    [Senate Hearing 111-1007]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 111-1007

                       FIVE YEARS LATER: LESSONS LEARNED,
            PROGRESS MADE, AND WORK REMAINING FROM HURRICANE KATRINA

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

                                    HEARING

                                   before the

                    AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                                     of the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                         FIELD HEARING IN CHALMETTE, LA

                                   __________

                                AUGUST 26, 2010

                                   __________

            Available via the World Wide Web: http://www.fdsys.gov/

           Printed for the use of the Committee on Homeland Security
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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   JOSEPH I. LIEBERMAN, Connecticut, Chairman
    CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
    DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
    THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
    MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
    MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
    CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
    JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
    ROLAND W. BURRIS, Illinois
    EDWARD E. KAUFMAN, Delaware

                      Michael L. Alexander, Staff Director
         Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                      Trina Driessnack Tyrer, Chief Clerk
                 Joyce Ward Publications Clerk and GPO Detailee

                    AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                     MARY L. LANDRIEU, Louisiana, Chairman
    CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina
    ROLAND W. BURRIS, Illinois           SCOTT P. BROWN, Massachusetts
                          Ben Billings, Staff Director
                      Andy Olson, Minority Staff Director
                           Kelsey Stroud, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statement:
                                                                       Page
        Senator Landrieu.............................................     9
    Prepared statements:
        Senator Landrieu.............................................    49

                                   WITNESSES

                           Thursday, August 26, 2010

    Gregory C. Rigamer, Chief Executive Officer, GCR and Associates,
      Inc., New Orleans, LA..........................................     3
    Amy Liu, Deputy Director and Senior Fellow, Metropolitan Policy
      Program, The Brookings Institution, Washington, DC.............     5
    Hon. Charlie Melancon, a Representative in Congress from the
      State of Louisiana.............................................    11
    Hon. Steve Scalise, a Representative in Congress from the State
      of Louisiana...................................................    13
    Hon. Joseph Cao, a Represenative in Congress from the State of
      Louisiana......................................................    15
    Hon. Shaun Donovan, Secretary, U.S. Department of Housing and
      Urban Development..............................................    17
    Paul Rainwater, Commissioner of Administration, State of
      Louisiana; and Former Executive Director, Louisiana Recovery
      Authority......................................................    21
    Doris Voitier, Superintendent, St. Bernard Parish Schools........    24
    Mark Schexnayder, Agent, Louisiana State University Agriculture
      Center.........................................................    27
    Lauren Anderson, Chief Executive Officer, Neighborhood Housing
      Services of New Orleans........................................    28
    Hon. W. Craig Fugate, Administrator, Federal Emergency Management
      Agency, U.S. Department of Homeland Security...................    33
    Lieutenant General Robert Van Antwerp, Jr., Chief of Engineers,
      U.S. Army Corps of Engineers...................................    35
    Mitchell J. Landrieu, Mayor City of New Orleans..................    37
    Kevin Davis, President, St. Tammany Parish.......................    39
    Jiff Hingle, Sheriff, Plaquemines Parish.........................    40

                         Alphabetical List of Witnesses

    Anderson, Lauren:
        Testimony....................................................    28
        Prepared statement with attachment...........................    95
    Cao, Hon. Joseph:
        Testimony....................................................    15
    Davis, Kevin:
        Testimony....................................................    39
        Prepared statement...........................................   127
    Donovan, Hon. Shaun:
        Testimony....................................................    17
        Prepared statement...........................................    53
    Fugate, Hon. W. Craig:
        Testimony....................................................    33
        Prepared statement...........................................   106
    Hingle, Jiff:
        Testimony....................................................    40
        Prepared statement...........................................   131
    Landreiu, Mitchell J.:
        Testimony....................................................    37
        Prepared statement...........................................   125
    Liu, Amy:
        Testimony....................................................     5
    Melancon, Hon. Charlie:
        Testimony....................................................    11
    Rainwater, Paul:
        Testimony....................................................    21
        Prepared statement...........................................    75
    Rigamer, Gregory C.:
        Testimony....................................................     3
    Scalise, Hon. Steve:
        Testimony....................................................    13
    Schexnayder, Mark:
        Testimony....................................................    27
        Prepared statement...........................................    92
    Van Antwerp, Lt. Gen. Robert Jr.,
        Testimony....................................................    35
        Prepared statement...........................................   116
    Voitier, Doris:
        Testimony....................................................    24
        Prepared statement...........................................    82

                                    APPENDIX

    Statement submitted by Sam Riley Medlock, J.D., CFM, Association
      of State Floodplain Managers                                      136
    Questions and responses submitted for the record from:
        Mr. Donovan..................................................   145
        Ms. Voitier..................................................   148
        Ms. Anderson.................................................   150
        Mr. Fugate...................................................   151
        Mr. Van Antwerp..............................................   155
        Mr. Hingle...................................................   158

     FIVE YEARS LATER: LESSONS LEARNED, PROGRESS MADE, AND WORK REMAINING
                             FROM HURRICANE KATRINA

                                  ----------

                           THURSDAY, AUGUST 26, 2010

                                       U.S. Senate,
                  Ad Hoc Subcommittee on Disaster Recovery,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                         Chalmette, LA.
        The Subcommittee met, pursuant to notice, at 10:00 a.m., at
    Chalmette Elementary School, 75 East Chalmette Circle,
    Chalmette, Louisiana, Hon. Mary L. Landrieu, Chairman of the
    Subcommittee, presiding.
        Present: Senator Landrieu.
        Senator Landrieu. Good morning. If everyone would have
    their seats, I am Senator Mary Landrieu and welcome to our
    presentation and official Congressional hearing that will start
    in just a moment.
        But I would like to turn the microphone over to the
    Superintendent of St. Bernard Schools, Doris Voitier, who will
    welcome you officially, and I think her students have a welcome
    presentation.
        Ms. Voitier. Well, good morning and welcome to Chalmette
    Elementary School. During the storm, this facility was under
    between 8 to 10 feet of water and it was a middle school,
    Chalmette Middle School. We had to demolish the school and we
    have built this beautiful structure for our elementary school
    students, pre-K through five. We have 820 children on this
    facility, and it is state of the art.
        What you are sitting in right now is our Teacher Training
    Center. So adjacent to this property prior to the storm, we had
    a Teacher Training Center. So when we rebuilt, we decided to
    incorporate it into the school itself, and I think that it is--
    as you can see, it is a beautiful facility, the main meeting
    room, we have a training lab and some secondary meeting rooms,
    as we do in-service training for our teachers and our staff, as
    well as allow the students to use it during the day and
    community at other times.
        So as we rebuild the community, it is truly a partnership
    with the school system and parish government, all of our
    community partners as well as our Federal partners. So we thank
    the Federal Emergency Management Agency (FEMA), we thank
    members of our Congressional delegation. The Senator has just
    been phenomenal in fighting that cause for us and we applaud
    her tremendously for her efforts. [Applause.]
        If it were not for Senator Landrieu, much of this would not
    have happened. She has just been a tigress in getting that
    legislation passed for us. And our Representative, Congressman
    Melancon, has also been phenomenal. I mean, he was here on day
    one, has done so much to help this community with much of the
    restart legislation. [Applause.]
        So we thank him, and we welcome our neighboring
    Congressman, Congressman Scalise, as well.
        So without further adieu, we would ask that you please
    stand, because our children from--Victoria and Cory--are going
    to lead us in the Pledge with some of their classmates behind
    them.
        [The Pledge of Allegiance was recited.]
        Thank you. That was wonderful.
        Senator Landrieu. Beautiful. Thank you, children.
    [Applause.]
        Thank you, and welcome, Congressman Cao. Please have a seat
    up here.
        Winston Churchill once said, if you are going through hell,
    keep going. [Laughter.]
        Five years ago, in the aftermath of Hurricane Katrina and
    the Federal levee failures that followed, that is precisely
    what millions of Louisianans and residents of the Gulf Coast
    decided to do.
        I am very honored, actually, to be joined today by leading
    citizens of St. Bernard Parish, leaders from around the
    Southeast region of our State, and the heads of three Federal
    agencies that have had the responsibility to invest over $40
    billion into the recovery efforts underway that you are seeing
    this morning and will hear about in just a few minutes. We have
    with us the Secretary of Housing and Urban Development (HUD),
    Shaun Donovan, Administrator Fugate of Federal Emergency
    Management Agency, and General Robert Van Antwerp from the
    Corps of Engineers.
        The last 5 years have revealed remarkable strength and
    resiliency among the people of the Gulf Coast, particularly
    here in Louisiana. Our faith in government at every level and
    in elected leadership and in ourselves has been tested along
    the way, but we continue to adapt, to persevere, to fight for
    the recovery and renewal of a great American city and region
    that is uniquely positioned. Our cultural heritage, our rich
    history, our strong sense of community are unmatched in the
    United States.
        Hurricanes Katrina and Rita and the resulting levee
    failures claimed the lives of 1,577 Louisianans, displaced
    800,000 residents from their homes, forced 220,000 workers out
    of a job. The floodwaters, storm surge, and winds shuttered 875
    schools, destroyed 215,000 homes, 18,700 businesses, and 217
    square miles of coastal wetlands was lost. To put that coastal
    wetlands figure clearly in mind, it would be like losing the
    entire cities of Shreveport, Lake Charles, Monroe, and Natchez.
        We will always be grateful to our first responders who
    saved so many lives, our firemen, our police officers, the
    Coast Guard, the National Guard, the Cajun armada of ordinary
    citizens and individuals who traversed the floodwaters in
    skiffs and airboats to ferry distressed citizens to safety. We
    are grateful to the hundreds of thousands of volunteers who
    have provided relief to help build our communities and we are
    thankful to the American people for their generosity, their
    prayers, and their investment in this region's recovery,
    represented by over $60 billion in Federal aid for rebuilding.
        As we approach the 5-year anniversary of the worst natural
    and manmade disaster in American history, we are compelled to
    pause and consider the road we have traveled, the condition we
    find ourselves in today, and a pathway forward. That is the
    purpose of today's hearing, to take stock of the lessons that
    we have learned, maintain our momentum, and to make Louisiana
    safer, stronger, and more prosperous than ever before. And, I
    might add, in doing so, to share the lessons we have learned
    with other communities around the United States and world.
    Haiti comes to mind. Pakistan comes to mind. So when people
    around the world are suffering, they might look to what has
    happened here in South Louisiana to make changes for
    themselves.
        We will begin with two brief but very informal
    presentations on the status of recovery before proceeding with
    our formal hearing, which will help frame the discussion to
    gain a perspective on what we are going to hear at the formal
    hearing.
        Our first presenter is Greg Rigamer from GCR and
    Associates. He will discuss population and recovery. Mr.
    Rigamer is an acknowledged expert in urban planning and
    management and CEO of GCR and Associates.
        We will then turn to Amy Liu from the Brookings Institute
    Metropolitan Policy Program for an overview of the recent
    report released in conjunction with the Greater New Orleans
    Community Data Center. Ms. Liu is a Senior Fellow and Deputy
    Director with the Brookings Metropolitan Policy Program. We are
    grateful for what the Brookings Institute has done from the
    beginning to help us keep track, actually, of what the
    situation was and how we were progressing or not.
        I would like to again thank everyone in the audience for
    being here today. We will start with our presentations now and
    then the members of the Congressional delegation and I will sit
    at the panel and begin the more formal part of our hearing, and
    I will turn this over to you, Mr. Rigamer. Thank you.

     TESTIMONY OF GREGORY C. RIGAMER, CHIEF EXECUTIVE OFFICER, GCR
              AND ASSOCIATES, INC., NEW ORLEANS, LOUISIANA

        Mr. Rigamer. Thank you, Senator Landrieu. As we cue up the
    presentation, I appreciate being invited to participate and
    feel honored and privileged to be here.
        As Senator Landrieu pointed out, obviously, we need not
    tell anyone here the colossal impact of Hurricane Katrina, but
    it was a devastating storm by all measures--lives lost, homes
    lost, assets lost. When you think of a complete cessation of
    governmental and business activities within a community, it is
    phenomenal to think that 5 years later, we are sitting here
    today in one of the hardest-hit areas and having such a meeting
    to discuss the challenges and also the accomplishments that we
    have made.
        Today, 91 percent of the pre-K population in the New
    Orleans region is here. We have about 84 percent of the jobs
    and we have about 86 percent of the commercial businesses that
    were established pre-storm back today. So there has been over
    $10 billion invested in housing in the immediate impact area,
    and most--I shouldn't say most importantly, but we have the
    benefit of $15 billion of hurricane protection for the
    community that will serve to protect us from future events.
        Also, real similar with 2010, following the anniversary of
    significant change in many aspects of the political landscape
    within the community, we win the Super Bowl. It is a real
    statement about that we are back.
        Senator Landrieu. And we can take credit for that.
        Mr. Rigamer. Absolutely. Well, I think, clearly, you were a
    motivating factor in this. People wanted to prove that we could
    do this.
        All that said and done, we do have major challenges. We
    have lost 93,000 jobs in the region since June 30, 2005. These
    figures are from June 30, 2010. Our rents are high. And we have
    about 57,500 units that we can identify that are out of service
    today that are directly related to the impact of Hurricane
    Katrina. Currently, we have building but diminished public
    services and we have yet to see significant provident
    investment within our community.
        When we look at the impact area, the five parishes,
    Jefferson, Orleans, Plaquemines, St. Bernard, St. Tammany, and
    the metropolitan area, while the metropolitan area is 91
    percent back, St. Bernard is about 63 percent back and the City
    of New Orleans is about 80 percent back. Now, when you look at
    the extent of the flooding that we experienced, it is
    absolutely phenomenal that we are at this level today. We zoom
    in a little bit closer and look at the St. Bernard and Orleans
    Parish areas and we can see that the depth of flood was
    absolutely significant.
        One of the things that is very interesting is to look at
    the sequence of recovery of our communities. We monitor
    information at the address level aggregated to a block and then
    compare it to 2005. So in 2005, the community was fully
    occupied and everything was up. By January 2006, everything in
    red is a neighborhood or a block that is less than 20 percent
    back, zero to 20 percent back. For the most part, what you see
    in red was zero. But within 6 months, by July, we see signs of
    recovery, green being fully back and the shades between red and
    green coming up. January 2007, July 2007, January 2008, July
    2008, January 2009, July, January 2010, and where we are today.
        So when we look at this phenomenal change from where we
    were in January 2006 to where we are today, throughout St.
    Bernard and Orleans Parish, it is very impressive. So 5 years
    after Hurricane Katrina, though, we have 57,500 units that we
    can put our finger on that are not in service today that were
    in service in July 2005.
        So what does that look like? That is what Orleans Parish
    looks like. Every red dot on there is a parcel that was in
    service in July 2005 and not today. This is what St. Bernard
    looks like. I apologize, the images aren't quite as crisp on
    this. But every red dot that you see on there is a home or a
    business that was occupied in 2005, not today. So when we look
    at this, it is absolutely significant.
        Now, how do we address this? Obviously, investment is part
    of it, but we need jobs. It is not just the short-term money to
    fix the issue, it is the money to sustain the community. Jobs
    is the key. We have lost nearly 94,000 jobs in the metropolitan
    area since Hurricane Katrina, and if we have any expectation of
    absorbing these properties that are out of service, it is going
    to be through economic growth.
        Today, our rents are very high. In the New Orleans area,
    the fair market rent for a two-bedroom unit is now higher than
    comparable cities like Houston and Atlanta. It peaked in 2009,
    but still in 2010 we are higher than any of our other major
    metropolitan areas.
        When we look at the affordability index, how easy is it for
    somebody to live in New Orleans, what is the percent of rent
    that someone would expect to pay of their income, and the
    greater New Orleans area is here at the bottom and we are over
    25--we are between 25 and 30 percent of our income. And these
    figures are from HUD. We are more expensive, a more expensive
    place to live, than places like Miami. This is a real problem
    for our community.
        But on the good side, there is significant money being
    invested that will result in major new jobs for this area. The
    LSU-VA Hospital project, Federal City, the Bio Innovation
    Center, the Port of New Orleans expansion, the growing film
    industry, and the New Orleans Cancer Research Center will all
    provide the type of jobs that we need to attract people to our
    community. If we attract people, we can redevelop our
    neighborhoods and restore value.
        There has been a significant amount of money invested and
    we know that there is a lot more to be invested. Right off the
    top, we can identify $27 billion in project funds that will
    really have a significant impact on our community.
        So the bottom line is we are very positive about New
    Orleans. We think given where we are 5 years later, we all have
    a lot to be proud of. We are sitting in a great new facility
    that is state of the art in an area that was as hard hit as
    any. It is really remarkable that we have the benefit of having
    this hearing here today. Thank you for letting me be a part of
    it.

