not allowing a full and fair evaluation of the 
highest-ranked proposals. Based on my selections, the projects 
previously described by both Mr. Jamieson and the Inspector 
General were the top five projects that were funded.
    Madam Chairman, I thank you for the opportunity to appear 
before you, and I would be pleased to answer any questions you 
have regarding my role as the Primary Selecting Official for 
the Alternative Housing Pilot Program.
    Chairman Landrieu. Thank you. We will have a great deal of 
questions about this. Go ahead, Mr. Duany.

TESTIMONY OF ANDRES DUANY,\1\ FOUNDING PRINCIPAL, DUANY PLATER-
                       ZYBERK AND COMPANY

    Mr. Duany. Madam Chairman, thank you. A little bit of 
history. Myself and our firm, we have been involved for most of 
the time since Hurricane Katrina, beginning by preparing the 11 
charrettes that were done for the cities of Mississippi for 
Governor Barbour. We were also the firm selected to do all the 
charrettes in Louisiana, from east to west, as you know. And 
then we did three of the neighborhoods in New Orleans.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Duany appears in the Appendix on 
page 102.
---------------------------------------------------------------------------
    We have in some ways seen it all and done it all, and we 
find that there is nothing nearly as important, of all the 
things we have done--infrastructure, schools--as the provision 
of houses. The amount of human suffering that is being 
undergone in these States is truly astounding, and the people 
that I knew 3 months into the hurricane are not the people that 
you find now. There was a resilience, there was an anger to the 
people of Louisiana and Mississippi, a can-do attitude that is 
absolutely gone. The people have been destroyed, and the source 
is the absence of housing. There is nothing as important as the 
housing and nothing as important as doing it speedily. Time is 
of the essence, whatever happens.
    Now, about this issue and this process, which is 
magnificent. I was involved actually in the design of the 
original Hurricane Katrina cottages before Governor Barbour's 
charrettes. We knew that this would be necessary. What drove us 
was, when we first realized that the cost of the trailers was 
between $60,000 and $90,000 for these temporary and 
uncomfortable structures, when the average cost of the housing, 
at least in Mississippi, including a lot, was $70,000. These 
lousy little trailers were actually costing more than the 
average house in Mississippi, and possibly Louisiana and the 
coast.
    There was a fantastic opportunity to actually deliver 
housing better than the housing that was destroyed, which, 
after all, is the hope of these charrettes.
    The competition has been actually a brilliant idea, and we 
must bear in mind that at the heart of it is design. There is a 
lot of scrutiny about process and about numbers, but this is 
about design. This is how we will do it better now as the 
trailers collapse and delaminate and fall apart, but also how 
we will do it better next time. So I am going to confine my 
statements to design.
    First of all, cost and permanence. As I have said, for the 
up to $90,000 that is being provided by FEMA, both for 
provision and maintenance and removal, this magnificent sum is 
literally thrown away in disposable quarters. It is not the 
best use of our taxes. This magnitude of investment can and 
should create very good housing of a permanent or quasi-
permanent type. The Louisiana proposal, our competition 
proposal, does that. The housing can stay there essentially for 
good.
    Liveability and resilience. Hurricane Andrew--and I was 
involved in Hurricane Andrew 15 years ago; we did the 
charrettes for Hurricane Andrew--has shown that some FEMA 
trailers are still in place 15 years later. It is astounding 
after the event. And despite the smaller scale of devastation 
and the ability of Florida to have a construction industry 
which neither Louisiana nor--particularly Louisiana does not 
have a construction industry to speak us, South Florida does, 
and we still have FEMA trailers from Hurricane Andrew up. This 
means that a child could have been born and completed junior 
high school while inhabiting one of these trailers. Effectively 
for that individual, the FEMA house is his or her childhood 
home. Our Louisiana proposal is for real houses where such a 
child can grow up with pride and without unnecessary 
dysfunction.
    The contextual aesthetics. As you might know, the provision 
of the FEMA trailers has been made unnecessarily difficult 
because many neighborhoods did not want them. They were 
rejected everywhere. The public process charrettes actually led 
very often to people saying, ``We do not want them,'' 
regardless of how necessary. They are associated with ``trailer 
parks'' of the kind that decrease real estate value. A very 
well-designed and permanent unit similar in appearance to 
permanent housing can and will go a long way toward mitigating 
this political problem. Our proposal looks as good as most 
houses in the Gulf. And I hesitate to say they look better, but 
they do. And, furthermore, it can be adjusted to match any 
local vernacular in the future. Remember, this test is for 
problems of the future, for catastrophes of the future. 
Sometime in the future a hurricane will hit Virginia, will hit 
North Carolina, will hit, for example, the New England States. 
One of the things we would like to explore is the possibility 
