[Senate Hearing 113-495]
[From the U.S. Government Publishing Office]
S. Hrg. 113-495
ONE YEAR LATER: EXAMINING THE ONGOING RECOVERY FROM HURRICANE SANDY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON EMERGENCY
MANAGEMENT, INTERGOVERNMENTAL RELATIONS, AND THE DISTRICT OF COLUMBIA
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 6, 2013
__________
Available via http://www.fdsys.gov
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
______
U.S. GOVERNMENT PRINTING OFFICE
86-633 PDF WASHINGTON : 2014
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota
Richard J. Kessler, Staff Director
Keith B. Ashdown, Minority Staff Director
Laura W. Kilbride, Chief Clerk
Lauren M. Corcoran, Hearing Clerk
SUBCOMMITTEE ON EMERGENCY MANAGEMENT, INTERGOVERNMENTAL RELATIONS, AND
THE DISTRICT OF COLUMBIA
MARK BEGICH, Alaska Chairman
CARL LEVIN, Michigan RAND PAUL, Kentucky
MARK L. PRYOR, Arkansas JOHN MCCAIN, Arizona
MARY L. LANDRIEU, Louisiana ROB PORTMAN, Ohio
JON TESTER, Montana MICHAEL B. ENZI, Wyoming
HEIDI HEITKAMP, North Dakota
Pat McQuillan, Staff Director
Brandon Booker, Minority Staff Director
Kelsey Stroud, Chief Clerk
C O N T E N T S
------
Opening statement:
Page
Senator Begich............................................... 1
Senator Landrieu............................................. 3
Senator Booker............................................... 3
Senator Menendez............................................. 5
Senator Gillibrand........................................... 7
Senator Schumer.............................................. 9
WITNESSES
Wednesday, November 6, 2013
Hon. Shaun Donovan, Secretary, U.S. Department of Housing and
Urban Development.............................................. 10
Hon. John Porcari, Deputy Secretary, U.S. Department of
Transportation................................................. 13
Hon. W. Craig Fugate, Administrator, Federal Emergency Management
Agency, U.S. Department of Homeland Security................... 14
Hon. Jo-Ellen Darcy, Assistant Secretary of the Army (Civil
Works), U.S. Department of Army................................ 16
Hon. Kathleen S. Tighe, Chair, Recovery Accountability and
Transparency Board............................................. 18
Caswell F. Holloway, Deputy Mayor for Operations, City of New
York........................................................... 20
Alphabetical List of Witnesses
Darcy, Hon. Jo-Ellen:
Testimony.................................................... 16
Prepared statement........................................... 73
Donovan, Hon. Shaun:
Testimony.................................................... 10
Prepared statement........................................... 43
Fugate, Hon. W. Craig:
Testimony.................................................... 14
Prepared statement........................................... 58
Holloway, Caswell F.:
Testimony.................................................... 20
Prepared statement with attachment........................... 88
Porcari, Hon. John:
Testimony.................................................... 13
Prepared statement........................................... 50
Tighe, Hon. Kathleen S.:
Testimony.................................................... 18
Prepared statement........................................... 79
APPENDIX
Hurricane Sandy Rebuilding Task Force paper...................... 110
HUD Documents.................................................... 121
Questions and responses for the Record from:
Mr. Donovan.................................................. 169
Mr. Porcari.................................................. 175
Mr. Fugate................................................... 178
Ms. Darcy.................................................... 185
Ms. Tighe.................................................... 189
Mr. Holloway................................................. 196
Mr. Ferzan, State of New Jersey.................................. 199
ONE YEAR LATER: EXAMINING THE ONGOING RECOVERY FROM HURRICANE SANDY
----------
WEDNESDAY, NOVEMBER 6, 2013
U.S. Senate,
Subcommittee on Emergency Management,
Intergovernmental Relations,
and the District of Columbia,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:33 p.m., in
room SD-342, Dirksen Senate Office Building, Hon. Mark Begich,
Chairman of the Subcommittee, presiding.
Present: Senators Begich, Landrieu, Booker, and Paul.
Also present: Senators Schumer, Menendez, and Gillibrand.
OPENING STATEMENT OF SENATOR BEGICH
Senator Begich. Thank you for being patient. We are waiting
just a couple more minutes, and then we will start. But I thank
you all for being here. Just hang tight. Thanks.
[Pause.]
Good afternoon and welcome to the Subcommittee on Emergency
Management, Intergovernmental Relations, and the District of
Columbia. We thank you all for being here.
We are here today to examine the recovery in the Northeast
one year after Hurricane Sandy came ashore on October 29, 2012.
As we mark this solemn anniversary, we owe it to ourselves and
to those who were lost a year ago to continue to learn from
Hurricane Sandy to improve disaster response and recovery
across the country.
As we all know, the next big disaster can happen at any
time anywhere. In my home State of Alaska, we have had our fair
share of disasters from the Gulf of Alaska earthquake to the
Exxon Valdez oil spill. More recently, we saw a devastating
flood along the Yukon River. The village of Galena continues to
face challenges, but their ongoing recovery is a testament in
the same type of Federal, State, and local coordination that
was so crucial in the months following Hurricane Sandy.
As co-chair of National Preparedness Month, which wrapped
up at the end of September, I believe it is also important to
remember that individuals play a large role in preparing their
communities for disasters.
Following Hurricane Sandy, we saw citizens from around the
country donate their time, money, resources, and expertise to
help the affected area. Nonprofit organizations like the Red
Cross mobilized volunteers and leveraged nongovernmental
resources. It is this whole-of-community response that proves
to be the best practice following large disasters.
Alaskans take care of our own neighbors in times of need,
which is why I voted to support the much needed funding for
disaster relief following Hurricane Sandy. We understand that
the interconnected infrastructure is both this country's
biggest asset and our biggest vulnerability. While all
disasters begin locally, their effects can reach far beyond
established geographic boundaries.
One of the most critical aspects of the recovery process
following a disaster is learning from mistakes and integrating
those lessons learned. Since Hurricane Katrina, the Federal
Emergency Management Agency (FEMA) has worked with other
members of the Federal family to institutionalize recovery
reforms. The agencies released the National Disaster Recovery
Framework (NDRF), and it is already being used today in States
across the country, including my home State of Alaska.
All the agencies represented here today have illustrated a
fierce commitment to response and recovery. I applaud their
efforts, but we can do better, and our responsibility as an
oversight committee is to make sure that we do better.
One area that I believe requires additional oversight from
the Congress is the financial management of the Hurricane Sandy
supplemental funding. In January, Congress approved more than
$50 billion to aid with response and recovery efforts being
performed by 19 Federal agencies. Assuring this money is spent
in a timely fashion is critical. As we know, there are many
communities and individuals still in need over a year from the
storm. We must also ensure that taxpayer dollars are being
spent wisely.
As stewards of the public money, Federal agencies must be
accountable for their expenditures and must be prepared to
communicate exactly how these funds are being used. I do not
advocate for burdensome reporting requirements that slow down
recovery, but controls must exist to protect our national
investment. We must assure that laws and regulation that govern
the preparedness, mitigation, response, and the recovery
support robust and resilient communities across the country.
This must be the top priority.
I look forward to hearing the testimony of the witnesses
and today we are doing something a little different. When
Senator Paul gets here, we will interrupt the flow and allow
him his opening statement. We have also invited Members that
are not on this Committee to participate; but were affected by
Hurricane Sandy. We are also joined by Senator Landrieu here,
whose community was clearly affected by Hurricane Katrina.
What I have asked Members to do is make sure you have--we
will have your full statements in the record, and then a
reminder that we also want to hear from many of our folks here
to testify.
So we will start with Senator Landrieu. Then from there I
will do it in order of appearance.
OPENING STATEMENT OF SENATOR LANDRIEU
Senator Landrieu. Thank you, Mr. Chairman. I am going to
leave my comments briefly, submit my full statement to the
record, and honor the delegation from the Northeast that is
here. The work of Senators Schumer, Menendez, and Gillibrand
was absolutely essential to this recovery effort, and the bill
would not have been passed without their steadfast support in
crafting legislation.
Of course, welcome, Senator Booker, to the Committee,
former mayor right in the middle of the storm as it occurred, I
am sure can bring some extraordinary expertise to the Senate
and to this Committee as we struggle to build a better response
to disasters of all sorts, man-made or natural, small, medium,
and catastrophic, which was clearly the case with Hurricane
Katrina and came very close in Hurricane Sandy.
So we have a long way to go, Mr. Chairman, but I appreciate
the work of this special Subcommittee, because it is what
mayors and county commissioners and chambers of commerce and
individual families and, just consumers and residents and
citizens count on us to do our best work in times of a
disaster. They know that their government will be there for
them and helping them to recover.
So I will submit my full statement to the record, but,
again, I really thank the Northeast delegation for their
extraordinary work in the recovery, and we managed to even get
a little bit of money out of the bill for Louisiana to keep
going with our ongoing permanent recovery of the many storms
that hit our State.
Senator Begich. Thank you very much, Senator Landrieu.
Senator Paul does not have an opening statement, but I want
to thank him for attending and being part of this. He is the
Ranking Member, and it is important that we do continue to
analyze all these issues related to the emergency response of
our country.
So the order of attendance is I have Senator Booker next,
and he is so new, you can tell by his sign plate. [Laughter.]
Or he just brought his own as a former mayor, I do not
know, but we really appreciate----
Senator Menendez. Mr. Chairman, it gets smaller though.
Senator Begich. Senator Menendez, you were not supposed to
say that. We want him to learn that process. But we thank you
for being here, and I will start with you. Then I will go to
Senator Menendez, Senator Gillibrand, and Senator Schumer in
that order.
OPENING STATEMENT OF SENATOR BOOKER
Senator Booker. First of all, I cannot thank you enough,
Senator Begich and Senator Paul, for hosting this very
important hearing. As you know, not only do I appreciate the
opportunity to participate, but this is very clearly my first
hearing as a Senator, and it could not be on a more important
issue to the people of my State.
I would also like to thank those testifying, including a
long-time friend of mine, Secretary Donovan, who has been a
partner with me on many issues back when I was mayor, and I
look forward to working with him even closer now to the benefit
of our State. I look forward to hearing what he has to say as
well as those others who are testifying today, especially
Administrator Fugate, because we are going to be meeting later
on this week to discuss the issues, and I appreciate you making
time to do that.
In the aftermath of Hurricane Sandy, many of the people in
this room played such critical roles, holding multiple hearings
and advocating for a robust Federal response to ensure that New
Jersey, New York, and all those States affected had the
resources and support they needed. On behalf of the people of
New Jersey, I thank everyone for their leadership and for your
recognition that much urgent work had to be done.
I want to especially acknowledge my senior Senator, Senator
Menendez. He is a true champion of our State, and in the storm,
as a mayor who unfortunately had a significant impact in loss
of life, he was truly a champion not only of the whole State
but of every community that was suffering.
From day one, you were crisscrossing the State, Senator,
surveying damage and shepherding desperately needed Federal
resources to New Jersey. Now there is no denying the progress
we have made. Federal agencies have approved more than $5.67
billion in total Federal assistance in the form of individual
assistance grants, Small Business Administration (SBA) low-
interest loans, National Flood Insurance Program (NFIP)
payments, and public assistance grants.
In New Jersey, we are resilient, we are determined, and we
are incredibly resourceful. Our famous boardwalks have once
again welcomed families and tourists to the Jersey Shore.
Cities like Hoboken, Atlantic City, and, of course, Newark are
coming back, bustling with activity. And families and business
people continue to pick up the pieces and move forward.
Still, far too many are recovering, and it is challenging,
and it is a daily struggle. From Little Ferry in North Jersey,
where we were just last week, to Mantoloking on the shore,
thousands remain out of their homes, and countless businesses
that were washed away in the storm have not been reopened.
In July, I visited Ortley Beach. There were many signs of
rebirth and renewal, and I ate in some of the restaurants,
perhaps too many. But I also saw houses that stood like
skeletons on the roadside, facades intact but insides gutted.
And many of the residents I spoke to there on Roosevelt Avenue
felt left behind and forgotten by Washington. They were still
in pain. Many of them had challenges not just with D.C. but
also with Trenton.
I know no one in this room has forgotten those families,
but they remind us that we have still so much more work to do.
In New Jersey, we have an estimated gap of about $28.3
billion between what is needed for a full recovery and what we
are receiving in Federal support. This number considers
residential and commercial sector support, reimbursement of
municipalities, and critical mitigation activities. Though
Congress passed a relief package in the aftermath of the storm,
billions of dollars in Federal assistance have yet to make
their way to families in need.
One State-run federally funded homeowner assistance
package, the reconstruction, rehabilitation, elevation, and
mitigation grant program, provides up to $150,000 to individual
families--critical dollars to help them rebuild their homes.
Until last week, this $600 million program had yet to make even
a single payment.
The logjam in Federal fundings in my opinion is
devastating. Indeed, the delay has literally put lives on hold,
entire families uprooted from their homes, small businesses
still shuttered, retirements postponed, and I have heard
directly from many of those affected, painful stories of strong
people struggling against still incredible odds, but determined
to make it one way or another.
