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37–355 PDF 2008

S. Hrg. 110–404

FEMA’S PROJECT WORKSHEETS: ADDRESSING

A PROMINENT OBSTACLE TO GULF

COAST REBUILDING

HEARING

BEFORE THE

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

JULY 10, 2007

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

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

SUSAN M. COLLINS, Maine 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E. SUNUNU, New Hampshire

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY 

MARY L. LANDRIEU, Louisiana, Chairman 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

TED STEVENS, Alaska 

PETE V. DOMENICI, New Mexico

DONNY WILLIAMS, Staff Director 

CHIP ABERNATHY, Minority Staff Director 

AMANDA FOX, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Landrieu .............................................................................................. 1

Senator Stevens ................................................................................................ 3

WITNESSES 

TUESDAY, JULY 10, 2007

C. Ray Nagin, Mayor, City of New Orleans, Louisiana ........................................ 4

Kevin Davis, President, St. Tammany Parish, Louisiana .................................... 5

Henry ‘‘Junior’’ Rodriguez, President, St. Bernard Parish, Louisiana ................ 7

Colonel Perry ‘‘Jeff’’ Smith, Jr., Executive Director, Governor’s Office of 

Homeland Security and Emergency Preparedness, State of Louisiana ........... 17

Bryan McDonald, Executive Director, Office of Recovery and Renewal, State 

of Mississippi ........................................................................................................ 19

Mark C. Merritt, Senior Vice President of Response and Recovery, James 

Witt Associates ..................................................................................................... 21

James Walke, Director, Public Assistance Division, Disaster Assistance Directorate, Federal Emergency Management Agency, U.S. Department of Homeland Security ........................................................................................................ 32

ALPHABETICAL LIST OF WITNESSES

Davis, Kevin: 

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 47

McDonald, Bryan: 

Testimony .......................................................................................................... 19

Prepared statement .......................................................................................... 66

Merritt, Mark C.: 

Testimony .......................................................................................................... 21

Prepared statement .......................................................................................... 71

Nagin, C. Ray: 

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 39

Rodriguez, Henry ‘‘Junior’’: 

Testimony .......................................................................................................... 7

Prepared statement with an attachment ....................................................... 53

Smith, Colonel Perry ‘‘Jeff’’ Jr.: 

Testimony .......................................................................................................... 17

Prepared statement with an attachment ....................................................... 59

Walke, James: 

Testimony .......................................................................................................... 32

Prepared statement .......................................................................................... 75

APPENDIX 

‘‘FEMA, Public Assistance, Louisiana,’’ June 22, 2007, Global Report, submitted by Senator Landrieu ................................................................................ 81

(1)

FEMA’S PROJECT WORKSHEETS: ADDRESSING 

A PROMINENT OBSTACLE TO GULF COAST 

REBUILDING 

TUESDAY, JULY 10, 2007

U.S. SENATE,

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:07 a.m., in 

Room 342, Dirksen Senate Office Building, Hon. Mary Landrieu, 

Chairman of the Subcommittee, presiding. 

Present: Senators Landrieu, Pryor, and Stevens. 

OPENING STATEMENT OF SENATOR LANDRIEU 

Senator LANDRIEU. Good morning and welcome to our Subcommittee hearing on Disaster Response and Recovery. If you all 

would like to come up and sit at the table, that would be fine, our 

first panel. 

I have a brief opening statement and then I would like to turn 

to my Ranking Member, Senator Stevens, and then we will begin 

as expeditiously as possible with our first panel. 

On April 12, this Subcommittee held its first hearing on our 

work monitoring the Gulf Coast rebuilding effort. I told Members 

of this Subcommittee that I wanted to use this Subcommittee to 

tell a story, an important story that needs to be told. I wanted to 

put together a narrative that would clearly illustrate the challenges of rebuilding the Gulf Coast, and in addition, rebuilding a 

stronger and better disaster response and recovery mechanism for 

our country. 

From the onset, it was clear that there were stories State and 

local officials were bursting at the seams to tell. At that first hearing, we heard from several State and local officials who had dramatic stories to tell, and nearly every witness named among the 

most pressing recovery obstacles FEMA’s Project Worksheet process. 

Project Worksheets (PWs), as we have come to know them in 

Louisiana and Mississippi, are a series of maddening forms filled 

out by FEMA based on information submitted by applicants. At our 

first hearing, a witness from the Louisiana Recovery Authority testified, in some cases, 2,680 documents were required for a single 

project. 

2

The Mayor of Waveland, Mississippi, Tommy Longo, testified 

that his city submitted a PW for a sewer system in September 2005 

and that at the time of the hearing on April 12, 2007, only the first 

phase had been approved by FEMA. He went on to say that FEMA 

had a second phase in hand, but because of a continued rotation 

of personnel every 3 months or so, there was a slow exchange of 

information, variances, and decisions between old and new that resulted in delays of as much as 6 months. 

I am sure, based on these panelists, we will hear other similar 

stories. Indeed, every witness on that panel told the story of how 

the PW process is a nightmare, slowing down recovery and making 

it almost impossible. 

I won’t go into the details, but will instead submit the rest of this 

in my statement, but let me just continue on to say, in pursuit of 

an approach to solve this problem, I introduced an amendment to 

the Homeland Security appropriations that would give at least our 

school districts a chance to be reimbursed in a global fashion as opposed to project-by-project, building-by-building, campus-by-campus, in order to help us get the thousands of children in Louisiana 

and Mississippi that want to come home to school and to be a part 

of the rebuilding process, but this particular work order process is 

stopping them, as it is stopping so much of our other endeavors. 

I hope that we can move quickly on this amendment, but that is 

not the purpose of this hearing. 

You will hear from our second panel today that some PWs are 

underestimated by a factor of four to five times compared to the actual cost. The Louisiana State Office of Facility Planning and Control, the Louisiana agency responsible for rebuilding all the Stateowned facilities, has reported that the actual cost of completing 

projects averages four times the original PW estimate. Jefferson 

Parish has reported the costs were two-and-a-half times the estimates, and New Orleans has reported the costs over and above the 

estimates, as well. This puts the burden of proof on localities to pay 

for an independent architect and engineering firm at a time when 

they have precious little money to provide the higher cost estimates, which is based on actual contractor bids, and we are going 

to submit for the record evidence that we have received today to 

back up these claims. 

Additionally, I mentioned earlier in my statement using schools 

as an example, the program prohibits lump-sum global projects 

currently. We would like to see that changed. 

There are opportunities to be found in the wake of disasters. Recovery should be driven by free market and citizens, but government must do their part to stand up critical infrastructure and 

vital services and offer a minimum level of security to people seeking to rebuild. Our government has not met that standard, in my 

view, in the Southeast or Southwest of Louisiana or on the Gulf 

Coast, and hopefully our hearing today can lead us to a better process. 

You will hear today from FEMA that they have ‘‘obligated’’ funds 

for nearly 90 percent of the Hurricane Katrina projects and 61 percent for Louisiana, but this does not tell the whole story and obligated funds does not mean that they are readily available, ready 

to be used, and ready to rebuild the hundreds of libraries, schools, 

3

police stations, fire stations, and other infrastructure that is critical for these parishes to stand up from a catastrophic disaster. 

What you will understand after this hearing, I hope, is that obligated means that in terms of FEMA’s view, Congress has appropriated the money and they have it on the ready. The problem is 

that they have estimated the cost of many of these projects to be 

two and three or four times lower than it will actually cost to rebuild. 

So I am looking forward to the witnesses today to build an argument and a case for a new approach, a better approach. We have 

gotten some very specific suggestions from these officials and I am 

looking forward to questioning them, as well as the FEMA officials, 

throughout the morning. 

Let me turn now to my Ranking Member, Senator Stevens, and 

thank him. As I said in earlier meetings, he has a lot of experience 

with disasters that have occurred in Alaska. He has been on the 

forefront of some change and reform and I hope that this hearing 

will give us all, and my colleague from Arkansas, an opportunity 

to make the system better. Senator Stevens. 

OPENING STATEMENT OF SENATOR STEVENS 

Senator STEVENS. Thank you very much. I am particularly interested in the Project Worksheet process. These worksheets are apparently the key to the reconstruction process and I am hopeful 

that we are going to have some time to ask some meaningful questions about what has happened to this Project Worksheet process. 

Other than that, I thank you for the hearing and look forward 

to witnesses. Thank you very much. 

Senator LANDRIEU. Thank you. Senator Pryor. 

Senator PRYOR. I don’t have an opening statement, Madam 

Chairman, but thank you again for keeping our focus and attention 

on this very important issue. 

Senator LANDRIEU. Thank you. 

Then let us begin with our first panel. Let me introduce them 

briefly and then I will ask them to speak in the order that they 

are introduced, and I thank them for being available, taking time 

from their busy schedules and tasks of rebuilding their parishes 

and their regions. 

First, Mayor Ray Nagin from the City of New Orleans. He has 

worked for many years to resolve some of the city’s most persistent 

problems. Prior to becoming Mayor, Mr. Nagin served as General 

Manager of Cox Communication in Southeast Louisiana. He has 

had to fight to get assistance to the people of New Orleans and he 

continues that fight today. 

Our second witness will be Kevin Davis, President of St. Tammany Parish, also one of the hardest-hit parishes. Mr. Davis was 

elected in January 2000. His efforts to streamline the St. Tammany 

Parish Government are well respected and well known and he has 

made major contributions to the improvement of the parish. 

President Henry Rodriguez, Junior Rodriguez as we know him, 

from St. Bernard Parish has served in local governments since 

1976. He was first elected to the Police Jury, where he remained 

for 16 years. He has battled to basically lead the effort of a parish 

that was virtually completely destroyed, 67,000 people that are 

4

1The prepared statement of Mr. Nagin appears in the Appendix on page 39. 

anxious to return and build homes stronger and better, so I look 

forward to your testimony, Junior, as well. 

Let us begin with Mayor Nagin, and please understand, your testimony has been received and recorded, if you would like to summarize it or read it. I would ask each of you to limit your opening 

remarks to 5 minutes. Thank you. 

Mayor Nagin, please begin. 

TESTIMONY OF C. RAY NAGIN,1 MAYOR, CITY OF NEW 

ORLEANS, LOUISIANA 

Mr. NAGIN. Good morning to this Subcommittee. I am C. Ray 

Nagin, Mayor of the City of New Orleans and I am honored to be 

here this morning to testify to Chairman Landrieu, Ranking Member Stevens, Senator Pryor, distinguished Members, and guests of 

the U.S. Senate Ad Hoc Subcommittee on Disaster Recovery of the 

Committee of Homeland Security and Governmental Affairs. Thank 

you for calling and inviting us today to talk about this very important aspect of any recovery, and that is FEMA Project Worksheets. 

We have had a persistent area—this has been a persistent area of 

difficulty and challenge for all of us, and all of my colleagues in the 

disaster areas. 

As I begin my testimony, I would like to thank you in Congress 

for your tremendous support for our region over the past 22 

months. You have ensured that attention remains focused on New 

Orleans and the entire region so drastically affected by the hurricanes of 2005. I would also like to once again thank the American 

people and people all over the world for their generosity and support. 

As I begin my testimony, while the Federal Government has appropriated significant resources for our recovery, as I have mentioned many times, these dollars have been very slow to reach local 

governments and the citizens who need them. As has been the 

topic of much discussion in the past, we have found ourselves 

locked in a cycle of futility in certain respects and the need of needing money to undertake projects so that we can seek reimbursements for work that has been undertaken. 

To ensure that we have done everything to help ourselves, right 

after the disaster, we changed some laws to permit the city to borrow more than $30 million from other departments and other 

projects to begin critical projects related to public safety. We focused our efforts on public safety because those were our most critical needs at the moment, such as police, fire stations, and we were 

able to bring back our criminal court buildings at Tulane and 

Broad in June 2006, less than a year after the flooding. 

Today, we continue to maintain a very cautious balance of very 

limited general fund dollars as we continue to stand up our economy. My finance team has worked with national advisors, and recently we came up with a 5-year plan, a budget plan, that keeps 

costs in line with spending and assuring responsible management 

of our Community Disaster Loans (CDLs). Wall Street has acknowledged this, our prudent use of our limited dollars, and reVerDate 0ct 09 2002 10:18 Jun 13, 2008 Jkt 037355 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 P:\DOCS\37355.TXT SAFFAIRS PsN: PAT
5

1The prepared statement of Mr. Davis appears in the Appendix on page 47. 

cently upgraded our investment grade bonds from ‘‘junk’’ status to 

‘‘stable’’ status. 

Perhaps more importantly, our residents, ladies and gentlemen, 

are definitely coming home. After the floods, I set an aggressive 

goal for New Orleans to return to 75 percent of our pre-Hurricane 

Katrina populations. We now sit at about 64 percent and gaining, 

meaning that our population is somewhere around 300,000 people 

compared to the 455,000 pre-Hurricane Katrina. 