of this FEMA housing being adjustable to the vernacular of 
these other places so they will be accepted by the neighbors. 
And we would like to do that as part of the experiment.
    Flexibility. FEMA housing should be transitional in one 
specific sense, and only one, which is that their earliest use 
would be as dormitories housing first responders. Our proposal, 
at least half the units we intend to build include those that 
would house between 6 and 12 first responders comfortably, and 
they would be transformable. This housing would actually then 
transition--because what we need are the workers. The first 
responders come first. They must be the ones in housing first 
because they are the labor that will build the subsequent 
housing. Our units will house up to 12 of these workers, and 
then, with nothing other than a coat of paint, I suppose, they 
are transitional to full-time housing. And that is an 
extraordinary need.
    Production in quantity. One of the problems in providing 
housing for large-scale catastrophes is the reality of 
production bottlenecks. When you have a single system, it can 
easily bottleneck. The Louisiana proposal mitigates that in the 
most efficient way with technology supplied by multiple 
construction systems, some of which are ``open shelf'' systems. 
Ours is keyed to Lowe's. Any Lowe's can actually provide the 
materials for some of our Hurricane Katrina cottages, which 
means they are available in containers ready to go. And as you 
know, Lowe's has a distribution system that is second to none. 
You may know that Wal-Mart and Lowe's were the first people in 
after the hurricane right behind the National Guard, and they 
provided the water and the supplies. It is a fantastic system, 
built in, it requires no public subsidies to actually have this 
ready to go. That is only one of the open shelf systems we 
have. The Louisiana proposal, if permitted, will explore this 
aspect of emergency housing, the fact that it can be supplied, 
and we are now considering up to five different technologies so 
that the bottlenecks are virtually impossible. Also, this 
failure, technical failure of a type, and some of the FEMA 
trailers by the very few manufacturers that were used, the 
current ones, if they fail technically, the failure is 
cataclysmic because you do not lose one, you lose tens of 
thousands. This is impossible in a system that actually uses 
many technologies.
    Last, I would like to say that the community aspect is 
important. If these are essentially--and, by the way, we have 
submitted up to six different designs. The designs are for in-
fill for individual lots but also for the creation of new 
communities. These new communities are relatively dense, but 
they look single-family, up to 35 units to the acre while 
looking like single-story, single-family houses.
    One of the things we would like to further explore with the 
FEMA funds available is to provide the services that are 
necessary. Anything from barbershops, banks, post offices, 
daycare centers, small markets, FEMA offices, and so forth must 
be simultaneously provided in a dignified way. These sort of 
concentration camps that FEMA trailer parks have turned into 
fulfill the worst, absolutely the worst fears of the neighbors 
who think that they are going to turn into slums, which indeed 
they have. The Louisiana housing proposals are of quality that 
you can achieve a mix of poor people, lower-middle-class, and 
upper-middle-class. People of different classes can live 
comfortably in these communities because of the nature of our 
design.
    Now, to speak a little bit about Mississippi and----
    Chairman Landrieu. If you could wrap up in about one 
minute.
    Mr. Duany. Right. To speak a little bit about Mississippi 
and Louisiana and the nature of their--the Mississippi trailers 
are different from the Louisiana ones. The Mississippi ones, 
they can come faster; they can be the absolute first responder. 
They can be stocked somewhere, and they can be in within weeks. 
Ours will take a little longer. But gradually those, which 
essentially are mobile homes, very good-looking mobile homes 
but mobile homes, nevertheless, could gradually evolve into the 
next ones, which is to say they are both necessary. I think the 
selection was brilliantly done. The only thing we do not 
understand is why there are 9,000 of those, essentially, of a 
certain type which are vulnerable to monocultures. You know, 
9,000 of anything is a problem right there. It is not that they 
are inferior. They are excellent and necessary. But I do not 
understand why there are 9,000 of those and only 400 to 500 of 
ours, when actually we have greater diversity and ours are the 
ones that provide actually the more permanent solution to the 
problem.
    So I would say what is necessary is a rebalancing, not so 
much opening it up to more types, which would be a tremendous 
delay, because the array that is available is very substantial, 
but there may be a rebalancing in types. I do not think that 
the 400 that we have and the funding that we have would allow 
suitable experimenting in terms of providing the stylistic 
differences and the technical differences that are necessary to 
break the problem of the monoculture. Nor have we been funded 
to do the neighborhood centers which are necessary, the ones 
that contain the banks and the administration buildings, post 
offices, and so forth, that we could certainly use some 
additional funding for that.
    Chairman Landrieu. Thank you. Mr. Badman.