As I travel across my State, there is understandable
concern. People ask why did the Hurricane Sandy take so long in
the first place. They speak of a bureaucratic maze that forces
those impacted by the storm to complete reams of what seems to
be unnecessary paperwork sometimes just to be considered for
Federal aid. They detail stringent Federal regulations that
leave little to no flexibility to local officials who know
their communities best. They worry of pending hikes in their
flood insurance rates as well.
We must increase our sense of urgency to get funding out
the door as quickly as possible while still remaining good
stewards of taxpayer dollars and always protecting against
fraud and abuse.
It is critical that we provide for accessible, sensible
grant programs and specifications and to avoid something that
has been championed by all the people to my right, flood
insurance rates, the rising of flood insurance rates at a time
when it would bring severe economic distress to too many
families who are recovering after a disaster.
As this Committee knows too well, recovery from a national
disaster of this magnitude is a very long process, and it is
not easy. But as hard as it seems for those here who have been
toiling for over a year to make this work, we can be sure that
it is much harder for the thousands of New Jersey families and
business owners. They are the ones who are deserving of a
helping hand in the wake of this terrible storm.
So my commitment to them is to join with all of you to
ensure that folks from the Maurice River to Little Ferry to
Ortley Beach and everywhere in between get the help they
certainly need, the help they rightfully expect, and the help
that they definitely deserve.
I look forward to working hand in hand with State and local
officials, my fellow Senators, and members of the
Administration to make this recovery period as short,
efficient, and successful as possible.
Thank you.
Senator Begich. Thank you very much.
I have Senator Menendez next.
OPENING STATEMENT OF SENATOR MENENDEZ
Senator Menendez. Well, thank you, Mr. Chairman, and since
you are going to include our full statement for the record, I
am not going to go through it all, but there are a couple of
points I want to highlight, particularly for the Committee's
consideration as it moves forward in thinking about future
disasters.
Let me just say I am thrilled to be here with my colleagues
from New York who were extraordinary in our joint effort to
fight for the resources for recovery in our area and continue
to be that.
I remember that my late colleague Senator Lautenberg, a
Member of the full Committee, was passionate about this issue,
and I appreciate then-Mayor Booker doing an extraordinary job
because people think it was only the shore of New Jersey, but
cities in New Jersey faced tremendous challenges, and he did an
extraordinary job in responding to the crisis there, and that
is when you really test the mettle of leadership, and we
appreciate his leadership in this regard and look forward to
having him work with us to continue to recover.
There are many successes, and I want to commend the
Department of Housing and Urban Development (HUD) Secretary as
the overall chair of this effort, the Transportation Department
(DOT), FEMA. There are many successes. But there are also
challenges. Recovery is not yet a reality. Full recovery is not
a reality for the people of New Jersey. There are many people
who are hurting, Mr. Chairman, and they continue to languish.
There are those for which either flood insurance did not exist,
or if it existed, did not still make them whole. There are
those who find themselves in new flood zones that mean that the
ability to keep their home and what they have built a lifetime
is now in the crosshairs because of new requirements to either
raze their homes and/or a variety of other issues, as well as
the challenges of flood insurance.
There is a responsibility to ensure that when we give out
the taxpayers' money, even in a disaster, that we do it in a
way that ultimately ensures the integrity of that money. But
that has to be balanced by the urgency of now. And I appreciate
that hopefully part of what the task force is doing is looking
at how we do this prospectively so that we do not wait for a
disaster to figure out what would be the appropriate programs
that need to be set up in order to respond, because that
process in trying to balance the integrity of the money with
the need and the urgency of now has been somewhat of a
challenge. And there is still too much money flowing to the
State that has not quite flowed to the people of New Jersey. We
need to do a better job of that.
And the one thing that I do want to take the balance of my
time to talk about--and I appreciate virtually all of my
colleagues sitting here and the Chair having joined us--is the
question of not the natural disaster that we face bureau the
man-made disaster that we may have if we do not rectify it, and
that is the question of flood insurance. The reality is that
for thousands of people in New Jersey, recovery is an around-
the-clock effort, and New Jersey families as well as others in
the Nation, as we saw by the broad bipartisan support we have
for the legislation we are promoting, have been hit with a
triple whammy. They were first flooded by Hurricane Sandy, and
they lost their homes, their lifetime of effort, many of their
memories of a lifetime. And then the second is that they have
to face repair and mitigation costs. And then now, third, they
are facing astronomical increases in flood insurance costs
built into the flood reform bill that was passed before
Hurricane Sandy hit.
Now, the fact is that the combination of updated flood maps
and the phaseout of premium subsidies for the National Flood
Insurance Program threatens to force victims out of their homes
and destroy large segments of communities, if not some smaller
communities and entire communities. Homeowners would be forced
to pay premiums that are several times higher than the current
rate. And those who cannot afford the higher premiums will
either be forced to sell or be priced out of their home, which
will drive down values, property values, and local revenues at
the worst possible time.
So I want to take the opportunity to promote the bipartisan
legislation that seeks to take a timeout, that seeks to say,
OK, we asked FEMA to do an affordability study, they have not
had the time and the resources to finish it. Well, we should
not have premium increases until that affordability study is
done and we find an affordability mechanism so that, in fact,
we can keep the solvency of the program but also create
affordability so people do not lose their homes and be the
victims of a natural disaster. And that, Mr. Chairman, I think
is one of the most urgent things that sits before the Senate
that I look forward to your help and the help of my colleagues
here to achieve.
Senator Begich. Thank you very much. Senator Gillibrand.
OPENING STATEMENT OF SENATOR GILLIBRAND
Senator Gillibrand. Thank you, Mr. Chairman. Thank you,
Ranking Member Paul and Members of the Subcommittee. I also
want to give a special thanks to Senator Landrieu, who I have
dubbed the ``third Senator from New York'' during Hurricane
Sandy because she was such a vociferous advocate for our
families. She made sure that we could fix as many things in
advance to make sure recovery flowed, to make sure all of the
logjams she experienced with Hurricane Katrina did not happen
in New York and New Jersey and other States. She is someone who
really understands these programs, what works, what does not
work, and I just want to thank her for her continued focus on
recovery and preventing--and creating resiliency, and her
leadership on this really is extraordinary, and I just want to
thank her.
I also want to thank Senator Menendez and Senator Schumer
and Senator Lautenberg, who obviously is not with us. You have
never seen tougher, stronger champions than my colleagues who
put themselves in the shoes of every family and advocates for
what they need most. And I just want to thank them for their
leadership.
I know that Senator Booker will also not only stand in
Senator Lautenberg's shoes but be able to be that same strong
advocate at a time of grave need. He has shown it as mayor. I
know you will show it as Senator, and I want to welcome you to
this fight.
Obviously the road to recovery is long and hard, but New
Yorkers are strong. We rebuild. We rebuild better, we rebuild
stronger. But the damage was severe. We lost 61 lives. We lost
hundreds of thousands of small businesses. We lost 300,000
homes, and I remember Senator Landrieu, who suffered far more
in loss of life, really could not quite conceive of the loss
that we suffered in businesses and homes because our population
was so dense. And so our road to recovery is difficult and
different, and the solutions are difficult and different, and I
think the work that you are doing is essential for us to meet
our goals.
Now, Congress has worked hard on a couple of problems and
done a few things that were necessary. We did extend the
critical deadline to give Hurricane Sandy survivors the time
they needed to document the losses, which is difficult for a
lot of families. We did ease regulations that would have
prevented substantially damaged homes from accessing recovery
funds. We also received assurances from the Army Corps of
Engineers (ACE) that they will fund the critical shore
protection projects at full Federal expense, and this is
something Senator Schumer was very aggressive on very early on,
because there were a lot of projects that the Army Corps had
already designated as necessary that we wanted to make sure got
funded, and he made sure that was the case.
But we have to do so much more, and that is exactly what
the Senators who have already talked have touched upon. We have
to continue to ensure that the red tape does not get in the way
of reimbursements. We need to make sure these communities that
have been affected can get the financing and the money that
they need. We have to make sure that homeowners, individual
homeowners, receive the kind of resources they actually need to
rebuild.
The Senate must pass legislation that we have cosponsored
to delay the added burden of the disastrous flood insurance
premium increases. These increases are set to take effect, and
no one can afford them. They are unaffordable for nearly every
New Yorker that I have spoken to, absolutely out of reach. So
you cannot have a flood insurance program that is too expensive
for everyday Americans that need flood insurance. It just does
not work. So we must do that. When FEMA has completed this
study, we can then look at it, and Congress can make a plan for
how to make the rates affordable.
Even as the homeowners are rebuilding, they are seeing
these rates increase. They could force many New Yorkers not to
be able to rebuild because they will not be able to buy the
insurance, so they will not get the permitting, and they are
out of a home. They are homeless.
As we continue to recover from Hurricane Sandy, we need to
strengthen the resiliency on future storms. This is not the
first and it is not the last superstorm. We know this. And as
we see storms come in more violently, more damaging, more lives
lost, we know what is to come. So when we rebuild, we have to
rebuild for the future storm. Every dollar that we invest to
strengthen our homes, businesses, and infrastructure saves $4
in potential recovery costs down the line.
Early this year, Senator Wicker and I introduced a bill to
do this. It is called the STRONG Act. We introduced in the
Environment and Public Works (EPW) Committee. It is a
bipartisan bill. It is the kind of bill that builds on the
progress that Mary Landrieu and others have been making on
these storm recovery efforts.
It also is something that engages the local government by
requiring the Federal Government to develop national resiliency
strategies and to assess where there are gaps and use best
practices that are being developed around the country.
We have come a long way in the last year, but as I said, we
have so much more to be done. When I read reports of how few
homeowners have actually been able to rebuild, it breaks your
heart. New Yorkers want to rebuild. They want to rebuild
stronger. But they do need Federal help.
Thank you so much for your dedication.
Senator Begich. Thank you very much. Senator Schumer.
OPENING STATEMENT OF SENATOR SCHUMER
Senator Schumer. Thank you, Mr. Chairman. First, let me
thank you for your diligence. You have been a great force in
helping us as we have had our troubled times. Senator Landrieu,
as has been mentioned, has been invaluable. We have learned
from the mistakes that were made in Hurricane Katrina, and she
was our guide as we went through this. I want to thank my
colleagues here. We were a great team and did basically the
impossible: getting $60 billion. We were held up for too long a
period of time by some, but getting that amount of money in
programs that are really going to work was one of the
accomplishments I think we can be proudest of in our
legislative careers. And I want to welcome Senator Booker. He
will fill Frank Lautenberg's large shoes and be a valuable
member of our bi-State team.
I would like to say to at least the five of you, I have
worked closely in making sure things worked, and you have done
a great job. You have been exemplary public servants, four at
the Federal level, one at the city level. And I thank you for
that and look forward to continuing working. I look at each of
you and can think of accomplishments that we have done together
in terms of negotiating and getting things done, so thank you
to Shaun Donovan, John Porcari, Craig Fugate, and Jo-Ellen
Darcy. To Cas Holloway, you have done a great job as head of
the city, and I have not dealt with Ms. Tighe because she is
oversight. She is supposed to watch what we are doing. So keep
an eye on us.
Well, there is so much to say here. First, there is a
question everyone asks: How is it going? It is going overall
very well. The amount of money that has been spent and
allocated is large. And at least up to now--and let us hope it
continues--we have not seen a major misspending of money. We
want to avoid the scene of trailers being unused, which
happened despite Mary Landrieu's great efforts in Louisiana.
And then what she warned us of as well, lots of money sitting
there that could not be used. And so the way we structured
these programs, particularly the community development block
grant (CDBG) but the Army Corps' programs, the Transportation
programs, the FEMA programs as well, was to make sure that the
money would go where it had to go and go quickly, but without
wasting money.
And so I know there is a move, all the money should be
spent in 3 months. If that were happening, there would be still
millions of people--or thousands of people complaining that
they did not get what they needed because it would not have
been allocated carefully and properly, and there would have
been lots of--our newspaper reporters would have been writing
about all the misspent money. We have not seen that. And so it
is taking longer than we would like, and it is certainly true
that homeowners have not gotten the money that we would have
liked to see have gotten more quickly. But I believe while the
first year was one of laying the structure and recovery, making
sure the roads were cleared, making sure people had
electricity, making sure rents were paid for the hundreds of
thousands of people who were pushed out of their homes, the
second year--the first year was recovery, but the second is
rebuilding, and the money is flowing and flowing well, and
flowing, I think, in a way that it will be better used than in
any major public disaster in the history of this country.
Our homeowners will see $1.4 billion. We told many of them,
we all did together, lay out the money to rebuild, and you will
be repaid. And the combination of the FEMA program, which is
fairly rigid, and the CDBG program, which is more flexible,
will lead to that happening.
Now, it could not happen immediately for a lot of reasons.