       TESTIMONY OF AMY LIU, DEPUTY DIRECTOR AND SENIOR FELLOW,
        METROPOLITAN POLICY PROGRAM, THE BROOKINGS INSTITUTION,
                            WASHINGTON, D.C.

        Ms. Liu. Great. Good morning. I want to thank Senator
    Landrieu and other Members of the Subcommittee for giving me an
    opportunity to present at this very important hearing.
        What I want to do with my 10 minutes is to cover two key
    points. First is that I want to assert the proposition that the
    goal of post-disaster recovery should, as much as possible,
    help a community be more resilient and also to help put that
    community on a path to long-term prosperity. Given those goals,
    then second, how has New Orleans performed on those fronts
    since Hurricane Katrina and what does that mean for Federal and
    State policies going forward.
        So let me talk about resilience. There is no doubt that the
    term ``resilience'' is used in many different ways and applied
    to many different contexts, particularly in a natural disaster
    context, in an ecological context, and in a psychological
    context. What we want to focus on is regional resilience in the
    face of any shock, whether it is a hurricane, an economic
    crisis, or an oil spill.
        And the literature then says, given that definition, how do
    we know a region is resilient? There are two ways to look at
    it. First is the one that you can measure. This graph shows
    that how does a region literally perform after a shock, and
    this map looks at the job growth in New Orleans metropolitan
    area after the last 15 years. New Orleans in general would be
    considered resilient if it bounces back to its prior trend
    line.
        But in this case, in many instances, bouncing back to the
    prior trend line may not be such a good thing if the prior
    trend line was stagnation or decline. This is why many of us
    have been talking about building back better than before. We
    need to transform the city and the metropolitan area in a way
    that we start to see indicators and outcomes that improve upon
    past performance, particularly on key areas of prosperity, the
    economy, opportunity, sustainability, and quality of place and
    quality of life.
        But the second way of looking at regional resilience is the
    extent to which a community has the capacities and the
    characteristics to literally adapt to, minimize, or absorb the
    impact of a shock, and the literature says there are five key
    characteristics a community has to really do that well, and the
    first two are economic. The other three are community.
        A strong, diverse regional economy--if a community has
    this, then if one of their major sectors gets hit hard, whether
    it is an auto sector or an oil and gas sector, it has other
    industries it can fall back on.
        Second, if a community has a large share of skilled and
    educated workers, it is more likely that the people are going
    to be able to adapt to what the changing demands of the
    industry or economy will be.
        Strong social capital--if a community has strong community
    ties, community relationships, engagement, and trust, they are
    more likely to work together to get things done. And community
    competence is about taking that social capital and really
    resulting in effective problem solving.
        And last, wealth. There is no doubt that resources matter--
    Federal, State, local, philanthropic, corporate, individual
    resources. If you have that to build a home, invest in the
    capacities of the people, the organizations, or invest in
    reform, you are obviously going to be more adaptive to shocks.
        So given that definition of resilience and prosperity, how
    has greater New Orleans performed along this front in the last
    3 years? The work that Senator Landrieu talked about, which is
    the New Orleans Index at Five, co-produced with the Greater New
    Orleans Community Data Center, we found three findings that, I
    think, are really relevant for today's hearing.
        First is that this region has not just sustained one shock,
    but three shocks in 5 years--Hurricane Katrina, the worst
    recession since the 1930s, and now the oil spill. But despite
    those three crises, this region is becoming more resilient,
    beginning to demonstrate new capacities to transform its
    future, and at the same time beginning to show some emerging
    signs of improving its prosperity better than its past. But
    this region is a work in progress and key challenges do remain,
    as Greg Rigamer described. Therefore, it is really important
    for Federal and State leaders to use the moment of the oil
    spill to build on the progress made since Hurricane Katrina,
    but also to finish some unfinished business that will continue
    to transform this city and region going forward.
        So let me talk first about the good news. So first is that
    of the five factors that can predict resilience, New Orleans
    has actually demonstrated three of those post-Hurricane
    Katrina, and they are highlighted here, and I will just talk
    about them real briefly.
        There is no doubt that everyone talks about the power of
    citizen engagement, of citizen activism that has contributed to
    a lot of the rebuilding underway. But it goes further than
    that. The people and the groups are smarter. They are more
    informed. They are more strategic. They are more sophisticated,
    therefore being more important partners in both advocating for
    reform but also in the implementation of reform. There is more
    capacity in the region, for instance, in the rise of community
    development organizations, nonprofit developers and other
    community groups that have been really critical to neighborhood
    transformation. And obviously other coalitions have been
    enacting reforms.
        All those energies have actually led to some systemic
    changes, which says that this place, this New Orleans is really
    competent, and we are going to hear about some reforms later on
    in this hearing and we have produced essays that have really
    described the outcomes from a lot of these reforms.
        But behind each of these reforms are resources, and this is
    an important part of the recovery story. Behind the increased
    capacity, behind every single one of these reform areas are
    Federal dollars and philanthropic partners who have made all
    these outcomes possible. But let us take a look at the numbers,
    and I am going to skip this one, given the time.
        On the good news, I am going to talk a little bit about the
    economy and opportunity. There are some numbers that are
    showing that this region is rebounding better than before, so
    let us talk about the economy. In our report, we wanted to look
    at those sectors that are most important to the seven-parish,
    ten-parish, and New Orleans metropolitan area. We separated the
    economy from the export sectors and those from the local
    serving jobs. Export sectors matter because they are the
    critical drivers of the region's economy. They are the ones
    that bring value and wealth from outside the region into the
    region. They tend to--for each export job, it creates two to
    three local serving jobs. And they do tend to pay more. In the
    case of New Orleans metropolitan area, it pays $20,000 more
    than the typical local serving job, like a grocery store or a
    dry cleaners and so forth.
        So how are the export sectors in the New Orleans region
    doing? I am going to not--ignore for a moment all the downward-
    sloping trend lines. We will come back to that. What I think is
    the positive story here is the upward-sloping red lines, which
    is in the last 20 years, we are starting to see a steady
    emergence of knowledge-based service industries in this region
    in higher education, in legal services, insurance, and that is
    really important for an economy that has been historically
    dependent on oil and gas and tourism.
        The growth in heavy construction and engineering is not
    highlighted in red primarily because it has been trending
    downward for the last 20 years, but got a big bump after
    Hurricane Katrina. What we are still waiting to see is whether
    or not that is a result of purely from the rebuilding
    activities along the Gulf Coast or whether that trend can be
    sustained.
        But the other positive news is that average wages in the
    metropolitan area have increased, and this is really important
    in an economy that has historically been low-wage economy. So
    since 1990, we are seeing an accelerated growth in average
    watches catching up finally to the national average. Some of
    this is the result of the emerging knowledge-based jobs in the
    economy, but also, honestly, because the loss of many low-wage
    tourism jobs after Hurricane Katrina. And no doubt, wages
    matter to the workers.
        Entrepreneurship--if you take a look at the blue line for
    New Orleans, entrepreneurship has really spiked in the
    metropolitan area since the storm, surpassing the national
    average. This is really important because it indicates the
    capacity of innovation in the metropolitan area.
        So those are some of the trend lines that show departures
    from the past, but there is no doubt that there are still
    challenges that remain, and let me focus on the economy for a
    moment. If you take a look at the four largest economic drivers
    in the New Orleans economy in 1980--tourism, oil and gas,
    shipping, ship building--each of these four sectors have been
    generally trending downward for the last 20 or 25 years. As a
    result, the New Orleans economy actually is now smaller than it
    was in 1980.
        I think what is interesting to point out is that tourism
    actually had grown for a while, but it took a huge hit after
    Hurricane Katrina and it has actually never recovered. The same
    four sectors are also the ones that are directly impacted by
    the oil spill.
        I think the big take-away from this graph is that this
    economy here is still dependent on a high number of sectors
    that are shrinking and obviously vulnerable to the recent
    crises and we need to rethink how we strengthen and diversify
    this economy.
        But if we want to modernize and diversify the regional
    economy, it is going to need skilled workers, and in this
    regard, we are starting to see that the share of college
    educated workers in the New Orleans area has actually plateaued
    since post-Hurricane Katrina, which is counter to the national
    trend and even counter to its previous history.
        Income disparities remain stark in this region between
    racial groups, and the only thing I would highlight here is in
    the yellow-green bars, is that the typical African-American
    household in New Orleans earns about half of the typical--the
    average wage for a black household, $32,000 compared to $58,000
    of a white household.
        And we have heard that poverty has dropped in the city. As
    you can see from the yellow line in New Orleans, this is
    primarily because of the changing demographics of the city
    after the storm. But what is interesting to note here is the
    flip that has occurred after Hurricane Katrina. There are now
    more poor people in the suburbs of New Orleans than in the city
    itself, 93,000 low-income people in the surrounding parishes
    versus 68,000 in the city.
        And even though we have seen a growth in wages in the area,
    it has not kept pace with the growth of housing costs, and so
    you look at the yellow line in the Orleans Parish alone, 58
    percent, nearly 60 percent of renters in the community pay more
    than 35 percent of their incomes on rent. That is enormously
    high and much higher than the national average of 41 percent.
    This is also a burden for homeowners.
        So those are some of the challenges, and let me just close
    with one final slide, is what do we do with all of this. One of
    the advisors to our project, a leading leader in the community
    debate, simply said to us, the one big take-away I want you to
    tell folks from your report is that despite all the crises and
    all the emergencies that this community has faced, we need to
    keep our eye on transformation and the goal of long-term
    prosperity, and I think that was very well said.
        So what do we do at the Federal and State level to really
    ensure that? No doubt we need to sustain and build on the
    positive progress made on reforms post-Hurricane Katrina. Those
    are early developments, and there is still a lot of unfinished
    business there, and some of those gains are actually starting
    to be unraveled because of the State budget cuts.
        I think the recession and the oil spill does present new
    opportunities to do more to move this region forward, and these
    are just some sample ideas. We do need to, as we think about
    the Mavis plan, what we think about the post-oil spill recovery
    plan, which is focused on the economy and the environment, we
    need to think about ways to strengthen the existing industries,
    particularly like the Port, if that is going to be part of,
    say, helping the President's goal of doubling exports. We could
    continue to diversify the economy with a clear focus on those
    industries that are growing because that is an asset. We do
    need to strengthen skills in the area towards those growth
    sectors. And again, the more you diversify the economy, the
    more you strengthen skills, the more you increase the
    resilience of the region. Obviously, we want to make sure that
    minority-and women-owned firms participate in the clean-up and
    recovery so we ensure that we grow the black and minority
    middle class.
        And most importantly, we obviously want to focus on
    restoring the wetlands as part of building on the levee
    investments that we have made so far. And, of course, restoring
    the wetlands in a comprehensive way will not only generate
    jobs, but with that one sector focused on high-construction
    engineering, we may be able to actually convert wetland
    restoration and coastal protection and convert that into a true
    industry in the Gulf region.
        So let me just close by saying if we do all these things, I
    think we are at the verge of really witnessing probably one of
    the most catalytic urban transformations in recent history.
        Senator Landrieu. Thank you. Let us give them a round of
    applause. [Applause.]

                 OPENING STATEMENT OF SENATOR LANDRIEU

        Senator Landrieu. I would like to officially call the
    meeting of the Subcommittee on Disaster Recovery into focus and
    thank the members of the Louisiana Congressional delegation for
    joining me at this official hearing.
        By way of just very brief introduction, this Subcommittee
    did not exist when Hurricanes Katrina and Rita and the
    subsequent storms had hit Louisiana 5 years ago. The Senate
    reorganized their Committee structure and allowed this
    Subcommittee to be formed. I am very grateful to be able to
    serve as Chairman of this Subcommittee, and we have conducted
    any number of hearings over the course of the last 5 years
    related to smarter, better disaster response and recovery and I
    am pleased to be able to continue to chair this Subcommittee.
        The members that are joining me are not members of this
    Subcommittee, but as members of the Louisiana delegation, they
    have become experts on disaster recovery themselves and will be
    giving opening remarks just briefly.
        I want to thank Amy Liu and Greg Rigamer for a wonderful
    presentation. It is comforting as a leader to hear such strong
    and focused and objective data that will help all of us to make
    really hopefully good and smart decisions moving forward. That
    data is a blessing, because in the first 2 years after
    Hurricane Katrina, it was very hard to figure out what was up,
    what was down, who was here, who was there, and it really--I
    thank Brookings for following this so closely and for Greg
    Rigamer's group that gives the leaders making these decisions
    the information that we need on your behalf to try to make the
    best situation moving forward.
        I am going to try to minimize what I say. I have a lengthy
    written opening statement, but I am going to summarize it to
    keep within 3 minutes and ask my colleagues to do the same.
        I just want to touch briefly on a few important challenges
    that lie ahead. We are pleased to have an extraordinary two
    panels of Federal and State and local officials with us today.
        First, the challenge for this region will always be--the
    most important challenge for us will always be flood control,
    levee protection, and coastal restoration. No challenge, not
    housing, not economy, will ever surpass that as number one. It
    is because we live in the ninth largest delta in the world. We
    have to recognize that we live on, around, and some of us
    actually in water. We have to learn how to manage it. We are
    learning all sorts of new strategies and you will hear some of
    that today.
        Housing and neighborhoods are so important. There are new
    ideas coming forward as the Road Home Program wraps up. You
    have seen the challenge for multi-family housing, senior
    housing, more affordable rental housing for workers as we
    struggle to bring our businesses and workers back. Land bank
    concepts are exciting. We heard about that today in St.
    Bernard. We are pleased to hear some exciting new opportunities
    for housing and neighborhood revitalization.
        FEMA reform, we have a better and smarter FEMA today and we
    are very grateful. Craig Fugate is here, our Administrator. We
    have seen example after example this week of FEMA saying yes as
    opposed to no. Tony Russell is in the audience. You will hear
    from them later.
        Building smarter schools, you are in one right now. This is
    a very smart redevelopment project. I cut a ribbon at Salmen
    High School in Slidell yesterday, and today we got an
    announcement that $1.8 billion is coming to this region for
    rebuilding smarter schools that stabilize our community. So we
    are excited about the transformation of the new system of
    public education that is emerging, building on the strengths of
    what was here and transforming public education in the places
    that it needed to be.
        New models for health care delivery, you will hear some of
    that today. We didn't have the greatest health care system in
    this region before, although there were places like St. Bernard
    and others that were very proud of the health care system. St.
    Bernard today does not have a hospital. If you tried to deliver
    a baby here in St. Bernard, it would take you a minimum of 30
    minutes to get to a delivery room. And if it was traffic, it
    might take you an hour and a half. So needless to say, we have
    many challenges with hospitals in the region, particularly here
    in St. Bernard. But the good news is community clinics have
    been developed, over 92, and we are excited about a new model
    of delivery that is focused on preventive care and real doctor-
    patient relationships that are going to be very important.
        You heard about the effective nonprofits that are emerging.
    You will hear more about that today. It really is quite
    exciting to see neighborhood associations, when they call a
    meeting, 500 people show up and they keep showing up because
    they do care very much about what is being done and going on.
    We have lots of nonprofits all over the region that have
    received national awards. The St. Bernard Project is here in
    the house, Cable News Network (CNN) Heroes of the Year Award,
    and I could list 200 to 300, including those promoting new
    entrepreneurship.
        Criminal justice reform is an exciting thing that is
    happening in our community, and I will say in conclusion, I
    thank the Brookings Institute for their support of our
    delegation and our friends in Washington, and we have many
    allies and friends from both parties and officials that are
    helping us to really capture the opportunity of this oil spill
    to help lay on top of what we are going to see today as
    progress made.
        And specifically in closing, British Petroleum (BP) under
    the law, the polluter under the law, responsible party under
    the law, is going to pay to the Federal Government anywhere
    from $5 billion to $20 billion in penalties for violating the
    law. If they are found simply negligent, they will pay $5
    billion. If they are found grossly negligent, they will pay
    approximately $20 billion, assuming five billion barrels was
    spilled, and that number is rough. Our delegation wants to
    claim a minimum of 80 percent of that penalty money to be spent
    on the Gulf Coast in communities that have been hard hit, from
    Florida to Texas, from the storms in 2005 to the current
    storms. You have seen the charts. Oil and gas down.
    Shipbuilding down. Tourism down. The Gulf Coast is a very
    vibrant region. We will not be able to recover, though, without
    additional resources, and that penalty money is going to be
    something that we are very focused on, and others.
        Let me turn in seniority to Charlie Melancon, the
    Congressman from this district.