 TESTIMONY OF JOHN BADMAN III,\1\ FOUNDER AND CHIEF EXECUTIVE 
                OFFICER, RE: FORMED SYSTEMS, INC

    Mr. Badman. Thank you, Senator Landrieu. I am Jack Badman, 
CEO of RE: Formed Systems. First, let me say that better and 
cheaper approaches to providing disaster planning, response, 
and recovery do exist. They exist now and are available to 
FEMA, to the Federal Government, and to the American taxpayer.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Badman with an attachment appears 
in the Appendix on page 103.
---------------------------------------------------------------------------
    Five years ago I founded our firm to find a way to build 
Force 5 hurricane-proof houses for the price of wood housing, 
hence prevent having to rebuild every time a hurricane hits. 
This was expanded into our comprehensive Emergency Planning, 
Response, and Recovery System, which we submitted to Alabama 
for consideration in the Alternative Housing Pilot Program. 
Alabama and Mobile County ranked our system No. 1 and featured 
it in their proposal--Mobile County Alternate Housing Pilot 
Program. We had discussed doing a demonstration of our 
emergency housing, and how quickly a lot of it could be 
assembled by unemployed workers, then show how it all 
transitions into temporary housing, then how all these 
materials could be incorporated into truly permanent housing. 
We had hoped to do a large emergency response development, but 
Mobile County said FEMA controlled how much money we would get. 
FEMA did not select us, and we have not received a debriefing. 
We are unaware of a selected concept that better met their 
RFP's criteria. We also hope to better understand their 
rationale in a debriefing.
    We offer a ``pay one time'' and ``ship one time'' approach 
that results with virtually indestructible housing suitable for 
any location that Hurricane Katrina struck. Our emergency 
housing, which competes with tents, hotel rooms, and cruise 
ships, is highly flexible and far more cost-effective. It can 
be a studio or a 1- to 5-bedroom shelter. Each family is 
allocated what they need, in a private, secure facility. They 
do not have to cohabitate in a tent with other families. 
Thousands of various sized shelters can be erected at various 
sites within 12 hours of a storm's passing. We anticipate being 
able to construct and furnish shelters faster than emergency 
workers can sort out who will be assigned which shelter. Lots 
of preplanning is involved, but it is highly cost-effective and 
very responsive to evacuees' needs in a time of crisis.
    While families inhabit our shelters, without disturbing 
them except for 2 hours, their shelters can be expanded quickly 
into temporary housing by adding our toilet and kitchen modules 
and a long list of amenities and wrap-around services. This 
replaces FEMA trailers with a long list of benefits. When no 
longer needed, the materials for our emergency to temporary 
housing is disassembled and locally reassembled into our 
permanent Force 5 hurricane-proof, submergible housing. All 
material is shipped one way and is consumed locally. Money 
spent for emergency to temporary housing materials is not 
wasted since all the materials are incorporated into our 
permanent housing. Nothing becomes surplus or obsolete, nor 
needs to be shipped to storage yards, stored or refurbished. 
There are no disposal problems.
    During the next emergency response everybody gets fresh, 
new, next-generation materials. In future storms no one will 
feel they are getting used trailers or less-than-the-latest. In 
summary, instead of paying first for emergency housing via 
tents, then paying for temporary housing via FEMA trailers, 
then paying for permanent housing--which really may be 
destroyed again--our system has all the materials in our 
emergency housing included in our temporary housing, and all 
that is included in our permanent housing, which will never 
have to be replaced. Each phase just adds more materials to the 
previously used materials. Our permanent housing conceals all 
materials behind new finishes, so nothing looks used. This 
approach was honored as the ``Disaster Response'' cover story 
of CM magazine, the official magazine of ACMA, the American 
Composite Manufacturers Association, and the world's largest 
trade organization for polymers. It's on our website, 
ReFormedSystems.Com. A photo from the first of my four trips to 
New Orleans is on the cover. What it does not show is right 
behind the teddy bear is its owner's body.
    Saving money has not been our only objective. We feel FEMA 
failed to recognize some of the benefits we bring. Our system 
is one-third the cost of their current system. It is far faster 
and prevents having to spend money for future damage; hence, it 
has an extremely low life-cycle cost. In the future, we suggest 
FEMA address what should be their most important goals, make 
these goals their primary focus and ensure that they select the 
new, vitally needed innovative approaches that work toward 
meeting these goals.
    The greatest problem is in pre-hurricane planning. FEMA 
should be seeking new innovative approaches that can provide 
permanent units that can be sited anywhere, including on the 
coast and under sea level. This requires a variable wall system 
to develop the flexibility needed. We are unaware of any of the 
selected systems that can do any of the above or the following: 
FEMA should look for systems which do not use wood, gypsum, SIP 
panels, or other materials prone to flood or mold damage. Seek 
structures designed to be submergible, which can have the muck 
and mold cleaned. Evacuees will lose the use of their houses 