First, people did have to rebuild. Second, we were not going to
pay when private insurance should step up to the plate, so we
had to see how much private insurance people were getting. But
what we made sure of is, if your damage was $100,000 and your
FEMA money was $10,000 and your private insurance was $40,000
and you had a $50,000 gap, that the CDBG money will be there.
Good thing.
Second, we worked really hard to make sure that there were
mitigation processes put in housing and transportation and in
everything else we did. So when we rebuild, we will be much
more resilient against a future storm, which has been said will
happen. And we have done that, and that makes a great deal of
sense, too.
So I predict that this second year of Hurricane Sandy
recovery will be a year when people see lots of rebuilding, and
by the end of year two, people will be a whole lot happier with
the program than they are at the end of year one. But it is
because of the good work that we all did together, the five of
us here--Cory, of course, doing his work in Newark. The five of
us here at the Federal level and those of you back there, it
has been a strong team effort that I believe will be regarded
as one of the most successful efforts in terms of getting a
large area to recover from a powerful, horrible storm as well
and as quickly as possible.
Senator Begich. Thank you very much, Senator Schumer.
What I would like to do is go through the panel, and I am
sure many of us will have questions, but, again, we want to
thank you for being here. Thank you for your work on a daily
basis on the disasters that we are faced with across the
country.
The first one we have to speak is Secretary of HUD,
Secretary Donovan, who has served in the position since 2009.
Thank you for coming to Alaska as you have done before. Prior
to work in the Administration, he served as Commissioner in the
New York City Department of Housing Preservation and
Development, so I know you have a personal concern about what
happens in New York. So let me turn it over to Secretary
Donovan.
TESTIMONY OF THE HON. SHAUN DONOVAN,\1\ SECRETARY, U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Secretary Donovan. Chairman Begich, Senators Landrieu,
Schumer, Menendez, Gillibrand, and Booker, it is a great
pleasure to be joining you today, and I want to begin by
remembering that last week on the 1-year anniversary of
Hurricane Sandy, our Nation paused to remember all those who
lost their homes, their businesses, and, most tragically, lost
their lives.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Donovan appears in the Appendix
on page 43.
---------------------------------------------------------------------------
I remember visiting the region soon after the storm struck
and being stunned by the breadth of destruction: $65 billion in
damage and economic losses, 650,000 homes damaged or destroyed,
9 million people lost power. It was clear that the road to
recovery would be long and difficult. But if you know anything
about the people from this region--and I am proud to count
myself as one of them--it is that they are resilient. They may
get knocked down, but they always get back up.
After Hurricane Sandy, they began the work of putting their
lives and communities back together, and President Obama
quickly pledged his support of these local efforts in order to
ensure a full recovery. So he created the Hurricane Sandy
Rebuilding Task Force to maximize Cabinet-level coordination in
support of the work to rebuild this region. I have been
enormously proud to chair this effort as we work to achieve two
basic goals: one, to get the assistance that you all fought so
hard to make a reality to communities as quickly as possible,
to meet the immediate needs; and, second, to ensure that the
region rebuilds stronger and smarter than before so that it is
better equipped to deal with future storms.
Let me begin with the work of getting assistance to
communities quickly and effectively. As you know, in January
President Obama, working with all of you in the Congress, State
and local leaders, fought tirelessly to get $50 billion in
Hurricane Sandy supplemental funding in order to aid victims of
the storm. And ever since, it has been a priority of the
Administration to get these dollars into communities as quickly
and responsibly as possible. That is why we thought it was
critical to include several measures in the supplemental that
facilitated more efficient spending of these dollars, and I
want to particularly call out Senator Landrieu for all her help
and assistance on this. A few examples:
Giving HUD the authority to reduce duplicative
environmental reviews. As a result of these and other measures,
we made great progress on a number of fronts. More than 230,000
people and small businesses have received direct assistance
from FEMA, the Small Business Administration, the Department of
Labor (DOL); more than 99 percent of Hurricane Sandy-related
National Flood Insurance policy claims totaling more than $8
billion have been paid out to roughly 143,000 policy holders
who filed claims; 97 percent of public beaches in the affected
region were open by Memorial Day 2013, sending a strong message
that the shore was ready for business. And when you include the
National Flood Insurance Program, the Administration has
allocated nearly $40 billion in funding for recipients with
roughly $13.5 billion of this already paid out.
HUD in particular has allocated $10 billion in community
development block grants, including an allocation that took
place within 8 days of the signing of the Hurricane Sandy
supplemental into law. This represented the fastest ever
allocation following the signing of an appropriations bill.
So relief is getting to communities, but as you have all
said, we know it can never be fast enough. That is why we have
been creative in finding ways to work with local partners to
expedite the rebuilding process. This includes the Small
Business Administration's work to accelerate application
processing times, which has fallen from 61 days during
Hurricane Katrina to 42 days during Hurricane Sandy, a drop of
about one-third.
The use of a streamlined permitting and review process for
complex large infrastructure projects that is based on a model
which has reduced implementation times by 50 percent. Just one
example, cutting 3 to 5 years off of projects like the Tappan
Zee Bridge.
The alignment of the Federal Housing Administration (FHA)
and the Federal Housing Finance Agency (FHFA) for closure
prevention policies in disaster-affected areas, making it
easier for homeowners to get the help they need to stay in
their homes at such a critical time in their lives.
And the establishment of a uniform minimum flood risk
reduction standard across the Federal Government for major
Hurricane Sandy rebuilding projects in floodplains,
representing the first time a Federal Governmentwide standard
has been set that accounts for the effects of rising sea
levels.
And moving forward, we will continue to look for new ways
to remove unnecessary barriers and headaches, ensuring that the
billions that flow into the region are put into use as quickly
and efficiently as possible.
This complements our other goal: rebuilding stronger and
smarter so that the region is better prepared to withstand
future storms. On August 19, the task force released our
rebuilding strategy for the region, which included 69
recommendations to do just that. It included steps to harden
our power grid and our fuel supply chain, to address the
sustained outages in gas lines we saw during Hurricane Sandy,
and steps to help families and small businesses rebuild in
these new times.
The strategy also identifies ways to leverage additional
private funds to support infrastructure projects. Investing in
projects that will make our communities more resilient is vital
to their safety. It is also good for our economy. As Senator
Gillibrand pointed out, we know that for every dollar we spend,
we save $4 in avoided costs in future storms.
Every recommendation in this strategy has a detailed
implementation plan, and I and my Department will be
accountable to the region, to you, to see them through. And we
will stay at it for as long as it takes, knowing that
eventually we will emerge stronger and more vibrant than ever.
As I mentioned earlier, following Hurricane Sandy it was
clear that the road to recovery would be long and difficult. A
year later, I am proud to say we have made significant
progress. Families have gotten back on their feet, businesses
have reopened, communities are turning the page and looking
toward the future with new hope. But we all know that much more
work needs to be done, and all of us in the Obama
Administration are committed to working with local partners and
with all of you to continue to get assistance to those in the
process of rebuilding, ensure the region is better prepared to
withstand future extreme weather events, and work to improve
our recovery efforts across the Nation.
These are our goals I look forward to working with this
Committee on, and I look forward to answering your questions
today. Thank you.
Senator Begich. Thank you very much.
The next person I have on the list, Mr. John Porcari, has
served as the Deputy Secretary of DOT since 2009. Before
becoming the Deputy Secretary, he had served twice as the
Secretary of the Maryland Department of Transportation.
Thank you very much for being here.
TESTIMONY OF THE HON. JOHN PORCARI,\1\ DEPUTY SECRETARY, U.S.
DEPARTMENT OF TRANSPORTATION
Mr. Porcari. Thank you, Chairman Begich and Members of the
Subcommittee. It is a pleasure to be here today to highlight
the Department of Transportation's role in assisting the
communities that were devastated by Hurricane Sandy just a year
ago.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Porcari appears in the Appendix
on page 50.
---------------------------------------------------------------------------
When the hurricane hit, the damage it caused did not just
take a tragic human toll; it also dealt a devastating blow to
the regional transportation system, which is the lifeblood of
the region's economy. On the aviation side, three of the
busiest airports in the country and 19,000 flights were
affected. The highway system as well suffered significant
damage. But what stands apart is this historic storm triggered
the worst public transit natural disaster in the history of the
United States.
In response to this disaster, Congress passed the Disaster
Relief Appropriations Act, which included $12.4 billion in
assistance for transportation programs. It is worth noting that
the assistance was reduced by $650 million due to
sequestration. More than $10 billion of this went to fund the
Federal Transit Administration's (FTA) new Public
Transportation Emergency Relief Program, which had been
proposed by President Obama back in 2011 and was later
authorized by our transportation bill, MAP-21. This emergency
relief (ER) program for transit was in place for about 30 days
before the disaster hit.
In addition to helping transit agencies make immediate
repairs, the ER program also supports mitigation activities
that will improve resiliency and help transit infrastructure
resist similar storms in the future.
Disaster relief appropriations funding also went to fix the
rest of the transportation network as well: roads and bridges,
restore Amtrak service, and as I mentioned, repair airport
facilities at Newark, LaGuardia, and John F. Kennedy
International Airport (JFK). To date, the Department of
Transportation has allocated nearly $7 billion for repairs and
resiliency efforts in response to Hurricane Sandy.
We have learned a lot from the hurricane experience that
will help us respond to future events.
First, a coordinated and efficient Federal response is
essential. President Obama's Hurricane Sandy Rebuilding Task
Force has helped all the Federal agencies involved work
together to deliver the best possible outcomes for the
communities affected by the storm. Secretary Donovan's
leadership has been important in moving forward.
Second, Hurricane Sandy and other recent disasters
underscore the Nation's vulnerability to extreme weather events
under current climate conditions. That is why one of our top
priorities moving forward is to better protect existing
transportation infrastructure and equipment from the impact of
future natural disasters. It just makes sense. If we are going
to spend money rebuilding transportation, let us build it to
last.
We will soon be issuing a Notice of Funding Availability
for capital projects that will reduce the risk of damage of
from future disasters in the region impacted by Hurricane
Sandy. We are going to do that on a competitive basis. We
believe these investments in resiliency will help reduce the
need for any future recovery efforts. And as has been
previously pointed out, research has shown that every dollar
spent by FEMA on actions to reduce disaster losses now saves
the Nation almost $4 in avoided impacts. We are hoping to
realize similar cost savings for the American taxpayer by
ensuring that our transportation infrastructure is built to
withstand future storms.
However, I must caution the need for resilience investments
far exceeds the available funding. The FTA has only emergency
relief funds available for Hurricane Sandy recovery efforts and
nothing nationwide beyond that. That leaves us without any
ability at the Department to address our next crisis, including
future emergencies occurring outside this region.
Much of my own career has been at the State and local
level, and I know firsthand how important it is to respond
quickly and effectively. I strongly encourage Congress to
appropriate funds so that when the next disaster strikes and
takes public transportation systems offline, we will be in a
position to respond immediately.
I thank the Subcommittee for inviting me to testify. I
would be happy to answer any questions. Thank you.
Senator Begich. Thank you very much.
The next speaker is Mr. Craig Fugate, who was confirmed for
the FEMA Administrator in 2009 after serving as the Director of
the Florida Division of Emergency Management. In 2004, he
managed the largest Federal disaster reason in Florida history
as four major hurricanes impacted the State in quick
succession.
Thank you very much. Good to see you again.
TESTIMONY OF THE HON. W. CRAIG FUGATE,\1\ ADMINISTRATOR,
FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF
HOMELAND SECURITY
Mr. Fugate. Thank you, Mr. Chairman and Senator. Secretary
Donovan laid out a lot of the numbers, so I want to come back
to what you have done to set the stage for what we were able to
do as a Federal Government and then our next steps.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Fugate appears in the Appendix on
page 58.
---------------------------------------------------------------------------
I am going to start with something that you are not hearing
a lot about but I think it is important we talk about, and that
has been the continued support and funding from Congress to
State and local governments through homeland security grants
and emergency management preparedness grants, building the
capability at the State and local level to manage the initial
impacts of these types of disasters. Without that, the Federal
Government could not have done its job if our State and local
partners were not able to do theirs. So this is one thanks for
the investment over time, specifically since 9/11. Those
investments are paying off in increased capability and
resiliency our communities have against all hazards.
The second piece was we would not have been prepared to
respond as FEMA without the Post Katrina Emergency Management
Reform Act (PKEMRA), and I doubt very much I would be here
testifying, because that law substantially changed what FEMA's
mission was, requirements of the person that is chosen to lead
the organization, as well as the tools required to not wait
until States are overwhelmed before the Federal Government can
mobilize. This put us in the position under the President's
leadership to move resources and supplies before any State was
hit by this storm, before we knew how devastating this was
going to be. Again, those tools set the stage for the response
and support of State and local government.
