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S. HRG. 111–1151 

A YEAR LATER: LESSONS LEARNED, PROGRESS 

MADE, AND CHALLENGES THAT REMAIN FROM 

HURRICANE IKE 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS AND 

ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 25, 2009 

Printed for the Committee on Small Business and Entrepreneurship 

( 

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

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED ELEVENTH CONGRESS 

MARY L. LANDRIEU, Louisiana, Chair 

OLYMPIA J. SNOWE, Maine, Ranking Member 

JOHN F. KERRY, Massachusetts 

CARL LEVIN, Michigan 

TOM HARKIN, Iowa 

JOSEPH I. LIEBERMAN, Connecticut 

MARIA CANTWELL, Washington 

EVAN BAYH, Indiana 

MARK L. PRYOR, Arkansas 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

KAY HAGAN, North Carolina 

CHRISTOPHER S. BOND, Missouri 

DAVID VITTER, Louisiana 

JOHN THUNE, South Dakota 

MICHAEL B. ENZI, Wyoming 

JOHNNY ISAKSON, Georgia 

ROGER WICKER, Mississippi 

JAMES E. RISCH, Idaho 

DONALD R. CRAVINS, JR., Democratic Staff Director 

WALLACE K. HSUEH, Republican Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS

Page 

Landrieu, Honorable Mary L., Chair, and a United States Senator from 

Louisiana .............................................................................................................. 1 

WITNESSES

Thomas, Honorable Lyda Ann, Mayor, City of Galveston .................................... 9 

Eiland, Honorable Craig, a Texas State Representative from District 23 .......... 19 

Callender, MD, MBA, FACS, David, President, University of Texas Medical 

Branch ................................................................................................................... 20 

Gillins, Curtis, Co-Owner, Y’a Bon Village Coffeehouse ...................................... 35 

Dryden, Frank, Owner, Island Flowers and Nefertiti Boutique .......................... 44 

Alonzi, Achille, Assistant Division Administrator, Texas Federal Highway 

Administration, U.S. Department of Transportation ........................................ 55 

Tombar, Frederick, Senior Advisor, Office of the Secretary, U.S. Department 

of Housing and Urban Development .................................................................. 63 

Gonzalez, Manuel, Director, Houston District Office, U.S. Small Business 

Administration ..................................................................................................... 70 

Eckels, Honorable Robert, Judge, and Chairman, Governor’s Commission for 

Disaster Recovery and Renewal, State of Texas ............................................... 77 

Harris, Brad, Texas Federal Coordinating Officer for Hurricane Ike, U.S. 

Federal Emergency Management Agency .......................................................... 89 

APPENDIX MATERIAL SUBMITTED

Alonzi, Achille 

Testimony .......................................................................................................... 55 

Prepared statement .......................................................................................... 57 

Supplemental responses ................................................................................... 115 

Callender, David 

Testimony .......................................................................................................... 20 

Prepared statement .......................................................................................... 23 

Colbert, Dr. Linda 

Prepared statement .......................................................................................... 169 

Cornyn, Honorable John 

Prepared statement .......................................................................................... 97 

Dryden, Frank 

Testimony .......................................................................................................... 44 

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

Eckels, Robert 

Testimony .......................................................................................................... 77 

Prepared statement .......................................................................................... 80 

Eiland, Honorable Craig 

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

Gonzalez, Manuel 

Testimony .......................................................................................................... 70 

Prepared statement .......................................................................................... 73 

Gillins, Curtis 

Testimony .......................................................................................................... 35 

Prepared statement .......................................................................................... 37 

Information for the Record .............................................................................. 159 

Harris, Brad 

Testimony .......................................................................................................... 89 
Page

IV 

—Continued 

Prepared statement .......................................................................................... 103 

Hutchison, Honorable Kay Bailey 

Prepared statement .......................................................................................... 99 

Landrieu, Honorable Mary L. 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 4 

Letter dated October 13, 2009, to Karen G. Mills ......................................... 117 

Response dated December 3, 2009, from Karen G. Mills .............................. 120 

Letter dated September 30, 2009, to Governor Rick Perry ........................... 122 

Response dated October 27, 2009, from the Texas Department of Rural 

Affairs ............................................................................................................ 124 

McKinley, Jr., James C. 