Despite the hard work and creativity of our dedicated staff, we 

have run into many difficulties, and the biggest problem that we 

have is the Robert T. Stafford Act. The Act functions as a reimbursement program where a community like mine that has been totally devastated does not have the resources to adequately start 

projects and do them well. 

Now, recently, we have had some very positive movement in our 

relationship with FEMA and I would like to congratulate the recent staff and Gil Jamison for his hard work. But we are asking 

that as you consider changes in the Stafford Act, that there be a 

new category for catastrophic events that would allow a government to be in a position to have funds advanced to them so that 

they can start the meaningful work that they are needing. 

And another point I will make as my time expires is that there 

is a national standard called RSMeans, which basically sets estimates, reasonable estimates for what it would cost to reimburse a 

particular community for a disaster such as ours, and those calculations were not done accurately on the outset. So we had many 

Project Worksheets that were under-valued, and we continue to 

fight the under-valuing, and until we get the dollars appropriated 

at reasonable levels, we cannot start the work. 

So I thank this Subcommittee, and my time is up, and I will be 

more than happy to answer any questions that they have. 

Senator LANDRIEU. Thank you, Mr. Mayor. President Davis. 

TESTIMONY OF KEVIN DAVIS,1 PRESIDENT, ST. TAMMANY 

PARISH, LOUISIANA 

Mr. DAVIS. Good morning. Thank you, Chairman Landrieu, 

Ranking Member Stevens, and Senator Pryor. First, thank you for 

the Federal aid to help the Gulf Coast region recover from the 

worst natural disaster in American history. I also want to thank 

you for the opportunity to be here before you today. 

It has been almost 2 years since Hurricane Katrina’s storm surge 

and winds brought massive damage to our community. I hope my 

testimony will be constructive and assist in future recovery efforts. 

I wanted to quickly give you the background for the issues I 

would like to address. St. Tammany Parish is north and east of Orleans Parish. My parish is about 850 square miles of which 57 

miles are coastline. The northern half is rural and the southern 

half is a mix of urban and suburban. Drainage is provided by our 

rivers, streams, and bayous. The eye of Hurricane Katrina passed 

over eastern St. Tammany Parish. The storm surge was 20 feet 

high at its peak. 

6

It extended for over 50 miles and came inland for over seven. 

Over 48,000 homes were damaged. Every roadway was blocked. 

Our natural drainage system was clogged by downed trees. All utilities were destroyed. All bridges into St. Tammany from the south 

shore were incapacitated immediately after the storm. Seven 

square miles of marshland was pushed into towns and subdivisions 

south of I–12. Hurricane Katrina created 6.8 million cubic yards of 

debris, over 90 percent of which were trees. 

This was our situation when we began working with FEMA and 

the Public Assistance process. The primary problems we faced related to a lack of trained and qualified representatives from FEMA 

on the ground, as well as the inability of local FEMA representatives to make decisions regarding Project Worksheets. The disaster 

specialists fiscal year assigned to the parish have, for the most 

part, been inexperienced and not knowledgeable regarding the 

laws, memorandums and rules, and other policies of FEMA regarding Hurricanes Katrina and Rita. Inconsistent rulings finally forced 

me to sue FEMA in Federal Court. We did not want to take this 

step but were forced to do so to protect our citizens. 

The eye of Hurricane Katrina stripped dozens of acres of marshland from the lake and deposited the mud and grass into homes, 

roads, canals, especially in the Coin Du Lestin area. Homeowners 

cleaned and scrubbed their homes and possessions. The parish contractor hauled away debris in the roads, but to this day, parts of 

the bayous are so full of debris that you can almost walk across the 

water. 

FEMA dictated that we could only remove specific debris out of 

the canals. One was a car. The second was a part of a house, and 

another was a boat. FEMA officials arbitrarily decided what could 

and could not get done to clean this area. In no way were we able 

to dredge. That was a forbidden word. We bid the project three 

times, at FEMA’s request, without succeeding in cleaning these canals. FEMA wanted to manage a response, as well as audit the results. 

I believe that to improve emergency assistance in our country, 

we must resolve this conflict within FEMA’s own mission. FEMA 

has roles that are not compatible. FEMA primarily operates as a 

regulatory bureaucracy. During crisis, FEMA changes to an action 

organization, and then within days it reverts back to a regulatory 

agency. By its very nature, it cannot manage a chaotic situation. 

In a crisis, flexibility and the need to think quickly and creatively 

are essential. 

We recommend FEMA be defined as a regulatory bureaucracy. 

Give the responder’s job to an agency such as the National Guard. 

While the National Guard is a large agency, it is built for action. 

FEMA is a bureaucracy built for regulation. FEMA’s role, I would 

argue, is to provide regulatory oversight without managing the situation. FEMA does an excellent job of auditing its grantees. Why 

not ask FEMA to do what it does best, the oversight of FEMA-supported programs. 

FEMA and local governments need more training than is now 

given. Almost every conflict that we had can be traced back to a 

lack of basic training in the law and its roles and regulations. Rule 

interpretation varies significantly from one jurisdiction to another. 

7

1The prepared statement of Mr. Rodriguez with an attachment appears in the Appendix on 

page 53. 

This is evident in a lawsuit we filed to clean Coin Du Lestin area. 

St. Tammany Parish cannot even use the word ‘‘dredge,’’ but Biloxi 

Bay is being dredged. The action of dredging is approved in one 

area while the word alone is forbidden in another. This is a result 

of the lack of training. Many good and hard-working people have 

come to St. Tammany Parish as FEMA employees. Sadly, in many 

cases, they were not given the training or the tools to do their jobs 

well. 

FEMA should, like other Federal agencies, have well-trained 

FEMA personnel stationed permanently in those States that are at 

risk for disasters. This would enable FEMA to be part of a planning prior to any disaster. This would enable the same personnel 

to train State and local officials on the programs, policies, procedures, and management issues related to disaster response and 

funding. Both FEMA and local government would be operating 

with the same set of operational protocols with the trust built by 

working together during good times as well as bad. 

Well-trained FEMA personnel on the ground should have more 

authority to make significant decisions. If that is not possible, 

those at the regional and national level need to expedite their efforts during and following major disasters. 

I want to thank you for the opportunity to speak with you today 

and for the help you have given my community. I also want to commend the many men and women who have come to St. Tammany 

as part of the FEMA bureaucracy and did their best to help us. I 

hope that my recommendations will assist you in your efforts to improve emergency response in our Nation. Thank you. 

Senator LANDRIEU. Thank you, President Davis. President Rodriguez. 

TESTIMONY OF HENRY ‘‘JUNIOR’’ RODRIGUEZ,1 PRESIDENT, 

ST. BERNARD PARISH, LOUISIANA 

Mr. RODRIGUEZ. Thank you, Senator Landrieu, Senator Pryor, 

and Senator Stevens. It is an opportunity and a privilege to be here 

today and I would hope that you would take into consideration our 

frustrations because this is frustrating. After 2 years, gentlemen, 

we are still in the same shape that we were prior to. 

Obviously, St. Bernard Parish is the only parish that was entirely destroyed. There were not five homes out of 26,500 residences that you could live in. There were no services, but you could 

stay in them. Sixty-seven-thousand-five-hundred people were displaced overnight, displaced without a home and without a job, 

without an opportunity to make a living. Our tax base went down 

to zero. Our infrastructure was totally destroyed. We are coming 

back relatively slowly. 

FEMA has been a problem. One of the issues that I always say 

is that we got by Hurricanes Katrina and Rita. I don’t know if we 

are going to get through FEMA. This is one hell of a catastrophe. 

I don’t know if this country can continue to afford FEMA. There 

are some major decisions that have to be made. 

8

But one of the big issues is lack of experienced personnel. People 

don’t seem to have the expertise they need to make the decisions 

that they have and that would be beneficial to the parishes. I 

thought that we had to help, not hinder. Incorrect information—

FEMA’s representatives would provide different—once you have a 

representative and you talk to that representative and he gives you 

some—he makes a decision, and in one case, I will just give you 

a particular instance. We are talking about sewer plants that everything was in it. We had consolidation in mind of our sewer 

plants prior to, and what happened is the hurricane came, so when 

FEMA came in, we said it was cheaper, less cost to consolidate the 

program. 

Well, the first gentleman that came in, the first representative, 

he said that sounded like a good idea and it could be done. This 

is a PW, gentlemen. This is the first one our parish worked on. 

FEMA writes these PWs. Now, this PW, the next gentleman that 

came in, he said, no, we are not going to do it as an improved 

project. We are going to do it as a least-cost alternative. This is 

down the drain. You have to rewrite it. 

Now, the cost involved in this situation actually is 50 percent 

less than the cost that our engineers told them it would cost to put 

these plants back in operation. We figure at the St. Bernard Parish 

we have about $564 million that FEMA has said, this is what the 

cost is going to be. They have underestimated so bad that we figure 

it is going to be over $1 billion. This project alone here took up to 

14 months, and then for somebody to come in and tell you that is 

not where you should go. You have to rewrite a version for this. 

Versions take up to 8 months. That is 12 months. 

We are in a situation where we should be setting an example for 

people. Infrastructure is what local governments need to get back, 

and Senator Landrieu, you made a statement with regard to school 

districts being a priority. I understand that, and I am thankful and 

I appreciate that. But it does no good to put the priority on the 

schools if we can’t get the sewer for the schools, if we can’t provide 

access to and from the schools. The local government needs to be 

able to put these infrastructures and these facilities back in order, 

and as of today, I mean, we haven’t—we are still working out of 

trailers. 

We are in no better shape now than we were 2 years ago, and 

unfortunately, that is not acceptable. How can we as a government 

tell our people that they need to board their houses, they need to 

gut their homes, they need to clean their yards, when we as a government don’t set an example? We should be setting an example. 

People don’t want to hear that it is FEMA. They look at the local 

officials and local government. Thank you. 

Senator LANDRIEU. Thank you very much. 

I have just a couple of questions to each of you, and if you don’t 

have them, if you could submit them to the record. But I think it 

would be helpful to know what percentage of your homes have access to clean drinking water to date and electricity and sewer. I 

don’t know, Mayor, if you want to start, a percentage. If you could 

give even a rough estimate, is it 80 percent? One hundred percent 

of the city? And then, I think, President Davis and then also President Rodriguez. 

9

Mr. NAGIN. As far as what percent of the homes have access 

to——

Senator LANDRIEU. Electricity, water, and sewer. 

Mr. NAGIN. For the most part, just about the entire footprint of 

the City of New Orleans, the utilities have been restored. But Senator, I must tell you that we have patched the systems up. There 

have been very few permanent repairs made to our systems, so we 

have challenges. 

For example, on the sewer side, we have made, I want to say 65 

or 66 pumping stations related to sewer. Just about every one of 

those pumping stations have temporary diesel-generated power to 

them, and it is very tenuous. It is very fragile. 

And the water system is the same way, and I will give you another quick example on the water system. We have three intake 

pump stations where we take water from the Mississippi and convert it into drinking water. Two of those stations broke and we 

were down to one. The only thing that saved us is that the river 

was at such a height that we had another dormant station that we 

activated until we got the second one fixed. So because the Project 

Worksheets have not been done adequately and appropriately we 

are at a very tenuous situation. 

Senator LANDRIEU. President Davis. 

Mr. DAVIS. Senator, yes. Pretty much it would be the same scenario in St. Tammany. We do have availability of all utilities at 

this point. Several of our sewer facilities, though, are operating but 

they are not operating what they should be as they were prior to 

Hurricane Katrina and they still need additional work. 

Senator LANDRIEU. President Rodriguez. 

Mr. RODRIGUEZ. Our water situation, we have 100 percent of our 

parish back with our water, but, of course, the parish took care of 

their own water issue. We could not wait for FEMA. We used the 

little reserve funds that we had and we got our water system back. 

The sewer system is still a major issue. At the present time, we 

have one of the stations back, which is a very small one. We have 

an oxidation pond that is working, but the rest in Monster and 

Drabo, those two plants are only back to 25 percent. We have 92 

lift stations. Of those 92 lift stations, there still hasn’t been any 

work done on those because of the PW process. 

However, we have been able to put some pumps, we rented some 

pumps to put in those lift stations to get the water to the processing plants. However, we still are dependent upon vacuum 

trucks. Now, gentlemen, these vacuum trucks, that is what I don’t 

understand. That is the situation that kind of disturbs me and how 

we waste money. We have spent so far, we are going to spend $60 

million on vacuum trucks and suck the sewer out of these manholes and bring it to the Riverbend oxidation pond. That $60 million, had you taken care of business with this, could have been 

spent on redoing our processing plants. There is something wrong 

with this process that we are going through, gentlemen. It is the 

tail wagging the dog. It is just not correct. Something is wrong. 

Senator LANDRIEU. And I want to just clarify for the record, and 

then I have one more question and then we will pass it to our 

Ranking Member, that to date in St. Bernard Parish, FEMA is reimbursing the parish for vacuuming out the sewage and transVerDate 0ct 09 2002 10:18 Jun 13, 2008 Jkt 037355 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\DOCS\37355.TXT SAFFAIRS PsN: PAT
10

porting it by truck, which is what is being testified today to, rather 

than providing that much money or less to redo a sewer system because of bureaucratic inadequacies, inefficiencies, and downright 

stupidity, in my opinion. So the taxpayers are going to pay maybe 

double, maybe triple eventually. So this hearing isn’t about spending more money, it is spending less money and spending it smarter. 