We oftentimes talk about the money and the supplemental,
which overshadows something I think is very fundamental, a
change to the Stafford Act. The Sandy Recovery Improvement Act
addressed many of the issues that we still had that became
impediments to recovery. Probably one my best examples was in
debris management. We were actually increasing the cost of
removing debris because we had rules and policies that said if
you use your folks and your Public Works Department to pick up
debris, we are not going to reimburse you for those costs, only
their overtime. But if you hire a contractor to do that, we
will pay you the full cost share on that. And it was these
tools that we began to implement. We have used them in
disasters post. These were not Hurricane Sandy specific, but
Hurricane Sandy certainly became the catalyst of how we would
be better stewards of getting money out effectively to empower
local and State governments to rebuild faster without losing
the ability to maintain the fiduciary responsibility of
ensuring that the dollars go toward the things they were
intended to go.
We have used these not only now in Hurricane Sandy, but
some of these we were allowed to go to previous disasters,
where we have been able to use cost-estimating tools in Vermont
to do a big challenging project there. We have been able to do
some things that quite honestly they always made sense, but you
gave us the tools. Although it was only a few tribes impacted
and this came after Hurricane Sandy, I think for our sovereign
federally recognized tribes, also something that was very
unheard of is you finally gave federally recognized tribal
governments the recognition of the sovereignty that no longer
requires them to go through a State to request declarations. We
implemented that program after the law was signed. In fact, the
first tribal government that came in was the Eastern Band of
the Cherokee Indians. We did not wait for the rules to catch
up. We did not wait for our procedures to catch up. We fully
implemented the law as you intended, and we have now
successfully executed disaster declarations at the request of
tribal governments.
We have a lot of work to do. We tend to look at one-year
marks, but I knew going in that this was going to be a multi-
year recovery. I think Senator Schumer said it right, that the
first year is oftentimes those initial steps where you see a
lot of progress in the beginning, and then it starts to slow
down because now we are starting to move into rebuilding. From
the President's direction on down, we want to make sure is we
rebuild for the future and not the past.
We know that we can make these improvements and make
investments that may cost a little bit more on the front end,
but we can assure the delivery of critical services and
infrastructure in the future.
Last, Senator Martinez, again, we agree. The
Administration's position on the reauthorization of the Flood
Insurance Program, we need to have affordability. But we found
that in the legislation passed we did not have the tools to
allow us to build in affordability before the increases took
place. We look forward to working with Congress to get a tool
that allows us not to keep kicking the can down the road but
address affordability for people that live in their homes. We
also want to ensure we are not building back the same way,
putting people in future generations at risk.
Thank you.
Senator Menendez. Mr. Chairman.
Senator Begich. Yes?
Senator Menendez. Martinez was my former colleague from
Florida, but---- [Laughter.]
Mr. Fugate. Sorry, Senator Menendez.
Senator Begich. It was a Freudian slip.
Senator Menendez. We are both Cuban, but we do not all look
the same.
Mr. Fugate. Sorry.
Senator Begich. Great. Thank you very much. And let me also
say that I really appreciate the work you did with the tribes.
That is a huge opportunity, so thank you for that.
The next person I have is Ms. Jo-Ellen Darcy who is the
Assistant Secretary of the Army (Civil Works), which has
primary supervision over the U.S. Army Corps of Engineers.
Prior to her appointment, Ms. Darcy served as the senior
environmental adviser to the Senate Finance Committee
responsible for environment, conservation, and energy issues.
Good to see you again. Thank you.
TESTIMONY OF THE HON. JO-ELLEN DARCY,\1\ ASSISTANT SECRETARY OF
THE ARMY (CIVIL WORKS), U.S. DEPARTMENT OF ARMY
Ms. Darcy. Thank you, Senator Begich, and thank you for the
opportunity today to testify on the Corps' continued work on
the recovery from Hurricane Sandy.
---------------------------------------------------------------------------
\1\ The prepared statement of Ms. Darcy appears in the Appendix on
page 73.
---------------------------------------------------------------------------
Federal support during the response to Hurricane Sandy was
unprecedented. The Corps was part of an interagency team to
include State and local governments which provided technical
assistance and rapid response activities across the impacted
areas. The Disaster Relief Appropriations Act of 2013 provided
the Corps with $5.35 billion to address damages caused by
Hurricane Sandy. This money is being used to reduce future
flood risk and increase the long-term sustainability of the
coastal ecosystem and communities while reducing the economic
costs and risks associated with large floods and storms.
The Corps has made significant progress in the year since
Hurricane Sandy and in the time since the passage of the
appropriations bill.
The Corps' Hurricane Sandy recovery program has three major
components: First, it is our near-term component that supports
emergency operations and repair and restoration of previously
constructed Corps projects along the coastline, dredging of
Federal navigation channels and repair of Corps-operated
structures; second, an investigations component that expedites
the completion of ongoing studies at full Federal expense and
funds the North Atlantic Coast Comprehensive Study; third, our
construction component rehabilitates, repairs, and constructs
projects to reduce future flood and storm damage risk in
smarter and more sustainable ways.
As part of the near-term component, the Corps started beach
repair and restoration of existing projects along the Atlantic
coast in February 2013 and is scheduled to conclude these
actions by the fall of 2014. To date, the Corps has placed
approximately 12 million cubic yards of sand to repair dunes
and berms and will continue work to restore them to their
original design conditions. Also, the Corps has obligated
almost $390 million to restore damaged projects. Of the total
33 projects in this phase, 7 are completely restored, 22 have
awarded construction contracts, and 4 are in the design or the
pre-award stage.
Near-term efforts also include addressing the storm's
impacts to our navigation infrastructure. The Corps' operations
and maintenance work began in February 2013, and most projects
are scheduled for completion by the spring of 2015. By the end
of fiscal year (FY) 2013, the Corps had obligated over $160
million for this work with 35 projects completed and 28 in
construction.
For the investigations component, the Corps is using
funding to expedite completion of 18 flood and storm damage
reduction studies in the Northeast that were underway when
Hurricane Sandy occurred. Twenty million dollars of the
investigations funding is for the Comprehensive Study, which
will assess 31,000 miles of the North Atlantic coastline,
bringing together experts in coastal planning, engineering, and
science from more than 90 governmental, academic, and
nongovernmental entities. The Comprehensive Study team has
developed a draft framework that is currently under review, and
the results of the study we think will inform our future
planning efforts.
The Corps was also directed to conduct a Performance
Evaluation Study to evaluate the effectiveness of completed
Corps projects during Hurricane Sandy and to include summary
recommendations for future improvements. I signed the
transmittal of this report this morning, so it should be here
on the Hill by now.
The third component of the program will construct projects
that were previously authorized but not constructed at the time
of Hurricane Sandy's landfall, potential projects identified
for implementation following the investigation process, and
projects that will fall within our Continuing Authorities
Program (CAP). Planning, design, and expedited reevaluations
are underway for the 18 previously authorized but not yet
constructed projects, the Corps anticipates construction will
begin in early 2014.
The Corps expects to complete construction work on roughly
half of these flood risk reduction projects by mid-2015. Of the
identified Continuing Authority Projects, Massachusetts,
Connecticut, New York, New Jersey, Delaware, Maryland, and
Virginia are currently scheduled to receive beach erosion and
coastal storm damage risk reduction projects, and we expect 70
percent of this work to be completed by 2016.
There will always be a residual risk for Americans who live
in coastal regions. Expected changes in sea level rise, extreme
weather, and other impacts due to climate change are likely to
increase the risks facing these areas. Together with the
National Oceanic and Atmospheric Administration (NOAA) and
FEMA, the Corps of Engineers has developed a sea level rise
tool to help communities anticipate the implements of sea level
rise. We will use base flood elevation maps from FEMA, the
coastal mapping capabilities of NOAA, and a sea level rise
calculator from the Corps of Engineers. This tool yesterday was
recognized by the President and was awarded the Green
Government Climate Change Champion Award. So the collaboration
between our agencies as a result of Hurricane Sandy has already
produced a future-looking sustainability tool that we can all
use throughout the Federal Government.
In addition, NOAA and the Corps of Engineers are working
together to help rebuild more resilient and sustainable coastal
communities. While working on post Hurricane Sandy recovery
efforts in New York and New Jersey, NOAA and the Corps jointly
developed a set of infrastructure systems rebuilding principles
in order to promote a unified strategy for activities in
restoring the coast. Collaborative efforts on all levels
continue to explore and implement solutions that reduce risk
from coastal storms, such as appropriate land use planning,
non-structural solutions, and well-communicated evacuation
planning.
Mr. Chairman and Members of the Committee, I thank you for
the opportunity and look forward to any questions.
Senator Begich. Thank you very much.
Our next speaker is Ms. Kathleen Tighe currently serves as
the Chair of the Recovery Accountability and Transparency Board
while continuing her position as Inspector General (IG) for the
Department of Education. The Board has been charged with
tracking Federal dollars being spent on the Hurricane Sandy
recovery.
Thank you for being here.
TESTIMONY OF THE HON. KATHLEEN S. TIGHE,\1\ CHAIR, RECOVERY
ACCOUNTABILITY AND TRANSPARENCY BOARD
Ms. Tighe. Thank you very much. Mr. Chairman, Senators, I
want to thank you for the opportunity to appear before you
today. As Chair of the Recovery Board, I will be speaking to
you about the Board's role in the oversight of funds expended
in support of Hurricane Sandy recovery efforts.
---------------------------------------------------------------------------
\1\ The prepared statement of Ms. Tighe appears in the Appendix on
page 79.
---------------------------------------------------------------------------
The Board was created in February 2009 as part of the
Recovery Act. It consists of 12 Inspectors General, and its
mission is to provide transparency of the use of recovery funds
and to prevent and detect fraud, waste, and abuse. We meet this
mission by managing the FederalReporting.gov website through
which recipients of recovery funds report and by displaying
that spending information in unique ways on our public website,
Recovery.gov. We also developed the Recovery Operations Center
(ROC), as a central data analytics service to support fraud
detection and prevention. The ROC has the ability to rapidly
aggregate and analyze large, complex volumes of data, to screen
for potential risks or identify targets, and provide deeper
investigative information in the support of audits,
investigations, and prosecutions.
While the Board was originally due to sunset on September
30 of this year, the Hurricane Sandy legislation extended the
Board through September 2015, with additional duties for the
Board to develop and use our resources and oversight mechanisms
to detect and remediate fraud, waste, and abuse of funds
related to Hurricane Sandy.
Our oversight efforts related to Hurricane Sandy have
focused on applying the techniques and processes developed by
the ROC to examine the spending, primarily working with our IG
partners. In coordination with the Department of Homeland
Security Office (DHS) of Inspector General, we conducted a
review of 104 entities that received Hurricane Sandy debris
removal contracts from 32 cities in New York and New Jersey
totaling over $329 million. Among the particular risk
indicators we reported to DHS the Office of Inspector General
(OIG) were firms whose owners had Federal and State tax liens,
one that had previously been listed on the Federal list of
suspended or debarred bidders, and companies that had filed for
Chapter 7 bankruptcy and had Federal tax liens.
In addition to this work, we have provided assistance to
DHS OIG on its investigations of other FEMA Hurricane Sandy
public assistance grants and to other OIGs in their Hurricane
Sandy work. For the State of Rhode Island, we undertook a
proactive analysis of 10,000 potential Hurricane Sandy
contractors against our databases that would show potential
risks and reported information back to that State.
In addition to our work in the ROC, we are using our
website, FederalTransparency.gov, to attempt to collectively
display what information is available on Hurricane Sandy
spending. We visually display Hurricane Sandy-awarded contracts
from the Federal Procurement Data System and agency award
information, as well as links to FEMA spending by State and
State Hurricane Sandy websites. We also display the Department
of Justice's (DOJ) disaster fraud reporting hotline.
We are currently in the final stages of moving the
Hurricane Sandy information to our Recovery.gov website to be
able to better use the functionalities of that website.
Since commencing our work on our Hurricane Sandy mission,
we have identified a series of challenges that we continue to
face. The first is obtaining accurate and complete Hurricane
Sandy spending data. With no mandated centralized reporting,
such as we had in Recovery, access to standardized data is
limited. While the Federal Procurement Data System and
USASpending have information related to Hurricane Sandy, each
has its limitations.
For example, on USASpending, Hurricane Sandy grants and
loans lack a unique identifier, making it problematic to
accurately extract and analyze Hurricane Sandy awards.
In addition, the lack of sub-recipient data will further
complicate our work. Given the types of Hurricane Sandy grants
expected to be awarded, prime recipients of these awards
oftentimes will be a State or a municipality, but historically,
the majority of fraud occurs below this level by entities
performing the actual work.
That concludes my testimony. Thank you for the opportunity
to discuss the activities of the Board, and I look forward to
answering any questions.
Senator Begich. Thank you very much.
For our last speaker, again, I want to thank you for being
here. Before I mention you and your title, I want to make sure
that folks know for the record we did invite representatives of
both the New York State and New Jersey State governments. They
declined the invitation to testify today, so we are happy that
a local government person is here, Cas, and I appreciate that.