until cleaned out, but no structural damage should be likely. 
In floodable areas, FEMA should not use materials such as wood 
and SIP panels that float and add buoyancy forces if 
underwater. Seek materials that are very compact and only ship 
one way via high-speed common carrier, so the highways and 
commuters are not affected by slow traffic, trucks pulling 
trailers, etc.--hence, with shipping costs and aggravation that 
are far lower.
    Ideally, nothing has to be eventually returned to storage 
yards, refurbished, or disposed. A great advantage would be in 
systems that require very few skilled workers to assemble it, 
and do not compete for scarce carpenters. Hence, unemployed 
persons seeking hard but rewarding work can earn money while 
taking pride in helping their communities respond or rebuild.
    Systems should not have a fixed sized, not be design 
specific or copyrighted like a Hurricane Katrina cottage. This 
allows communities to determine how their units will look and 
aids community buy-in. Key is taxpayers should not be asked to 
keep paying for disaster recovery over and over again. The 
criteria should be fix it once and never have to have it fixed 
again. This is in the Gulf's best interest. By rebuilding with 
what will not be destroyed, taxpayers will back it. More money 
will gladly flow into the Gulf. Mortgages and insurance with be 
available. Tax incentives should pass to back this new 
approach. Find systems which are ideal for the areas that now 
cannot get mortgages or insurance.
    Because FEMA did not recognize the need for all the above, 
which we offered, we are concerned that FEMA is not asking the 
right questions. As CM magazine explained in more detail, there 
are approaches such as ours that can be of great benefit to 
FEMA, the evacuees, the communities, the States, and the 
taxpayers. As such, we feel Congress should now add an 
additional pilot project that encourages the development of 
additional projects in order to test the additional diverse 
ideas available. We suggest this new pilot project be viewed a 
venture capital and suggest FEMA draw on the technical 
community to help rank and select those projects with the 
greatest potential return on investment and long-term payback.
    Chairman Landrieu. Can you wrap in just a minute?
    Mr. Badman. Yes. With such an enhanced selection process, 
taxpayers should see new hope that there will be improvements, 
new approaches, new effective planning, real progress. By 
investing additional pilot program funds effectively now, 
trillions can be saved over time, making it of outstanding help 
to the community, not just taxpayers. We hope Congress and FEMA 
will give us an opportunity to work together for the common 
good.
    Chairman Landrieu. Thank you all very much.
    Let me just begin by saying the time is going to be so 
short this morning that I anticipate we are going to have to do 
a second hearing on this subject sometime shortly because we 
have really just scratched the surface with the problems and 
challenges for housing. And I recognize that we are not the 
only Subcommittee focusing on this, and you all have testified 
before other committees. But while I have heard a lot of 
problems, I have not heard many solutions this morning, and we 
are going to have to get to some better solutions.
    But for the purposes of this panel, as one of the key 
architects of the $400 million pilot program that was supposed 
to be to seek alternatives from the trailer situation that was 
described not just by Louisiana officials or Mississippi 
officials but by Florida officials, who said people had been in 
trailers not for 3 years, not for 5 years, but for 15 years, 
with no way out and no good options. We put this $400 million 
in to explore alternatives, only to find out recently that of 
the $400 million, $275 million was awarded to one State for the 
Park Model project, which was Mississippi; $74 million to 
Louisiana, which had three times the housing loss of 
Mississippi, but we got one-third or less of this particular 
funding pool; and then projects like Mr. Badman has suggested 
did not get any consideration and still to this date, since the 
award, has not received any information about why their project 
did not get awarded.
    So I guess, Mr. Jamieson, this is for you and General 
D'Araujo to try to explain to the public at large how this was 
done. I know that you all say it was done competitively, but I 
am holding in my hand the competitive grant document. Unless my 
information is incorrect, there is no competitive process, this 
is still in draft form? Or is there one that has been 
finalized? Because I cannot find it.
    Mr. Jamieson. Senator, in relation to your specific 
question, I am not aware of any final document.
    Chairman Landrieu. So there is no final competitive process 
that everybody keeps saying was used. There is no final 
competitive process.
    Mr. Jamieson. Well, there was a process----
    Chairman Landrieu. There was one made up for the purposes 
of this program, but there is not a standard one, because this 
is the draft.
    Mr. Jamieson. Actually, Senator, we engaged in competitive 
grant processes after September 11, 2001, for communication 
interoperability and a variety of different supplemental 
funding----
    Chairman Landrieu. So you used that process for this 
process because we do not have a standard one.
    Mr. Jamieson. Yes, we did.
    Chairman Landrieu. Is it also true that you gave the States 
only 30 days to respond?
    Mr. Jamieson. I believe it was in the neighborhood of 30 
days, 35 days.
    Chairman Landrieu. And was there some reason that could not 
be extended?