        TESTIMONY OF HON. CHARLIE MELANCON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF LOUISIANA

        Mr. Melancon. Thank you, Senator Landrieu. I appreciate you
    giving me the opportunity to say a few words. I appreciate you
    convening this hearing today and I particularly appreciate the
    fact that we are doing it here in the Third Congressional
    District and in the community of Chalmette, St. Bernard Parish.
        In the 5 years since Hurricanes Katrina and Rita devastated
    Louisiana, your leadership in helping our State and its people
    recover has been unmatched. We are at this point today because
    of your persistence and your refusal to accept no for an answer
    when it comes to delivering for Louisiana.
        So today's hearing will give us the opportunity to hear
    from experts, elected officials, and agency heads who have been
    on the ground driving this recovery every day. We will hear
    about the exciting progress that has been made and the many
    difficulties that remain. We will take this information back to
    Congress, share with our colleagues, and push for solutions
    that ensure that we meet the challenges of rebuilding our State
    stronger than ever before.
        Five years later, many needs still remain, from education
    to health care to housing, law enforcement, and we will hear
    testimony today about those priorities. But for today, to fully
    recover, we need a serious Federal commitment to rebuilding our
    coastline and protecting our homes and communities here in
    South Louisiana.
        Our coastal wetlands serve as the first line of defense
    against hurricanes, yet we are still losing a football field of
    land every half hour, leaving our towns more exposed to the
    storms from the Gulf with each passing day. Progress is being
    made. The House of Representatives recently passed my amendment
    to invest over $1 billion in penalties from BP in coastal
    restoration projects along the coast, and Senator Landrieu is
    pushing for similar, however better and more money, funding in
    the Senate. So I encourage the Senate to cooperate with our
    senior Senator and I encourage the President and his
    Administration to support these efforts.
        While the levee system has been significantly strengthened
    in New Orleans, hurricane protection throughout the rest of
    South Louisiana is still well below that which is needed to
    protect our people from another Hurricane Katrina or another
    Hurricane Rita. Many of the communities that I represent have
    little or no hurricane protection, as critical projects are
    delayed year after year. Morgans [ph.] to the Gulf, for
    example, has been on the drawing boards for over 15 years.
    Inadequate funding coupled with bureaucratic red tape have
    repeatedly stalled this important hurricane protection project,
    leaving approximately 200 people in the Terrebonne and
    Lafourche Parish area in harm's way. This should not be.
        We need a partner, not a parent, to complete these projects
    in Coastal Louisiana. Our State has the best coastal engineers
    and know-how in the country, but until the Federal Government
    decides to support our efforts, we will not make the progress
    we need. Louisiana needs a serious commitment from the Federal
    Government to protect all of our coastal communities from major
    hurricanes before it is too late.
        This weekend, we reflect on a solemn anniversary for the
    people of South Louisiana and the entire Gulf Coast and our
    entire Nation. But this is also a time to celebrate the
    progress we have made, both individually and as a community, in
    rebuilding what we have lost to these storms.
        So let us honor the spirit today and recommit to building a
    better future for Louisiana. And again, I thank you, Senator
    Landrieu, for holding this hearing.
        Senator Landrieu. Thank you. Congressman Scalise.

     TESTIMONY OF HON. STEVE SCALISE, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF LOUISIANA

        Mr. Scalise. Thank you, Senator Landrieu, for having
    today's hearing and for inviting our panelists to participate.
    I also want to thank our entire delegation for the work that
    has been done since Hurricane Katrina. Only through the
    teamwork and the shared love and commitment to our State have
    we been able to clear the hurdles necessary to accelerate our
    recovery.
        I also want to thank our witnesses who are here today for
    their continued work on behalf of Louisiana's recovery. I have
    met with many of you on multiple occasions to discuss our
    recovery and I once again look forward to hearing your comments
    today and working with you to resolve the remaining issues from
    Hurricane Katrina.
        It is hard to believe that Sunday marks the fifth
    anniversary since Hurricane Katrina's landfall. The images we
    saw and the challenges we faced on August 29, 2005 and the days
    and months and even years since are still fresh in everyone's
    mind and will not be forgotten. Hurricane Katrina is a story of
    the strength and perseverance of the people of South Louisiana.
    I think it is very appropriate that we are here in St. Bernard
    Parish because I think the people of St. Bernard are the
    embodiment of that strength and resilience, and you can see
    today the progress that has been made, and as you are leaving
    and drive away, you can see the work that is still left to be
    done. So this parish is an encompassment of the entire region's
    challenges that have both been achieved but still are faced.
        During these 5 years, we have experienced many successes in
    our recovery and made significant progress. But as we all know,
    there have been setbacks and there is still work left to be
    done. I think we can all agree that these past 5 years have
    been a struggle, but one that the people of our State,
    including many in this room, are continuing to work through
    every day and will continue to do so until our recovery is
    complete and until we have achieved our ultimate goal of
    rebuilding better, stronger, and smarter than before the storm.
        In order to do so, we must resolve the issues still
    lingering from Hurricane Katrina and make necessary
    improvements to the regulations and laws that govern disaster
    response and recovery. And we must make the investment
    necessary to protect our coast and to finally achieve Category
    Five hurricane protection.
        One issue that we are still dealing with 5 years later is
    the forgiveness of Special Community Disaster Loans (SCDL).
    While a number of these loans have recently been forgiven, an
    overwhelming majority of applicants did not even qualify and
    were recently rejected. In my district, only 5 of 17 applicants
    qualified for partial or complete forgiveness. I continue to
    call on FEMA and the Administration to resolve these
    disparities so that communities that were equally devastated by
    Hurricane Katrina are not treated unfairly in the Community
    Disaster Loan (CDL) process.
        In addition, we have learned many lessons from and are
    still facing problems with the provisions of the Stafford Act
    and interpretations of FEMA regulations. I have introduced
    legislation, as has Senator Landrieu and other members of our
    delegation, to make reforms to the Stafford Act, including
    expediting the public assistance appeals process and improving
    cost sharing for debris removal and hazard mitigation.
        Debris removal was a significant issue in my district
    following Hurricane Katrina, especially in St. Tammany Parish.
    I know Parish President Kevin Davis is here and he will testify
    about the struggles his parish faced. They learned many lessons
    about debris removal and project worksheets, including how the
    use or lack of certain words or phrases in a project worksheet
    would drastically impact its final outcome. The fact that we
    are still working through some of these interpretations and
    assessments 5 years later is unacceptable. We must build upon
    the progress that has been made by FEMA and The Governor's
    Office of Homeland Securities Emergency Preparedness (GOHSEP)
    to close out the remaining projects.
        And finally, we must ensure that the Corps of Engineers and
    the Administration commit to supporting Category Five hurricane
    protection for South Louisiana. This includes barrier
    protection at the mouth of Lake Pontchartrain, which will
    protect both the north and south shores of the lake, as well as
    major investments in restoring our vanishing coast. The BP oil
    spill has underscored the critical nature of Louisiana's coast
    and we must redouble our efforts to protect and restore our
    valuable wetlands. I share the sentiments of Senator Landrieu
    that at least 80 percent of the disaster penalties be dedicated
    to coastal restoration efforts.
        As we come to the fifth anniversary of Hurricane Katrina,
    we are at a critical juncture in our recovery. Over the last 5
    years, we have cleaned up and cleared away the debris. We have
    rebuilt many communities and are still in the process of
    rebuilding others. We have learned from the challenges we faced
    and are taking vital steps to complete the remaining work and
    complete our recovery. Now we must continue to move forward and
    build upon the foundation that has been set over these 5 years.
        On this fifth anniversary, we stand on a strong foundation
    for future growth, improvement, and prosperity for families
    throughout South Louisiana. Moving forward, I am eager to
    continue working with my colleagues in Congress and with the
    resilient citizens of our region to shape our home into a more
    prosperous place where all can take part in preserving and
    strengthening our future. Thank you, and I yield back.
        Senator Landrieu. Thank you so much, Congressman Scalise.
        Congressman Cao, who represents the district of New Orleans
    and parts of----
        Mr. Cao. The West Bank.
        Senator Landrieu [continuing]. The West Bank, yes.

    TESTIMONY OF HON. JOSEPH CAO, A REPRESENTATIVE IN CONGRESS FROM
                         THE STATE OF LOUISIANA

        Mr. Cao. Thank you very much, Senator, and I would like to
    thank you personally for bringing us here together for this
    occasion.
        As I reflect on the fifth anniversary of Hurricane Katrina,
    I am confronted, really, with mixed emotions, a sense of
    sadness because Hurricane Katrina cost nearly 2,000 lives,
    destroyed thousands of properties. I remember returning home to
    my own house and seeing that it was basically destroyed by 8
    feet of water and went through the struggles of rebuilding,
    like thousands of us here.
        But also a sense of optimism in the sense that when we look
    at all of the projects that are springing up thanks to the
    partnerships that we have built with the Federal Government--
    thank you to the Secretary of HUD, Shaun Donovan and his hard
    work, with Paul Rainwater and his hard work with FEMA and their
    continued cooperation with us to help us to rebuild--the sense
    of optimism is there and I can feel it as I drive around the
    city, talking to the thousands of people that I have met in the
    past 2 years.
        When we look at our future, we look at the diversification
    of our economy. We are looking at building up our levees, the
    restoring of our coasts, and feel more secure about the future
    of this region.
        And when we talk to businesses and when we talk to
    citizens, we see that New Orleans has become a hotbed for young
    entrepreneurs and start-up businesses. If we look at our
    schools, it has undergone a much needed and overdue
    transformation, and every student, obviously, deserves a
    quality education. But we have to make sure that our progress
    must continue and we have to do everything that we can to
    provide our children with the best possible education.
        But we must also be cognizant of the many problems that we
    still have. In the City of New Orleans, obviously, we have to
    get crime under control. We have to be focused more on how to
    get criminals off the streets while addressing the root causes
    of crime and to end this violence. I believe that we need to
    have more focus on better educating our children, to provide
    youth programs and initiatives as well as other projects that
    will enable our children to stay off the street and to be more
    productive.
        As we go forward, we have to look at our continued
    rebuilding of our health care system in the New Orleans East
    region. We still do not have adequate health care to provide
    services to the thousands of people who live in Northeast, even
    though we have made great strides in the past month by
    purchasing the Methodist Hospital, but we still need about $100
    million to restore that building, which in this day and age
    seems like an insurmountable hill that we have to climb.
        But given all of the problems that we continue to face,
    again, I cannot help but to feel great optimism, great
    enthusiasm for the future of New Orleans and the region, and
    just listening to Dr. Liu and her presentation, to have a
    clearer picture of what we need to do in order to continue our
    transformation and to continue pushing forward the recovery of
    our wonderful State.
        So with that, I would like to thank the Senator, the other
    members of the delegation who are here. I would like to
    personally thank the Secretary of HUD, who has been wonderful
    to the City of New Orleans and to the region with his
    commitment, and also to the other members of the Presidential
    cabinet who have been committed and continue to commit all of
    their resources to help rebuild our great State. So thank you,
    and I look forward to hearing what he has to say.
        Senator Landrieu. Thank you, Congressman Cao, so much, and
    I thank again my colleagues for joining me for this important
    hearing.
        I would like to introduce very quickly the panel, the first
    panel that is with us. Shaun Donovan is Secretary of Housing
    and Urban Development. He previously served as the Commissioner
    of New York City Department of Housing, Preservation, and
    Development. Before that, he was in the private sector and
    became an expert on financing issues relative to affordable
    housing. In my view, he is one of the most outstanding leaders
    at the Federal level today and we are grateful for him to be
    here and his absolutely extraordinary commitment to this region
    and his multiple visits, both to Orleans, Jefferson, St.
    Bernard, Plaquemines, and the region.
        Paul Rainwater is now Commissioner of Administration. He
    has held in the last 5 years almost every job in the State----
    [Laughter.]
        Senator Landrieu [continuing]. And we are grateful----
        Mr. Rainwater. Some in Washington, too.
        Senator Landrieu. And some in Washington, too. We are all
    so grateful for his leadership. He currently serves as
    Commissioner of Administration. He previously served as Chief
    of Staff to the Governor, Executive Director of the Louisiana
    Recovery Authority. He was Legislative Director, happily, in my
    office. He also served as Chief Administrative Officer for the
    City of Lake Charles. And most importantly, he is a Colonel in
    the Louisiana Army National Guard and was on duty the night
    that Hurricane Katrina came ashore. He has done two tours of
    Iraq, two tours overseas, and we are grateful, Paul, for your
    service to our State and our Nation.
        Doris Voitier became Superintendent of St. Bernard Public
    Schools in 2004 and has a 33-year career in the St. Bernard
    School System. She is the first Louisianan and first K through
    12 educator to be awarded the John F. Kennedy Profile in
    Courage Award, which was an extraordinary honor to our entire
    State when she received that award on the stage in Washington
    in the aftermath of Hurricane Katrina. She has almost
    singlehandedly, although with some help from many in this room,
    but almost singlehandedly rebuilt a school system that was
    completely destroyed, and you are sitting in one of those
    buildings today. She holds a B.A. and Master's degree in
    Education from the University of New Orleans and is truly one
    of our outstanding leaders.
        Mark Schexnayder is a Marine Biologist and Coastal
    Scientist. He has intimate knowledge of the needs of fishermen
    and the ecosystem in Louisiana. He graduated from Southeastern
    Louisiana University and he has been doing a tremendous amount
    of work on our coastal issues and our fishery issues.
        Lauren Anderson serves as the Chief Executive Officer (CEO)
    of Neighborhood Housing Services in New Orleans since 1992. She
    has been working to increase home ownership, affordable
    housing, enhance the city's neighborhoods, and she previously
    served as Housing Coordinator for Armstrong Redevelopment in
    New Orleans and was one of the leaders--and is one of the
    leaders in the redevelopment of the Treme neighborhood that is
    now receiving national and international fame because of the
    show that is on television.
        So we thank all of you for being here. And Lauren
    represents, as I said, hundreds of extraordinary nonprofits
    that have reemerged, emerged, or grown to help us handle this
    challenge.
        Mr. Secretary, we will start with you.