Could one of you, any of you—and if not, submit it to the 

record—talk about the error made in this RSMeans estimate. Does 

anybody know what RS stands for? I know I could ask this question of FEMA. But there is some mathematical calculation that was 

made for all of you initially that was then deemed to be wrong and 

those calculations had to be redone. Do any of you want to testify 

to that? 

Mr. NAGIN. Yes. It is my understanding that RSMeans is a company that does estimates for different localities as to what it would 

cost to either rebuild a home or commercial structure or build one 

new, and that is part of the calculations that FEMA uses to estimate what it would cost to repair a public facility. Well, it is our 

understanding that there were some errors made in those formulas 

and it caused FEMA to have to—I guess about a couple of months 

ago—go back and recalculate thousands of PWs because of this 

error. It is also my understanding that RSMeans as a company had 

to come in and do a seminar to go over that with some FEMA representatives to get that straightened out. 

Senator LANDRIEU. OK. We will get more information from 

FEMA to you. President Davis, can you describe why FEMA continues to tell you that dredging the bayous in your parish, which 

run pretty much throughout the whole parish, why is it not in their 

jurisdiction to get them dredged to pull up any debris, etc., meanwhile dredging, you said, the Biloxi Bay, which is in a different jurisdiction of FEMA? 

Mr. DAVIS. Right. Senator, I am embarrassed to tell you I really 

don’t know why. We have been, as I stated earlier, we actually with 

FEMA’s guidance bid this particular project under the PWs three 

times. The last time was to remove the marsh grass. What is interesting is they have written a PW to remove marsh grass off of personal property. They have written a PW to remove marsh grass off 

of our roadways, which we have done. But they won’t write a PW 

for marsh grass in these drainage canals. That is why I was forced 

to file a Federal suit in New Orleans to ask them to hopefully rule 

on our side to have it dredged. 

You made mention of Biloxi Bay. I read with great interest that 

they announced they were dredging that area under FEMA’s rules 

that they could dredge it. So that is the reason for the suit. 

Senator LANDRIEU. OK. Thank you. 

Mr. NAGIN. Senator, if I could illuminate one point, it seems as 

though there were certain members of FEMA’s organization that 

would get into great debates with us as local municipalities about 

what was preexisting conditions, and there were many arguments 

about whether a rusted pipe in the sewer system was there before 

Hurricane Katrina. We have made case after case to prove to them 

that the system was working prior to Hurricane Katrina. Hurricane Katrina hit us and then something happened that caused it 

not to work. The same thing with streets. Tons and tons of pounds 

11

of water were on our streets for many weeks, and it is not until 

recently that FEMA acknowledged that Hurricane Katrina had 

something to do with that and now we are writing PWs. 

Senator LANDRIEU. Thank you. Senator Stevens. 

Senator STEVENS. I am fairly concerned about the continued conflict between the local authorities and FEMA and the process of 

litigation, which takes years, to try and solve those problems. Have 

you tried to set up an arbitration system between the Federal 

agencies and the agencies involved in Hurricane Katrina reconstruction? 

Mr. DAVIS. Yes, sir, Senator Stevens. The problem is that we did 

file an appeal. We followed the rules, the Federal guideline rules. 

We filed an appeal, but that may take 6 to 9 months, or 12 months, 

they tell me, to get through that process. I needed an answer faster 

than that because we are in hurricane season, so I filed a Federal 

suit. 

Senator STEVENS. But you really need arbitration somehow. 

Have you sought to get these things arbitrated rather than go 

through lawsuits? 

Mr. DAVIS. Yes, sir. We filed the documents to appeal their decision, but that will take 9 months to a year to get that appeal, or 

that arbitration. 

Senator LANDRIEU. And it is my understanding, Senator, that 

there is no official arbitration process. In other words, they can appeal to FEMA, but FEMA monitors their own appeals, and after 

you have an appeal, there is no ultimate objective, independent entity. It is basically up to FEMA, is my understanding. 

Mr. DAVIS. Yes, that is right. 

Senator LANDRIEU. So it is a never-ending appeals process with 

no justification, I guess, or no fairness on the part of the local governments who may have disagreements about cost, etc., is my understanding. 

Mr. DAVIS. That is correct. 

Mr. RODRIGUEZ. And actually, Senator, the person that you appeal to—are the same people that turned you down. So that really 

needs to be adjusted. 

Senator STEVENS. Is the argument primarily over money? 

Mr. RODRIGUEZ. As far as I am concerned, the argument is, Senator, why do I have to prove to anybody that I was totally devastated? Why? I thought FEMA was there to help us, not hurt us. 

Senator STEVENS. Is it money? 

Mr. RODRIGUEZ. Yes, sir. Money is the bottom issue. 

Senator STEVENS. Are there arguments over money? 

Mr. RODRIGUEZ. Yes, sir. Money is the primary issue. If we had 

the money, we wouldn’t be here talking to you. We wouldn’t be asking FEMA for anything. We go on about it and take care of our own 

business. But as the parish is totally devastated, tax structure 

down to zero—we were at zero. From $50 million budget a year, 

we are down to $20 million. Yes, sir, it is all about money. If we 

had the money, we wouldn’t be sitting here. But what we don’t understand and what we are frustrated about is we continue to have 

to prove that we were devastated, that we were hurt, that we were 

damaged. 

12

Senator STEVENS. Mr. Davis, how about you? Is the argument 

about money? 

Mr. DAVIS. Yes, sir, certainly, it would be. This particular project 

that you are asking about, the last bid to remove the marsh was 

$14 million. Local government doesn’t have those funds. 

Senator LANDRIEU. I think what the Senator is asking, are the 

discrepancies, the arguments on the Project Worksheets, about an 

argument over what the projects will cost more or less, and I understand from the documents that there might be as much as a 40 

to 50 percent discrepancy between FEMA’s estimates——

Mr. RODRIGUEZ. Yes. 

Senator LANDRIEU [continuing]. Of what it would cost to do the 

job and their estimates. 

Mr. DAVIS. Senator Landrieu, if I could real quick, they wrote a 

PW on this project for 130 cubic yards. We believe that there could 

be as much as a half-a-million cubic yards, and they agreed and we 

actually bid that project, which came in at $14 million. They called 

me and said, ‘‘Don’t do that.’’ We rebid it and we are doing it for 

$24,000—the FEMA person is on the ground with us and we can 

only remove certain items that they tell us while we are on the 

ground. 

Senator STEVENS. Well, it seems to me that what you need is an 

arbitration process. We had one during the earthquake recovery in 

1964 and it was a Presidential appointee, as a matter of fact, that 

came in and just resolved the differences, and the Federal Government, the State governments, and local governments had to live 

with the decision. I think you need some arbitration. I don’t know 

whether you need one arbiter for the whole situation, but it does 

seem to me that there ought to be an arbitration process. The judicial process is not meant to solve differences in money between estimators——

Mr. DAVIS. I agree, Senator. 

Senator STEVENS [continuing]. And it has to be an arbitration 

process. 

Senator LANDRIEU. I think that is an excellent suggestion. Any 

additional questions? 

Senator STEVENS. No. Thank you. 

Mr. RODRIGUEZ. I would hope that it would be a Congressional 

arbitration process. 

Senator LANDRIEU. Well, since Congress is appropriating the 

money for this recovery, that is exactly the direction we may have 

to go in that direction. 

Mr. RODRIGUEZ. You need to see how your money is being spent. 

Senator LANDRIEU. Senator Pryor. 

Senator PRYOR. Thank you, Madam Chairman. 

I have a question for each of you. I will start with you, Mayor. 

It is good to see you again. Thank you for being here. 

Mr. NAGIN. Good to see you. 

Senator PRYOR. I hate to ask it this way, but how much face time 

do the three of you get with senior FEMA and DHS people? Do you 

deal with them or with lower-level folks that are assigned to New 

Orleans and Louisiana? Are they there full-time? I would like to 

get a feel for how much time you spend with them. 

13

Mr. NAGIN. Well, it is a multi-layered organization, so it depends 

upon what is your definition of senior FEMA people are. The most 

senior person that I deal with on at least a monthly basis is Gil 

Jamison, who is a fairly high-ranking person. But to be honest with 

you, my perception of dealing with him is that he has difficulties 

with his own organization, trying to make sure that arrangements 

and agreements that we make and the direction that we set is filtered through and carried out at the lower levels of FEMA. So 

there is some disconnect there. 

Senator PRYOR. Is it your impression, Mayor, that is a bureaucratic problem, or is it a resistance within FEMA that they just 

don’t want to be helpful, or is it a money issue, or what is that? 

Mr. NAGIN. I think it is a bureaucratic issue, and I also think 

that the Stafford Act is written with so much flexibility in it that 

it leaves room for various interpretations, and then interpretations 

change over time. 

Senator PRYOR. Yes. Looking at the Stafford Act, to me, it seems 

like you want it to be flexible——

Mr. NAGIN. Yes. 

Senator PRYOR [continuing]. Because you want discretion. However, that flexibility may also cause confusion, and it sounds like 

you have had a lot of that in Louisiana as you have tried to work 

through this process. Is that fair to say? 

Mr. NAGIN. That is fair to say, and I think it goes back to the 

point that all of us are making. There needs to be more trained individuals inside of FEMA, pre-trained, pre-positioned, and there 

needs to be a consistency. Every couple of months, we seem to have 

dealt with a different FEMA representative and we almost had to 

start from scratch every time the new person came in. 

Senator PRYOR. Mayor, is there a FEMA team of people that are 

there full-time and have been there for the last 2 or 3 years? 

Mr. NAGIN. No, not any consistency that I have seen. 

Senator PRYOR. OK. Have you seen anything different? 

Mr. DAVIS. No, Senator. In St. Tammany Parish, I actually have 

a liaison person there who now has been there for months, but that 

was not the case earlier. I have a lot of respect for Mr. Jamison, 

as the Mayor spoke about. It seems like when I do meet with him, 

I seem to get things moving. 

Mr. NAGIN. Yes. 

Mr. DAVIS. But I get the impression that they want—I have to 

go through my field personnel, and it may take weeks, and they 

want to know particularly exactly what do we want to talk to Mr. 

Jamison about, and I don’t know if he gets those messages a lot 

of times, so it is a little frustrating. 

Senator PRYOR. So President Davis, are you saying that you have 

trouble getting time with Mr. Jamison? You can’t just pick up the 

phone and——

Mr. DAVIS. No, sir, I can’t pick up the phone and call. 

Senator PRYOR. You don’t have a regular meeting scheduled with 

him? 

Mr. DAVIS. No, sir. 

Senator PRYOR. The reason you can’t just pick up the phone and 

call him, seems to be more on the FEMA end, not on your end. Am 

14

I correct in thinking that you would like to talk to him more frequently? 

Mr. DAVIS. Yes, sir. 

Senator PRYOR. What about you, President Rodriguez? 

Mr. RODRIGUEZ. I would like to talk to anybody that could give 

me a definite answer. 

Senator PRYOR. Right. 

Mr. RODRIGUEZ. That is one thing you can’t do with FEMA, is 

you can’t get anyone to give you anything in writing. Nobody will 

give you a definite answer. One of the problems that you have with 

regard to this is we are talking about contracts. We have contractors that will not bid on processes anymore. They will not bid on 

any projects because of the inability to get their funds through the 

FEMA PW process. 

A typical example is the last contract that I had—the vacuum 

truck service for St. Bernard Parish—didn’t even bid on the last 

contract, refused to bid. We have contractors that are owed $4 or 

$5 million. I am talking about small subcontractors in the parish. 

We have a number of contractors in the parish that have gone out 

of business because of the inability of this, and that is what is driving the cost up. They are telling you we are not bidding, and if we 

do, we are going to have to drive the cost up to take care of business. We have one contractor that is paying $9,000 a day on money 

that he has borrowed. 

Senator PRYOR. OK. This is a contracting process, and normally 

when there is a contract, there is some assurance that the contractors will be paid. Do they not have that type of contract here? 

Mr. RODRIGUEZ. Not to my knowledge. There is no assurance of 

anything with FEMA that you are going to get paid. The only thing 

consistent about FEMA is the inconsistency. This is a typical example right here, this voluminous work that was done, and then the 

next gentleman that comes in says, no, we can’t do it like that. We 

have to do it another way. 

Senator PRYOR. President Rodriguez, let me ask you about 

FEMA. Is it your impression that they are resistant to help you, 

or is it more of a competence issue with FEMA? 

Mr. RODRIGUEZ. I think, without using some special adjectives, 

I think it is a combination of both, lack of experience and competency and inability to make decisions based on a consistent issue. 

One of the things that they don’t do is they don’t listen to the local 

government engineers and officials that tell them that know exactly what it is going to cost or can give them a much better picture of what it is going to cost. 