As the Deputy Mayor for Operations oversees a number of
offices, including the police department, fire department, and
Office of Emergency Management. And I was going to say Mayor
Michael Bloomberg, but you had an election last night so I am
not sure what it is today, but we are glad you are here, and we
appreciate it, especially from a local perspective, so please.
TESTIMONY OF CASWELL F. HOLLOWAY,\1\ DEPUTY MAYOR FOR
OPERATIONS, CITY OF NEW YORK
Mr. Holloway. Thank you very much, Mr. Chairman, and just
for clarification, the inauguration is January 1, so I still
have my job for the next 55 days. [Laughter.]
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Holloway appears in the Appendix
on page 88.
---------------------------------------------------------------------------
Senator Begich. Good.
Mr. Holloway. And so does the mayor.
Senator Begich. OK. Very good.
Mr. Holloway. Good afternoon, Mr. Chairman and Senators.
Thank you for being here. Thanks for the opportunity to testify
about the role and effectiveness of Federal aid to New York
City's recovery from Hurricane Sandy.
I want to begin by thanking you on behalf of Mayor
Bloomberg and all New Yorkers for answering New York City's
call after the unprecedented devastation caused by Hurricane
Sandy. From President Obama and members of his Cabinet,
including Secretary Donovan who is here today; to entire
agencies of the Federal Government, particularly FEMA, HUD, and
the Army Corps of Engineers; to assets including generators,
fuel, food, and many others; to the billions of dollars in
recovery aid that Congress made available through the Disaster
Relief Appropriations Act of 2013, what I will refer to as
``the Sandy recovery bill,'' the Federal Government has been
there for New York City since well before Hurricane Sandy made
landfall on the New Jersey coast last October 29.
Hurricane Sandy was the worst natural disaster ever to
strike New York City. It took the lives of 44 New Yorkers,
caused unprecedented damage to public infrastructure and
private property, and triggered an enormous and ongoing public
and private response. I will touch briefly on the role of
Federal aid in three specific components of the city's
recovery: before and up to 5 months after the storm; the
second-stage housing recovery efforts that are underway now and
will continue for the next 12 to 18 months; and the city's
long-term plan to protect and mitigate against the climate-
related impacts that have become an increasingly frequent part
of everyday life.
I will start with the pre-and immediate after Hurricane
Sandy aid.
Our partnership with Federal agencies began well before
Hurricane Sandy moved up the east coast of the United States
and took that leftward hook that would subject New York City to
the storm's most devastating impacts. As the city implemented
its Coastal Storm Plan, FEMA and the National Weather Service
(NWS) were embedded with us at the city's Emergency Operations
Center, and I was there for days, so I can attest we had much
support. Although the storm did tremendous damage, the pre-
storm evacuation operation was largely successful, and post-
storm surveys indicate that most New Yorkers knew about the
storm, knew if they lived in a vulnerable area, and knew they
should evacuate if they lived in an evacuation zone.
After the storm, together with FEMA and the New York
National Guard, we removed an estimated 700,000 tons of storm
debris through some of the contracts that Ms. Tighe just
mentioned; fueled more than 25,000 emergency and essential
vehicles through a partnership with the National Parks and the
Defense Logistics Agency (DLA); distributed more than 2.1
million Meals Ready to Eat and canvassed more than 100,000
households in affected areas to distribute food and water,
sanitary items, and to make referrals to health care and case
management services.
As we reported to you when Congress took up the Sandy
Recovery Act, the city suffered and estimated $19.5 billion in
damages due to the storm, including nearly $5 billion in direct
recovery costs. Hundreds of homes were totally destroyed;
thousands of families were displaced. Given the unique density
of New York City and the challenge of relocating thousands of
families, Mayor Bloomberg made it a priority to get people back
into their homes.
Thanks to the creativity of Craig Fugate and his team at
FEMA, we developed what FEMA called the Shelter and Temporary
Essential Power program (STEP). In New York City, we call it
``Rapid Repairs.'' Rapid Repairs was a truly innovative
approach to temporary emergency shelter that is based on a
simple premise: The best temporary shelter is permanent
shelter. STEP enabled the city to hire contractors to make
emergency heat, hot water, and power repairs to victims' own
homes. In only 110 days since we went into the first home on
November 21, the city was able to complete repairs on 11,800
homes and multi-family buildings. That enabled roughly 54,000
New Yorkers to return to their homes. And our survey data
indicates that most people, the vast majority, are back in
their homes in New York City, although many still need to
recover, have additional recovery to do.
I note that all Federal dollars have been accounted for,
and we want to make sure that they are properly spent. It has
been a priority for New York City since the beginning, and we
have established monitoring programs overseen by the city's
Department of Investigation for each of the housing initiatives
we have undertaken. We will continue this rigorous oversight,
and we can provide reporting at any level that the Committee
would like.
While Rapid Repairs helped thousands of New Yorkers to move
back into their homes, that was just the beginning. Thousands
of families need much more work to be done to make a full
recovery and make their homes better able to withstand severe
storms and other climate impacts. Thanks to $16 billion,
unfortunately, due to sequestration--of community development
block grant funding under the Sandy Recovery Act, and the
leadership of Shaun Donovan and the Federal Recovery Task
Force, we launched ``Build It Back,'' a $700 million program,
in June with the city's first allocation of CDBG funding, and
the basic idea is to help homeowners continue that recovery.
As of October 31, nearly 26,000 families have signed up for
the program, and approximately 500 of those had homes that were
destroyed. We have encouraged many New Yorkers to seek this
help, and we are glad that they have done so. Of course, the
overall need and demand does exceed supply, so we will need
additional allocations to make sure that the neediest get
funding and support first. We have prioritized by income level
and those who are the most damaged.
We estimate that between 55 and 60 percent of all of these
applicants are in our first priority group, and we are focusing
on them. Right now we are actually working, and we have 8,000
people who are going through insurance verification processes,
Tier 2 environmental assessments, and Secretary Donovan has
been very helpful in trying to streamline those processes so
that we can take advantage of all the work the Federal
Government has done.
At the homeowner and building level, perhaps the greatest
remaining challenge for New Yorkers is the affordability of
flood insurance. Members of this Committee are well aware of
it. The city commissioned an independent study that shows that
only 35 percent of property owners in the floodplain who were
required to have flood insurance actually had it. Premiums
could go up for the new FEMA maps that are going to be coming
out from an average of $430 a year to $5,000 to $10,000 a year,
so we are encouraged by the legislation that is working its way
through to delay until affordability can be addressed in a real
way.
Of course, the greatest long-term challenge we face is
protecting New Yorkers over the long term. At the same time
that we were getting families back into their homes and
repairing the city's infrastructure, the mayor commissioned
study of the likely impacts that New York City will face
between now and the 2050s. The result is this plan, ``A
Stronger, More Resilient New York.'' I brought some extra
copies for the Committee, and you can get it on our website at
NYC.gov. It has 257 separate initiatives to protect New York
City's 520 miles of coastline, as well as critical
infrastructure and service networks over the long term.
Hurricane Sandy took out huge segments of the power grid, 95
percent of the telecommunications network in lower Manhattan.
It took out Hospital Row on First Avenue, closing down
hospitals around the city. This plan is an achievable,
affordable way to mitigate most of these impacts when the next
big storm or other climate event, whether it is a flood,
downpours, or drought, hits New York City. And we are on track
to complete 43 critical milestones before the end of the year.
The Army Corps of Engineers is also one of our most
important partners in this effort. We estimate that more than
1.5 million cubic yards of sand were lost during Hurricane
Sandy; 600,000 cubic yards have been put back; 3 million more
cubic yards are on the way. And I have to say, having worked
with the Army Corps for the last 7 years, the work that they
are doing on the beach right now is the fastest I have ever
seen them operate, without exception.
Senator Begich. Can I have you summarize? Because you are
little over the limit, and I want----
Mr. Holloway. Yes. Sorry about that.
Senator Begich. But do not worry. Your statement will also
be included in the record.
Mr. Holloway. Great. Finally, I just want to note, New York
City cannot do all of this recovery alone. There are many areas
over which we have little or on control: the power grid,
telecommunications, and other critical networks. And so we want
to work with Congress, with additional allocations that we will
get to make sure that we can implement this plan. Clearly we
have a long way to go, and we will need additional allocations.
But if the support we have received from Congress and the
Federal Government so far is any indication, I am confident we
will be able to meet those needs and better prepare New York
for whatever climate challenges come next. And I am happy to
answer any questions.
Senator Begich. Fantastic. Thank you very much.
What I would like to do is go to the Ranking Member, and
then I will come back to me, and then I will go down to the
other two Members that are here. Senator Paul.
Senator Paul. Thank you, and thank you for coming today. I
grew up in Texas on the Gulf Coast, so I know a lot about
hurricanes from personal experience, but we appreciate all of
you trying to help in the aftermath of the terrible hurricane.
A question for Secretary Donovan. Do you think that
Hurricane Sandy relief funds ought to be spent on TV ads?
Secretary Donovan. I assume what you are referring to,
Senator, is that there has been an effort in a number of
States, not just in Hurricane Sandy but historically as well,
in many prior storms to encourage economic development. And we
did see a small amount of CDBG money that was used for an
economic development campaign to encourage people back to the
beaches. The evidence----
Senator Paul. Do you think it is a good idea or a bad idea
that----
Secretary Donovan. The evidence----
Senator Paul [continuing]. We spend Hurricane Sandy relief
funds on TV ads?
Secretary Donovan. The evidence that we have seen is that
those campaigns are effective in growing economic development
in those areas, and, therefore, they actually reduce the cost
of recovery to the Federal Government.
Senator Paul. I do not think we need to argue about whether
ads work. Ads work. But do you think ads for Hurricane Sandy
relief should be spent on TV ads? Yes or No. I mean, good idea?
Bad idea?
Secretary Donovan. As I said, we looked at the evidence,
and we have seen that encourages economic development. What I
would say is----
Senator Paul. My understanding is that you all gave----
Secretary Donovan [continuing]. That community
development----
Senator Paul. You all had to give a waiver to do----
Secretary Donovan. Senator, if I could just----
Senator Begich. Go ahead.
Secretary Donovan. The community development block grant is
a very flexible program. This is clearly within the legal
boundaries of what Congress has determined the program can be
used for, and it was demonstrated to us that this could be an
effective tool and actually lower the cost to the Federal
Government.
Senator Paul. It gives a little bit of a black eye to
something that maybe a lot of it is going to a good purpose.
But I would say that if I were in your position, I would have
said no, we are not going to spend ads.
Here is another problem. Some of these ads, people running
for office put their mug all over these ads while they are in
the middle of a political campaign. In New Jersey, $25 million
was spent on ads that included somebody running for political
office. You think there might be a conflict of interest there?
That is a real problem, and that is why when people who are
trying to do good and trying to use taxpayers' money wisely,
they are offended to see our money spent on political ads. That
is just offensive.
In New York you actually have a rule. They are not allowed
to do it. So New York did the same thing, which I still object,
but at least they did not put someone's face on the ad, and
their family, and it looks like a bio ad. I think, oh, yes,
come to New Jersey, but it is, like, I do not want to pay for
ads for someone's advertising out of the Hurricane Sandy relief
fund. It gives the whole thing a black eye.
But it is not just Hurricane Sandy relief funds. We spent
$684 million advertising for Obamacare. Well, it is a fairly
contentious issue that was very partisan and passed by one
party. Should we then get to spend taxpayer money advertising
for political purposes? I do not think a penny of taxpayer
money should go to advertising, TV advertising.
Here is the other criticism: People have pointed out it has
taken a while for some of the money to get to people. I think
it was, like, one article said one house or one homeowner in
one instance coming to your department, yet the money the TV
advertisers sure got through pretty quickly. I mean, when
people want to advertise and promote themselves, all of a
sudden, boom, money is on TV and so is their ad.
So I would just ask that all of you who are civil
servants--and I know you want to do the right thing--reconsider
whether or not it is a good idea. My understanding is it took a
waiver from your office to use these grants for this and that
the TV ads had to be approved in that sense by your office.
The other thing is that there have been community
development grants given to something called a River Festival
in Manhattan. I sure hope that none of this money is going to
it and that I do not find out in a year that the River Festival
got money for this, because the River Festival is full of all
kinds of great and groovy things like performance art, a bunch
of people showing up and holding their cell phone up and
playing the same songs. That would be a lot of fun. I would
love to attend that. But I hope we are not going to find that
Hurricane Sandy relief money went to stuff like that, because
as you said, community block grants can go to anything. And so
I sure hope that someone is watching the taxpayer's dollar.
That is all I have. Thank you.
Senator Begich. Thank you very much.
Secretary Donovan, can I followup? I wanted to make sure we
are clear on one thing. CDBG money, as a former mayor--and I
think now Senator Booker would say the same thing--it cannot be
used for anything. There are limitations. Is that correct?
Secretary Donovan. That is exactly correct. I did not say
it could be used for anything.
Senator Begich. Right. That is----
Secretary Donovan. It has very clear statutory purposes,
and we reviewed and made sure that it did meet those purposes.