    TESTIMONY OF HON. SHAUN DONOVAN,\1\ SECRETARY, U.S. DEPARTMENT
                    OF HOUSING AND URBAN DEVELOPMENT

        Secretary Donovan. Good morning, Chairman Landrieu and
    Members of the Subcommittee. Thank you for inviting me today to
    testify before you on the fifth anniversary of Hurricane
    Katrina as part of my sixth trip to the Gulf Coast since
    becoming HUD Secretary.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Donovan appears in the appendix
    on page 53.
    ---------------------------------------------------------------------------
        From my first visit with Secretary Napolitano, where we
    announced millions of dollars in funding to stimulate long-term
    recovery, to volunteering with my wife and two boys as part of
    the St. Bernard Project last summer, it has been critical to
    see the progress we are making and the work that still lies
    ahead, particularly in the wake of the recent oil spill. So
    thank you for this opportunity, and more importantly, thank you
    for your leadership and remarkable friendship over this time.
        I also want to thank each and every member of the
    delegation that is here. I have to work personally with you,
    not only to see your enormous commitment to this region, but
    also to see the relentless focus you bring on ensuring that
    this recovery continues, and you have my pledge to continue to
    work side-by-side with you in that effort.
        Since taking office, the Obama Administration has worked
    hard to provide residents of the Gulf Coast with the tools that
    they need to recover and to rebuild their lives and
    communities. Today, I would like to discuss the scope of HUD's
    efforts to make that possible, where we were when President
    Obama took office, the progress we have made since that time,
    and the steps we still need to take to ensure that the
    resources we provided are used in the most effective way
    possible, and I have provided more complete testimony for the
    record.
        When President Obama took office 3\1/2\ years ago--when
    President Obama took office a year-and-a-half ago, nearly
    40,000 families who had been displaced by the storms were still
    relying on government assistance to find housing. And within
    days of his inauguration, I discovered that more than 30,000 of
    those families were on the verge of losing that assistance and
    potentially their homes when the Disaster Housing Assistance
    Program (DHAP) would come to an end. Working with nearly 350
    Public Housing Agencies around the country, we helped all of
    these families find permanent housing by extending DHAP for an
    additional 6 months, providing comprehensive case management,
    and 12,300 Housing Choice Vouchers to the most vulnerable
    families.
        We also worked closely with our partners across the
    Administration. From the 7,600 families that remained in
    temporary housing units throughout the Gulf Coast when we took
    office, FEMA and HUD worked together to move as many of these
    families as possible into permanent housing. All told, because
    of these efforts, Madam Chairman, I am proud to say to you
    today that of the 40,000 families who relied on temporary
    government housing assistance when we took office, we have
    helped 98 percent of them move into permanent housing. But we
    will not rest until we have completed the job for the remaining
    883 families.
        One of the reasons we have made progress is that we
    realized early on that far too many Gulf Coast residents,
    through no fault of their own, had become stuck in the recovery
    process due to numerous challenges and barriers that left them
    unable to complete the rebuilding of their homes or their
    lives. That is why since taking office HUD has provided the
    additional clarity and guidance to States that gives them the
    flexibility to address these so-called unmet needs, including
    modifying a rigid duplication of benefits rule which failed to
    account for the true cost of displacement.
        My experience with the St. Bernard Project that I mentioned
    earlier provided a powerful example of how we could get
    resources to people on the ground more quickly and effectively.
    Spending a day with my family rebuilding the homes of an
    elderly woman living alone and a retired couple struggling with
    advanced Alzheimer's disease, I saw for myself who has borne
    the greatest need of the road home, our most vulnerable
    population.
        Perhaps most important of all, the work of nonprofits like
    the St. Bernard Project affirmed my belief that these
    extraordinary organizations could do even more with the support
    of a true Federal partner. Indeed, we have already seen how
    nonprofit organizations partnering with nonprofit rebuilding
    programs run by the State of Louisiana and Mississippi have
    housed hundreds of Hurricane Katrina and Hurricane Rita
    victims. That is why we have provided $23 million in funding to
    these groups under the Nonprofit Rebuilding Program of
    Louisiana to encourage their assistance, as well as $28 million
    under Mississippi's Neighborhood Rental Restoration Project.
        With hundreds of thousands of homes damaged and destroyed,
    Louisiana's Road Home Program is among the largest housing
    efforts ever undertaken by a State in our Nation's history,
    assisting homeowners across more than two dozen parishes
    throughout all of Southern Louisiana and nearly 46,000 in
    Orleans Parish alone. A year ago, more than 4,000 eligible
    applicants had yet to receive their program award. By working
    with the State, we have reduced that number to 170, and we have
    resolved more than 1,700 appeals over the last year with only
    103 remaining. Last year, we removed the $50,000 cap on grants
    to help low-and moderate-income homeowners rebuild their homes.
    This change has put nearly $400 million in rebuilding resources
    in the hands of homeowners with modest incomes.
        None of that is to suggest the job is over, Madam Chairman.
    In Louisiana, while the Road Home Program is close to its end,
    we recognize the decisions made by the previous Administration
    have left some families with ongoing difficulties and the Obama
    Administration remains committed to getting those families the
    help they need. As part of this commitment, HUD's Office of
    Fair Housing and Equal Opportunity is investigating several
    complaints concerning practices that may be impeding the
    availability of Federally-assisted housing to families most in
    need, as well as new rental permit practices that allegedly
    restrict rental housing for African-Americans attempting to
    return to their homes after Hurricane Katrina. No one should
    have to wonder if the color of their skin somehow influenced
    whether they could receive a mortgage, access to economic
    opportunity, or disaster recovery assistance.
        But this isn't just about helping families who are living
    in temporary housing or at risk of homelessness, Madam
    Chairman. It is also about rebuilding the region's housing
    stock for families who have yet to return. It is also about
    helping a community that at one point had lost half its
    population and is now back over 90 percent, not only rebuild
    what was there before the storm, but rebuild stronger and
    smarter.
        One of the most important challenges we face today is
    vacant buildings and blight across the metropolitan area, where
    we estimate there are 59,000 blighted units today. We have made
    progress since we came into office. This number has been
    reduced by 14 percent. But to truly address the problem of
    blight, we must go beyond recovery to revitalization that also
    solves the problems that existed before the storm, when the
    metropolitan area had one of the highest per capita vacancy
    rates in the country, with almost 30,000 vacant properties.
        In that respect, the Neighborhood Stabilization Program
    (NSP) can be a powerful tool, helping communities purchase and
    redevelop vacant and abandoned homes. With Mayor Landrieu's
    leadership, guidance from HUD, a professional procurement
    process, and technical assistance provided by enterprise
    community partners, I am pleased to report that HUD expects New
    Orleans to obligate 100 percent of its Neighborhood
    Stabilization Grant in the next few weeks, targeting these
    funds to the families and neighborhoods where they are needed
    most.
        As part of the competitively awarded second round of NSP
    funding, the New Orleans Redevelopment Authority received a $29
    million grant from HUD that will help the Mayor's plan to
    combat blight by demolishing hundreds of blighted properties,
    building and rehabbing hundreds of affordable rental homes in
    their place, and providing homebuyer counseling and other
    services essential to the neighborhood success.
        I am also pleased to say that we are making real progress
    building affordable rental housing, which prior to Hurricane
    Katrina comprised half of all the housing stock here in New
    Orleans. In the wake of the storm, public housing developments
    known as the Big Four were severely damaged, disrupting the
    lives of some of the city's most vulnerable populations. HUD is
    committed to rebuilding the Big Four and rebuilding the New
    Orleans Housing Authority under the leadership of David
    Gilmore.
        When we first came into office, the Housing Authority of
    New Orleans (HANO) was in disarray. Today, it has leased up
    thousands more vouchers than were in use before the storm.
    Combined with our other efforts to spur privately-owned
    affordable housing developments, we have created 8,400
    affordable homes in New Orleans since taking office, and in
    total, this means there is more Federally-assisted housing in
    New Orleans today than there was before the storm.
        But even still, we are committed to doing more. When we
    first came into office, not a single family had returned to the
    Big Four. Today, all four complexes are under construction and
    hundreds of families have returned to their homes there.
    Programs that were simply stuck under the previous
    Administration, such as the State of Louisiana's $684 million
    Small Rental Property Program, are now producing thousands of
    units with expenditures of $7.3 million per month, more than
    five times before I became Secretary.
        But as you also know, this work depends on a mixture of
    Federal, State, and private sector funds, which will require an
    extension of the placed-in-service date on Gulf Opportunity
    Zone Low-Income Housing Tax Credits (LIHTCs). Without an
    extension of the GO-Zone Tax Credits, more than 6,000 Gulf
    Coast affordable housing units are unlikely to be completed.
    This is a top priority for this Administration, which is why I
    am so thankful for the leadership provided by the members of
    the Louisiana delegation that are here today to ensure that the
    extension will be passed by the House and close to passage in
    the Senate. And I am committed to working with all of you to
    send this critical legislation to President Obama's desk.
        Community Development Block Grant (CDBG) Disaster Recovery
    Funds have also been critical to New Orleans to help forge
    partnerships that will create jobs out of this affordable
    housing development. One example is Louisiana's partnership
    with a consortium of local nonprofits created to offer vital
    assistance in the Small Rental Property Program I mentioned
    earlier, which has produced over 3,000 affordable homes in the
    State. I am happy to say that the City of New Orleans has
    committed to participating in this partnership, as well, by
    creating a bonding pool to ensure small and minority businesses
    participate in redevelopment construction projects. The Housing
    Authority of New Orleans has pledged to join with the city to
    provide similar opportunities in HANO developments.
        Of course, comprehensive community development means more
    than just housing or economic development. It also mean quality
    health care for community residents. Toward that end today,
    Madam Chairman, I am pleased to announce that HUD has approved
    the use of CDBG funds to help keep 87 community health clinics
    open, reducing the strain on emergency rooms and improving
    access to health care for the families who need it most.
    [Applause.]
        Last, let me say a word about the lessons we have learned.
    Perhaps the most important is that when it comes to disaster
    recovery, it is not just how much money government spends, but
    how we can spend it better and more effectively. Too often in
    the past, the Federal Government has paid to rebuild what was
    there before the storm rather than to build back stronger and
    smarter, helping avoid disaster when the next storm strikes.
        According to an independent study by the National Institute
    of Building Sciences, every dollar spent on disaster mitigation
    saves taxpayers $4 in disaster recovery expenses. That is why
    HUD created the Disaster Relief Enhancement Fund, a $300
    million pool to incentivize States recovering from disasters to
    use their funds in a way that also mitigate against future
    disasters and prepare them for future recoveries.
        That is why I am pleased to announce today that HUD is
    awarding Louisiana over $32 million and Texas nearly $68
    million from the Enhancement Fund, to complement, enhance, and
    scale-up their innovative efforts. We are also awarding funds
    to Mississippi and Florida to help them as they work to recover
    from the Gulf oil spill.
        And so, Madam Chairman, as you can see, while we have a
    ways to go, we are making progress for a Gulf Coast region
    still struggling to regain its footing. I know it isn't easy,
    and I want every resident of this proud region to know that
    this Administration will never forget you. Indeed, at HUD, we
    have made Gulf Coast recovery one of the very measures of our
    agency's success for the next 5 years and we expect to be held
    accountable for producing results. But as long as we continue
    to cut through red tape, listen to the voices of people on the
    ground, and work together to get help to families and
    neighborhoods that need it most, across agency silos, at the
    Federal, State, and local levels, I have no doubt we will
    continue to produce results, results this region needs to not
    only rebuild, but rebuild stronger, better, and faster.
        That is what moving from recovery to revitalization is all
    about and it remains our goal today. Thank you.
        Senator Landrieu. Thank you so much. I think that deserves
    a round of applause. [Applause.]
        Thank you for that passionate, informed testimony.
        The rest of the panel, I am going to ask if you could limit
    your remarks to 5 minutes, and we have a second panel starting,
    but the Secretary was given great latitude and we are thrilled
    for the funding that he has provided. And he could have as much
    time as he wants if he keeps giving out money like that.
    [Laughter.]
        Yes, we will invite him back next week. Mr. Rainwater.

    TESTIMONY OF PAUL RAINWATER,\1\ COMMISSIONER OF ADMINISTRATION,
     STATE OF LOUISIANA, AND FORMER EXECUTIVE DIRECTOR, LOUISIANA
                           RECOVERY AUTHORITY

        Mr. Rainwater. Thank you, Senator Landrieu. Again, it was a
    great honor to serve with you in Washington, D.C., as your
    Legislative Director, and we appreciate very much your tireless
    efforts, and also to the Congressional delegation who I have
    all worked with very closely over these last 5 years.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Rainwater appears in the appendix
    on page 75.
    ---------------------------------------------------------------------------
        I have had the honor of working through this disaster from
    day one as part of the original evacuation team that managed
    the I-10 causeway site and have been humbled by it, to be very
    frank with you. And it is humbling to be with the folks here in
    St. Bernard, who I remember going back after managing the I-10
    causeway site, going back to Lake Charles, and the first
    evacuee that the City of Lake Charles actually received was an
    older gentleman from St. Bernard Parish who got off a bus and
    just said, ``Thank you for having us.'' It is those memories
    that are ingrained in my mind for the rest of my life.
        When I took the job with you and then came down to work
    with Governor Jindal to run the Louisiana Recovery Authority
    (LRA), I took it with that in mind, that whatever we did, we
    needed to make this right from a State perspective. Governor
    Jindal consolidated our operations here and said, ``Get to
    work.'' Let us get rid of the silos, get rid of the turf, work
    with our Federal partners, and let us get this moving. And I
    will say that we struggled for the first year.
        Then when Shaun Donovan took over, Secretary Donovan took
    over HUD, and FEMA Administrator Craig Fugate came in and took
    over the Federal Emergency Management Agency, we began to make
    progress, and I will say thank you to Secretary Donovan for his
    partnership. He got it right off the bat. When we began to look
    at what was the wolf closest at the door to us, it was the
    Disaster Housing Assistance Program. I went and briefed him and
    he got it within 5 minutes and said, ``I am going to make this
    right,'' and you did, Secretary, and I thank you for that.
        Secretary Donovan. Thank you.
        Mr. Rainwater. We have continued to make great progress on
    the recovery. Of the $13.4 billion that we had in Community
    Development Block Grant money in the Road Home Program, we have
    put out $8.6 billion. We know that we have 3,000 folks left to
    serve. We have hired Legal Services to go in and work with
    those folks. Many of them have title issues that we all know
    about and we have talked about that issue before. We continue
    to do outreach to those citizens, understanding that they are
    the most underserved in our community, and we will continue to
    work through those issues and providing extensions along the
    way as best we can within the rules and regulations.
        We have listened to people. The Affordable Compensation
    Grant Program, which again, Secretary Donovan, we briefed him
    on it, he understood it, helping us raise the cap. I think he,
    as I understood the story, walked over to the Office of
    Management and Budget (OMB) himself--I don't know if I was
    supposed to tell that story or not--and made the presentation
    himself, and Fred Thombar [ph.], who is one of his special
    assistants, called and said, ``Hey, the Secretary is handling
    this.''
        We have put out $400 million, and you can see the progress
    for people who needed that money. Now, we just didn't hand out
    a check. The Secretary said there has to be some rules around
    this. We have to put a case management program, and we did. And
    we have made great progress in those terms.
        Our elevation program, HUD is not used to doing elevation
    programs, and so when we went and said, look, we are working
    with Administrator Fugate on moving these elevation dollars out
    through the traditional Housing Mitigation Program, we need to
    front-load some of these elevation projects for homeowners
    using a $30,000 grant, we put out over $897 million in
    elevation grants, and you can see, obviously, that progress as
    you go around here and look at the homes in St. Bernard and
    Orleans and Cameron and all through the recovery area. People
    are elevating their homes.
        And we are doing things, I think, much smarter here in
    Louisiana, with new building codes, with elevating homes. As
    you and I have worked with the Smart Growth Summit last week
    and talking about what we are doing with urban planning and the
    things that we are doing in the State, we are doing things
    smart and I am proud to be part of that culture of change, and
    it is very humbling to sit next to Doris, who has built some of
    the best schools in the country, I think, as you look at the
    sorts of things she is doing, taking FEMA Public Assistance
    money and taking Community Development Block Grant money and
    putting it together in a way that is a really smart investment
    for our communities.
        You can't have people back without infrastructure, and the
    FEMA Public Assistance Program, and I think the things we have
    done with that program and working so closely with the FEMA
    Administrator and the challenges that we had with the
    Transitional Recovery Office here, and Secretary Napolitano,
    another good partner, brought in Tony Russell to work with us
    and we sat down in meeting after meeting after meeting with our
    State partners, Governor's office, Homeland Security, and
    worked through issue after issue.
        We started off--in fact, I will never forget the meeting in
    2008 when Governor Jindal came in. I had my first meeting with
    FEMA and they told me we would never have more than $5 billion
    obligated, and today we are at $9 billion, and we have about
    2,600 more large projects to kind of work through, but nobody
    is complaining because we have a great process, a great
    partner, and we are going to get there, working together, and
    not arguing or yelling or just providing data back and forth,
    and a great example of that is the lump-sum settlement for $1.8
    billion. You passed that legislation. It is fantastic. We
    worked very closely with our FEMA partners and the Office of
    Management and Budget and other members of the Obama
    Administration to make that happen and it was a great success.
        And I will finish with this, health care. We know we need
    health care. Well, we are in the process of purchasing property
    at a very rapid rate for the VA hospital and the charity
    hospital. We are going to do a groundbreaking in November. That
    is what we are pushing towards. We are going to work with the
    Mayor of New Orleans, Mayor Landrieu, on the fabric of that
    hospital and how it fits into the community, because I would
    never dare to cross him.
        Senator Landrieu. It is a good thing, because he is sitting
    right behind you. [Laughter.]
        Mr. Rainwater. I could feel his presence. [Laughter.]
        And as Secretary Donovan said, we are in the process of--
    and again, he has been such an outstanding partner--the $30
    million to help assist in clinics, still working with Centers
    for Medicare and Medicaid Services (CMS) to work out a few
    pieces of that. HUD has approved the usage, which I have never
    met an administrator that worked so outside the box, and I
    appreciate you very much, and with that, I will end. Thank you,
    Senator.
        Senator Landrieu. Thank you very much. Doris. And we are
    going to pick up some time by limiting our questions, so the
    second panel, just hold tight. We are going to try to get you
    all on in about 15 minutes.