    Mr. Jamieson. Just the urgency in terms of trying to run 
this process as quickly as we could to get different 
alternatives in advance of the upcoming hurricane season.
    Chairman Landrieu. So you must have assumed the next 
hurricane was going to hit Mississippi and not Louisiana or 
Alabama or Florida or North or South Carolina since $275 
million went to Mississippi. So how did we know that the next 
hurricane would hit Mississippi? Because we would be happy to 
pass that information on.
    Mr. Jamieson. Senator, we do not presuppose that the next 
hurricane is going to hit----
    Chairman Landrieu. But you sent the majority of the money 
to Mississippi in case a hurricane did?
    Mr. Jamieson. What we attempted to do through the pilot 
program and through using the Gulf Coast States as a laboratory 
is explore different alternatives that could be used 
nationally, any hurricane, any natural disaster----
    Chairman Landrieu. So how many Gulf Coast States do we 
have?
    Mr. Jamieson. We have five that were involved in the pilot 
program.
    Chairman Landrieu. And do you disagree that the end result 
of a competitive process that was never fully established, that 
75 percent of the money basically went to one of the Gulf Coast 
States? Was their project so superior--I see the ranking here, 
and I just will submit it to the record, that was a score of 
182. The Cypress Cottage was next at 156; Texas Heston was 159; 
Modular Townhome in Mississippi was 157. So there is only a 
one-point difference between these in the ranking. Mobile 
County I do not think got anything. They were 146.
    Was the Park Model so superior? And if it was superior in 
its design--which let's just grant for the sake of this 
argument. Let's just say we are going to prove through a series 
of these hearings beyond a shadow of a doubt that the one 
design was so far superior than everything else that was 
submitted. Why do they need--how many are we going to provide 
for them?
    Mr. Jamieson. Senator, you will see in the documentation 
that I think their proposal came in at something in the 
neighborhood of 7,000 or something like that based on----
    Chairman Landrieu. So we are going to provide 7,000----
    Mr. Jamieson. No, we are not. As a matter of fact, the 
panel specifically--there are two housing alternatives----
    Chairman Landrieu. So how many are we going to provide?
    Mr. Jamieson. In the neighborhood of 1,800.
    Chairman Landrieu. For $275 million?
    Mr. Jamieson. Well, the other part of their proposal is the 
Mississippi Cottage, and that is--we thought----
    Chairman Landrieu. OK. So let's just get for the record: 
How many cottages and how many trailers on wheels?
    Mr. Jamieson. There will be 1,858 mobile park units that 
will be awarded to Mississippi with the funding that they 
received. Mississippi Cottages, there will be: Two-bedroom, 
1,397; three-bedroom, 1,396; for a total of 4,651 units.
    Chairman Landrieu. So my point is, based on being one of 
the key authors of this total amount of funding, that the idea 
of it was to promote alternatives, not to build communities. 
And if the alternatives worked, then we could expand it fairly 
across the Gulf Coast and, frankly, the Atlantic Coast, that 
has similar vulnerability here.
    Mr. Jamieson. Sure.
    Chairman Landrieu. But evidently, that thought obviously 
never got communicated to FEMA in the way this grant was put 
out. You just decided that we just needed to get these houses 
in Mississippi in case a hurricane hit them again and too bad 
for Louisiana, Florida, or anybody else that might have people 
in harm's way. Is that the thought or the argument, the process 
that you went through?
    Mr. Jamieson. No, Senator. It clearly is not the thought or 
the process that we went through.
    Chairman Landrieu. Then why is it necessary to have 1,800 
of something to prove it works?
    Mr. Jamieson. Well, we did not prejudge what States could 
propose. To overemphasize to make a point, I was prepared to 
say that if no State submitted a competitive proposal, that all 
of the funding could go to one State--Louisiana, Mississippi, 
Alabama, or Texas. The intent of this was to let the 
marketplace speak to us and tell us how we could do better than 
the current manufactured housing, travel trailers and mobile 
homes that we were currently using. And so what we did is we 
evaluated what was given to us by the States. A technical panel 
looked at it. They told us what they thought were the most and 
the best solutions.
    Now, I think there is an argument that can be made in terms 
of what is the right number of units to constitute a fair 
evaluation. Is it 7,000? Is it 1,500? Is it 10? But what we 
have to do is react to what the States gave us, look at the 
technical evaluation that we received, and make a decision.
    Chairman Landrieu. See, I disagree with that. I do not 
think you had to react to what the States gave you. You are the 
agency trying to evaluate different models and projects for the 
benefit of the Nation. You were supposed to look at 
alternatives to trailers, which have been proven to work only 
in a very certain circumstance. They are expensive, and they 
can be vulnerable, and they might be appropriate in certain 
circumstances. And the record was replete with meeting after 
meeting, document after document. And so we said, OK, since we 
are spending billions of dollars in a system that seems to not 
be meeting the needs of our constituents--rich, poor, black, 
white--let's provide some funding to seek alternatives. It 
wasn't let's provide funding to keep one State safe or safer 
from the next disaster. It was to explore. And there was no 