If Congress determines that economic development campaigns
should not be included, then obviously that could be added to
legislation. But currently they are within the bounds of the
law.
Senator Begich. Let me get to a broader question. FEMA--and
I think I know the answer to this, but I want to have the three
agency people other than FEMA answer this, because I think
FEMA--when I look at the money of appropriated, obligated,
expended, you are fairly high up there. You have moved the
money out there. The other agencies, it is kind of in process
or not as much in the percentages compared to what is
appropriated. So maybe if I can start with Secretary Donovan
and then go to the next two, just so I understand why there is
a lag. I want to make sure I hear this for the record because I
understand FEMA because you have to get in there--you do not
have the luxury of waiting 3 years and bringing the money then
after the fact. So help me understand that, because that is one
of the questions that I get a lot of times when they see the
reports and they say they have gotten it appropriated, where is
the money being spent?
Could I start with you, Secretary Donovan?
Secretary Donovan. Absolutely, and I think this is a very
important point. One of the things that is critical to
understand about CDBG is by law it is only allowed to be used
on needs that are not met by other funding sources, and so----
Senator Begich. So you are the last bucket.
Secretary Donovan. We are the third step, effectively, for
homeowners, for small businesses first--and I think we have
seen very consistently that FEMA moved very quickly to make
that first allocation, but only up to $30,000 can be used for
homeowners, for example.
Senator Begich. Right.
Secretary Donovan. And that takes care of the moderate
damage. You must make sure that your insurance company has paid
their full claim, and that process needs to happen. And then
only when those two have been utilized can we then make CDBG
available, and that is why CDBG only began to pay out more
recently.
Let me just give you one comparison. At the point where we
are today since the appropriation was made by Congress, we are
more than 20 percent faster in Hurricane Sandy than we were
under Hurricane Katrina; we are more than 300 percent faster
than we were in Hurricane Ike on CDBG. And so, clearly, we have
improved the process. Are there things we could do
legislatively or within our own power to make it faster? Yes.
We are working on many of those things. But, relatively
speaking, I think we have both been faster and more careful in
the way we are using CDBG money in this story.
Senator Begich. And as I move to Mr. Porcari, can I ask
you, some of those ideas at some point legislatively or
regulatory, can you share those with the Committee at some
point? So if there are things we could be doing to help that in
the future as we continue and improve that flow, that would be,
I think, helpful.
Secretary Donovan. Absolutely, and I would just compliment
the Committee on having made many changes for Hurricane Sandy
that have sped up spending already.
Senator Begich. Very good. I was going to ask you, if I
have time, I will ask you about the bridge issue and how you
used the techniques. I want to know more about that.
Mr. Porcari. Mr. Chairman, thanks for an excellent
question. The transportation funding that was provided in the
supplemental is being used for very specific transportation
purposes, and I will just quickly go through mode by mode.
The Federal Aviation Administration (FAA), with a direct
appropriation, for example, has repaired the damage to the
three major airports in the region. That is work that we have
done ourselves or with contractor forces.
The Federal Highway Administration (FHWA) first released
money within hours of requests under what we call ``quick
release authority'' to get the work started on building the
highway system.
And then its Emergency Relief Program operates on a
reimbursable basis, so the work gets done, and it is done by
State or local governments, and the Federal Government
reimburses at the end. That is the way that we protect and make
sure that we get the project built the way it should be, and in
this case with some resiliency for the future.
The Transit Program, we have made extensive use of what we
call ``pre-award authority,'' so specific transit projects as
part of the Hurricane Sandy recovery have been given pre-award
authority where the transit agency will be rebuilding those
facilities according to Federal requirements and then
reimbursed as part of the process. That is a way to get the
project underway quickly and make sure we get the product that
the taxpayers deserve.
Senator Begich. Very good. Jo-Ellen.
Ms. Darcy. As I said in my opening statement, we have
several buckets of money.
Senator Begich. Right.
Ms. Darcy. Some for investigations, which is ongoing
studies, as well as our comprehensive studies, so the spend-out
rate on that is not as quick as would be for our emergency
money. The emergency money we had we have expended nearly all
our expenditures, and that will be completed in the early part
of next year. Those were the repairs to our existing projects;
repairing the sand dunes that had been devastated.
And the third bucket of money is for construction. We had
18 projects that were authorized but unconstructed, and some of
those projects had been authorized several years ago. What we
are doing now is looking at those projects to see whether in
the light of climate change and sea level rise, those projects
are still--will be sustainable and resilient. The study is the
floor of the process and the less expenditure. But once we go
through that study process, do the pre-construction engineering
and design, which is a smaller amount of money, and get to the
actual construction, that is when you will see the outlays on
these projects.
Senator Begich. Very good. I have one quick question, and
then I am going to go to the members, and we are trying to do
5-minute rounds here, so I will try to be quick.
Cas, let me ask you a question. Of course, I am going to
speak in a moment. I am going to substitute myself back to my
mayor days. The frustration I always had with the State
organizations was they would get this money, and then you would
hope and pray it would come down to you at some point in some
rational, deliverable way. Can you give me your sense of how
that worked? Or could there have been--and maybe later you
could give some recommendations. How did that work? When that
money--CDBG, I do not know in this case if it went directly to
State or local, I do not know how that went here. But can you
tell me how that worked when money went to the State and then
you are down there waiting for it?
Mr. Holloway. Well, in this case, Mr. Chairman, the
funding--actually New York City got its own direct allocation.
Senator Begich. They did.
Mr. Holloway. Which was great for us, because the level of
damage that we sustained and our ability to take those
resources and really start working with them immediately is
really strong. So, far, the allocations that have come, there
is a separate allocation for the State of New York, and New
York City has gotten its own allocations. From that perspective
it has been great.
Senator Begich. So that has worked.
Mr. Holloway. Yes.
Senator Begich. Fantastic. Let me stop there, and I do have
additional questions, but let me go to Senator Booker and then
Senator Gillibrand.
Senator Booker. If we may, the Senator from New York, who
has a wonderful view of New Jersey, would like to go first
because she has some place to go.
Senator Begich. Please.
Senator Gillibrand. Thank you, Mr. Chairman. Thank you very
much, Senator Booker.
I appreciate all the work you have done, and every single
one of you has done extraordinary work in terms of getting
money flowing, getting large projects done, getting things up
and running, and I appreciate it.
But what I hear from my constituents is not good. I hear so
many stories of constituents who cannot rebuild, who have not
gotten money. There is so much red tape that they cannot
possibly find their way through. And so I want to ask each of
you some issues of red tape that concern me that hopefully you
can give me the road forward so I can let my constituents know
that relief is possible.
Secretary Donovan, this one seems very difficult. A number
of my constituents were dismayed to learn that because they
accepted Small Business Administration loans that they are now
ineligible for CDBG funding. Now, I understand the need to make
sure there is no duplication in getting Federal benefits, and
we want to protect against fraud. And that is absolutely
critical to the integrity of this program. But is there any
distinction that could be made between grants and loans under
the duplication of benefits regulations? And under the current
Federal regulations, what are the options for Hurricane Sandy-
affected homeowners who accepted SBA loans but who believe they
are at a financial disadvantage relative to homeowners who
chose not to accept an SBA loan?
Secretary Donovan. Senator, this is something that your
office raised with us and that others did, and we actually made
clear that even if a homeowner or business had been approved
for a loan, they were still eligible for SBA assistance. So, in
fact, it is not accurate that they are ineligible.
Senator Gillibrand. But they have been told they are
ineligible, so is that something we can fix in terms of those
communicating with----
Secretary Donovan. Let me be clear, though. Like everything
else in CDBG, it is up to local communities to determine
exactly how they use these funds, and one thing that we have
encouraged communities to do--and I want to be clear about what
situation the homeowners you are talking to. If a homeowner, if
a small business can afford to repay a loan, we do not think--
and we have made clear--that communities should make grants
available because these are precious limited dollars, and so
what we have encouraged communities to do is to do an
evaluation. And I have heard frustrations from business owners,
homeowners. They say, well, somebody else is getting a grant, I
am getting a loan. Well, the fact is if they can afford that
loan, then we encourage communities to do an underwriting and
to evaluate that and to use grants only where a homeowner or a
business cannot afford to repay a loan.
And so that is the guidance that we have given, but we do
leave flexibility for communities to make that determination.
Senator Gillibrand. Well, I would appreciate that you make
that guidance very clear when someone is looking at an SBA
loan. They need to know what limitations they will be under in
the future. It needs to be clearer.
Secretary Donovan. I agree there was confusion, and we have
absolutely worked with your office, and you have raised this
before to try to clarify that as much as possible.
Senator Gillibrand. Thank you.
Secretary Donovan. We are happy to do that more.
Senator Gillibrand. Deputy Mayor Holloway, so we have read
a lot of news stories, and we have done yeoman's work on so
many infrastructure issues and done excellent work. But for
homeowners, there is still enormous challenges because, while
FEMA caps the payment out at 30K, very few people receive the
full payout. Their home might have been destroyed, and they are
eligible for a grant of $8,000.
So, while we do our best, it is not enough for these
homeowners to rebuild. And, in fact, there are families that
are still homeless a year out, and that is horrible.
So specifically for Breezy Point, Staten Island, and the
Rockaways, how quickly do you think CDBG money will get to
homeowners? And what percentage of those areas have actually
received any CDBG money?
Mr. Holloway. Well, so each of those areas, having been
there many times and worked with, particularly in Breezy Point,
the homeowners association, we have done a lot to try to
advance building. It is not only getting the money. It is being
able to actually build, put things in the ground. And so we
have been able to advance that.
I think that in terms of FEMA recovery, that really is a
case-by-case determination of their assessment of what the
damage is. We now have 26,000 families that have signed up for
Build It Back, and we are in some stage of financial assessment
for them. So as Secretary Donovan said, the CDBG money is money
of last resort, which means that you have to do an insurance
verification; you have to figure out whether they have any
other FEMA money, any funds from any other sources. We are
working closely with insurance companies, but we have 1,400
requests for verification from one company in particular that
have not been met. And these steps in this process--which we
are not opposed to in any way because you do have to make sure
that the dollars are going to people who actually need it, but
they do take time.
Now, I think we have had some CDBG money flow, but I will
say the mayor is not satisfied that it has gotten to enough
people yet. I think you will see, I am confident you will see,
between now and the end of the year, we will begin to ramp up
to hundreds and then ultimately thousands who will be getting
that funding.
Senator Gillibrand. Thank you. Well, let me address some of
the red tape that your mayor is probably experiencing with
regard to Administrator Fugate. So FEMA worked with the local--
these localities to submit project work sheets, which makes
them eligible for reimbursement. And over the last year, many
of these project work sheets have still not been paid, and
these delays have caused setbacks to local projects and bottom
lines, many of them borrowing while they await payment.
Do you know how long--or how many project work sheets FEMA
is still processing and what the anticipated timeframe for
turning those around is?
Mr. Fugate. Senator, it depends upon the project. A project
work sheet is a tool to determine what is damaged and what is
going to be needed to make repairs. We have prioritized working
with the State. Some of the first projects were going to be all
the debris and all of the emergency costs that were expended.
Those were dollars that went out the door immediately. And so
as we have been going through that, we have to have
documentation to demonstrate the costs so that we can satisfy
the requirements that they did the work, it was expended, and
we reimbursed that.
Most of the emphasis has been on the initial cost. There
are some that still need more documentation--but if you have
specifics, we will work on them.
Now, the rebuilding piece of those project work sheets is
going to take more time because once we get in the permanent
work, we have several different tools we are trying to use to
speed this process up, but we still have to go and work through
processes to ensure that is it over 50 percent, are we going to
be able to mitigate this, and what is the longer-term
requirements to rebuild?
Senator Gillibrand. Thank you, Administrator. My time has
expired, but for Assistant Secretary Darcy, obviously Long
Island is so important, and people are very concerned about the
time it is taking for the stabilization projects within the
Fire Island to Montauk Point (FIMP) study to be started and to
know when these emergency stabilization projects will be done.
Can you just give a quick update about where we are in that
process?
Ms. Darcy. For the Fire Island to Montauk Point?
Senator Gillibrand. Correct.
Ms. Darcy. Well, we have begun some of the emergency
response, which was part of rebuilding what was there. We are
currently reviewing the Fire Island to Montauk Point, which as
I mentioned is an authorized but unconstructed project. So we
have to relook at it to make sure that it is in today's sea
level rise and climate change lens that we are looking through
and building it to the right dimensions. We are committed to
doing some expedited review processes for all of these
projects.
Senator Begich. Thank you very much. Senator Booker. And we
will probably have time for another round if there are
available questions.
Senator Booker. Senator Begich, I just want to say again
thank you for holding this hearing. I have a lot of affection
for you even though we have only been colleagues for 6 days.
[Laughter.]
But that affection is born from the fact that you know what
it is like to be a mayor and the difficulties you have
grappling with real issues on the ground every single day.