      TESTIMONY OF DORIS VOITIER,\1\ SUPERINTENDENT, ST. BERNARD
                             PARISH SCHOOLS

        Ms. Voitier. Well, good morning, and I am honored to have
    the opportunity to speak with you this morning and to spend
    some time highlighting our struggles as well as our progress.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Voitier appears in the appendix
    on page 82.
    ---------------------------------------------------------------------------
        What happened on August 29, 2005, changed the face of our
    school district and the community we serve forever. In
    hindsight, there are some things from which we will never
    recover, yet there are also things that have admittedly moved
    us forward, and I am going to briefly paint a picture of our
    school system and community to you prior to the storm.
        We were a public school system that worked. Our kids scored
    above the State and national averages on standardized testing,
    the first district in the State of Louisiana to be fully
    accredited by Southern Association of Colleges and Schools
    (SACS), universal four-year-old program, and we have won awards
    for fiscal responsibility and financial reporting before
    Hurricane Katrina hit. We were totally wiped out, as everyone
    knows, completely underwater, no land access to us whatsoever.
    The only way you could get in was by boat or landing a
    helicopter on the levee.
        But we were desperate right after Hurricane Katrina to
    restore educational services for this community. Our
    firefighters, our sheriff's deputies, our essential personnel
    had never left, and the refineries which are so vital to this
    region and the country wanted to bring their workers back, and
    with them came families and children. And I don't know how to
    impress upon everyone the importance of getting a school
    started, because when people want to come back to repopulate,
    the first thing they want to do is, what can I do with my
    children? Where can I put them in a safe environment? And
    schools are critical and crucial, right up there with all of
    the essential services that we must restore initially.
        So then there was also the uncertainty of funding. The
    mantra was, let the money follow the child, so we looked at
    Federal obligations with displaced student monies and even our
    normal Federal allocations. At first we were getting, send the
    money to where the kids are going and let it follow the child.
    Our State was in a situation where they felt that--I think
    about 30, 35 percent of the general operating fund for the
    State was generated by revenues in this region, so a Special
    Session was being called and part of that was, well, let us
    send the money where the kids are going and where the people
    are going. And then, of course, locally, we had nothing, no
    sales taxes coming in, no property taxes, because we were
    totally destroyed.
        So there was no course in college that I took in how to
    rebuild a school system from scratch 101 with no local,
    Federal, or State resources. So what did I think? I thought,
    well, my first response was, I live in the most powerful
    country in the world. Surely our Federal Government is going to
    come in and provide some assistance to get me up and running
    initially, and boy, was that a mistake. And I am just going to
    briefly paint this classic picture of what not to do.
        I think our FEMA kick-off meeting was the worst experience
    I have ever had in my entire life. We had 25 to 27 FEMA
    representatives from historic preservation, environmental
    review, 504 mitigation, 506 mitigation, interim housing. They
    all introduced themselves, set a stack of manuals down, and
    told us what not to do and what we couldn't do. And my basic
    question to them--I said, well, all I need is some portable
    classrooms and some temporary housing, some of those little 8-
    by-29 trailers. Help me get those quickly so that I can provide
    educational services for the first child that enters St.
    Bernard Parish.
        So we started working. We were going to mission assign it
    to the Corps. We thought that was a great idea. I felt that
    there must have been contracts in place, resources that come in
    immediately and bring those to us, and I quickly found out and
    was gold that would not happen until March or April 2006.
        So we did what we should have done, or what I should have
    done from day one. We took matters into our own hands. We
    located classroom trailers in Georgia and North Carolina. We
    had them shipped down in 3\1/2\ weeks. We opened a school with
    334 children. So 11 weeks after the storm----
        Senator Landrieu. Can we give her a round of applause for
    that, please? [Applause.]
        Ms. Voitier. And in the interest of time, I am not going to
    go through some of these examples, but this was classic in what
    not to happen. What should have happened was someone on the
    ground should have been empowered to make those decisions hand
    in hand with local government as to what you needed. Secure the
    area, bring in the vital resources for education and for health
    care and get us started, and forget the manuals, forget the
    regulations. Bring it in and get us ready to go. Then step back
    and start imposing those.
        So the first lesson that I hope everyone has learned is how
    to coordinate from day one in the case of a catastrophic
    disaster a Federal response that would encompass Federal,
    State, and local authorities.
        Many people have asked us, how do we make it happen? What
    progress did we have? We have renovated and rebuilt 13 major
    school sites. We had the first two permanent buildings built in
    the metro area since the storm. All of our schools are state of
    the art. When we did the tour this morning, many of you saw the
    ninth grade academy and the new Cultural Arts Building, and we
    have plans to consolidate in what we call the Museum of Modern
    Art (MOMA) center, a planetarium, science interactive exhibits
    for kids, Hurricane Katrina history museum for the school
    system.
        And how do we accomplish it? Our school board immediately
    in March 2006, we got a plan together. We haven't deviated from
    that. We have secured financing not only with FEMA funds, but
    with the Community Development Block Grant funds, insurance
    money, and for the first time, as a public educator, we never
    went out and did fundraising, but we have been able to raise
    money from the Exxon-Mobil Foundation, the Merrill Foundation,
    the Kellogg Foundation, Lions Club International, Energy, and
    the list goes on, in trying to form that true public-private
    partnership and be a little creative in the financing of these
    structures, which will serve an entire community as well as
    schools.
        There are just two things that I would quickly ask, because
    I know time is of the essence. I am not going to go through the
    whole thing. Two challenges that we have, as Congressman
    Scalise mentioned, is the Community Disaster Loan. We were
    eligible to borrow $34 million. We only borrowed $4.5 million
    because of these other sources coming in. We were financially
    responsible. We didn't just go out and say, give me, give me,
    give me. We borrowed only what we needed.
        And because of the timing of this mess, they are telling us
    we are going to have to pay this back. We are beginning--we
    will begin, with the economy the way it is, to experience some
    deficits that other school systems across the country have
    already experienced, and some of that Category A and B FEMA
    money is considered in these calculations and whether or not
    you have to pay it back as operational expenses. Some of the
    money we moved to capital projects to do FEMA-ineligible
    projects, we are told, well, those are really operational funds
    that you had control over. So we are going to throw those in
    the calculation. Somebody has to look at that formula.
        Many people have told me, you should have borrowed the
    whole $34 million, increased salaries, hired more people, and
    do national recruitment of teachers to come into this
    community, and then you would show a deficit. But no, because
    we were fiscally responsible and we behaved in a prudent
    manner, we feel we are being penalized.
        And last, Senator, with the restart funds, the first year
    after Hurricane Katrina did this, Representative Melancon was
    kind enough, you all had your whole delegation down. We met and
    we talked about those restart funds, because initially we
    weren't able to spend one penny because of the clauses in there
    for nonsupplanting, not only nonsupplanting of Federal funds,
    but more importantly, nonsupplanting of local and State monies.
    And because of that, we couldn't spend a penny. I testified in
    Congress, in the House Committee on Education, just to that
    point. And you all were successful in getting the authority to
    grant waivers in that legislation. So if restart monies are
    coming to other communities in other disasters, really, that
    provision needs to be put in initially so that we don't have to
    fight every year to get that done.
        So finally, I want to leave you with these thoughts. If you
    have doubts about funding a safer, more protected New Orleans
    area, if you have doubts about whether or not the stream of
    money that has come to the Gulf Coast is warranted, if you have
    any doubts about whether or not money has been used wisely or
    with integrity, I want you to tour this school building with me
    if you have a chance after the hearing. I will introduce you to
    820 students who can resolve all doubt. Because with or without
    Federal assistance, they are back in school in St. Bernard
    Parish. They are striving. They are home. They once again have
    found normal and they are well on their way to becoming
    tomorrow's leaders. And there are 5,000 more like them in our
    other nine schools and hundreds of thousands along the Gulf
    region.
        So it is said, if you want to touch the past, touch a rock.
    If you want to touch today, touch a flower. And if you want to
    touch the future, touch a child. So, ladies and gentlemen, your
    work has touched our future and we are grateful for your
    compassion and leadership. [Applause.]
        Senator Landrieu. Thank you. Mark. Mr. Schexnayder.

       TESTIMONY OF MARK SCHEXNAYDER,\1\ AGENT, LOUISIANA STATE
                     UNIVERSITY AGRICULTURE CENTER

        Mr. Schexnayder. Can you give me a little better panel to
    follow? [Laughter.]
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Schexnayder appears in the
    appendix on page 92.
    ---------------------------------------------------------------------------
        Thank you, Senator Landrieu. I really feel like I am
    preaching to the choir. I might give you all a few minutes of
    my time back because I am really tired of talking about the
    coast, and I know you guys are, too.
        I want to apologize to your staff for--I had a job change.
    I am going from the LSU Ag Center program to the Wildlife and
    Fisheries to work on a seafood certification program. I did
    provide some testimony----
        Senator Landrieu. Try to speak into the microphone. It is a
    little bit jumbled. There you go.
        Mr. Schexnayder. I just want to give you a few bullets
    about the fisheries and coastal restoration. As you guys know
    from the challenges of the BP disaster, the Gulf Coast, the
    seafood industry is vitally important, not only to the State's
    economy, but to the local communities. The Gulf States account
    for 32 to 41 percent of the average commercial fishing
    production in the Lower 48 States. Louisiana provides 75
    percent of that landings, and over 95 percent of all these
    fisheries are estuarine dependent. We lost 217 square miles of
    coastal land to open water just during Hurricanes Katrina and
    Rita and over 1,900 square miles in the last century to
    hydrologic modification, nutrients, sediments, starvation, and
    subsidence.
        The fisheries community, as you guys know, was devastated
    by the storms, both by Hurricanes Rita and Katrina, everything
    on the river, east of the river, the Gulf Coast sustained $580
    million worth of storm damage. We had a lot of different
    programs that came in and they were very slow in coming, as you
    guys know, as everybody knows, I mean, every aspect of
    recovery. During that, we lost 2,000 commercial boats, 17,000
    recreational boats, which we didn't lose them. They became
    debris in the waterways which prevented the recovery of the
    communities.
        And I provided all these notes to you guys----
        Senator Landrieu. That is OK. You can just summarize it. We
    have all the written testimony.
        Mr. Schexnayder. One of the projects that worked really
    well was the LRA stepped in with some of the block grant money
    and devised a project with Wildlife and Fisheries, the Seafood
    Promotion Board, and other groups to form a Fisheries
    Infrastructure Recovery Program for $20 million, and then an
    additional $9 million. They had a competitive process where we
    picked coastally resilient projects to develop publicly owned
    vessel staging areas. These are fairly important when you get a
    storm, because this last storm, we had no place to stage the
    boats. Getting them on barges greatly increased the cost and
    time to recover. We have a great project through that program
    with--that was the first, and then now in Venice, and now we
    are going from there with that program.
        We also developed a gear efficiency program to make the
    fishermen more efficient in their fishing efforts. Now we are
    doing through that program, to do a seafood certification,
    transparency. It all goes back to making the fishermen and the
    fishing communities more resilient.
        On the coastal land loss, I think Paul is right. We are at
    kind of a silo syndrome. I think we have lost our sense of
    urgency for coastal restoration. I think we need to look with
    the Corps of Engineers with the coastal protection projects,
    with their design-build lessons, building a billion-dollar gate
    in less than 2 years and another pump, another billion-dollar
    project. We need to bring that urgency and that actual process
    to the coastal restoration. We plan projects to death. They
    never get off the ground.
        We have, I think, the best U.S. Army Corps of Engineers
    (USACE) team we have ever had. The State has taken their
    resources and reorganized to be able to act quickly. We have a
    local flood protection authority. So I will work with--Tim is
    in the audience. They are focused on coastal restoration. We
    have everything, all the tools we need. So we just need to look
    at what we did with the coastal protection and put that to
    coastal restoration gain.
        And on the sense of urgency, one thing we could do is get
    the National Guard involved in some of these projects. The
    Bonnet Carre West Project, where we take water out of the lake
    and put it in, we could get that going tomorrow if we could
    just bring that design-build urgency back to the process. Thank
    you.
        Senator Landrieu. Thank you, Mark, very much. Ms. Anderson.