Let us take the canals, for instance. He is exactly correct. I don’t 

know, it is hard for me to explain to you, but its been 2 years and 

I have a fishing industry in my parish that cannot go back to work 

because our canals haven’t been cleaned. The same issue with St. 

Tammany, pick up the debris. To pick up the debris, you have to 

get a barge in there, so you have to clean the canal to get the barge 

in. Basically, this is an area of stupidity because what they are 

doing, it is a double layer and they are spending your money twice. 

Gentlemen, I will just tell you this. In 1965, when Hurricane 

Betsy hit, the Corps of Engineers had our canals cleaned. FEMA 

has NRCS doing this job. NRCS should be inside the levee systems. 

15

The Corps should be outside, not the Coast Guard. The Coast 

Guard is a regulatory unit. They shouldn’t be having to do it. They 

don’t actually know what they are doing. 

I hate to tell you, because I am getting so frustrated. It is frustrating. I don’t even want you to come down to see some of the 

problems and issues because there is no sense in you getting heartburn, too. But it is just pure ignorance on some people’s part. We 

had a FEMA person that was from Idaho that was looking at one 

of our main fishing areas, and it was fully clogged with grass and 

she says, ‘‘That was never a canal.’’ Now, I could stand right there 

and then 50 feet away there is a guy that used to have a dock, used 

to have a home, and he used to have a boat. Well, his boat is a 

65-foot double-rigger. The boat is there. What I asked her was, 

‘‘Honey, if you don’t think this was a canal, how do you think this 

gentleman got this boat in? Although the boat is not usable anymore, and it is half there, do you think this guy airlifted his boat 

from here to the lake?’’

Those are the kind of angry things that you have to put up with 

that are so frustrating. In 1965, Hurricane Betsy hit in September 

1965. Gentlemen, by December, we were enjoying Christmas. Our 

canals were cleaned. Our parish was cleaned. Everybody had their 

homes built. And you know what? All we had at that time from the 

government was a SBA loan. But they didn’t require that you give 

them an arm and a leg or your property. You didn’t have to do all 

of that. And you were forgiven $1,800. But by Christmas, we were 

back and enjoying Christmas. We had no FEMA and no Federal 

flood insurance. Does that tell you something? We had no DEQ, no 

EPA. All of these agencies are a problem. You have a catastrophe. 

One of the biggest jokes is the one that is concerned with historic 

preservation. Now, you talk about a joke. That is a joke and a half. 

I don’t care what was historic about that. It is totally destroyed 

now. What am I going to do with it? It is still an eyesore. It is a 

problem. It is a health hazard. But that is one of the things they 

are telling us in the canal, that it is historic. If a board is connected to an old bulkhead, that is historic. The historic part about 

it is how ignorant it is to make that decision. That is historic. 

Senator PRYOR. Thank you, Madam Chairman. 

Senator LANDRIEU. Thank you. I think the Mayor wanted to add 

to something, and then we are going to move to the second panel. 

Mr. NAGIN. Well, I was just going to add a point to give the Senators a specific example of the undervaluation of a specific project. 

We have in Congo Square a performance venue called the Mahalia 

Jackson Performance Theater. It was severely damaged during 

Hurricane Katrina, roof damage as well as about eight feet of 

water. FEMA’s initial Project Worksheet was valued at $3 million 

to repair this facility. Our staff thought it was going to be in excess 

of $6 million based upon our local knowledge. FEMA held that 

valuation up until recently, and now the valuation is over $8 million. But almost 2 years has gone by and we still haven’t been able 

to start construction in a city that values culture, and it probably 

will be our only cultural institution that we can open and hold 

venues for our opera, jazz, orchestra, and so be it. 

Senator LANDRIEU. Any other final comments from you, President Davis? 

16

Mr. DAVIS. No. Thank you, Senator. 

Senator LANDRIEU. OK. I would just like to conclude by saying 

that I most certainly, as the Chairman of this Subcommittee, believe that it is the private sector that will rebuild and nonprofits, 

community-based civic organizations that will be part of the rebuilding, but none of that is possible without basic government infrastructure—sewer, drainage, clean canals, police and fire stations, libraries, schools, etc. Even the strongest and greatest businesses cannot function in a place where regular government services are not readily available. And what is stymieing this recovery 

is not the will of the people, it is the bureaucracy of the government. 

Finally, I will say—and we are going to plow through this—this 

parish President has had his parish destroyed not once, but twice, 

once in 1965 with Hurricane Betsy and then once in 2005 with 

Hurricanes Katrina and Rita. He has testified on the record——

Mr. RODRIGUEZ. Don’t forget we got Hurricane Katrina and then 

we got Hurricane Rita. 

Senator LANDRIEU. Yes, I said Hurricanes Katrina and Rita. He 

has testified on the record that after 1965, by Christmas, their parish was basically back up and rebuilding. It has been 2 years. It 

will be not the first Christmas, but the second Christmas, and we 

still can’t get these drainage canals dredged. We have a major 

problem. 

So thank you all. We are going to continue to get to the bottom 

of it and we will see the second panel in a minute. 

Mr. NAGIN. Thank you, Senator. 

Mr. DAVIS. Thank you, Senator. 

Mr. RODRIGUEZ. Thank you, Senator. 

Senator LANDRIEU. All right. I am going to introduce the second 

panel and we will begin in the order that they are introduced. 

Colonel Jeff Smith is Acting Director of the Governor’s Office of 

Homeland Security and Emergency Preparedness, and that would 

be the Governor of Louisiana. He assisted in coordinating the State 

of Louisiana’s response to Hurricanes Katrina and Rita. He has 

also been involved in recovery and response from several other 

Presidentially-declared disasters. He is a Certified Public Accountant and has his own firm, and he has served the maximum years 

allowed with the Louisiana National Guard. 

Next, we will have Bryan McDonald, Director of the Mississippi 

Governor’s Office of Recovery and Renewal. Mr. McDonald is responsible for leading the team charged with coordinating the 

State’s Hurricane Katrina response and recovery. Prior to joining 

that office, he served as Mississippi’s Director of Recovery Accounting Oversight. And prior to that, he worked to provide Hurricane 

Katrina assistance to governmental and nonprofit applicants under 

the Stafford Act. 

Finally, we will have Mark Merritt, Senior Vice President for 

Crisis and Consequence Management at James Lee Witt Associates. Mr. Merritt has been the Project Manager for James Lee Witt 

Associates’ efforts in Louisiana. He has developed and delivered 

training programs for local emergency responders for numerous 

government officials, so he brings a wealth of experience from the 

private sector now to this endeavor. 

17

1The prepared statement of Colonel Smith with an attachment appears in the Appendix on 

page 59. 

Colonel Smith, we will start with you, and please limit your testimony to 5 minutes, the same for all of you, and then we will get 

into questions. Thank you. 

TESTIMONY OF COLONEL PERRY ‘‘JEFF’’ SMITH, JR.,1 EXECUTIVE DIRECTOR, GOVERNOR’S OFFICE OF HOMELAND SECURITY AND EMERGENCY PREPAREDNESS, STATE OF LOUISIANA 

Colonel SMITH. Madam Chairman and distinguished Members of 

the Subcommittee, thank you for inviting me here today. I appreciate the opportunity to come before you and share my thoughts 

about the difficulties we have encountered with the FEMA Public 

Assistance Program, and in particular the manner in which and 

the use of Project Worksheets is adversely impacting our ability to 

recover from the catastrophic Hurricanes Katrina and Rita. 

Today’s testimony is not necessarily intended to be critical, but 

only a reflection of events so that we may examine a process that 

is not serving any of us as well as it could. Our 23 months of experience leads us to the inexplicable conclusion that we must develop 

realistic procedures that are more responsive to and more supportive of the recovery effort. 

Before I begin, I want to thank the very dedicated field staff of 

FEMA who have spent countless time away from home and family 

in assisting our recovery. 

I want to thank Congress and especially you, Senator Landrieu, 

and the Louisiana delegation for the recent legislation for giving 

the cost share match. We are aware that FEMA has administratively waived some level of the cost share in over 30 cases in which 

the catastrophic nature of the disaster overwhelmed the State and 

the community. However, the Administration did not support a full 

waiver for Louisiana, a State impacted by the most devastating 

hurricane in U.S. history. Without Congressional intervention, our 

recovery efforts would have been that much more difficult, and in 

some instances brought to a halt. Again, thank you. 

Just a couple of examples that will sum up the Project Worksheet issues and problems and policies. One story is the Henry 

School in Vermilion Parish. Almost every school in Vermilion Parish was damaged to the extent that students were displaced outside the community. Almost 2 years later, the same students are 

still waiting to return to their schools. 

When FEMA first evaluated the Henry Elementary School, they 

approved approximately $2 billion of funding to replace the facilities. Facilities that are more than 50 percent damaged can be replaced. Relying on this determination, school officials announced 

that they were going to build a new school and begun moving. 

As the school board proceeded, expending considerable time, 

money, and emotional investment, a new FEMA team rotated in, 

conducted a second assessment, and came to a contrary decision. 

The new assessment concluded that a replacement facility was no 

longer justified and FEMA would only authorize $855,000 to repair. 

18

Obviously, this shocked and frustrated the school board and they 

immediately appealed. 

Vermilion Parish School Board asked for our assistance. We went 

out and we hired engineers and architects and we looked at this 

and came up with a new cost estimate. It was pretty obvious that 

a building that had been under eight feet of salt water was completely destroyed, but after going through months of reevaluation, 

FEMA obligated $5 million for the replacement of the school. So 

though Vermilion Parish is satisfied with the end result, this process took over a year. 

This illustration points out how constantly rotating staff, 

misapplication of cost data, the complete failure to properly scope 

the Project Worksheet, and the time it takes to engage and correct 

a highly bureaucratic process all greatly hinder the recovery. 

Bootheville High School in Plaquemines Parish is another exam- ple. The parish questioned FEMA’s original estimate of $1.9 million 

to make repairs to the building and actually added $500,000 to the 

Project Worksheet. Though the school board was not comfortable 

with FEMA’s estimates, it proceeded with the repair process and 

accepted a low bid of $3.4 million. Anxious to get the school back 

in service as soon as it could, the school board took the risk that 

necessary funds would eventually be obligated by FEMA. The Public Assistance Program provides reimbursement on all large 

projects based on actual cost, not cost estimates. 

The school board requested a revision to the Project Worksheet 

to actually recover the entire cost. However, over the last year, the 

costs have escalated by $6.2 million with change orders. FEMA has 

only obligated an additional $867,000. The school board is still 

waiting on FEMA to obligate nearly $5.3 million. They have already paid their contractor and the lack of FEMA funds has a severe budgetary impact on the parish. 

Additional questions lingered. How could the original estimate of $1.9 million been so far off the mark from almost $10 million? Had 

the damages been accurately identified in estimates in the first instance, would the school have been eligible for replacement? 

These two examples are representative of hundreds of similar 

Project Worksheets causing endless challenges to Louisiana’s recovery. Making decisions with poor information cannot yield optimum 

results and makes planning not much more than guesswork. 

Another challenge has been Louisiana’s State Administrative Allowance, which to date is approximately $22 million. Historically, 

the Administrative Allowance provides States funding for a broad 

range of activities to manage the Public Assistance Program, which 

would enhance our support to the local jurisdictions that badly 

need the help. However, FEMA has limited the use of these funds 

to only overtime, travel, and per diem. FEMA applied an unnecessarily restrictive interpretation to regulatory language that actually states that funds can be used for administrative costs, including these three categories. This is not restrictive language but only 

illustrative. FEMA’s restrictive interpretation is—the approach 

that FEMA is taking will not allow the State to use the full authorization that would otherwise be used. 

Accountability is essential. However, that should not preclude us 

from addressing our issues quickly and effectively. Unfortunately, 

19

1The prepared statement of Mr. McDonald appears in the Appendix on page 66. 

this is not happening. In fact, it is my observation that decisionmaking from FEMA and DHS on critical issues is excessively delayed. Nearly every issue goes to Washington, DC, for resolution. 

Further compounding the slow decisionmaking process is FEMA’s 

continued refusal to honor our repeated request to locate their key 

players and decisionmakers with the State staff and decisionmakers in Baton Rouge. 

I hope that this Subcommittee will find ways to encourage an environment at DHS and FEMA that looks to appropriately utilize 

the flexibilities that were built in the Stafford Act. 

Madam Chairman, thank you. That concludes my statement. 

Senator LANDRIEU. Thank you. Mr. McDonald. 

Mr. MCDONALD. Thank you, Madam Chairman. 

Senator LANDRIEU. And before you begin, let me just make clear, 

I think to the audience, they understand, but FEMA is divided into 

separate regions. So Texas, Louisiana, and several other States are 

covered by Region 6, and Mississippi, Alabama, Florida, and several other States are covered by Region 4. Major Phillip May is 

over Region 4 and Bill Patterson is over Region 6. So if we hear 

discrepancies in testimony, it could be because the regions are operating somewhat differently. However, we may see similar problems in Mississippi, as well. Please proceed. 