People do not know what a Secretary's number, they do not know
necessarily what a legislator's number is, but they know where
you live, and it is something that I take very seriously. And I
just want to say to the panel assembled, I am grateful that you
are here. I have only been here for 6 days. I still have that
new Senator smell, I am told, but I have had a chance to deal
with the Secretary on multiple occasions as mayor, and I think
the Obama Administration has many stars, and frankly none of
them shine brighter than you do.
The frustration my office already has is that we are
dealing with lots and lots of people who feel this sense of
discontent, ill at ease, frustration, and a lot of stories, and
we are unraveling them, and your team, the team assembled here,
has been in credible with my office. Again, Mr. Fugate, I look
forward to meeting with you and bringing to you a lot of the
individual concerns that are not necessary to go through here
because you have made yourself so available, and I am sure I
can expect the ability to meet with all of you as I deal with
what is a sense of urgency from my office.
Secretary Donovan thank you very much. You can call me
``Cory.'' I know the best thing about you is that your head is
with the entire State, but you married a New Jerseyan, so your
heart is with New Jersey, I am sure.
Secretary Donovan. As your colleague says, I married up.
Senator Booker. Yes, you did marry up most exceptionally.
So for me in my office--and we plan on spending a lot of time
in the district over this next month meeting with a lot of
families, because many of them do not know who to call. They
are so frustrated. They do not feel like they can rely on
government anymore. They have gone through some of the red tape
and gotten nowhere. And so as we stood--so the two points I
want to make, to the Chairperson, I am hoping that we can do
more of these as the recovery continues because this is not
going to be finished in a month, in 2 months, in 5 months, but
this is very good as we move forward.
Senator Begich. Very quickly on that, I will tell you one
of the goals of this Subcommittee and another Subcommittee that
I chair is one of the roles the Senate should do more of is
oversight like this. So we are not waiting for a crisis to
occur, but, 6 months from now or a year from now, we are going
to have these same conversations because we want to keep track
of how it is going, and if there are legislative and regulatory
changes we need to make, we should be trying to do that in
concert with what is going on. So, absolutely, the idea is to
have oversight and to work with agencies to improve what they
are doing, but also make sure people on the ground are getting
what they supposedly had thought they were getting.
Senator Booker. Right, and my hope is----
Senator Begich. And that should not count against your
time, what I just consumed.
Senator Booker. I appreciate that.
Senator Begich. I am telling that to the staff, whoever is
the clock holder.
Senator Booker. The Senate is a generous institution, I am
finding. So the----
Senator Begich. He is new. [Laughter.]
Senator Booker. So the point for my team right now is that
sense of urgency you get from being a mayor is the sense of
urgency we are going to treat this problem with, because we
have families in crisis, we have challenging counties on the
western shore of New Jersey who really feel like they have been
left out of this equation, who still feel like there is
everything from debris still in bodies of water to houses still
destroyed. And so my hope with everybody as we set up our
internal benchmarks is that we will be able to continue to
touch base over a regular period of time to make sure that your
professionals, your extraordinary professionals, are operating
with that constant sense of urgency and driving your teams as
hard as possible to meet the needs of the State of New Jersey.
And so in the 90 seconds that I have remaining, to my
friend and, again, our leader, I have learned a lot from and
have a lot of respect, when we stood together just about 2
weeks ago when I was still Senator-elect, we talked about the
next tranche being released, and it was interesting, though,
afterwards I heard from the mayors assembled and some others,
some of their individual frustrations.
And so my hope is--obviously there is going to be a third
tranche, and you have done a lot to expedite funding compared
to what happened in previous--you brought it to a whole new
level. But my concern is it still does not seem fast enough.
And I am wondering, Secretary Donovan, in the few seconds I
have remaining, could you just talk generally about things you
are doing to further expedite it and help me understand sort of
your expectation on that third tranche which is so critical?
Secretary Donovan. Senator, thank you for your leadership
in Newark as well. The city is much stronger, many families
that would not have gotten help without your leadership. I know
there is still pain there, but thank you for your leadership
locally.
Senator Booker. Thank you.
Secretary Donovan. And I know you are going to bring the
same energy to the Senate as well.
I think the problem with talking about these is this is
blocking and tackling hundreds of small decisions that are made
along the way, and so I could give you a list of 20 or 30 key
changes that we have made that have made a difference. Just one
example. There was some cruel irony that anyone who started
rebuilding themselves would not then be eligible for CDBG help.
We changed that with urging from many of your colleagues so
that now somebody can get reimbursed. That is just one small
example.
Historic preservation reviews and the environmental, we
followed on with FEMA's good work, made a programmatic
agreement that sped that up significantly. So there are
hundreds of small things like that.
I think the areas where I would say big picture are most
important, the insurance process, not just on flood insurance
and having enough reviewers and other things in a very dense
area like New York or New Jersey, but also getting homeowner
policies aligned so that families can know--often they get
their insurance, and then they cannot even get access to it
because their bank is there. And that is something that we have
worked a lot on. I think that is critical. And then the
environmental reviews.
The Committee did something very important in giving us the
authority when FEMA puts money into a project to just accept
their environmental review. We do not have that authority for
any other agency. It is something we think legislatively ought
to be done. That is an example. I would be happy to provide you
a longer list.
Senator Booker. OK. Thank you.
Senator Begich. I will let you go ahead, Senator Schumer,
and I will get back--if you are able to stay, we will give you
another round here, but Senator Schumer?
Senator Schumer. Thank you, Chairman.
The first question is to Assistant Secretary Darcy. I am
really worried about more bureaucracy getting in the way of
doing FIMP, of doing Rockaway, of doing Fire Island. One of the
problems we have is the Office of Management and Budget (OMB).
Even though we gave the Secretary the authority to approve
general reevaluation reports without extra review by OMB, they
seem to be demanding review. I have called OMB about this. We
have talked about it. But I am really worried about their
getting in the way of both the FIMP study, Fire Island to
Montauk, and East Rockaway Inlet to Rockaway Inlet
Reformulation Studies. If they have to review everything, it is
going to slow things down too much, and that gives me worry
about another storm.
Could you tell us what is happening? What is your view,
your candid view, of OMB's, shall I say, meddling here and what
we can do to speed things up?
Ms. Darcy. One thing that we are doing, Senator Schumer,
with both the limited reevaluation reports as well as the
general reevaluation reports, is we are having monthly meetings
with CEQ and OMB, with our division commander, who is sitting
right behind me, General Savre, to give them a status report on
a monthly basis of where we are on each of the 18 projects that
you were referring to that were in the Interim 2 report so that
we can all know what the status is, where we are, if we see
problems coming up. That will help to speed that review because
it will be ongoing before there is even a final product.
Senator Schumer. But it is my understanding--and I was one
of the, probably the lead author of this legislation--that we
did not need OMB approval for the things that were already
authorized, like FIMP. Are they seeking such approval? And is
it standing in the way? I do not mind you consulting with him.
That is fine with me.
Ms. Darcy. At this stage, Senator, as I say, we are going
to be consulting with them and reviewing this, but we will
follow the law as it was----
Senator Schumer. So, without being too confrontational to
your dear friends at OMB, you are agreeing with me that the law
does not require their approval.
Ms. Darcy. That is correct.
Senator Schumer. Thank you. Very good answer. [Laughter.]
Senator Begich. That was the perfect answer.
Ms. Darcy. Oh, really?
Senator Begich. Yes.
Ms. Darcy. I am not sure I feel real comfortable about it.
Senator Schumer. Yes. [Laughter.]
Perfect from this side of----
Senator Begich. Let me just say, if I can, for Senator
Schumer, your honesty and your forthrightness is greatly
appreciated.
Senator Schumer. Right. OK. Next we will go to Secretary--
--
Senator Begich. They are hoping they are not picked. I can
feel it.
Senator Schumer. To Secretary Porcari, another fine--and I
mean it. You guys and gals have done a very good job. Porcari
is from Rochester, so that explains a lot of it. But in any
case, two questions on highway stuff. When can we expect an
announcement of the remaining $5 billion in FTA emergency
relief funds? And, more importantly, Federal highway relief
money cannot be used for mitigation, like on Ocean Parkway;
that is why we turned to other funds to help us with Ocean
Parkway on Long Island. But are you considering using any of
your authority to use FTA money for resiliency on other
transportation modes? You can do that should you wish, as I
understand it. It was not used on Ocean Parkway, but it should
be used in other places on Long Island and in New York City.
Tell me a little about that.
Mr. Porcari. You are correct, Senator. First, the authority
exists under the act for the Secretary to transfer money to
another mode.
Senator Schumer. Right.
Mr. Porcari. First, to answer your question on the next
tranche of transit money--and, again, that is the single
biggest need in the transportation network, as you well know.
We have a Notice of Funding Availability that is in internal
review right now. We will have that completed very quickly. It
will be for $3 billion, specifically awarded on a merit basis
for resiliency projects. We will coordinate it with the task
force by, for example, making sure that we have Corps and HUD
and FEMA and other reviewers looking at that from a systems
perspective to make sure--because this $3 billion is honestly a
fraction of the need that is needed out there in the transit
network.
Senator Schumer. Right.
Mr. Porcari. The thinking is also that there are rail
projects that may well fall into that same category. There are
shared use facilities, which you are well aware of, like
Substation 41, which is an Amtrak-owned substation but serves
both New Jersey Transit and Intercity Passenger Rail, and
either through the award process directly or through the
Secretary's transfer authority, there may be rail projects. We
do not anticipate going beyond Transit and Intercity Passenger
Rail projects with that.
Senator Schumer. Right. I just hope you will keep an open
mind with the remaining $2 billion in terms of resiliency,
using your authority to transfer so we can build better to
avoid the next storm. Very important.
Mr. Porcari. Resiliency will certainly be our focus, and we
know, given the vulnerability of the whole transportation
network but, in particular, the transit system that--and what
we know about sea level rise, for example, we have a lot of
work to do.
Senator Schumer. You bet.
Could I ask one more question with your indulgence, Mr.
Chairman.
Senator Begich. You will also have time for a second one.
Senator Schumer. OK. Great. This goes to first Mr. Holloway
and then Shaun Donovan. As is obvious--it is not news--
homeowners are complaining they are not getting the money
quickly enough. There are all kinds of reasons for that, and as
I said, I think the second year they are going to be much
happier with the monies in the pipeline and flowing. The spigot
is now open. But what, in your opinion, Mr. Holloway--and I am
sure this would be true for your colleagues in Long Island and
West Chester as well--is the biggest red tape problem getting
in the way of aid to homeowners and projects at the Federal
level?
Mr. Holloway. Well, I will start by saying that there has
been a lot of red tape that previously had existed that has
been cleared up, and so that has been tremendous. I think that
it is a challenge to--since CDBG is essentially the backstop,
it is a challenge to get to the backstop.
Senator Schumer. Right.
Mr. Holloway. Now, that is not to say that that is
necessarily HUD's issue, but getting verification from
insurance companies, getting everybody's financial conditions
in order is very challenging to do. And so if I had to say what
would relieve that issue, figuring out the right way without
opening up the specter of, duplication of benefits and all of
those things, which have really driven a lot of--the creation
of a lot of process to basically get enough data to say, OK, we
are pretty sure we are pretty good at--that your 85 percent, we
can give you some portion of the funding even if you are not at
the end of the verification process. I know that would be
difficult to do, but that is the challenge.
Senator Schumer. And, yes, a lot of that--we do not want to
pay when insurance has already paid. Would you agree with that,
Secretary Donovan?
Secretary Donovan. I think it is absolutely the center of
many of the things that appear as red tape to homeowners,
whether they are necessary or just, frankly, unnecessary
delays.
One of the things that, as we started to work through this,
my team began developing is something I call a ``program in a
box.'' One of the problems that you have is that each State or
locality developing--particularly smaller localities. New York
City has, high capacity--I am a little biased here, but as high
capacity as any city in the country. But for many of the
smaller communities that have been hit to create a brand-new
program to figure out how to do these checks and other things
is a major barrier. And so what we have begun to work on is a
program in a box where literally we could say here is the
model, just adopt it, and it will allow you to move faster. I
do not think that takes care of, by any means, all of the
issues, but it certainly could remove some of the unnecessary
red tape.
And then I think it is worth going back and thinking about,
on duplication of benefits, are there things that we can do to
simplify and streamline that while still not running afoul of,
basically subsidizing insurance companies.
Senator Schumer. Right. Thank you, Mr. Chairman. Thank you,
Senator Booker.
Senator Begich. Thank you very much.
Let me have a couple quick ones, and then I will go to
Senator Booker. It dawned on me as we were talking that in your
testimony you mentioned what the impact of sequestration was to
some of the resources. So in this next round we are about to
hit, the CR in January and potential sequestration if we cannot
get a budget, will that have an impact on the additional
resources you have?
Secretary Donovan. Generally speaking, Senator, it was a
one-time reduction of 5 percent.
Senator Begich. OK.
Secretary Donovan. So specifically for the $16 billion----
Senator Begich. You have already had the reduction----
Secretary Donovan [continuing]. It was a 5-percent
reduction down to 15.2, and that is pretty much across the
board.