mandate to spend all the money in the first 6 months. I do not 
know where that came from. This was supposed to be money 
available to explore options. That was turned into, ``Let's 
hurry up and give 75 percent of the money to one State to build 
communities.''
    Mr. Jamieson. Senator----
    Chairman Landrieu. And that is a violation of the intent of 
the funding.
    Now, I am going to submit the memos to the record, and we 
are going to have another hearing on this because it is a 
pattern, I want to say, a pattern of not allocating money 
fairly between States to not meet the great challenges that we 
have to find adequate housing and response to disasters. And it 
is just another evidence in my view to that.
    And I will just say this for the record, and I know I am 
taking the prerogative as the Chairman, but that is what 
chairmans get. It is making it extremely difficult for a person 
like myself or any Senator representing any State to actually 
do anything about this, because every time we specifically 
direct funding to a State, we are told that we cannot do that 
any longer. There are no more earmarks. There is no more direct 
funding. So we trust--which will probably be the last time I do 
this--trust administrators with funding, hoping that you all 
will make appropriate decisions because we have some 
restrictions on earmarks, self-imposed but nonetheless, and 
ones that I do not necessarily agree to for this exact purpose. 
So it makes it even more frustrating in trying to get funding 
for a variety of different alternatives to try out, let us see 
what would happen over the course of the year, and then decide 
among all these what is the best and maybe move our entire 
Federal program closer to that. But that effort has now been 
thwarted by the awarding of this contract, in my view.
    Now, the time is short. Does anybody want to add anything 
else to this record? And we will probably have another hearing 
on it. Mr. Badman.
    Mr. Badman. Just one comment to back up Mobile County's 
submission. We feel that we offered the only one that actually 
addressed emergency, temporary, and permanent housing. In fact, 
all the housing that was selected is permanent housing, and I 
think the real need is to find a way to transition through each 
of the phases and not have it be three times the current cost. 
And that is what we propose.
    Chairman Landrieu. Any closing comments, General D'Araujo?
    General D'Araujo. Just a couple, if I could, Senator. Let 
me add from my perspective that, in my view, I thought the 
structure of the competitive guidance that was put together for 
this particular program--and I know you referred to the draft 
guidance there--but there was a specific competitive guidance 
document that guided me in this process. That is what I 
attempted to follow: The objectives for providing alternative 
solutions for future disasters, the life-cycle costs, the 
applicability across not only the Gulf Coast but across the 
country for future disaster operations.
    I think it would be remiss on all of us if we do not take 
those many lessons learned, some of them extremely painful, and 
use a mechanism like this to adjust for catastrophic events in 
the future. I think this does that.
    It is arguable about how the money was allocated, which 
projects were most meritorious. But keep in mind, I would ask, 
that we received requirements for $1.2 billion, and taking away 
administrative costs, we had about $388 million to allocate. 
Lots of good ideas that came out of them, a number that you 
heard here.
    One of my last comments in the memo that I sent to the 
Director of Management was that we not discard the other 
solutions that were not funded by this program and that FEMA, 
through its Joint Housing Solutions Group, keep those active in 
their review for other possible support. I am led to believe 
that that is being done.
    Those are the only comments that I would leave you with, 
Senator.
    Chairman Landrieu. I appreciate that, but I will just say 
that the chance to highlight some of the worthy aspects of many 
of these other programs has virtually been lost. FEMA can say 
what it wants to about what it liked to do. Maybe it could buy 
a billboard and promote how good some of them were. But the 
money that we allocated is gone, and the chances of me going 
back to an Appropriations Committee and saying please give me 
money for the projects that were not identified because they 
were good is non-existent.
    So whatever chance you all had to take a little bit of 
money that we gave you and highlight across the board some 
interesting proposals, you chose not to do that. You chose to 
go to mass production of one, and that is either what we are 
going to be stuck with--let's hope it is really good because 
that is what you all did.
    Go ahead, Mr. Jamieson.
    Mr. Jamieson. Senator, thank you, first of all, for the 
opportunity to be here with you. I would like to say--and the 
other vendors who proposed, as a matter of fact, I think Mr. 
Badman's point is a good point, and that is that all of those 
who proposed have an opportunity to review and have a back-
brief in terms of the award process----
    Chairman Landrieu. Well, when are you going to do that with 
each of them, so I could send them a note and let them know 
that FEMA will talk with them----
    Mr. Jamieson. Senator, I will go back and I will follow up 
with your staff in terms of getting a date when we can do that.
    Chairman Landrieu. OK.
    Mr. Jamieson. I do think there are opportunities--as 
General D'Araujo pointed out, there were a lot of good 
proposals in there. There were a lot of tough decisions that 