       TESTIMONY OF LAUREN ANDERSON,\1\ CHIEF EXECUTIVE OFFICER,
              NEIGHBORHOOD HOUSING SERVICES OF NEW ORLEANS

        Ms. Anderson. Good morning. Thank you, Madam Chairman,
    Members of Congress, for providing and using the occasion of
    the fifth anniversary of Hurricane Katrina as an opportunity to
    reflect on the lessons that can be learned in this tragedy.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Anderson appears in the appendix
    on page 95.
    ---------------------------------------------------------------------------
        One of the thoughts that sustained me in the aftermath of
    Hurricane Katrina was a Chinese saying that within every crisis
    lies an opportunity, and Hurricane Katrina certainly has
    presented us with many opportunities to learn as individuals
    and grow as a body politic.
        Neighborhood Housing Services (NHS) was founded 30 years
    ago to help stabilize faltering neighborhoods, and throughout
    our history, we have been committed to making New Orleans a
    better place to live for all of its residents. We have done so
    by improving our historic housing stock, by giving families the
    tools to improve their financial capacity, and by working in
    close partnership with residents, government, and businesses to
    improve the quality of life in our neighborhoods. We are a
    member of the NeighborWorks Network, which was founded and is
    supported by Congress.
        My immediate reaction after the levees broke was that all
    the work that we had accomplished in the past decade or more
    had literally been washed away. We had helped thousands of
    working class families achieve the dream of home ownership and
    their homes washed away. We had made tremendous strides in
    turning around the Freret neighborhood from one of
    disinvestment to being a neighborhood of choice, and it was
    underwater.
        For a time, I really felt that our work had been for
    naught, and then I began learning some critical Hurricane
    Katrina lessons. As it related to home ownership, we began to
    learn that as difficult as it was for homeowners to return home
    and to build, by and large, they were better off than renters
    because they had a little bit more control over their destiny.
    The numbers speak to this. The percentage of home owners in New
    Orleans has increased since Hurricane Katrina from 46 percent
    to 53 percent, not because the rate of the home ownership has
    increased, but because homeowners have been able to return home
    at a faster rate than renters.
        Therefore, continuing to work with working class families
    to achieve the American dream of home ownership in a
    responsible manner by improving their credit, reducing debt,
    and giving them financial literacy is still an important role
    for nonprofits working in partnership with government and local
    lenders.
        There are two greater lessons that we have learned from
    Hurricane Katrina. First is that community matters, and also
    the importance of helping residents to be organized within
    their neighborhoods and to be empowered to actively engage in
    civic matters. Hurricane Katrina was an equal opportunity
    disaster. Neighborhoods rich and poor, black and white, flooded
    when the levees broke. The ability of neighborhoods to recover
    has underscored the influence of class, race, and access to
    capital.
        But I hypothesized that there was one other influence on
    the resiliency of neighborhoods and that was the degree to
    which they were organized prior to Hurricane Katrina. The
    degree to which neighborhoods had preexisting strong
    neighborhood associations that were able to quickly mobilize
    had a distinct advantage over those neighborhoods that did not.
    Community organizing, strengthening the community-based
    organizations and neighborhood associations matters to the
    vitality of our neighborhoods.
        We did not just lose buildings when our levees broke. We
    lost communities. The fabric of life was torn apart. What we
    have experienced in the intervening 5 years is that as
    determined as residents were to rebuild their homes, they were
    equally determined to rebuild their communities. We all
    witnessed in the early years after Hurricane Katrina the
    sacrifice of time and energy residents were willing to make to
    be a part of the planning processes throughout our community. I
    won't recount the number of overlapping planning efforts and
    meetings that occurred, but even while people were having to
    rebuild their houses, they were willing to devote hours and
    hours to being a part of meetings and planning for the future
    of their neighborhoods.
        We live in a country where people want to be involved. They
    want to be a part of the solution and not just bystanders to
    destinies. Our challenge as leaders is to how to empower people
    to be active participants in our democracy, to have the tools
    to do more than vote, to do more than protest, but to be able
    to be a full partner with government to make their community a
    better place.
        So my comments now focus on some of these--how we have
    implemented some of these lessons learned post-Hurricane
    Katrina, and I will use our work in the Freret neighborhood
    uptown to demonstrate that.
        The work that the (NHS) did in the Freret neighborhood
    provides examples of the way that nonprofits, residents,
    businesses, and government have been able to work together and
    forge an active partnership to create a better neighborhood.
    NHS's response in the Freret community, and we have replicated
    this also in the Seventh Ward, was to provide an opportunity
    for residents to come together to reconnect and provide the
    opportunity to listen to determine what people wanted for their
    neighborhood.
        We began this with facilitated conversation in early 2006
    to discern their vision for their neighborhood. More than 80
    residents turned out that evening, which was twice the number
    of residents who would typically attend a neighborhood
    association meeting, and even more significant because the
    population was down by more than 50 percent. What we learned
    was that the residents of the neighborhood had a commitment and
    a vision to recreate that neighborhood the way it was before,
    to be a very diverse, vibrant neighborhood.
        Because so many places and institutions where people
    gathered had been lost due to the storm, our next step, with
    significant support from NeighborWorks, was to open a
    neighborhood center in the Freret neighborhood that became a
    gathering place for residents, children through senior
    citizens. The Freret Neighborhood Center sought a clear mandate
    from the residents as to how to focus our efforts in the
    rebuilding of our neighborhood, and therefore, we conducted a
    door-to-door survey in the neighborhood.
        When we asked, what was the primary concern for the
    neighborhood, the Freret residents' most common response was
    vacant and run-down buildings. Thus, our vacant property
    campaign began. In June 2008, NHS with the help of students and
    residents surveyed every property in the neighborhood, more
    than 1,300, to locate vacant and neglected properties. We
    determined whether the building was vacant or occupied, its
    condition, and whether or not it was under construction. We
    then plotted all these properties on a Geographic Information
    Systems (GIS) map to provide baseline data and the tool for our
    future work.
        Residents then began to develop the means to reach out to
    the owners of these distressed properties. They wrote hundreds
    of letters to property owners using their own knowledge of how
    to find these people rather than city records to be able to
    contact them and reach them. These letters included a
    photograph of the property and an inquiry, not a threat, as to
    the owner's intent and what the obstacles the owners were
    facing to rebuilding their homes. Neighbors connected with
    neighborhood to resources and then became effective caseworkers
    for those homeowners. We have created databases and computer
    tools that have given neighbors the ability to be the solution
    to the problem in our Freret neighborhood rather than looking
    to government to solve the problem.
        So I am going to end by posing some questions for us,
    because I do believe that the lessons we have learned in our
    work post-Hurricane Katrina throughout New Orleans, not just in
    the Freret neighborhood, is that we need to be able to provide
    the means and the tools to help residents become engaged and
    become active members of our democracy, not just voting on
    election day, although that is important, but what we as a
    nonprofit have been able to do is to provide technical skills
    and staff support that then mobilize and energize and empower
    residents to be community leaders.
        And the question is, how do we replicate that? How do we
    expand this work locally, and then how do we use these lessons
    throughout the country?
        I thank you for this opportunity to help inform this
    conversation going forward.
        Senator Landrieu. Thank you so much. Let us give our whole
    panel a round of applause. [Applause.]
        We normally don't do this at Congressional hearings, as my
    colleagues will note, but I think this panel most certainly
    deserves applause.
        I am going to make an executive decision that we are going
    to pass the question period, because we have elected officials
    that are here that have very busy schedules that are on the
    second panel and I want to accommodate those. But I will say
    that the record of this hearing will remain open for 2 weeks,
    and if any of the Members have questions, you can put those
    questions in writing and, of course, you will receive answers.
    And I actually have a whole list of questions in my mind and I
    am sure the Members do, as well. But in honor of time
    constraints, and we are committed to wrap this up at 12:30, we
    are going to move on to the second panel.
        We have heard the enormous work of housing, both home
    ownership and renters, and the challenges ahead.
        Mr. Rainwater talked about the new procedures in place and
    strategic partnerships at the Federal, State, and local level.
        Obviously, Doris Voitier gave us a great insight into the
    struggles of school systems, some that were mediocre and some
    that were excellent in this region and how they have all tried
    to recover in their own way and how we are going to try to make
    all of them as excellent as possible.
        Mark, thank you for your comments about fisheries. We
    sometimes forget the very important industry.
        And finally, Ms. Anderson, thank you for your comments
    about neighborhoods and nonprofits. When the Federal Government
    right after Hurricane Katrina said, well, this isn't what
    government can do, maybe your volunteers and nonprofits could
    do it, as we know, they lost their houses, too, and I don't
    know where we go to raise the money for all of our nonprofits
    since most everybody lost a job. We need support for nonprofits
    because nonprofits can leverage a tremendous amount of effort
    and you are an example of that.
        Thank you so much, and let us give them a round of
    applause. [Applause.]
        Mr. Melancon. As we change, I just need to ask Doris
    Voitier, I meant to ask you this a long time ago. Did you save
    those shoes that you kicked butt with? [Laughter.]
        I would like to see about putting them in the Smithsonian.
        Ms. Voitier. Well, we have a great relationship with FEMA
    now. And I did want to publicly thank Tony Russell and John----
        Senator Landrieu. We will take a few minutes to change.
    [Pause.]
        If the second panel would take their seats so that we can
    proceed, and thank you so much for your patience.
        I thank you all very much. The first panel was, as you
    could tell, focused on livelihoods and housing and human
    connections that are necessary to recover. This panel is about
    infrastructure generally and the importance of the physical
    infrastructure, whether it is buildings or roads or levees, and
    what it takes to make a community strong and resilient and to
    be a basis for economic development.
        And so we are very pleased to have with us the FEMA
    Administrator Craig Fugate, who will testify first. He has
    served as FEMA Administrator since 2009. This is his fifth time
    testifying before this Subcommittee. We are honored to have him
    again. He has been a partner in our work to help create a
    better, smarter, more agile FEMA and we really appreciate the
    experience that he brings to us previously as Director of the
    Florida Division of Emergency Management. So he is most
    certainly trained as a firefighter, as a paramedic, and then
    spent many years in Florida fighting hurricanes there, and he
    brings all of that experience to Washington, D.C., great
    leadership to his agency.
        General Robert Van Antwerp was appointed to serve as the
    Chief of Engineers and Commanding General of the Corps of
    Engineers. General, we are honored to have you today. He holds
    a Master's degree in mechanical engineering from the University
    of Michigan. He is himself a professional engineer. He has been
    on point for many years now on this recovery and I am glad that
    many of the students, General, were able to meet you today.
    They are very grateful for the levees that surround this
    building.
        Mayor Mitch Landrieu was elected Mayor of New Orleans in a
    historic landslide in February of this year. Prior to becoming
    Mayor, he served two terms as our Lieutenant Governor, where he
    led efforts after Hurricanes Katrina and Rita to rebuild the
    tourism industry, bring jobs back to the region, and promote
    our cultural economy. Mr. Mayor, we are grateful to have you
    today.
        Kevin Davis is President of St. Tammany Parish. He was
    elected in 2000. He has served three terms. Under his
    leadership, the Parish of St. Tammany has moved steadily
    towards recovery from the 2005 and 2008 hurricanes. This is his
    second time to testify before this Subcommittee. We are honored
    to have him with us today and we thank you, Kevin, for your
    really extraordinary leadership in St. Tammany Parish,
    particularly in the Slidell area, which was so hard hit by
    Hurricane Katrina.
        And then, finally, Sheriff Jiff Hingle assumed office in
    Plaquemines Parish in 1992. He is serving his fifth term.
    Sheriff Hingle worked tireless to reorganize and modernize and
    reinvigorate law enforcement in Plaquemines Parish, one of the
    hardest hit parishes. After Hurricane Katrina, the Sheriff
    coordinated the evacuation and rescue missions of the parish,
    led efforts for recovery of the Sheriff's facilities, and, I
    might add, has been a leader of law enforcement for the whole
    region, as other sheriffs have depended on him and looked to
    him for leadership and guidance. So, Sheriff Hingle, we are
    grateful for you to be here today.
        Let us start with you, Mr. Fugate, if you don't mind, and
    if we could limit our remarks to 5 minutes each, we would
    appreciate it, and then we will have a round of questions.

     TESTIMONY OF HON. W. CRAIG FUGATE,\1\ ADMINISTRATOR, FEDERAL
       EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND
                                SECURITY

        Mr. Fugate. Well, good morning, Chairman Landrieu and
    Congressmen. This 5-year anniversary, I am not going to go into
    much depth. You did great talking points about how bad it was.
    Why do I need to repeat what we were seeing up on the screen
    and we know has happened?
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Fugate appears in the appendix on
    page 106.
    ---------------------------------------------------------------------------
        Again, as you pointed out, as the Obama Administration came
    in, one of the first acts for Secretary Napolitano and
    Secretary Donovan was to come here to the Gulf Coast region,
    look at what was occurring, probably more importantly what had
    not been occurring, and take those steps to start enhancing the
    recovery. Secretary Napolitano made some key decisions. First
    of all was to bring in some new leadership, new eyes and a
    fresh approach to problem solving to the FEMA team. Also,
    working with the State and GOHSEP to begin an expedited process
    of clearing a backlog of projects that we are still unable to
    get to resolution. In addition to that, your Subcommittee, with
    the support of Congress, passed key provisions that gave us new
    tools, such as arbitration which would be binding, the ability
    to combine large projects, additional assistance and other
    programs to move through this backlog.
        As has already been mentioned, one of those people that
    Secretary Napolitano had appointed was Tony Russell, an
    experienced Federal Coordinating Officer (FCO) who came in to
    begin that process. It was also on that day that Tony was
    brought in that I was announced that I would be nominated to be
    the next Administrator of FEMA, and I was here and met with
    many folks to hear what again the challenges were.
        As I came on board and Tony and I met and we came back to
    Louisiana and we sat down with our counterparts at GOHSEP, I
    think one of the most important things that Tony brought back
    to the table was sitting down and talking. We had become too
    oriented on process. We were spending too much time going back
    and forth over procedures. And we brought back a discussion
    that we would not always be able to agree on everything, but we
    needed to start focusing on outcomes.
        I think today on the bus tour, we actually saw some of
    those outcomes. We saw buildings that were destroyed, critical
    public infrastructure such as fire stations and schools and
    others that are either under construction or have been
    completed. And we saw on the port the new Administration
    building, completed and reopened, the fire stations that are
    being built, not only to provide public safety protection, but
    also a wise investment of taxpayers' dollars, to be built to
    provide safety for the firefighters when there is a disaster,
    but also to make those buildings more resilient so they are
    there afterwards.
        This process has enabled us to, in the last year and a
    half, on behalf of the President and Secretary Napolitano, to
    have released over $2.5 billion in projects, but we are not
    done and we have not finished building everything that needs to
    be rebuilt, and we still have work to be done, as you announced
    yesterday, still significant work to be done in the school
    districts and other public infrastructure.
        Our commitment on behalf of the President and Secretary
    Napolitano is to continue to meet and sit down and use our
    tools more effectively. As you have pointed out and have asked
    me numerous times, it has been, ``Craig, do we need to change
    the Stafford Act? '' And I have asked that, let us look at our
    process and procedures first, because in many cases, Tony was
    able to get to the same solutions that we thought we couldn't
    do without changing the Stafford Act merely by not focusing in
    on a process but going back to what the law's intention was,
    what the Code of Federal Regulations (CFR) told us we could do,
    and not limiting ourselves by perceived limitations that may
    have been something that had been stated previously but were
    not actually based in the law or rules that were adopted to
    implement that. But these challenges continue and the
    rebuilding is not over and the work must be done.
        I also know that when I testified, that a lot of times
    questions would come up before I testified. I would rather just
    go ahead and let us get to some of the issues that have been
    raised. The Community Disaster Loan Program and the forgiveness
    of those loans and the process we are going through in the
    first round is resulting, I think, in questions about the
    intention of forgiving these based upon the impacts to the
    economies and to the tax base of the communities receiving
    these loans. Yesterday as we were talking with the
    Superintendent here in the St. Bernard Parish School District
    of some of the ways that the auditors were looking at what was
    being treated as income.
        I think what I owe back to you, because we were given
    specific legislation to address this issue, is to look at what
    we are finding in our initial reviews. Again, this is, I don't
    think, a process that we are--we do the first round of
    forgiveness and then we are done. I think we go through the
    first round of forgiveness and find what we did. Then we look
    at the ones that we did not reach that same conclusion and we
    go, why not, and we go back to the law and go, what was the
    intention and half way through that process not been able to
    address that? We may very well find that there will be those
    loans that won't be forgiven because the income of that
    particular taxing authority is sufficient to provide for
    repayment. But if we cannot and we still think there may be
    issues, we owe you back a report of what the legislation
    directed us, how we implemented that, and what the gaps were to
    get there.
        But we did hear yesterday enough for me and Tony Russell to
    come back. I want to sit down and go, in the audit process, how
    are we looking at income? Are we treating reimbursements from
    FEMA as income versus that should not be used in that? Are we
    using accounting principles which would make sense if we were
    doing an annual Single Audit Act-type audit? Are we looking at
    this under the provision of what is the revenue stream impacts?
    Within that, we have had some flexibility where we have allowed
    the applicants to pick the 36-month period. So we didn't start
    immediately after the hurricane, where some had rapid increases
    in population which skewed their tax numbers, or maybe the
    revenue streams and doesn't reflect the overall revenue stream
    as you go forward.
        So again, we are working those. We know that is a concern.
    And we are working to go through this first cut to determine
    what we can do, what we cannot do, and come back and report if
    we need additional guidance or legislation. Thank you.
        Senator Landrieu. Thank you so much, Administrator, and
    again, this is a perfect example. He knows he is going to get
    this question from this panel, so he has already answered it. I
    know Congressmen Scalise and Melancon are about ready to jump
    out of their chairs on this question, so thank you for being so
    forward in that way and we will have follow-up questions.
    General.