Senator Begich. And that is--everyone else--OK. Good.
Let me, Ms. Tighe, if I can ask you a question. When you
were talking, you had suggested some reporting process that
really are not in place. Are you going to prepare at some
point--or could you prepare, I guess--for this Committee kind
of what those items you would recommend to ensure that at least
there is more transparency in reporting of how the expenditures
are being done so people like yourself and others can review
them in a more accurate way, and if that is done by regulation
or legislation? That is the first question.
The second question is: Have you, in what you have been
seeing and looking at, uncovered any questions or hot spots
that might say here is an area we better be looking at today in
regard to some of these expenditures? And if the answer is yes
to that, is that occurring? Does that make sense, that last
question?
Ms. Tighe. Yes, it does. Mr. Chairman, we are happy to send
you information on specific recommendations that we would make,
but just to sort of give you--one thing we really learned from
Recovery is that the public is very interested in where money
is going, really specifically where it is going and what it is
being used for. And a lot of our impetus is on transparency of
information.
It seems like an easy fix to us to do what the Federal
procurement database already does, which is when a hurricane or
a special event hits, they give it a special code. Why can't we
do that on USASpending.gov so that we know what on that website
is being spent for Hurricane Sandy? It just seems easy to us.
It is----
Senator Begich. What do they say?
Ms. Tighe. Well, we have asked the question and, it had to
be something that was done right out of the box. It is not
something we can do now. It is not something--and I----
Senator Begich. Well, let me pause you there.
Ms. Tighe. Please.
Senator Begich. We have four agencies here.
Ms. Tighe. Yes.
Senator Begich. So your statement is good, so I guess here
is my question, if I can pause you for a second, to the four
agencies. Can you set up a system now or into the future that
whenever--I mean, to assume there is no disaster coming would
be a mistake. There will be one at some point. Can you do this
simple system here?
Secretary Donovan. So, Senator, let me address this,
because we have been working with the Recovery Accountability
and Transparency Board on this. We have set up a system to
collect data. We do have a website available monthly with
information on spending. I think the issue is not that we
cannot do that. It is that to get to the level of detail and
information that the Inspector General was talking about
requires additional steps. And so we do believe--and, in fact,
it was part of our Sandy Recovery Task Force report--that we
ought to have a legislative requirement for future
appropriations like this that we create a project management
office and that there are data requirements in terms of----
Senator Begich. But do you need a legislative requirement?
Why don't you just do it?
Secretary Donovan. The simple answer is that because of--
the extent of work was enormous to get to that reporting for--
it means inserting in hundreds of systems across the Federal
Government particular lines or codes, and that is not something
you can do overnight. It takes significant investment.
Senator Begich. Ms. Tighe wants to jump in. Let me go back
to her for a second.
Ms. Tighe. Well, I must confess to not knowing the
mechanics of what happens on the Federal Procurement Data
System, but every contract let by the government, it is really
a system that the General Services Administration (GSA) has set
up in the Federal Procurement Data System that you have to just
fill in a box that says, yes, this is a Hurricane Sandy, it
gets a national interest action code, I think it is called. I
think we are really talking about something that I think
USASpending itself could generate. I do not know if it has to
mean, changes to thousands of agencies' systems feeding data.
And I know that the HUD task force has done a good job, and
they do have a website that does discuss spending. It is just
that it is at a very high level, and the Secretary is right
that what we are really talking about is a level that is much
more granular.
Now USASpending has some of that. It is just that, it does
not separately capture or you cannot, search by, hey, what is a
code for Hurricane Sandy? There is really no reason why the
major portal we have for Federal spending cannot do that. I do
not think it is--and I am not a person who can tell you what
the mechanics are of having that done, but I think it can be
done without actually legislation, I do not think. There just
has to be a decision made to do it.
Senator Begich. Let me hold you at that, because I have run
out of time, but let me ask you that last--the first part of
the question, and that is, can you produce for the Committee
that shopping list?
Ms. Tighe. Absolutely.
Senator Begich. OK. Would you submit that? Then if you can
indicate if you think it is regulatory or legislative, so that
can help us do a little understanding of what we can do here or
what we can press to have happen.
Ms. Tighe. We will.
Senator Begich. Fantastic.
Senator Begich. Let me go to Senator Booker for your next
round.
Senator Booker. Sure. I have one more question, but I take
solace from the fact that this Committee as well as other ones
that have jurisdictional oversight will have other hearings in
the future, because obviously this is probably one of the worst
top two storms that has hit our country in the last century in
terms of its impact, damage, and cost, and especially in our
region, in the greater New Jersey region, which is one of the
most productive in terms of our national gross domestic product
(GDP) and important from an arts and cultural perspective. This
is obviously something of great concern not just to our region
but to the country as a whole. So I am glad--and just want to,
again, Mark, for the record, my gratitude that everyone
robustly shook their heads up and down about their willingness
to meet with me directly and work in close conjunction with my
office as we try to tackle these problems.
The one thing I will bring up--and I know, again, I am
looking forward to meeting with Mr. Fugate and being able to
discuss this issue, but I guess I am confused. I know at the
municipal level things sometimes do not make sense, but this is
the national level, and I am sure things are a lot more
rational here in Washington. And so, the thing that has chilled
my understanding of what is going to happen to my region when
the flood insurance rates go so up, it is going to devastate,
completely devastate areas of New Jersey, and not only will it
affect homeowners, but they will not even be able to sell their
homes because who is going to buy their homes, often with such
high insurance levels?
From my understanding, and just my beginning to dig into
this personally, when Biggert-Waters passed, it required FEMA
to do a study about the insurance affordability and the impact
it would have on the region. And it seems like a critical
thing, before you allow the phasing in of these incredibly high
insurance rates, that we would know sort of what we are going
to do to that region.
So I guess just for a matter of the record for now and
something that we could definitely get into more when we talk,
could you let me understand what is going on with that study
and what it really says about the devastating impact, potential
devastating impact this could have to regions like mine?
Mr. Fugate. Yes, Senator. The goal of Biggert-Waters was to
move toward an actuarially sound insurance program that would
encourage private sector participation because we would no
longer subsidize rates below market value. There were many
pieces to that, and generally, when you would see legislation
that would tie a specific action before further action would
go, the language would have been written so that the
affordability study would have been a requirement before you
went to the next steps. The way the legislation was written, it
was all done concurrently. So the phase-in of the rates was not
tied to an affordability study being done. It was an
affordability study was to be completed but not hold up any of
the other implementations. This is the area we have come back
and worked, and Senator Menendez had asked for technical
drafting assistance on the initial funding that we were given
and timeframes. We went to the National Academy of Science,
they informed us that in the timeframes given and the funding
provided they could not complete the study.
Senator Booker. So help us understand this. Does that even
in any way seem rational to you to let the phasing in happen
without even understanding and having the study completed?
Mr. Fugate. The ability to not phase in was not permitted
in the legislation. There were certain timeframes that we were
required to implement those phase-ins to start moving toward
actually based--a year ago, we had already done secondary
homes, commercial, and repetitive loss. The next steps were for
those people that are currently subsidized, begin phasing them
in over a period of time. And then the one that is causing the
most immediate problem is for those folks we are seeing map
changes where there is a very limited phase-in. All of these
changes were predicated upon when the legislation was passed,
you had certain timeframes to get that done, and the only
delays was the regulatory process of implementing those rules
for that.
So the affordability study, although still required; again,
we provided the technical drafting assistance that we needed to
be able to expend the funds that the National Academy of
Science said would be required and allow the timeframes they
stated it would be allowed, and then postpone the increases for
those areas until that study is done.
Senator Booker. So that sounds like a recommendation, in
other words, it makes sense to do the study. The study right
now is not being done, nor do we have the money to do the
study. But yet we are still moving forward with the phasing in.
It sounds like you are saying that the advisable thing to do
would be to do it right, to actually understand--to do the
study, allocate whatever resources are necessary so we
understand and we do not fly into this blind and hurt a lot of
people.
Mr. Fugate. Again, understand that as the legislation was
signed into law, we have been implementing the law as it has
been designed. This is an area that, when Senator Menendez in
the previous hearing that I testified on flood insurance, he
specifically asked for us to support technical drafting
assistance, and that is exactly what we have been working on,
is how do we make insurance so that we do not subsidize risk
beyond which there is a return of benefit to the taxpayer, but
obviously the intended goal should not also be place people out
of their homes because we make insurance so unaffordable for
existing homeowners.
Senator Booker. I understand that. I guess what I am
missing is the link, and I will talk to Senator Menendez about
this. I guess I am missing the link. So, in other words, you
have provided the technical assistance, but it is still not
done.
Mr. Fugate. It still will require legislative action to
change this to be signed into law, because as we understand the
law, we were not given any flexibility in implementing the
timeframes once we had the regulations done that the
affordability study was not--the increases were not dependent
upon the affordability study being done. It was written in such
a way that it was all being done concurrent.
Senator Booker. So you are saying it is really on the
legislature to act in order for this to be done the way it
should have been done.
Mr. Fugate. Senator, as I testified last time, we have not
found any way to delay those implementations without the
assistance of Congress giving us the ability to suspend some of
those increases until such time as an affordability study is
done.
Senator Booker. So we are rushing forward with this, not
knowing the impact it is going to have, not knowing if we have
even struck the right balance. That to me just seems a million
percent wrong and damaging. Would you agree?
Mr. Fugate. Well, I would agree, as I have testified, that
if we do not address affordability, our risk is we are not
going to be able to move this program to a sound basis. We will
continue to subsidize risk and encourage growth and development
where we probably should not be building that way. And we are
going to put people out of their homes.
Senator Booker. Right.
Mr. Fugate. So there is a balance here that has to be
struck between looking at affordability but not artificially
creating a situation that we are subsidizing risk at such a low
rate we continue to increase our vulnerabilities to future
disasters. We have to change how we are building. But it should
not be at the expense of people in their homes forcing them out
in the short run, but understand that in the long term we have
to look at how we build in coastal communities in such a way
that people's homes are not threatened every time we face a
storm.
Senator Booker. And I agree with you, but the frustrating
thing for me is you have to know before you go, and we are
acting without having the knowledge base necessary to make
sound decisions, and we could end up with a situation
profoundly devastating. That is very frustrating.
Secretary Donovan. Senator, if I could make two points
here. One is that this is an issue the Administration raised
when Biggert-Waters was passed. In our statement of
Administration Policy on this, we raised the fact that there
was not an affordability provision that would allow us to
protect folks. It is an issue that we raised in the Sandy Task
Force report. And I just want to echo Craig's point that this
is something that we need to act on without undermining what is
an important step forward in making the program something that
does not encourage development in places that--and I think it
is important we strike that balance, and I think even it is
possible that we could get some authority to start doing this
even before the affordability study is done, if we can work
correctly with you to get the right legislation.
Senator Booker. I would agree with that, and I know that my
colleagues from New York as well as the Chairman probably would
agree with that as well, so thank you.
Senator Begich. Thank you very much.
Let me add to that, and then we will close this hearing,
and that is, we have a piece of legislation, as you know, that
is pending, and it dawns on me as I am sitting here, I am
hopeful that you have reviewed that legislation that would
delay the implementation based on the affordability study done.
But I would ask, if you have not given input on that, at least
to this Committee--you may have to individual members--I would
greatly appreciate that, because what you are experiencing,
Senator Booker, is a piece of legislation that was not crafted
well. It was crafted with a good intent, but there are pieces
of the equation that were discovered after the fact that now we
are trying to fix. The problem is the Administration is bound
by the law of what they must go through. If we went back in
time, I bet you there would be a different discussion going on,
knowing the facts we know today, but we are in this quandary.
We have a bill pending. I know Senator Menendez has. I know I
am a cosponsor, and the whole idea is to partially unwrap this
to get us to the affordability study, get to an affordability
of rates, and then deal with the rate structure, because there
has to be reform. I think the Administrator has made it very
clear. Everyone knows this. We have to have some reform there,
but we have to get to the affordability and also the timetable.
So it is one of these pieces of the legislation that, when you
look at it today, you go, ``Why didn't we'' fill in the blank?
Now we are trying to fill in the blank, but the clock is
working much faster for them to administer versus us
legislatively. There is a pending bill, and we are anxious to
try to find a vehicle to move it. The Senate has a version; the
House has no version as far as we know right now.
So let me say the record will stay open until November 21
for additional questions that Members may have and submit to
the Committee. I do want to thank the panel. Usually we break
panels into two, but we thought because of all the uniqueness
and experiences you all have it was important to have you all
at the table.
Thank you for being here. Thank you for being part of this
hearing. And, again, to Senator Booker and to other folks from
New Jersey and New York that were here, we will have continued
efforts to follow this and make sure we are on the right track
with the expenditures and activity with Hurricane Sandy because
I think it is a good learning opportunity to make sure we
improve our systems.
So thank you all for being here. I appreciate it. The
Committee now is adjourned.
[Whereupon, at 4:33 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
[GRAPHIC] [TIFF OMITTED]