were made by technical experts and architects in terms of those 
proposals. I do think the Post Katrina Emergency Management 
Reform Act (PKEMRA) in terms of the Stafford legislation does 
offer us the opportunity to explore some of those.
    Chairman Landrieu. Let me just say this one other thing. 
The reason that this is so hard for me to understand is because 
under the general community development block grant funding 
which went to the States in question, the State of Mississippi 
received $5.5 billion for the community development block grant 
program, of which their general housing program only needed $3 
billion. So they had an additional $2 billion. They could have 
bought these themselves, and they could buy all of them with 
the $2 billion they have extra.
    So I am very puzzled as to how this was a free market or 
how this was based on demand or need. So we are going to visit 
that aspect of it, too. In other words, if the State of 
Mississippi thought that this program was so valuable, it 
actually has money in its bank account, it could have bought 
5,000 of these if it wanted to.
    Mr. Jamieson. As does Louisiana, Senator.
    Chairman Landrieu. No. I will say this: Louisiana does not 
have any extra community development block grant because--let 
me just say this for the record, because we are going to have 
many hearings until the truth comes out. The community 
development block grant funding that came to Louisiana was 
$10.5 billion. If you multiply three times three--we had three 
times three more houses destroyed than Mississippi. So if you 
want to use that as a basis--you do not have to, but it is one 
objective criteria--other than the political criteria that has 
been used. If you want to use objective criteria, then we 
should have gotten $15 or $16 billion. We got $10.5 billion. So 
we are either short $6 billion or we are short $17 billion, 
depending on what portion you want to use.
    Now, that is a fact. It is not Mary Landrieu's opinion. It 
is a fact.
    So we are going to be pressing this fact about how these 
community development block grant monies were distributed, and 
I understand that it was Congress itself that put a cap that no 
State could get more, which started this distortion. But that 
distortion is going to be corrected sooner or later.
    Mr. Jamieson. Senator, if I could make one final point, I 
think that the subject of need keeps coming up in terms of 
whether or not this Alternative Housing Pilot Program was 
designed to meet need. And I think the other statistic that 
needs to be looked at is the assistance that went into 
Louisiana for individual assistance where $5.5 billion went in 
for individual assistance and $1.2 billion went in for 
Mississippi, and----
    Chairman Landrieu. Well, it is only because there were more 
people displaced in Louisiana.
    Mr. Jamieson. That is precisely right, but that is my 
point.
    Chairman Landrieu. It is only more people displaced----
    Mr. Jamieson. I think in terms of the housing need, that is 
an adequate barometer in terms of FEMA's desire to meet the 
immediate and emergency housing needs in the State. That was my 
only point.
    Chairman Landrieu. Anything else?
    Mr. Jadacki. Senator, I believe our report speaks for 
itself, so I have no additional comments. Thank you.
    Chairman Landrieu. I thank the panel very much, and I 
appreciate--go ahead, Mr. Duany.
    Mr. Duany. I would just add one thing, which actually could 
be functionally. The funds that we have are substantial funds, 
and they can be used to greater effect if FEMA would manifest 
some flexibility in the proposals. When we only had 30 days to 
do it, we had thoughts, we had ideas, but not all the thoughts 
and ideas that could possibly be explored. And many have 
emerged, and the Louisiana program can actually make 
substantial contributions to the intention of the bill if you 
could--if FEMA would retain a flexible mind about additional 
good ideas that have emerged since. And it is not necessarily 
happening, and I would say that if you would urge them to do 
so, it would be a much better outcome.
    Chairman Landrieu. Well, I am not sure how much my urging 
is getting FEMA to do anything, but I will continue to try. But 
if you would submit those in writing to me, I will present them 
to this agency. I will do my best.
    Mr. Duany. Thank you.
    Chairman Landrieu. Mr. Badman.
    Mr. Badman. Senator, may I suggest strong focus be 
addressed to pre-hurricane planning. I think the greatest 
failure of all has been the failure to set up emergency 
response. With our system, if properly set up, we will be there 
instantly. And I think other systems can do that, too, and that 
is really where we have to start. We cannot have a knee-jerk 
reaction. We cannot be trying to figure out solutions after the 
disaster. We have to be ready for them ahead of time. And I 
think all the planning that was done after it was excellent, 
but a greater focus has to be on planning ahead of time.
    Chairman Landrieu. Thank you, Mr. Badman. But you might be 
shocked to know that in another committee that I sit on, most 
of the planning money that goes from the Federal Government 
block grant to the States has been cut out substantially. We 
have learned very little lessons from Hurricanes Katrina and 
Rita, because we needed that money to fund interoperability. So 
instead of finding additional funding, we cut the planning 
money to give it to interoperability. So we have got some 
interesting work ahead.
    Thank you very much. The hearing is adjourned.
    [Whereupon, at 11:32 a.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              