      TESTIMONY OF LIEUTENANT GENERAL ROBERT VAN ANTWERP, JR.,\1\
            CHIEF OF ENGINEERS, U.S. ARMY CORPS OF ENGINEERS

        General Van Antwerp. Chairman Landrieu, Members of the
    Subcommittee thank you very much, for the opportunity to be
    able to testify before you today. I am going to show a few
    slides. They have been running; they show some of the pictures
    that we have of these great projects behind you as we go along.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Antwerp appears in the appendix
    on page 116.
    ---------------------------------------------------------------------------
        The Corps has made significant progress on the Hurricane
    and Storm Damage Risk Reduction System (HSDRRS) in the last 5
    years. Over 270 contracts have been awarded and over $9 billion
    obligated. I would like to note that 60 percent of these awards
    have gone to Louisiana-based firms, and over $2.25 billion to
    small and disadvantaged businesses, about 30 percent of the
    total. The total Federal funds appropriated is $14.45 billion.
    1.5 billion of that is included for the non-federal cost share
    with repayment over 30-years. The State's cost is estimated at
    $1.7 billion.
        After Hurricane Katrina, the firm Administration commitment
    and quick Congressional action enabled the Corps to repair and
    restore 220 miles of the system. These photos show the Inner
    Harbor Navigation Canal (IHNC) breach site and the rebuilt
    flood wall that was completed in 2006. The system in place
    performed as designed during Hurricanes Gustav and Ike in 2008,
    where we had a 12-foot storm surge, as depicted in this photo.
    So it worked.
        The Corps is totally committed to providing a system that
    will defend against the effects of a 100-year storm in June
    2011, and work will continue beyond 2011 for some of the
    systems' features like the permanent pumps, but won't affect
    our ability to withstand that 100-year storm.
        The four major project partnership agreements necessary to
    proceed with construction were signed with the Coastal
    Protection and Restoration Authority (CPRA), and we also signed
    agreements with the State, all the agreements we need to extend
    its payments for its cost share portion over a 30-year period.
        In accordance with the Water Resources Development Act
    (WRDA) of 2007, the Corps has implemented a robust independent
    external peer review system to include overall design criteria
    and other important facets. We are seeking the best solutions
    humanly possible.
        Interim closure structures and pump stations at the three
    outfall canals provide a 100-year level of risk reduction, as
    depicted in this photo. You have the pre-Hurricane Katrina on
    the left and the current photo of the 17th Street Canal on your
    right. But they are not permanent facilities. They were
    designed and built in 2006 with an estimated project life of 5
    to 7 years.
        We will include adaptable design measures in the permanent
    solutions that are within our current authority. This is a
    picture of the concept for the future permanent pump stations.
    It does have a lower sill, so that if there is another
    alternative later on for the canals, it will be adaptable.
        The state-of-the-art Inner Harbor Navigation Canal (IHNC)
    Surge Barrier Project on Lake Borgne includes a concrete pile-
    supported wall across the Gulf Intercoastal Waterway (GIWW) and
    Mississippi River Gulf Outlet and three gated structures. The
    group of these photos shows the sequence of events since 2007
    on this project. It is the largest design-build civil works
    contract the Corps has ever had, so we are very proud of it. It
    will reduce the risk to the Ninth Ward, Gentilly, New Orleans
    East, Orleans Metro, and St. Bernard Parishes.
        The project has navigation safety features and a more
    robust barrier wall and added nourishment of 705 acres of
    marshland. The project is now 75 percent complete. The wall and
    surge barrier are already complete, and this photo shows a
    comparison of the new flood wall to the tie in, so you just see
    the stark contrast of that new one to the old one.
        The Gulf Intercoastal Waterway West Closure Complex will
    reduce risk for the West Bank portions of Jefferson, Orleans,
    and Plaquemines Parish by removing over 25 miles of levees,
    flood walls, gates, and pump stations. The progress of this
    complex is seen in this set of photographs.
        Following Hurricane Katrina, about 80 percent of the St.
    Bernard Parish levees were either repaired or constructed to
    achieve the pre-Hurricane Katrina authorized elevation. With
    the rigorous public involvement process, the Corps determined
    that T-walls on top of the existing levees provided the best
    solutions to provide a 100-year risk reduction. Construction of
    23 miles of floodwalls, proceeding at the rate of about two
    miles per month, is scheduled to be completed in 2011, and that
    is what these photos show, the St. Bernard floodwall.
        Closure of the Mississippi Gulf Outlet (MRGO) was completed
    in July 2009 using about 350,000 tons of rock. A study to
    identify the best ways to restore the wetlands is currently
    underway.
        And finally, I would like to just mention the Louisiana
    Coastal Protection and Restoration (LACPR) Final Technical
    Report. It was submitted to Congress. This is the long-term
    plan that we are working, embedded with the State of Louisiana,
    to come up with a master plan that will develop a long-range
    solution for defense of the coast.
        So, Madam Chairman, that concludes my comments and I
    appreciate the opportunity to be here with you today. Thank
    you.
        Senator Landrieu. Thank you, General, very much, and we
    will have questions following the presentations. Mayor
    Landrieu.

    TESTIMONY OF MITCHELL J. LANDRIEU,\1\MAYOR, CITY OF NEW ORLEANS

        Mr. Landrieu. Thank you, Madam Chairperson and Members of
    the Subcommittee. I want to just, if I could, thank the panel
    that was before, all of the individuals that were on that panel
    and all the individuals on this panel have been great partners
    of mine and the City of New Orleans throughout.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Landrieu appears in the appendix
    on page 125.
    ---------------------------------------------------------------------------
        I would start off generally by saying this, that
    notwithstanding all of the Federal money that has been sent to
    the Gulf Coast, it still does not approximate the level of
    damage that actually occurred. And notwithstanding how much
    better the system is working, there still is a gap between
    damage and resources necessary to get it back like it was
    before or better, although we have made some tremendous
    strides. And within that context, all of us continue to operate
    to try to understand what happened 5 years ago and how to make
    it better.
        For example, as we sit here today, it is worth noting,
    although we are celebrating the fifth anniversary of Hurricane
    Katrina, that this area has suffered from a number of
    disasters--Hurricanes Katrina, Rita, Ike, Gustav, the national
    recession, and the BP oil spill. And that is worth noting,
    because as we think about how to structure our responses, we
    have to find a way to become more flexible, break down the
    stovepipes that exist horizontally and vertically within
    government to move resources down to the ground more quickly. I
    think that is our overall challenge. Everything that we are
    talking about today fits into that phrase.
        It is true that we have had some great successes. I think
    the announcement of the 1.8 lump sum settlement for schools is
    just a tremendous success in so many ways. Number one, it is
    going to give us the resources necessary in New Orleans to
    build a first class 21st Century school system. But it is also,
    as Craig alluded to earlier, a new model, Senator Landrieu,
    based on your legislation that has allowed FEMA to assess a
    situation and to respond to it differently. And the reason that
    is so critically important to know and hope that Congressional
    authorization expands into FEMA's work is when you are trying
    to rebuild the city or you are trying to rebuild a parish, you
    can't plan long-term if you don't know what money is coming in.
        And, of course, as you try to rebuild the City of New
    Orleans and you are trying to rebuild neighborhoods, as
    Secretary Donovan spoke about with the amazing work that has
    gone on in the housing initiative, you try to build what we
    call place-based development, and it is important to be able to
    know what resources are going to be available because you just
    don't build the house. You have to build it next to a school,
    and the school needs to be next to the health clinic. So I was
    again thrilled by Secretary Donovan's announcement that he is
    going to allow CDBG money to be used to continue to fund the 87
    health care clinics.
        Suffice it to say that from the ground looking up, it is
    important to have stability and predictability so that we can
    actually master plan, so smart growth policies can actually be
    implemented as opposed to one-offs on whether or not a
    particular firehouse is going to be rebuilt.
        And so I would encourage Congress and the Senate to give
    broader authorization to FEMA to settle lump sum with parishes
    and mayors all over the country, because we have more storms
    coming, other catastrophes. That is a great tool that allows us
    greater flexibility and I believe that you will see the benefit
    of that. In the City of New Orleans, we are rebuilding
    everything. I think you have seen some successes there. But we
    have a long way to go.
        Let me just hit a couple of other points, because we are
    going to talk a lot about the great things that are happening,
    but there are some challenges that we have coming forward. For
    example, we still have to rebuild police, fire, and recreation.
    We are talking to Mr. Fugate now. We have a great relationship
    with them. The relationship with the State has been much
    better. Everything is working the way it is supposed to be
    working, but all of us have challenges. So we would like to do
    lump-sum settlements on police, fire, and recreation. We also
    have terrific challenges with the surge and Water Board.
        On top of that, I want to reiterate the urgency with which
    to deal with CDL, because that is going to be a burden that we
    are going to carry for a long time and that is a critical
    burden that we want to try to ameliorate over time.
        And finally, I think the Corps of Engineers has really done
    a superb job. The wall that was built is not only a testament
    to great engineering, but it is also going to give us great
    protection. Having said that, I believe the Corps understands,
    and, of course, all of us understand that 100-year flood
    protection is not adequate to protect what it is that we know
    is coming our way. The Corps, I know, was operating under
    authorization and financial limits, but I would strongly
    encourage all of us to continue to talk about finding a
    commitment to make sure that we protect the area.
        Senator Landrieu, you and many of you have been to the
    Netherlands. We understand the threat that we are under. The BP
    oil spill has again highlighted the incredible issue of
    restoring the coast, moving the levees up, making sure the
    building codes are where they are going to be if we are going
    to have a sustainable community over time, because if we
    rebuild the inner cities of the parishes but we don't have that
    outer layer of protection, we really are working for naught. So
    I think that is critically important.
        As we move forward, I do want to just reiterate how much
    better everybody is working together. I am very pleased with
    the tremendous support that we have received from President
    Obama. Many of his cabinet members have been down here multiple
    times and will continue to be here. Our working relationship
    with FEMA is really going very, very well. We have teams of
    people sitting in the same room all day now, from FEMA to the
    Office of Community Development (OCD), the Governor's folks,
    our folks on the city level as we speak are sitting in rooms
    working out these difficulties. But there are limitations that
    we have that could be loosened up that will allow us to do our
    work faster.
        So as we move into this anniversary, it is true that, by
    necessity, this area of the country has become the most
    important laboratory for innovation and change, just out of
    necessity. We are doing things here that nobody else in the
    country has been able to do because the fabric of our community
    got torn apart. So we have a special obligation to get it
    right. I know that you will and you will take these messages
    back to your colleagues. Thank you all so much.
        Senator Landrieu. Thank you, Mr. Mayor.
        President Davis of St. Tammany Parish.

       TESTIMONY OF KEVIN DAVIS,\1\ PRESIDENT, ST. TAMMANY PARISH

        Mr. Davis. Thank you, Senator Landrieu and Members of the
    Subcommittee and Congressional members. I will skip, because I
    know we are running out of time. I am here today to focus on
    lessons we learned and lessons we hope the Federal Government
    would learn.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Davis appears in the appendix on
    page 127.
    ---------------------------------------------------------------------------
        First, we learned that the Federal Emergency Management
    Agency does not manage emergencies. They manage the accounting
    that goes with emergencies. We learned that we must be self-
    sufficient in the emergency response for at least 5 days. We
    learned that if you clean anything at all, even in the interest
    of public safety, you had better have FEMA's paperwork complete
    and signed off at every level if you hope for reimbursement. We
    learned that the well-meaning FEMA workers on the ground change
    quickly, and with that change of personnel the interpretations
    of the Stafford Act. I would like to give you a specific
    example.
        Hurricane Katrina stripped thousands of cubic yards of
    marshland from coastal marshes in the Federal Wildlife
    Management Area--this is a Federal Wildlife Management Area--
    and just deposited them in waterways and canals and homes.
    Imagine, if you will, a home filled with five feet of mud and
    grass. We were successful in arguing that we could clean the
    marsh grass in the drainage ditches even though it was
    considered rooted vegetation because the grass grew roots
    because it took so long to get approval. However, FEMA had
    never approved the cleaning of the waterways. St. Tammany
    Parish has been forced to incur the cost to remove the debris.
    It is inconceivable that this work was not eligible under
    FEMA's rules. I submit that the only reason for this ruling was
    the inconsistent and cavalier application of FEMA's Public
    Assistance Program based on biased individuals.
        Be that as it may, the parish is about to complete cleaning
    these canals as I speak. In fact, the work is considered by
    many State and Federal agencies to be a model for debris
    removal and coastal restoration. We removed the debris in the
    canals by using a hydraulic dredge to pipe the debris back to
    the nearby Federal Big Branch National Wildlife Refuge from
    which it came. We are removing the hurricane debris, removing
    the navigational and drainage threats, and restoring Federal
    coastal marsh at the same time. Under FEMA's current policies,
    such a project is prohibited. This makes no sense to me,
    especially it is far less expensive than many of FEMA's own
    proposals which they later denied to clean the same area.
        And now I want to go just a little bit further and I want
    to mention the current disaster in which we are here in
    Louisiana and the Gulf Coast, battling the BP oil spill.
    Needless to say, this is a blow to continued recovery efforts.
    While FEMA's role in the response to BP oil spill certainly is
    limited to date, we cannot forget that this is hurricane
    season.
        In order to plan for response to a storm that this season,
    with the added threat of oil spill contamination, I initiated a
    dialogue with BP, the Environmental Protection Agency (EPA),
    the U.S. Coast Guard, Louisiana Governor's Office of Homeland
    Security, and the Louisiana Department of Environmental
    Quality, and FEMA. Every agency but FEMA was interested in
    discussing and agreeing to procedures to address questions
    related to the oil spill. FEMA's response was that they were
    coming up with their own rules. There was no need for
    discussion. To date, I have not received any guidance or
    procedures from FEMA pertaining to the storm response and the
    handling of the debris in light of possible oil spill
    contamination as a result of this hurricane season.
        To me, and I am sorry, Mr. Fugate, he stated that--and I
    have great respect for him, I will tell you that, and I think
    he is trying, but I want him to know today that just yesterday,
    I met with all of our agencies in St. Tammany Parish about the
    CDL loans, and I have to tell you, it is not happening on the
    ground, Mr. Fugate. They have told us directly in meetings, you
    have 5 days to sign this paperwork. You will sign it, and these
    are the numbers. We have had very little dialogue in reference
    to the capital expenditures, our budgets, our operating
    revenues, and the like. So I would request that you would work
    with us closely in reference to the CDL loans, and I want to
    thank you for the opportunity.
        Senator Landrieu. Thank you very much. Sheriff Hingle.