TESTIMONY OF BRYAN McDONALD,1 EXECUTIVE DIRECTOR, 

GOVERNOR’S OFFICE OF RECOVERY AND RENEWAL, STATE 

OF MISSISSIPPI 

Mr. MCDONALD. Thank you, Madam Chairman, for that clarification. I would like to thank the Members of the Subcommittee for 

allowing me to share with you to tell you about the recovery that 

is occurring in our great State. I want to thank you very much, 

Chairman Landrieu and Ranking Member Stevens, for giving me 

the opportunity to come before you today. I do appreciate it. 

On August 29, 2005, Hurricane Katrina struck Mississippi a 

grievous blow. The combination of the storm’s slow speed and shallow waters off the Mississippi shoreline created a storm surge in 

excess of 30 feet in some areas. More than 80 miles of Mississippi’s 

coastline were completely destroyed. Hurricane-force winds extended more than 200 miles from the coast. FEMA reported that 

over 65,000 homes in South Mississippi were damaged or destroyed. Electricity was lost to 80 percent of the State’s three million residents, and the miles upon miles of utter destruction are 

unimaginable, except to many like you, who witnessed it with your 

own eyes. 

Mississippians found themselves having to scramble, adjust, innovate, and just make do. However, it was the spirit of our people 

that pulled us through. Our people are strong and resilient. 

After the storm passed, they set about the work of putting their 

lives back together and helping their neighbors do the same thing. 

Their spirit has been an inspiration to all of us, and that spirit remains key to our recovery. 

The Federal Government has been a good partner. However, the 

size and nature of this disaster brought new challenges that have 

20

tested us all. We appreciate the opportunity to address changes 

that may help in future disasters. It is our hope that this Subcommittee’s work, along with that of others, will allow us to leave 

the Project Worksheet process better than we found it. 

Local governments in Mississippi have done a stellar job of working with State and Federal officials to manage the process of obligating more than $2.2 billion in Public Assistance. To date, FEMA 

has generated nearly 14,000 Project Worksheets for repair and rebuilding projects in Mississippi’s communities. Full transparency 

and cooperation were two of the cornerstones in Mississippi’s effort 

to work with FEMA after this disaster. 

We recognized the potential information void present in the traditional NEMIS system, FEMA’s electronic system for grants management, and we developed the Mississippi Public Access Management System, M–PAM, or PAM as we refer to it, to provide realtime access to applicant cost and procurement information and a 

systematic means for identifying funding roadblocks in an attempt 

to speed up the funding process. M–PAM utilizes the latest advancements in computer-based management technology to scan, 

record, and store all documents, invoices, and receipts related to 

every Project Worksheet written in Mississippi. 

It is an Internet-based solution and it does allow real-time management and analysis and communication of issues related to all of 

our Public Assistance matters, the systems used by FEMA, the 

FBI, Homeland Security’s OIG, and our Office of State Auditor as 

a tool for early identification of fraud or mismanagement. It was 

designed to effectively fill the void between the obligation and 

close-out process in NEMIS. We believe that closing those existing 

Project Worksheets is absolutely critical to ensuring that local governments receive final allocations of recovery money and thus are 

able to pay contractors and subcontractors for work that in many 

cases was completed more than a year ago. 

Mississippi is committed to working to maintain the positive momentum and cooperative spirit that exists between FEMA, the 

State, and locals. In recognition of that cooperative spirit that exists, we also seek to ensure that FEMA headquarters continues to 

honor critical decisions made by local FEMA leadership and field 

personnel in the weeks and months immediately following the disaster. We believe it is important for decisions made by local FEMA 

leaders during the immediate post-disaster environment to be affirmed and upheld throughout the disaster recovery process so that 

the State and local officials can act quickly and in good faith based 

on those decisions. 

Furthermore, the State of Mississippi seeks to ensure that 

FEMA’s reasonable cost standards are applied in a manner that 

protects communities that adhere to all reasonable and prudent requirements and that worked with FEMA personnel during the 

process. The State asks that FEMA expand its standards through 

which reasonable costs are established to take into account all factors contributing to the market conditions that exist in the postdisaster environment. 

Despite the challenges we still face, Mississippi is well on its way 

towards recovery. We understand that our work to recover, rebuild, 

and renew will take years. More importantly, it will take the conVerDate 0ct 09 2002 10:18 Jun 13, 2008 Jkt 037355 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\DOCS\37355.TXT SAFFAIRS PsN: PAT
21

1The prepared statement of Mr. Merritt appears in the Appendix on page 71. 

tinued support of our Nation’s leaders and the American people. 

Much opportunity lies ahead. Hurricane Katrina, with all of its destruction, gave birth to a renaissance in Mississippi and that will 

result in rebuilding our State bigger and better than ever before. 

Our citizens will be at the heart of that renaissance, and the people 

of the Gulf Coast have been a model of the spirit and character of 

Mississippians. 

Our people are rebuilding one day at a time. We ask for your 

continued assistance in helping them move forward. Through your 

efforts and the efforts of the people of our great State, we are rebuilding a Mississippi that will exceed anything we have ever 

known. Thank you, Madam Chairman. 

Senator LANDRIEU. Thank you. Mr. Merritt. 

TESTIMONY OF MARK MERRITT,1 SENIOR VICE PRESIDENT OF 

RESPONSE AND RECOVERY, JAMES LEE WITT ASSOCIATES 

Mr. MERRITT. Madam Chairman, Senator Stevens, thank you for 

inviting me to participate in today’s hearing. I appreciate the opportunity to come before you to discuss the impact of Project Worksheets (PWs), on the local recovery efforts and on the overall allocation of Public Assistance dollars. My testimony has been shaped by 

my perspective of working on these issues in both the public and 

private sector and at all levels of government, Federal, State, and 

local. 

I had the honor and privilege to work for the Federal Emergency 

Management Agency (FEMA), from 1993 to 2001, on hundreds of 

disaster responses, from the great Midwest floods of 1993, to the 

catastrophic Northridge earthquake experienced by the Los Angeles area in 1994, to the bombing of the Murrah Federal Building 

in 1995. The professional staff I worked with at FEMA throughout 

the 1990s were some of the most dedicated and creative problem 

solvers with whom I have ever worked. To me, this is high praise 

for this great public servant, since I am a graduate of West Point 

who also served with some of our Nation’s finest from the First 

Gulf War. 

My experience and the experience of State and local emergency 

management professionals during the 1990s was that when you 

dealt with FEMA, you were working with the best of the best. 

These were the people who knew how to get things done. They 

were people who knew how to quickly identify and meet the needs 

of individuals and communities struggling to recover from a disaster. They were empowered to make decisions. 

While I believe many of the same people with the same spirit 

still exist in the agency, our experience over the past few years 

shows that things have changed. I want to make it clear that the 

people at FEMA, both permanent and local hire, are good people 

with a lot they can bring to the table. But the reality is that over 

the past few years, many of the most experienced staff have left 

the agency or retired and neither FEMA nor DHS have empowered 

the field staff to problem solve, make decisions, and creatively address the unique issues that arise during every disaster. 

22

Also, the FEMA regions, and I want to stress this point, the 

FEMA regions who we relied on heavily during my tenure at 

FEMA for their expertise and relationships are scarcely utilized 

during the recovery any longer. I find this to be highly disappointing. 

My experience leading the Special Disaster Close-Out Teams 

while at FEMA required that I become intimately familiar with the 

Stafford Act, 44 C.F.R., the regulations and the body of knowledge 

and experience codified throughout the years through various 

FEMA policies and precedent. I know how flexible the laws, regulations, and policies governing FEMA disaster recovery programs can 

be. They are written broadly enough to be adapted to a variety of 

situations, since no two disasters are alike and there are unique 

needs and lessons that are learned on each disaster, particularly 

those that are considered to be catastrophic. 

The Stafford Act, 44 C.F.R, and the 9500 Series, which is the 

compendium of policies for FEMA’s Public Assistance, or PA Program, are short and broad in scope. They are meant to outline 

some of the things you can fund and all the things that you can’t. 

The idea was to place boundaries on what is possible with Federal 

disaster relief dollars, yet provide maximum flexibility within the 

law to meet critical disaster needs at the State and local levels. 

However, FEMA’s current leadership has been working under a 

philosophy that unless something is specifically mentioned in the 

law, regulations, or policy, that it cannot be done. 

Colonel Smith’s testimony today does a very good job of illustrating the difficulties the State of Louisiana has experienced with 

the PW process as applied to Hurricanes Katrina and Rita. His examples highlight the fact that PWs written in this disaster are 

chronically underfunded and/or poorly scoped. Colonel Smith’s testimony also does a very good job of summarizing the primary reasons for the four PWs, including a lack of flexibility being applied 

to meet real-world local issues present in these catastrophic disasters; the unintentional consequence of establishing numbers-based 

management goals related to Project Worksheet production as opposed to measuring or demonstrating progress in the rebuilding 

process—we should be counting the number of schools, hospitals, 

and miles of roads repaired or replaced, not the numbers of PWs 

written; the failure to take into account local factors impacting reconstruction costs, including the scarcity of labor and construction 

materials, when preparing cost estimates for work; and the lack of 

experience and suitably-trained staff with the authority to make 

decisions working for FEMA on this disaster, who both understand 

the Public Assistance Programs and the nuances of how it has been 

and both can and should be implemented. 

I want to especially emphasize this last point, that there aren’t 

enough experienced staff working for FEMA on this disaster who 

know enough about the program and its history to understand how 

flexible it can be to meet unexpected needs after a disaster. I believe this to be the core of what is hindering the PW process. 

The problems were compounded, however, through the institution of the Transitional Recovery Office (TRO) concept. In order to 

reduce costs, FEMA has moved to hiring locally to fill recovery positions, including senior management. The hiring of people with litVerDate 0ct 09 2002 10:18 Jun 13, 2008 Jkt 037355 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\DOCS\37355.TXT SAFFAIRS PsN: PAT
23

tle or no FEMA experience and putting them in charge of the recovery programs with little or no oversight by experienced staff is 

not working. Again, the staff hired locally in Louisiana and elsewhere are dedicated and talented people, but most personnel are 

coming into the largest and most complex recovery and reconstruction project in U.S. history with only the practical experience that 

they have gained since being hired after the hurricane. For the 

most part, that translates to, at most, 23 months, not enough to 

understand the nuances of the program and how it has been applied previously. 

It is not fair to the committed temporary staff who have been 

hired and it is not fair to the parishes. The communities in Louisiana deserve FEMA’s full complement of staff and resources to 

help them to obtain the full disaster funding due them under the 

law and to provide the technical assistance that will help them to 

build back stronger. The TRO must have a core of experienced program staff from regional offices and headquarters in Washington, 

DC that can help to guide the process. We need people who know 

how far they can stick their necks out without getting them 

chopped off. 

Compounding this issue is the fact that senior agency officials 

rarely make it to the State to participate in meetings that would 

help bring resolution to many of the complicated policy issues. Senior leadership involvement is sporadic and from a distance. Most 

have only come to the State a handful of times, usually for brief 

periods and with few meetings with State and local officials designed to resolve critical issues. In my days with FEMA, it was understood that large disasters provide a laboratory for the disaster 

programs because it was assumed that we would encounter and 

have to overcome many unusual situations and complicated issues, 

issues that would present new policy questions or would require 

the participation of staff having the deepest understanding of the 

laws, regulations, policies, and past precedent. 

During the Northridge earthquake, perhaps the most complicated 

and costly disaster prior to Hurricanes Katrina and Rita, senior 

FEMA staff—to include the director and his associate directors and 

general counsel—spent weeks in Los Angeles meeting with State 

and local officials to deal with critical issues firsthand. The lack of 

this involvement has had consequences. As a West Pointer, I 

learned quickly that the longer your lines of communications, the 

more difficult it is to be successful. Attempting to have effective 

communications that will result in timely and effective resolution 

of issues in Louisiana is very difficult to do from Washington, DC, 

without senior staff understanding and involving themselves in the 

issues they are deciding. These long lines of communications have 

created more difficulty in managing the PW process and delays in 

getting decisions made than just about anything else. 

When I was coordinating the disaster close-out for Hurricane Andrew and several other large disasters, I would make sure our 

teams from headquarters included the best programmatic minds, 

the Office of General Counsel, and, yes, the Office of Inspector General. That way, we would resolve issues without leaving the room 

in real time. 

24

FEMA and DHS rarely, if ever, involve the Inspector General on 

the front end in a proactive fashion in Louisiana. Doing so could 

save a lot of time and potential eligibility problems downstream. I 

have always said getting the money is the easy part. Keeping the 

money is difficult. 

We have to find a better way to do all of this. It did not used 

to be this difficult. It does not need to be this bureaucratic. The 

second anniversary of the storms is quickly approaching and we 

are nowhere near where we should be in our recovery efforts. 