[GRAPHIC] [TIFF OMITTED] T5527.001

[GRAPHIC] [TIFF OMITTED] T5527.002

[GRAPHIC] [TIFF OMITTED] T5527.003

[GRAPHIC] [TIFF OMITTED] T5527.004

[GRAPHIC] [TIFF OMITTED] T5527.005

[GRAPHIC] [TIFF OMITTED] T5527.006

[GRAPHIC] [TIFF OMITTED] T5527.007

[GRAPHIC] [TIFF OMITTED] T5527.008

[GRAPHIC] [TIFF OMITTED] T5527.009

[GRAPHIC] [TIFF OMITTED] T5527.010

[GRAPHIC] [TIFF OMITTED] T5527.011

[GRAPHIC] [TIFF OMITTED] T5527.012

[GRAPHIC] [TIFF OMITTED] T5527.013

[GRAPHIC] [TIFF OMITTED] T5527.014

[GRAPHIC] [TIFF OMITTED] T5527.015

[GRAPHIC] [TIFF OMITTED] T5527.016

[GRAPHIC] [TIFF OMITTED] T5527.017

[GRAPHIC] [TIFF OMITTED] T5527.018

[GRAPHIC] [TIFF OMITTED] T5527.019

[GRAPHIC] [TIFF OMITTED] T5527.020

[GRAPHIC] [TIFF OMITTED] T5527.021

[GRAPHIC] [TIFF OMITTED] T5527.022

[GRAPHIC] [TIFF OMITTED] T5527.023

[GRAPHIC] [TIFF OMITTED] T5527.024

[GRAPHIC] [TIFF OMITTED] T5527.025

[GRAPHIC] [TIFF OMITTED] T5527.026

[GRAPHIC] [TIFF OMITTED] T5527.027

[GRAPHIC] [TIFF OMITTED] T5527.028

[GRAPHIC] [TIFF OMITTED] T5527.029

[GRAPHIC] [TIFF OMITTED] T5527.030

[GRAPHIC] [TIFF OMITTED] T5527.031

[GRAPHIC] [TIFF OMITTED] T5527.032

[GRAPHIC] [TIFF OMITTED] T5527.033

[GRAPHIC] [TIFF OMITTED] T5527.034

[GRAPHIC] [TIFF OMITTED] T5527.035

[GRAPHIC] [TIFF OMITTED] T5527.036

[GRAPHIC] [TIFF OMITTED] T5527.037

[GRAPHIC] [TIFF OMITTED] T5527.038

[GRAPHIC] [TIFF OMITTED] T5527.039

[GRAPHIC] [TIFF OMITTED] T5527.040

[GRAPHIC] [TIFF OMITTED] T5527.041

[GRAPHIC] [TIFF OMITTED] T5527.042

[GRAPHIC] [TIFF OMITTED] T5527.043

[GRAPHIC] [TIFF OMITTED] T5527.044

[GRAPHIC] [TIFF OMITTED] T5527.045

[GRAPHIC] [TIFF OMITTED] T5527.046

[GRAPHIC] [TIFF OMITTED] T5527.047

[GRAPHIC] [TIFF OMITTED] T5527.048

[GRAPHIC] [TIFF OMITTED] T5527.049

[GRAPHIC] [TIFF OMITTED] T5527.050

[GRAPHIC] [TIFF OMITTED] T5527.051

[GRAPHIC] [TIFF OMITTED] T5527.052

[GRAPHIC] [TIFF OMITTED] T5527.053

[GRAPHIC] [TIFF OMITTED] T5527.054

[GRAPHIC] [TIFF OMITTED] T5527.055

[GRAPHIC] [TIFF OMITTED] T5527.056

[GRAPHIC] [TIFF OMITTED] T5527.057

[GRAPHIC] [TIFF OMITTED] T5527.058

[GRAPHIC] [TIFF OMITTED] T5527.059

[GRAPHIC] [TIFF OMITTED] T5527.060

[GRAPHIC] [TIFF OMITTED] T5527.061

[GRAPHIC] [TIFF OMITTED] T5527.062

[GRAPHIC] [TIFF OMITTED] T5527.063

[GRAPHIC] [TIFF OMITTED] T5527.064

[GRAPHIC] [TIFF OMITTED] T5527.065

[GRAPHIC] [TIFF OMITTED] T5527.066

[GRAPHIC] [TIFF OMITTED] T5527.067

[GRAPHIC] [TIFF OMITTED] T5527.068

[GRAPHIC] [TIFF OMITTED] T5527.069

[GRAPHIC] [TIFF OMITTED] T5527.070

[GRAPHIC] [TIFF OMITTED] T5527.071

[GRAPHIC] [TIFF OMITTED] T5527.072

[GRAPHIC] [TIFF OMITTED] T5527.073

[GRAPHIC] [TIFF OMITTED] T5527.074

[GRAPHIC] [TIFF OMITTED] T5527.075

[GRAPHIC] [TIFF OMITTED] T5527.076

[GRAPHIC] [TIFF OMITTED] T5527.077

[GRAPHIC] [TIFF OMITTED] T5527.078

[GRAPHIC] [TIFF OMITTED] T5527.079

[GRAPHIC] [TIFF OMITTED] T5527.080

[GRAPHIC] [TIFF OMITTED] T5527.081

[GRAPHIC] [TIFF OMITTED] T5527.082

[GRAPHIC] [TIFF OMITTED] T5527.083

[GRAPHIC] [TIFF OMITTED] T5527.084

[GRAPHIC] [TIFF OMITTED] T5527.085

[GRAPHIC] [TIFF OMITTED] T5527.086

[GRAPHIC] [TIFF OMITTED] T5527.087

[GRAPHIC] [TIFF OMITTED] T5527.088

[GRAPHIC] [TIFF OMITTED] T5527.089

[GRAPHIC] [TIFF OMITTED] T5527.090

[GRAPHIC] [TIFF OMITTED] T5527.091

[GRAPHIC] [TIFF OMITTED] T5527.092

[GRAPHIC] [TIFF OMITTED] T5527.093

[GRAPHIC] [TIFF OMITTED] T5527.094

[GRAPHIC] [TIFF OMITTED] T5527.095

[GRAPHIC] [TIFF OMITTED] T5527.096

[GRAPHIC] [TIFF OMITTED] T5527.097

[GRAPHIC] [TIFF OMITTED] T5527.098

[GRAPHIC] [TIFF OMITTED] T5527.099

[GRAPHIC] [TIFF OMITTED] T5527.100

[GRAPHIC] [TIFF OMITTED] T5527.101

[GRAPHIC] [TIFF OMITTED] T5527.102

[GRAPHIC] [TIFF OMITTED] T5527.103

[GRAPHIC] [TIFF OMITTED] T5527.104

[GRAPHIC] [TIFF OMITTED] T5527.105

[GRAPHIC] [TIFF OMITTED] T5527.106

[GRAPHIC] [TIFF OMITTED] T5527.107

[GRAPHIC] [TIFF OMITTED] T5527.108

[GRAPHIC] [TIFF OMITTED] T5527.109

[GRAPHIC] [TIFF OMITTED] T5527.110

[GRAPHIC] [TIFF OMITTED] T5527.111

[GRAPHIC] [TIFF OMITTED] T5527.112

[GRAPHIC] [TIFF OMITTED] T5527.113

[GRAPHIC] [TIFF OMITTED] T5527.114

[GRAPHIC] [TIFF OMITTED] T5527.115

[GRAPHIC] [TIFF OMITTED] T5527.116

[GRAPHIC] [TIFF OMITTED] T5527.117

[GRAPHIC] [TIFF OMITTED] T5527.118

[GRAPHIC] [TIFF OMITTED] T5527.119

[GRAPHIC] [TIFF OMITTED] T5527.120

[GRAPHIC] [TIFF OMITTED] T5527.121

[GRAPHIC] [TIFF OMITTED] T5527.122

[GRAPHIC] [TIFF OMITTED] T5527.123

[GRAPHIC] [TIFF OMITTED] T5527.124

[GRAPHIC] [TIFF OMITTED] T5527.125

                                 