        TESTIMONY OF JIFF HINGLE,\1\ SHERIFF, PLAQUEMINES PARISH

        Sheriff Hingle. Thank you, Madam Chairman and Members of
    the Subcommittee. Hurricane Katrina completely destroyed the
    Plaquemines Parish Sheriff's Office (PPSO) Detention Center
    located in Pointe a la Hache. On first availability, the
    Sheriff's Office and FEMA met to discuss assistance in
    rebuilding the detention facility. From the beginning, the
    talks agreed that a temporary detention facility was necessary
    due to the duration of time needed to build a permanent one and
    the fact that the Sheriff's Office had no place to hold their
    prisoners. The following is a summary of events that have
    unfolded from that time.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Hingle appears in the appendix on
    page 131.
    ---------------------------------------------------------------------------
        August 2006, the LeBlanc Group was contacted to assist in
    the bid package for the demolition of the existing detention
    center that had been destroyed. The LeBlanc Group was the
    architect and engineer (A&E) of the damaged facility and had
    the expertise and information necessary to safely move the
    demolition forward. The damaged detention facility was
    successfully removed by February 2007.
        In March 2007, we advertised for an architect-engineering
    service for a temporary facility. The LeBlanc Group was awarded
    the contract in May of that year and began work on the original
    temporary facility design. The original proposal was to build
    the temporary facility at grade level using modular units.
    During that period, the design of the temporary detention
    facility was halted due to advisory base flood elevation (ABFE)
    concerns raised by FEMA. Eventually, the LeBlanc Group decided
    they could no longer afford to wait on the constant delays
    created by FEMA regarding the base flood elevation and asked to
    be relieved of their contractual obligations.
        Madam Chairman, I have entered all this into the record.
    This is a very long and tedious presentation. I am not going to
    read it all. I would like to say that the base flood elevations
    were finally determined in July of this year. We are working
    with FEMA and have signed a Project worksheet (PW) that has
    been sent to Washington that hopefully will begin construction
    of the permanent facility. We have abandoned the idea of a
    temporary facility altogether.
        If we receive our PW as promised by the end of this year,
    advertise for bid, and by the spring go out for construction,
    with the construction time, you will be there with me for the
    cutting of the ribbon of that facility on the tenth anniversary
    of Hurricane Katrina.
        I want to thank the Senator and I want to thank Congressman
    Melancon for all of their assistance over these years in
    pushing FEMA forward on this. I also want to thank some sheriff
    friends of mine, former Sheriff Litchfield from Baton Rouge,
    former Sheriff Lee from Jefferson, Sheriff Norman of Jefferson,
    and Sheriff Marlon Gusman of New Orleans, who have held my
    prisoners all this time. Without their assistance, we would not
    have been able to run a successful Sheriff's operation in
    Plaquemines Parish.
        I have to say that during this time period, we finally saw
    some light a year ago and that light began when Tony Russell
    came to New Orleans. The roadblock that we had experienced for
    almost 4 years was finally opened within about a 90-day period
    with face-to-face conversations with Mr. Russell and I thank
    him for that. It has taken us a little while to finish this,
    but I do see progress now and light at the end of the tunnel.
    And I want to thank all of you for being here today and hearing
    this testimony and working with us, not only in the past, but I
    know working with us in the future. Thank you.
        Senator Landrieu. Thank you, Sheriff.
        I am going to begin with just the first few minutes of
    questions and then move down the panel.
        I would like, just for the record, to establish the
    question I am going to ask on the Community Development Loans
    for Mr. Mayor, for you to just say into the record what the
    total budget of Orleans Parish is, roughly, your budget, the
    city. You might want to throw in what, if you do know, what the
    school board is, because I guess those combined would be the
    two largest. What is your general----
        Mr. Landrieu. I don't have the school board number. The
    city's number is $451 million on city general fund dollars.
    And, of course, when the Federal dollars are laid on top of
    that, it is approximately a billion dollars. We don't operate
    the school system, so I don't have those numbers available.
        Senator Landrieu. But that is very, very good for this
    question. Kevin, what is your total budget?
        Mr. Davis. 101 million.
        Senator Landrieu. A hundred-and-one million. And Jiff, what
    is your budget?
        Sheriff Hingle. Twenty million.
        Senator Landrieu. OK. The question--I am glad to have that
    on the record, because I want to say that at the time of
    Hurricane Katrina--Mr. Fugate, this--that the Federal
    Government allowed these officials to borrow a total amount of
    money of $5 million. That was the cap in the Federal law. So I
    want to ask you, what would $5 million do for them, and could
    you comment on this whole loan situation that has been a
    nightmare for us and how we are going to find justice on this
    issue.
        Mr. Fugate. Madam Chairman, I think, first of all, I have
    actually had this conversation with the Emergency Manager
    Commissioner for the City of New York, and $5 million wouldn't
    even be, I think, a half-day of their personnel budget.
        The Community Disaster Loan Program, as you point out, is
    something we are going to have to look at, expanding that, but
    I think there is a more fundamental question. In the gravity of
    the situation and erosion of the tax base and the likely costs
    that are going to occur, should we be looking at a loan or
    looking at a grant program?
        Historically, under the Stafford Act, operating costs were
    not generally considered eligible if there was a tax revenue
    stream that would be expected to pay for that. And so
    disruptions in tax base--we look at, in the Stafford Act, for
    those increased costs, the extraordinary costs, the overtime.
    But it doesn't really address the underlying issue of, one,
    what is going to happen with reimbursement? So should we be
    looking at these differently?
        But on the current situation is--and again, I got this
    yesterday when we were talking about what is being considered
    as income to determine what is considered a surplus versus a
    deficit in the operating budget, and I was told they were
    looking at FEMA assistance and how that was being calculated.
    And so Tony Russell and I immediately said, A, it didn't sound
    right, and B, we need to go back and go, what are we actually
    using for determining what is the revenue stream and level of
    income.
        Senator Landrieu. But I just want to be clear for this
    record on this question, because this is just critical to our
    success moving forward, that what you just testified to, what I
    heard was that in FEMA's mind, you are clear that these
    officials could borrow money from you for overtime, etc, etc.
    But I continue to remind you and other Federal officials that
    overtime is important, but in a catastrophe, regular time is
    very important because police officers have to be paid for
    regular time before they can actually be present to work
    overtime.
        So I keep pressing for an adequate response. Now, we know
    that you are leaning forward on this. I can hear it in your
    voice and I hear it in the testimony. But I want to be clear
    that we are going to leave here committed to figuring this out,
    because if my staff will give me the number, we have
    outstanding debt of, what is it, over a billion? It is over
    $800 million that the State of Louisiana, our elected officials
    collectively owe, and we have that in the record as to--and
    each one of them sort of have a--well, you have a very good
    idea of how much it is, I am sure. But I will say it is between
    $800 million and $1 billion.
        Now, for communities that are struggling to build schools,
    fire stations, sidewalks, sewer systems, levees,
    transportation, support their neighborhood groups, finding this
    $800 million or $1 billion is going to be very difficult even
    for our wealthiest parishes. So we have to really figure this
    out, and that would basically be my question. Do you have any
    additional comment, and then I am going to pass it on to my
    colleagues.
        Mr. Fugate. Madam Chairman, I think you got it exactly
    right. I think the original intention prior to Hurricane
    Katrina was the Community Disaster Loan Program could provide a
    loan until the FEMA reimbursement process kicked in. It never
    addressed the underlying issue of what happens if you had the
    extraordinary cost plus a tax base which is devastated so your
    baseline costs aren't being covered, and that was something I
    don't think that was ever anticipated in the Community Disaster
    Loan Program, and as we did the Special Community Disaster Loan
    Program, we were trying to address.
        So I think this is something, again, to look at it, is when
    should we look at this as a grant that we don't really expect--
    how do you make up this revenue stream as you are trying to
    rebuild a tax base and pay back a loan? I know that is the
    mechanism we use. So maybe the question is, the tool we use, we
    need to find a different tool. But we have to take the tool we
    have now and figure out what it is going to take to make sure
    we continue communities being able to continue their
    operations, that these loans--so we can deal with two issues,
    the forgiveness but also the loans themselves affecting bond
    rating as communities try to move forward.
        Senator Landrieu. Well, I would hope, and I would turn it
    over to the Congressman--I know the Mayor and others have
    suggestions--I would hope that you would take some time very
    soon to sit down face-to-face with these elected officials,
    because you won't find more experienced elected officials
    anywhere in the country except for the ones along the Gulf
    Coast that have taken out these loans, trying to figure out how
    to repay it, why it didn't work, maybe it should be grants,
    than these folks, and I hope that you will do that. Congressman
    Melancon.
        Mr. Melancon. Thank you, Senator Landrieu.
        Mr. Fugate, if you would, let me just follow up on that.
    One of the things that I have found and I think most of the
    officials found after Hurricane Katrina was that Stafford was
    totally inadequate for the catastrophic event we experienced.
    It is OK if you have levee breaks up north in Iowa and a
    regular hurricane, whatever that is these days. But if you
    could help us as members of Congress, you and Tony, because I
    know you have been through the experiences before, is I think
    we need assistance in trying to--and these gentlemen and their
    offices can help us, also--to look at a reauthorization or
    reforming so that there is a catastrophic event clause that
    triggers in and how we trigger it in, that the norm, the
    Stafford, doesn't become the norm for a major catastrophic
    event and would maybe give more leeway to the people that run
    the agency going into the future. Hopefully, you will never
    have to experience it, but we thank you for what you and Tony
    have done. It has been 100 percent better.
        Mr. Fugate. Well, sir, I think one of the things we would
    like to continue to pursue, and we are going to use the
    existing authorities we have and working with Mayor Landrieu,
    is we oftentimes would look at a project by project, building
    by building type approach instead of stepping back and saying,
    instead of doing a project as a fire station, let us look at
    fire service or, as the Mayor says, public safety as a project,
    and again, use some of the tools we used to recover the school
    district, and that, I think, is a more effective, faster way.
    When you have large system impacts, look at the system, not the
    individual buildings in trying to do the grant process.
        Senator Landrieu. Amen. Congressman Scalise.
        Mr. Scalise. Thank you, Senator. I have two questions, and
    I will ask the questions if that is OK, Senator, and then let
    the panel address it.
        First, on the Category 5 flood protection, General Van
    Antwerp, under one of the things that we have been trying to
    push as a delegation is to get a real commitment on Category 5
    flood protection, which is something we don't have right now.
    One of the things, and I wasn't here initially after Hurricane
    Katrina in the Congressional delegation, but language that was
    passed by our delegation back then seemed it was the intent of
    the delegation to get specific recommendations from the Corps
    on specific projects to bring us to, not, as Mayor Landrieu
    talked about, not hundred-year flood protection, but true
    Category 5 flood protection, which is a much stronger level
    that we all want to achieve. But the recommendations that came
    down for the Corps, it wasn't specific recommendations. It was
    more of a spreadsheet with options that were given to the State
    and then asking the State to come back and identify those.
        And so if you can address kind of that difference between
    what the Congressional intent seemed to be that the
    Congressional delegation wanted to have the Corps give specific
    recommendations, as has always been done in the past and is
    typically the process we need to go and then seek the
    authorization and funding versus what was sent down.
        And then if I can ask Parish President Davis to touch again
    on the CDL issue, because I know you have come down more than
    one time, come to Washington, working with me and others to try
    to get clear definitions, and as the definitions did come out
    and the rules on the CDL process, and recently the unfortunate
    rejection, not only in your parish but in other parishes, the
    rejection of forgiveness of those loans where in some places
    you had forgiveness and some you didn't get forgiveness, how we
    can get some better dialogue with the FEMA Administrator Fugate
    to get, as you mentioned, in that second round, if there
    hopefully will be a second round of rules to try to get over
    that hump for those communities that are experiencing problems
    today, but just because of the guidelines that seem to be in
    place, it didn't necessarily take into account the issues that
    they had, so they didn't get the same forgiveness as somebody
    else did even though they both were in that line of fire. So if
    I could----
        Senator Landrieu. Excellent question. If you all would,
    limit your response to 2 minutes each so we can get Congressman
    Cao in.
        General Van Antwerp. Your question is a great one. When we
    did the LACPR report, what we essentially were looking at in
    the different planning units what are the alternatives. That is
    what we did first. And then which ones were, in our opinion,
    the best alternatives, but there are tradeoffs. For instance,
    in St. Bernard Parish where we built the T-walls, if you would
    build a conventional levee there, the base would have been 900
    feet and you would have needed more property. It would have
    impacted wetlands. So there are different effects of each of
    these.
        The standard in the United States right now is the 100-year
    level. We have looked at the system in the Netherlands and
    there are alternatives similar to that system, but they can be
    very, very expensive and they can impact the environment. So
    that is where there are tradeoffs. We are meeting with the
    State right now to try and pick the best alternatives in each
    of those planning units, in each of the regions, if you will.
        We kind of mix Category 5 and the 100-year, because
    Category 5 isn't necessarily a 500-year event. Hurricane
    Katrina, for instance, had a very large surge which was much
    greater than its category. We can give more information on what
    we hope to get out of the long-range plan, but it is going to
    take working with the State to do that and to determine what
    alternatives that the people want and the subsequent tradeoffs.
        Senator Landrieu. Thank you. President Davis.
        Mr. Davis. Yes. I think, to answer the Congressman
    directly, yesterday, we had a meeting with all of our agencies,
    be it fire, municipalities, hospitals. I think the problem is
    how they determined the surplus or the income of a local
    government authority. Like, we have a 2-cent sales tax, and in
    that discussion, it is highly dedicated. It can't be used for
    other expenditures. It can't be used for personnel. But they
    are using some of those dollars in the overall picture, which
    then they came back to us and said we had a surplus of $125
    million. But that is not correct. It is not the accounting
    process that we use.
        And again, I am--it is great that I have this opportunity
    while he is here, because I have to tell you, the people on the
    ground have been very forceful and have--I had one mayor just
    sign off the other day. She just gave up and signed the thing.
    She says, ``I am not worried about it because when the first
    payment comes due, I am going to have a deficit so I can't pay
    it.'' I said, ``But Mayor, I don't think you understand. They
    can take other assets,'' and I have seen them do that. We had
    them do that with the Natural Resources Conservation Service
    (NRCS) on us because of the 20 percent match. When we didn't
    make the payment, they took other Federal funds from other
    agencies and took our money. So this is a serious issue and I
    would look forward to meeting with them in reference to how the
    surpluses or how the accounting is done.
        Senator Landrieu. OK. Thank you.
        Mr. Scalise. And if Administrator Fugate can help us with
    that, to get that, hopefully the differences in accounting
    practices between what the parishes actually experience versus
    what the FEMA folks on the ground looked at.
        Mr. Fugate. And I am very familiar, having come from local
    government, where you have a taxing authority that is currently
    going to a certain bond or a certain activity and part of that
    enabling legislation is it can't be used other places. So
    again, that is one. Yesterday, we were hearing what was being
    counted, and we want to go back and make sure that we are
    looking at what the actual revenue that should be going against
    a loan and not looking at other types of revenue that would not
    necessarily be supporting that repayment.
        Senator Landrieu. That is an excellent--we will take that
    testimony and we will take that as a yes, we will work on it.
    Thank you. Congressman Cao.
        Mr. Cao. Thank you, Senator, and my two questions will be
    to General Van Antwerp.
        One, based on my observation of the BP oil spill, it seems
    to me that the Army Corps still has this level of bureaucracy
    that prevents the Army Corps to make very quick decisions,
    which is something that we needed in the situation of the oil
    spill. My question to you, the first question is, have you
    looked at that problem and what are the future steps that you
    will take to reduce this bureaucracy and to enable the Army
    Corps to make quicker decisions?
        My second question is, how are you working with Secretary
    Mavis to look at the issue of a long-term environmental
    redevelopment?
        Senator Landrieu. And General, if you will take 2 minutes
    to answer that, and then I am going to have the Mayor give
    closing remarks and we are going to end this panel.
        General Van Antwerp. Regarding the oil spill, our primary
    mission was the evaluation of emergency permits under our
    regulatory authority. We received 57 permits, and we can tell
    you exactly when we received them and how it took to reach
    decisions. We used emergency procedures. Many of the permit
    requests had no science or engineering behind them, so we had
    to model them to determine effects. As it turned out, a lot of
    them would have done more damage had we permitted what was
    requested. So we have to get that part right.
        We had a strong urge, to let us do something and do it now.
    But you have to also do the right thing. We will continue to
    look at our emergency procedures. A lot of those 57 permits
    that were requested were given on the same day that they were
    requested. It is something we do need to work more on, but we
    also want to get the science and engineering right.
        On the other part, we are definitely working with Secretary
    Mavis on the long-term environmental impacts, the marshlands,
    the wetlands, and what could be done. We are also looking at
    that as part of the long-range master plan for this area and
    what is the mitigation and how do we make sure that we are
    building better and building better environmentally in this
    wonderful ecosystem.
        Senator Landrieu. Thank you.
        Mr. Mayor, any closing remarks?
        Mr. Landrieu. Thank you so much, Madam Chairman and Members
    of the Subcommittee, and, of course, my fellow panel members. I
    would just say this. We obviously have made great progress, but
    we have a very, very long way to go and we have some
    challenges, and the broadest challenge in my opinion is that
    the U.S. Government is not adequately prepared structurally to
    respond to a catastrophic event. That is the big message. I
    think everybody here is working as hard as they can within the
    guidelines that exist. Obviously, being more responsive, being
    available, giving quick answers is critically important. Trying
    to lean towards yes is critically important, and Tony and those
    guys have done a great job.
        But my general observation in the policy discussion that
    you have, should Stafford be amended, should it not be, I don't
    know the answer to that question. I can say this to you,
    though, that this country right now organizationally is not set
    up to recover from a catastrophic event. FEMA is not a recovery
    organization. They are not a rebuilding organization. They were
    designed to get there quick and to respond.
        But as you can see from catastrophic events that we have
    had, we need something bigger and more robust, something more
    flexible, something that takes into consideration all of the
    different permutations that we have learned through the agony
    that we have all been through, and that is the big take-away
    lesson for us.
        Finally, I would say this. We continue to want to work
    very, very closely. There is a disconnect sometimes between now
    the efficacy with which the folks in Washington are working and
    what we are hearing on the ground from the folks. We saw that
    during the BP oil spill. We saw it with the Coast Guard. We see
    it all the time, and we have to tighten that up a little bit. I
    feel very comfortable that we have a lot of really great hands
    on deck. We have a lot of passion. We are now once again the
    eye of the Nation and we should take this opportunity to help
    learn from them and also be able to ask the Nation to learn
    from the travails that we have gone through.
        But thank you so much for your attention and thank you all
    for your advocacy on behalf of the city and the State of
    Louisiana.
        Senator Landrieu. Thank you all very much, and the meeting
    is going to be adjourned. There will be a press availability in
    front of the school, downstairs, in 5 minutes. It will last
    only 10 minutes. There will be questions only from the press,
    no statements, and anyone is invited to participate.
        Thank you all very much. Hearing adjourned.
        [Whereupon, at 12:30 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

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