Madam Chairman, I applaud your efforts with this hearing today 

and I suspect this dialogue that you and the Subcommittee have 

opened with FEMA and DHS may give us insight into whether legislative fixes are in order or whether the existing laws, regulations, 

and policies allow the flexibility and discretion necessary for a 

quick and complete recovery in the State of Louisiana. 

This hearing is not just about the physical and economic recovery 

of Louisiana and Mississippi. This hearing is just as importantly 

about the credibility and viability of FEMA and the critical roles 

and responsibility that Congress has given them. If the public loses 

faith in the process, they will lose faith in the organization responsible for that process. 

I am a true believer in FEMA, its mission, and its people. I want 

nothing more than for FEMA to regain its place as the premier 

Federal agency it once was. Thank you, and I would be glad to answer any of your questions. 

Senator LANDRIEU. Thank you. 

Senator STEVENS. If I may, Madam Chairman, I do have an appointment at 11:30 and have to leave. 

Senator LANDRIEU. Go right ahead. 

Senator STEVENS. Mr. Merritt, we spent some time together and 

I think your criticism is valid to a certain extent. There is no question but that you and James Lee Witt used great ingenuity in dealing with the disasters you faced, including the California earthquake. But it was, after all, 20 square miles within one State. We 

are dealing now—we have been dealing with a disaster that covered the area from the East Coast to Texas, an area the size of 

France and Germany. The disaster was roughly equivalent to the 

destruction of World War II in France and Germany, and I don’t 

think any of us have come up with a solution to how to manage 

really the requests of each individual area within each State that 

has demanded immediate attention, and they are entitled to immediate attention. 

It seems to me that we really need a command structure that is 

different from FEMA for this, and probably should have recognized 

that some time ago. But the difficulty is trying to deal with an 

agency that has to make the decisions that affect so many different 

localities at the same time. I think we have to go back to the drawing board and find a way to get the Federal oversight much broader and, in effect, have what you and James Lee Witt devised for 

California in each area. The trouble is, we are looking to the FEMA 

management to do what you did in that area, but there are literally 

hundreds of those areas. 

While I respect you, I think your criticism of the agency really 

ought to be a criticism of the law. We did not contemplate such a 

25

disaster or series of disasters. After all, we have at least two disasters here in terms of Hurricanes Katrina and Rita, but there were 

many disasters within those areas that resulted from the failure of 

the systems that had been designed by the Corps of Engineers or 

the failure of the recovery plan that existed in various areas because there was total destruction. They all assumed that we were 

going to be moving in and dealing with a few entities within each 

State that had been affected by disasters, but this is a whole area 

that was affected, as I have seen it. 

I think we have to go back to the drawing board, and I really 

think this Subc8ommittee is going to have to come up with some 

suggestions to change the Stafford Act. Now, that will take too 

much time, so we really have to come up with some suggestions 

and we have to look to find ways, in my judgment, so we can bring 

about the creation of an arbitration process. 

From the point of view of money, Mr. Merritt, there has been a 

lot of money put up there. It is not a question of money. It has 

been arguing over who gets it first. This has been a problem, I 

think. FEMA has had to try and figure out where to put the money 

first. What is the total we put in? I think we put up about $130 

billion so far, haven’t we? 

Senator LANDRIEU. A hundred-and-ten. 

Senator STEVENS. A hundred-and-ten billion dollars. It is not just 

a little pot of money, it is a big pot of money and it could have been 

replenished, as needed. But the difficulty is it has not been effective yet in terms of meeting the immediate demands of each area, 

which are unique and not comparable at all. You can’t compare any 

part of this to Los Angeles. Los Angeles was a well-defined earthquake, very small compared to our earthquakes, by the way, in 

Alaska, but it was really a staggering impact on about 20 square 

miles of Southern California. 

I do believe we should call on you and James Lee Witt to be part 

of the group to give some advice on how to be prepared for any future disaster of this type, but right now I think we need an interim 

solution in terms of getting some way to get arbitration involved 

in these areas and get decisions made that will make this money 

available to proceed in every area where the recovery has been delayed because of the argument over who gets the money first. 

Now, that is my analysis of it. I could be wrong, but it wouldn’t 

be the first time. Thank you, Mr. Merritt. It is nice to see you all. 

Senator LANDRIEU. Senator, I would like to respond. I know that 

you have to leave, but I think you have hit the nail on the head, 

comparing this to the rebuilding of parts of Europe after World 

War II. If you use that analogy and think about where we would 

be if this country and our allies decided to rebuild Europe using a 

Project Worksheet process, we would still be building Europe. I 

mean, think about that. Every building, every library, every sewer 

system, every street that was destroyed by bombs or warfare would 

have to go through a bureaucratic nightmare to get rebuilt. I don’t 

think that is the way this was done, and I think the comparison 

is very apt and very appropriate. 

So Senator Stevens, thank you for your comments and I appreciate them. 

26

1 ‘‘FEMA, Public Assistance, Louisiana,’’ June 22, 2007, Global Report, submitted by Senator 

Landrieu appears in the Appendix on page 81. 

Senator STEVENS. You need a new Marshall Plan for this area, 

not just FEMA. Thanks. 

Senator LANDRIEU. Thank you. Let me just try to get a few questions in here to this panel. I don’t know if you all have access to 

this particular data. I am going to ask the staff if they have copies 

of this to pass it out because I would just like to get clear, this is 

the ‘‘Public Assistance Project Worksheet (PWs), and Dollars.’’ This 

is on the FEMA website. It talks about Texas, Louisiana, Mississippi, and Alabama, total gulf-wide. Now, maybe you all have 

this data, but in a different form. If there is a copy, if you could 

get it to the table.1

But let me just ask for clarification purposes. This is percentage 

of PWs obligated, 91 percent in Texas, 88 percent in Louisiana, 61 

percent in Mississippi, 71 percent in Alabama, for a total gulf-wide 

average of 80 percent. 

Now, these numbers—those are the percentages according to 

FEMA. The numbers vary substantially in that there is only $1 billion of damage estimated in Texas, $6.3 billion in Louisiana, $2.8 

billion in Mississippi, and only $114,000 in Alabama. Obviously, 

the major damage was in Louisiana, a distant second, is Mississippi, and then again, a distant third is Texas, with Alabama 

being quite a distant fourth. 

But I am interested in what these percentages actually mean to 

each of you, not you, Mr. Merritt, but to Mr. McDonald and Mr. 

Smith. Do you agree that 91 percent of all the Project Worksheets 

have basically been agreed to, processed, money obligated, and 

projects moving forward, or in your rules as the recovery chief for 

Louisiana and Mississippi, is it your experience that they are less 

a percentage or more a percentage of the projects that have basically been agreed to by both sides? And maybe the staff can help 

me clarify this for this panel. 

I don’t know, Mr. Smith, if you want to respond. 

Colonel SMITH. Senator, of course, I don’t see exactly what you 

are looking at, but in general, that doesn’t mean that those Project 

Worksheets are agreed to. What that percentage is is FEMA’s estimate of how many total Project Worksheets that they think will be 

written when it is all said and done, and then the percentage that 

had been written to date. 

Also, they can write a Project Worksheet that has an estimate 

in it, but they don’t have the funds obligated yet for some reason, 

and maybe the FEMA officials would be better to say why those 

funds had not been obligated. But one of the things that I think 

it is important to understand is there is a difference in obligated 

funds and whether those funds are due out to the local jurisdictions, because much of the money that is left is on work that is not 

even started yet. 

Senator LANDRIEU. Well, what I am trying to get at, and I am 

going to press this issue until we get a clear answer so that I can 

communicate it to my constituents and to the Members of Congress 

that are depending on us, I need to understand today, 2 years almost after this disaster, two hurricanes and a great flood, what 

27

percentage of this money that has been appropriated by Congress, 

$110 billion, of which only $10 billion is represented in this discussion today, so when people say, we sent you $110 billion to rebuild, 

the record reflects today that we are only talking about $10 billion 

out of the $110 billion that are involved in these particular Public 

Project Worksheets. Less than 10 percent of the money is even directed to these public projects that basically form the basis of recovery. 

I am now honing down on of the $10 billion, what percentage are 

you, Colonel Smith, and you, Mr. McDonald, agreeing to? In other 

words, you and FEMA see eye to eye that this particular school 

building is going to cost $5 million. They have said it, you have 

said it, and you are getting ready to build it. You might not have 

built it yet, but you have agreed to it. You acknowledged that is 

what you think the appropriate cost is. 

Colonel SMITH. A very small percentage——

Senator LANDRIEU. Well, that is what I need to know. I need this 

hearing to be able to get to the bottom of what percentage we are 

talking about. Are we talking about a 20 percent agreement? Or a 

30 percent agreement? Or an 80 percent agreement? 

Colonel SMITH. Senator, in one e-mail that I got about 4 months 

ago, FEMA has even acknowledged that they feel like there were 

well over 1,000 Project Worksheets out of what you have seen written here that were undervalued. You can see from some of the information that we supplied, we feel like that probably at least 75 

percent of the Project Worksheets for permanent work projects are 

grossly undervalued, so there is very little that the locals or the 

State has actually agreed on the permanent work and construction. 

Senator LANDRIEU. Because this is going to be of great interest 

to Congress, and I will tell you why. Let us assume that most of 

these Project Worksheets, thousands that are outstanding, are 50 

percent less than what has been reported to Congress, based on 

what our future obligations may be. These estimates could go up 

by 50 percent? Seventy-five percent? I don’t know. 

And that is what we are going to try to find out by submitting 

questions to you, very specific questions. 

Now, let me ask you, Mr. McDonald, of all of the Mississippi 

Project Worksheets, what percentage do you think have actually 

been agreed to, roughly? And you can go back and check and resubmit the data if you think the statement you have given is inaccurate this morning. 

Mr. MCDONALD. I appreciate that, Senator. Jeff and I visited a 

little bit about this before. Our legislative or our statutory environment is somewhat different, as I appreciate it, from Louisiana’s in 

that one of the barriers in Louisiana’s case is the need to make 

sure that money is agreed to before work begins, the funding 

source is identified and agreed to. 

In Mississippi’s case, Stafford, as you well know, is a cost-reimbursable statute, so in Mississippi’s case, the key component has 

been getting the PWs scoped properly, making sure that we agree 

on the scope of the PW. We have also experienced some of the same 

situations with respect to the RSMeans use and in moving that to 

reflect what an actual or more accurate amount might be, certainly 

28

critical to educational institutions as they try to evaluate whether 

they rebuild in an area or move to safer ground. 

But in terms of the numbers, which we tend to be numbers guys, 

in terms of the numbers, we have about $2.2 billion that have been 

obligated in Mississippi, $1.1 billion that is essentially out the 

door. Of course, as I mentioned earlier in my testimony, we are certainly keenly interested in making sure that that process continues 

so that the remaining monies can be distributed. 

Senator LANDRIEU. But let me ask you this, then. I am going to 

rephrase my question to you. What percentage, then, of the projects 

in Mississippi to date do you believe have been scoped in an agreeable fashion—let me just finish my question—in an agreeable fashion between FEMA, the State, and the locals? In other words, let 

us take Waveland. That was virtually destroyed. Of the projects in 

Waveland, which of the projects—what percentage has the Mayor 

of Waveland agreed, you have agreed, and FEMA has agreed to try 

to give us some idea of how accurate this scope is, not just from 

FEMA’s perspective, but from the mayor whose obligation it is to 

stand up his town, you from the State who are representing the 

governor and his view of this, and FEMA? 

Mr. MCDONALD. Well, Senator, my answer to that question 

would have been different had I not seen this report, which indicates that FEMA believes that number to be at 61 percent. With 

14,000 Project Worksheets, statistically speaking, I believe that 

number is in excess of 61 percent. 

Now, certain jurisdictions, do we have jurisdictional issues that 

we continue to work on where we are not at a high percentage? Absolutely. Is Waveland one of them? Bay St. Louis, the school districts there. But generally speaking, agreement on scope of the 

PWs is not a significant issue for us and a pressing issue. There 

is a mechanism to resolve that. But we don’t——

Senator LANDRIEU. What is that mechanism to resolve it? 

Mr. MCDONALD. Our communication flow is through the TRO, 

and we are very thankful that as recently as yesterday, we received 

our first permanent TRO Director. But that mechanism is to work 

quickly with——

Senator LANDRIEU. TRO is a Transitional——

Mr. MCDONALD. Transitional Recovery Office. Mr. Merritt mentioned that in his testimony, that under this disaster, we have the 

presence of Transitional Recovery Offices. 

Senator LANDRIEU. Do you have one? 

Colonel SMITH. Ours is the same one, Senator. The regions are 

not involved. 

Senator LANDRIEU. You all have the same Transitional Recovery 

Office? 

Colonel SMITH. Well, Gil Jamison has the Transitional Recovery 

Office and then we have a unit of that Recovery Office in New Orleans and then he has one——

Mr. MCDONALD. In Biloxi. 

Colonel SMITH [continuing]. In the sub-units. 

Senator LANDRIEU. OK. So the scope of the work is not a problem 

for you, but it is a problem for you. I am trying to understand, why 

is it not a problem for you, Mr. McDonald? 

29

Mr. MCDONALD. And we are working directly with the, I refer to 

it as our TRO in Biloxi, our local Biloxi TRO. Now, you mentioned 

earlier that we are in Region 4 and I believe you guys are in Region 6, do I understand that correctly? 

Colonel SMITH. Correct. 

Mr. MCDONALD. In scoping the PWs, Madam Chairman, I would 

have to research that. I don’t have a direct answer for you on that 

point. 

Senator LANDRIEU. Well, I would like you to do that because, 

first of all, the numbers are opposite your testimony. Colonel 

Smith, you are testifying that you have had less agreement in your 

situation, but the document indicates a greater percentage than 

Mississippi. Mississippi is testifying that they are pretty happy 

with all their scope of work and they don’t really have much of a 

problem, but their scope is, on that document, only 61 percent. So 

we are going to hone down and figure this out. 

Mr. MERRITT. Madam Chairman——

Senator LANDRIEU. Go ahead, Mr. Merritt, maybe you can——

Mr. MERRITT [continuing]. That was the point I tried to make in 

my testimony. PWs are a tool and it is very difficult to manage the 

recovery effort by the numbers of PWs written because one building could have 50 PWs written for it or another building might 

have one. So to use numbers like that to gauge how far the recovery is going is very difficult, at best. The circumstances are very 

different, and the State does not have to agree with the Project 

Worksheet to be obligated. So FEMA has the ability to obligate a 

Project Worksheet whether the State or the local governments 

agree to it. They don’t like to do it, but it can be done——

Senator LANDRIEU. Well, that is exactly my point, but I am going 

to find out, of the obligated monies that FEMA has told Congress 

is obligated for this disaster, what percentage of those have been 

actually agreed to by the locals so that we can give an estimate of 

how much the recovery might ultimately cost. It is not just what 

FEMA has obligated. If FEMA has obligated, for instance, only 20 

percent of the actual dollars to rebuild a school, for instance, we 

should have some indication that perhaps there is another 80 percent of the project that has yet to come to us to be even requested, 

because in FEMA’s mind, they think they can build a school for 20 

cents on the dollar, but the school president is saying, you are 

shorting me 80 percent of the money for the school. That is what 

I am trying to get at. 

And I am not measuring the recovery by this process. I am just 

trying to manage or to get to the bottom of what Congress’s obligations are as well as the problems with the process itself. 

Go ahead, Mr. McDonald. Anything else? 

Mr. MCDONALD. No. Madam Chairman, I would just add, as I 

mentioned in my more thorough testimony that the specific issue—

that issue as it relates to education is critical. As you mentioned 

in your comments, the impact on education and making sure that 

we give them priority and ensure that the schools are able to recover. 

Senator LANDRIEU. And how many schools, just really quickly, do 

you think you still have in Mississippi that have not been rebuilt 

that need to be, do you know? 

30

Mr. MCDONALD. I don’t know the exact number, Madam Chairman, but we were able to return our kids to the classrooms fairly 

quickly through superhuman efforts, many of which you have witnessed. But we still have schools and issues that are awaiting resolution, and I guess one of the observations that I have kind of 

gleaned from some of this frustration has to do with the role of 

education and the updating of the Stafford Act. I have a personal 

belief that while FEMA recognizes that there are areas that need 

specialists and deserve those—debris being one of them—that in 

the years since the Stafford Act, education should also be one of 

them. 

I think in regional disasters, and one of the themes that has 

been mentioned here is catastrophic events and regional disasters, 

Senator, the ability to send someone that has the education focus 

to sit beside and with a school district that may, in a 10-year period of time, be able to rebuild one school and is now facing a rebuild of all schools, having that resource present that is 

knowledged and skilled and sustained in education and Stafford 

would be a welcomed legislative relief to the Stafford Act in the future. 

Senator LANDRIEU. Thank you. Colonel Smith, any final words? 

Colonel SMITH. Senator, something that may help you frame this. Out of FEMA’s projected $6.3 billion that they will ultimately obligate, right now is a projection, about $4 billion of that is for permanent work. That is rebuilding infrastructure. So if you assume that 

that is undervalued by two to four times, then you could be looking 

at an undervaluation of two to four times $4 billion. So that ultimate amount could be $16 billion. In fact, most people will do that. 

Another thing, the difference between Louisiana and Mississippi, 

many of their buildings were 100 percent destroyed, so it is easier, 

actually, to do the scope of work on a destroyed building because 

you are rebuilding this building, versus trying to figure out all of 

the repairs to an existing facility. 

Senator LANDRIEU. I think that is a very excellent point, and we 

continue to try to express in every hearing we have that while the 

disaster, the results of it were the same to people in terms of loss 

of house, loss of job, loss of school, loss of livelihood, the characteristics of the disasters between these States was so wholly different 

based on what basically you just described. The destruction from 

a wave and a wind that eliminated structures in total down to the 

slab, and the difference between a city and suburbs and urban 

areas sitting under eight to 20 feet of water, when the water goes 

down, the structure is still there. The roof is still on. The walls are 

still there. The structure is intact, but it is uninhabitable and cannot in many instances be repaired without knocking it down and 

rebuilding it again. I mean, the structure itself is just rendered 

wholly not fixable. I don’t know what the word is that engineers 

will use. 

And that is the scope of the disaster in difference between, in 

large measure, Mississippi and Louisiana, which was never initially recognized. Hopefully, this Subcommittee can help the country understand a little bit better about walking to a slab and estimating what a 5,000-square-foot building costs and then walking 

to a 5,000-square-foot building that has had 20 feet of water sitting 

31

in it and spend the next 2 years deciding what was broken before 

the 20 feet of water entered the building——

Colonel SMITH. Exactly right. 

Senator LANDRIEU [continuing]. And what we are responsible for 

fixing when the 20 feet of water left. And that is part of our challenge and dilemma. 

Does anybody have final questions before we move on, or comments? 

Mr. MERRITT. Two quick thoughts, Madam Chairman. 

Senator LANDRIEU. Mr. Merritt. 

Mr. MERRITT. Short-term, if the Subcommittee could encourage 

FEMA and DHS to bring decisionmakers down to the Gulf Coast 

region to not only make creative and innovative decisions that stick 

would be the short-term solution. 

The second thing is to benefit FEMA. The Stafford Act was not 

written for a catastrophic event. I think Senator Stevens hit it exactly on the head, as well as your previous panel. We are desperately in need of a catastrophic annex to allow the rules that 

they are restricted by to be modified in those circumstances, and 

those things that are too open for interpretation because of the general nature of the Stafford Act can be restricted a little bit further 

to take people’s interpretation out of it, so we know exactly what 

our rules are going into it. 

So short-term, creative, innovative solutions that stick. Longterm, I think we desperately need a catastrophic annex to the Stafford Act, because it is a good Act and it has worked well for what 

we call garden-variety disasters. 

Senator LANDRIEU. And finally, if we did take the suggestion to 

move the appropriate FEMA personnel on the ground, which person would it be, Colonel Smith, that you report to? Who is your ultimate decisionmaker in your region? 

Colonel SMITH. Well, right now, the ultimate decisionmaker——

Senator LANDRIEU. Is it Bill Peterson? 

Colonel SMITH. No, ma’am. That is—the FEMA Region 6 is not 

involved in our recovery to almost no degree. I think that is one 

of the problems. They have a lot of excellent people. It is the Transitional Recovery Office that is down in New Orleans where they 

have got decisionmakers. The FCO that is down there that is in 

charge is the one that makes those decisions, but they won’t even 

come locate their key decisionmakers with the key decisionmakers 

in Baton Rouge. As you know, facility planning that has 2,300 

buildings to repair, it is a logistical nightmare to try and even get 

meetings with them when they are down so far away. 

So there are a few quick hits. The Stafford Act, we know needs 

to be amended, and there is a lot of long work, but there are some 

quick things that could be done. They could relocate their key people that are there to Baton Rouge. They could set up a problem resolution system, as Senator Stevens talked about, call it arbitration, 

whatever you wanted, where once a month decisionmakers got together and made decisions and move on. So there are some things 

that we can do to jump-start this. 

Twenty-two million in administrative money that I can’t use, I 

can hire engineers, architects. We can go down into these areas 

and help them start, and that is what the law is supposed to allow. 

32

1The prepared statement of Mr. Walke appears in the Appendix on page 75. 

But they won’t let us use it for anything but travel, per diem, and 

overtime. So there are some things that could be done like this that 

could help. The long-term solution, fix the Stafford Act and other 

things. 

Senator LANDRIEU. Mr. McDonald, who would it be if somebody 

showed up and stayed on the ground to help you all? 

Mr. MCDONALD. Well, at present, Sid Melton, who officially 

began work yesterday as the TRO’s Permanent Director. Mr. 

Melton does have a history both in Louisiana and Mississippi on 

the Individual Assistance side. Prior to him, there were a number—actually, there were three interim directors. 

Senator LANDRIEU. Are you testifying that between the storm 

and today, there has not been a permanent Director for Project 

Worksheets for Mississippi and Louisiana? 

Mr. MCDONALD. That is correct, Senator, but we have had a series of competent interim directors. The permanency, I appreciate, 

as has been pointed out here, finding the depth of resource from 

FEMA to properly place a permanent person has been a challenge. 

But Sid Melton is the short answer to your question, and then from 

there in our process, it gets elevated to Gil Jamison. 

Senator LANDRIEU. OK. Thank you very much. 

Mr. Walke, I understand that you are the Director of the Public 

Assistance Division that we have just spent the last hour and a 

half speaking about. You began your career at FEMA as a civil engineer with the National Flood Insurance Program. You have held 

various positions, including the Chief of Public Assistance. You 

were responsible for managing the Public Assistance Program. 

I most certainly look forward to your testimony today to try to 

shed some light on the situation that we are dealing with, so please 

proceed. 

TESTIMONY OF JAMES WALKE,1 DIRECTOR, PUBLIC ASSISTANCE DIVISION, DISASTER ASSISTANCE DIRECTORATE, FEDERAL EMERGENCY MANAGEMENT ADMINISTRATION, U.S. 

DEPARTMENT OF HOMELAND SECURITY 

Mr. WALKE. Thank you. Good morning, Senator Landrieu. My 

name is James Walke. I am the Director of the Public Assistance 

Division, which is part of the Disaster Assistance Directorate, formerly known as Recovery Division, at FEMA. I have been a career 

FEMA employee for 23 years and have been with the Public Assistance Division for 14 years. I am responsible for planning and providing national-level policies and oversight of the Federal Government’s efforts to restore and build eligible public infrastructure 

that is damaged as a result of Presidential-declared disasters and 

emergencies. 

It is my pleasure to be here today to discuss with you the Public 

Assistance process, the status of projects in the Gulf Coast, and initiatives FEMA has taken to improve the delivery of assistance following Hurricanes Katrina and Rita. 

The Public Assistance, or PA Program, provides cost-shared 

grants to assist State and local governments and certain private 

nonprofit organizations to remove debris, carry out emergency proVerDate 0ct 09 2002 10:18 Jun 13, 2008 Jkt 037355 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\DOCS\37355.TXT SAFFAIRS PsN: PAT
33

tective measures, and repair or replace damaged infrastructure. 

The Public Assistance Program is a vital part of the community 

disaster recovery process. 

The process begins with the creation of a Project Worksheet. 

FEMA uses the Project Worksheet to record the scope and amount 

of grants to applicants. The Project Worksheet includes a description of eligible damages, the scope of work, and estimated cost to 

repair the disaster damages. FEMA assigns technical experts, such 

as structural engineers, sanitary engineers, hospital specialists, 

etc., from our Disaster Reservist cadre or from our Technical Assistance contractors to work with the applicants to develop the 

Project Worksheet. 

In most cases, agreement on eligible scopes of work is achieved 

quickly. In a few cases, there are differences in professional opinion 

as to what are considered disaster-related damages and the appropriate repairs. If agreement is not reached, FEMA will approve its 

version of the Project Worksheet and provide the applicant an opportunity to appeal. In Louisiana, applicants have submitted over 

200 appeals to date. 

As of June 25, 2007, we have prepared 80,179 of an estimated 

84,474 Project Worksheets for all of the Gulf Coast States. In Louisiana, we have obligated 34,205 for an approximately $4.8 billion. 

This represents about 88 percent of the total estimated number of 

Project Worksheets to be written. In Mississippi, we have obligated 

12,842 for approximately $2.1 billion, and this represents 61 percent of the total estimated number of Project Worksheets. 

Over the last 6 months, we have implemented several initiatives 

to improve the Public Assistance process in Louisiana. First, we 

have established a new management team led by John Connolly, 

one of our most experienced Public Assistance Officers. We have 

also implemented an aggressive staff training and mentoring program to improve staff knowledge of the PA Program. In addition, 

we have deployed more cost estimating experts to ensure that our 

estimates are appropriate. And finally, we have collated program 

staff at the applicant’s premises to expedite the development of the 

remaining Project Worksheets. 

In addition, Senator, we have also taken several initiatives to 

further improve the delivery of assistance of the Public Assistance 

Program in the future. We have established a Public Assistance 

Steering Committee that is comprised of the senior Public Assistance staff person in each of the 10 regions, as well as 10n State 

persons, to serve on the Subcommittee. The steering committee will 

develop the visions, strategies, and policies to ensure efficient, effective, and consistent implementation of the program. We will continue to update all of our policies, guidance, and training documents so that our staff will have the tools to be successful. And 

also, we are evaluating more cost-effective ways to train our staff 

before disasters strike, as well as in the immediate aftermath of a 

disaster, to improve the level of service. 

On June 1, 2007, we implemented the Public Assistance Pilot 

Program that Congress authorized in the last session. The pilot encourages local governments to adopt pre-disaster debris management plans by providing an additional 5 percent in Federal cost 

share for debris removal for those that do so. In addition, the pilot 

34

will also speed recovery by making grants on the basis of estimates 

for projects up to $500,000. It is our hope that this pilot will yield 

good information that we can use in the future to improve delivery 

of services. 

FEMA is committed to the recovery and rebuilding of the Gulf 

Coast and will remain on the ground until the job is finished. The 

Public Assistance Division is using lessons learned from Hurricanes Katrina and Rita to refine our policies and pilot new initiatives to retool and improve the Public Assistance Program. 

And finally, Senator, we would like to reserve the opportunity to 

respond for the record to some of the comments that were made by 

some of the previous panel members. 

Senator LANDRIEU. Thank you, Mr. Walke, who is your point person in Louisiana to work these problems out with the Project 

Worksheets? As I understand, you are in charge for the whole 

country for FEMA. Who is the guy or gal that you depend on to 

report to you on a daily basis what is happening regarding this in 

Louisiana? 

Mr. WALKE. That person would be John Connolly, who is our 

Public Assistance Officer for——

Senator LANDRIEU. John Connolly. And who is it for Mississippi? 

Mr. WALKE. For Mississippi, it is Randy Walker. 

Senator LANDRIEU. And who is it for Texas? 

Mr. WALKE. Well, the disaster is closed in Texas, so we don’t 

have anybody there right now. 

Senator LANDRIEU. And I am assuming it is closed in Louisiana? 

Mr. WALKE. No. 

Senator LANDRIEU. I am sorry, I am assuming it is closed in Alabama. 

Mr. WALKE. In Alabama, we have a residual staff there. 

Senator LANDRIEU. So we only have two that are open for this. 

Tell me again their names, the Louisiana first? 

Mr. WALKE. John Connolly in Louisiana, and Randy Walker. 

Senator LANDRIEU. Where do they live and where do they work? 

Mr. WALKE. John Connolly is originally from Philadelphia. 

Senator LANDRIEU. Where is he presently residing? 

Mr. WALKE. Presently, he is in New Orleans. Randy Walker is 

from the Gulf Coast and he is working out of Biloxi. 

Senator LANDRIEU. So they are on the ground? 

Mr. WALKE. They are on the ground, yes. 

Senator LANDRIEU. And they handle this disaster for Project 

Worksheets, working through them, and report directly to you? 

Mr. WALKE. That is correct. 

Senator LANDRIEU. OK. When you said that FEMA has initiated 

a pilot, and I am somewhat familiar with the actions that Congress 

took. The pilot allows projects to move forward that are under 

$500,000. Do you know what the average cost of a fire station is 

with two fire trucks? 

Mr. WALKE. I do not know what——

Senator LANDRIEU. Let me tell you what it is. It is somewhere 

between $2 and $3 million to replace one fire station with two fire 

trucks. So this pilot program of $500,000, I don’t know necessarily 

a school that could be rebuilt, a police station, or a fire station for 

35

this pilot. So I would start with suggesting that the pilot is not sufficient and that we need to think more broadly. 

You said that Louisiana—this is still a puzzlement to me—you 

have testified and FEMA documents show that 81 percent of the 

Project Worksheets are agreed to, are being processed. Yet in Mississippi, it is only 61 percent. But it seems like there are more 

problems in Louisiana than Mississippi. This number would indicate to me that there are more problems in Mississippi than Louisiana. Am I correct or incorrect, or is it just a misreading, or are 

these numbers misleading? 

Mr. WALKE. Well, we have an updated number for Mississippi, 

and instead of 61 percent, that number is 75 percent——

Senator LANDRIEU. So it is closer. So the numbers that you have 

now in your records are 81 percent processed for Louisiana and 75 

percent——

Mr. WALKE. That is right. 

Senator LANDRIEU [continuing]. For Mississippi. OK. At least 

that clears that up. 

But again, do you agree that these figures now, 81 percent and 

75 percent, can be somewhat misleading in terms of the fact it is 

not an indication that these final dollar amounts for repair have 

been agreed to. It is just what FEMA has obligated. From FEMA’s 

perspective, it is agreed to, but not from the State or locals, or can 

you give us the percentage, if it is not 81 and 75, what is it that 

has been agreed to at the local, State, and FEMA level on the 

Project Worksheets under your jurisdiction? 

Mr. WALKE. Senator, I can only estimate that. The percentage of 

PWs that are obligated does include some—many or most that have 

been concurred with by the State and local. As I said before, in 

Louisiana, those who have not agreed with the scope and the estimates for the projects have appealed, and out of the thirty-somethousand estimated Project Worksheets, we have only had 200 or 

so appeals. 

Now, that is not just to say that is the total universe. I mean, 

our folks are working with some of the applicants, I think that Jeff 

Smith had mentioned, where there were some need to align the 

scope. And I think it is critically important to understand that we 

need to concentrate on what is the ultimate scope of work, because 

the estimate can flow from the ultimate scope of work. 

And I think the protracted discussion we are having on some of 

the Project Worksheets reside or revolve around what is disasterrelated damages, and I think this is what we preach to our staff 

and to the States as well, that let us just figure out—let us get 

some consensus on what is the eligible scope of work, what are the 

disaster-related damages, and I think we can—reasonable people 

can come to some understanding of what it is going to cost. 

Senator LANDRIEU. We would like to help reasonable people come 

together, but I am going to ask you for the record, not for today, 

but to submit to this Subcommittee, of the Project Worksheets that 

you have in Louisiana and Mississippi——

Mr. WALKE. Right. 

Senator LANDRIEU [continuing]. What Project Worksheets were 

agreed to without much debate or discussion, how many and what 

percentage. Then what percentage they have serious arguments 

36

about, but came to some settlement, but there were serious arguments. And then those that are under official appeal. What do you 

estimate future appeals to be, because I want to get a very clear 

indication of these projects, multiple millions, billions of dollars 

worth of projects, what were agreed to by reasonable people, what 

were disagreed to but finally came to some conclusions? Whether 

they were satisfactory or not is a wholly different question. 

Mr. WALKE. Right. We can do that, Senator. 

Senator LANDRIEU. And then what are under appeal, and I will 

tell you just from a perspective of a public official, as I have been 

for many years, for a small town—I am not even going to use a 

town in Louisiana. I could use many, but for a small town like 

Waveland that had only 10,000 people that was virtually destroyed, 

the pressures of that mayor and those public officials to accept 

whatever the Federal Government is giving them are great, because they don’t have the lawyers to appeal. They are a small town 

and can’t necessarily fight the Federal Government. They are at a 

distinct disadvantage. So if you say that you are going to give them 

$200,000 to rebuild their library, they might just accept the money 

and move on when they really were owed $2 million. 

Now, I am going to get to the bottom, as the Chairman of this 

Subcommittee, for the big Project Worksheets and how well you are 

working with these small towns in my State and in Mississippi and 

how well you are not, and if I am mistaken that it is going swimmingly well, I will be the first to make that clear and apologize. 

But from my own instincts, I don’t think that is happening, either 

in Mississippi or Louisiana. Now, I could be wrong, but we are 

going to sift through these numbers until we get there. 

And then the final piece is we are going to sift through these 

numbers so that I can, as an appropriator, give some heads up to 

Congress that these numbers have been either grossly underestimated or that they have been relatively accurately estimated and 

we are not going to have to go find another $10 or $20 or $30 billion when it comes to budget discussion time up here in Washington. 

Mr. WALKE. I understand. 

Senator LANDRIEU. Let me ask you this. What is your opinion 

about an arbitration process? Would it be helpful to you? Is it necessary? 

Mr. WALKE. Well, the current regulations allow for the Recovery 

Division Director or the Assistant Administrator for Recovery to 

engage a third party, independent third party for technical advice 

on appeals. It does not relinquish authority to this third party. It 

is just for input into the decisionmaking. So that is available to us 

right now short of the arbitration because the statute and the regulations do not allow for binding arbitration. 

Senator LANDRIEU. Would you support binding arbitration? 

Mr. WALKE. I do not. I think I stand by the regulations as they 

are written, to get professional input, technical input from technical experts to the decisionmaker. 

Senator LANDRIEU. Would you allow, then, the locals to hire 

those technical third parties as opposed to FEMA? 

37

Mr. WALKE. I think the whole notion of getting a third party is 

to get an independent person that doesn’t have a vested interest in 

the situation to provide technical advice and——

Senator LANDRIEU. Then how do you abide by the worthy goal of 

independence if you are the one hiring them? 

Mr. WALKE. What I think the process would be, Senator, that we 

would mutually agree to who that third party would be. 

Senator LANDRIEU. Is that how it works? 

Mr. WALKE. We have only availed ourselves of this procedure for, 

maybe on a couple of occasions in the past 20 years that I am 

aware of. 

Senator LANDRIEU. OK. What is FEMA’s rationale for rebuilding 

damaged public infrastructures in exactly the same way, in exactly 

the same State that they were found when they were destroyed by 

the storm? We say, and I even say it myself in speeches, we are 

going to build it better, stronger, and better and stronger. Actually, 

I have come to the conclusion that may be against the law, because 

the Stafford Act specifically, I think, says you can’t build it any better than it was when it was destroyed. They call it in the lingo of 

the community, is it ‘‘gold capping’’? You are prohibited from gold 

capping. Can you comment about how does FEMA help Waveland 

build a better sewer system under the current law that you operate? Is that even possible? 

Mr. WALKE. Well, there are two things. For structures that are 

totally destroyed, obviously they are built back to the current codes 

and standards, which I think by definition makes them stronger 

and perhaps a little more resistant to some of the forces——

Senator LANDRIEU. But those that are repaired. 

Mr. WALKE. The ones that are repaired, yes, the basic statute 

and regulations require us to return the facility to its pre-disaster 

condition. However, there are provisions to provide hazard mitigation to include in the repair that would make the building stronger 

than before, and I think we are looking at opportunities to do that 

in most cases, if not all cases. 

Senator LANDRIEU. Well, I think that it is important for our Subcommittee to focus on that the current law, and this is not a fault 

that I would levy to administrators but this is a fault that is apparent to me in the law, that when you are reconfiguring buildings or 

infrastructure in cities like New Orleans or places along the Gulf 

Coast that are older, in some instances certain neighborhoods 

much poorer, that all FEMA allows you all, the Stafford Act allows 

you to do is replace a 60- or an 80- or a 100-year-old sewer system. 

If it is not completely destroyed, you can only repair it up to the 

level it was before. It was insufficient before. It doesn’t make any 

sense to me to pour good money after bad money, and I would like 

to try to help save taxpayers money and build with common sense 

as opposed to the letter of the law, which doesn’t seem to me to 

be making any sense. I would appreciate any suggestions that you 

have along those lines. 

Our time has almost expired. Is there anything that you would 

like to add to your testimony? 

Mr. WALKE. Well, I would certainly like to say that we have 

done, I think, a very credible job in Louisiana and the Gulf Coast, 

notwithstanding some of the comments we heard before. I think it 

38

is to be expected that as we get further along, we encounter more 

complex projects, which takes longer to resolve, and I think that is 

where we are in both of these States. When you look at the number 

of projects that we have approved, that we have got consensus on, 

I think it is remarkable. 

So I would say that not judge us by the number of comments or 

criticism that you have heard here today, but measure us by how 

well we can respond and positively react to and solve the problems 

that have been raised, and I think we are committed to do that, 

Senator. 

Senator LANDRIEU. Well, Mr. Walke, you can be assured that I 

am going to let the numbers speak for themselves, that my instincts could be wrong, but the numbers need to speak for themselves. But we are going to get these numbers to show an accurate 

picture of this and that we are going to take this criticism that we 

have heard to heart. I am going to ask you how many people have 

worked for your division since this storm happened and what your 

turnover rate is. I am going to ask you how you train your people 

and how long they stay with you. We are going to look at these 

numbers again and find out which Project Worksheets were agreed 

to, which were disputed, which are under appeal, and what your 

projections are, and then we are going to let the numbers speak for 

our performance or lack thereof and figure out what we need to do 

to rebuild the Southern part of these two great States. 

Thank you, and the hearing is adjourned. 

[Whereupon, at 12:08 p.m., the Subcommittee was adjourned.] 

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