Article titled ‘‘As Galveston Recovers From Hurricane Ike, Some Residents Feel Left Behind’’ ................................................................................ 155 

Paul, Honorable Ron 

Prepared statement .......................................................................................... 101 

Steele, Jack 

Letter dated September 24, 2009, to Charlie Stone ...................................... 126 

Texas Appleseed 

Prepared statement .......................................................................................... 129 

Texas Forest Service 

Prepared statement .......................................................................................... 171 

Thomas, Honorable Lyda Ann 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 12 

Additional materials for the record ................................................................. 249 

Fact Sheet: Galveston Island After Hurricane Ike ........................................ 263 

Testimony and Overview of Recommendations .............................................. 265 

Prepared statement to the U.S. House Committee on Homeland Security 

dated March 3, 2009 ..................................................................................... 278 

Prepared statement to the Ad Hoc Subcommittee on Disaster Recovery 

dated September 23, 2008 ............................................................................ 288 

FEMA Hurricane Ike Response and Recovery Statewide Activity Report .. 300 

City of Galveston Hurricane Ike Orders Index .............................................. 305 

Tombar, Frederick 

Testimony .......................................................................................................... 63 

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

U.S. Small Business Administration 

Disaster Recovery Plan .................................................................................... 176 

Vitter, Honorable David 

Prepared statement .......................................................................................... 96 
(1) 

A YEAR LATER: LESSONS LEARNED, 

PROGRESS MADE, AND CHALLENGES THAT 

REMAIN FROM HURRICANE IKE 

FRIDAY, SEPTEMBER 25, 2009 

UNITED STATES SENATE, 

COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP, AND

THE COMMITTEE ON HOMELAND

SECURITY AND GOVERNMENTAL

AFFAIRS AD HOC SUBCOMMITTEE

ON DISASTER AND RECOVERY

Galveston, TX. 

The Committee met, pursuant to notice, at 1:21 p.m., Galveston 

Island Convention Center, 5600 Sewall Boulevard, Hon. Mary L. 

Landrieu (chair of the committee) presiding. 

Present: Senator Landrieu. 

OPENING STATEMENT OF THE HONORABLE MARY L. 

LANDRIEU, CHAIR, AND A UNITED STATES SENATOR FROM 

LOUISIANA 

Chair LANDRIEU. Thank you, ladies and gentlemen, and I apologize for the delay. We were waiting for some of our special guests 

to join us. 

I am Senator Mary Landrieu, and I would like to call this field 

hearing to order. I thank all of you for spending some time this 

afternoon focused on a very important issue, which is the recovery 

of this part of the country from the terrible destruction of the Hurricane Ike and to also focus on the procedures, at the federal, state, 

and local levels that can be improved, particularly with the focus 

on the federal level today. 

We have two distinguished panels with us. Let me begin by welcoming our first panel. We have asked them to keep their testimony relatively brief, but, as the Mayor and I toured Galveston 

this morning, she said to me, ‘‘Senator, I think I am going to need 

a little bit more than five minutes.’’ 

Mayor, you are going to have a little bit more than five minutes 

today, and let me start by thanking the Mayor and acknowledging 

her tremendous effort. Since the storm, Mayor Thomas is one of the 

many local leaders who have really had to stand up and speak 

forcefully about what needs to be done and continue to lead a very 

complicated effort. 

We are also joined by the—— 

[Applause.] 
2 

Thank you, Mayor. 

The mayor has traveled to Washington several times on your behalf. At one of the meetings I said to her, ‘‘Mayor, I will absolutely 

be in Galveston sometime soon,’’ so I am here today. 

I want to also acknowledge our speaker pro tem who is here with 

us, and I will be asking him to comment in just a moment. 

Let me introduce the first panel. These will be very familiar individuals to all of you. Mr. David Callender, President of the University of Texas Medical Branch; Mr. Curtis Gillins, Owner of Y’a Bon 

Village Coffee House; and Mr. Frank Dryden, Owner of Island 

Flowers and Boutique. 

We have business owners, a leader of a great medical school, a 

Mayor, and a speaker pro tem that will start our panel in just a 

moment, but let me give just a brief opening statement as we 

begin. 

Senator Hutchinson and Senator Cornyn could not be with us 

this afternoon. Senator Hutchinson was with me touring the area 

this morning. Senator Cornyn is at work in Washington, marking 

up the health care initiative in the Finance Committee as a member of the Finance Committee, so he apologized for not being here; 

however, both of their staffs are present. 

Also, Congressman Ron Paul has his staff here in the audience 

and was unable, because of scheduling conflicts, to be with us. I 

want to acknowledge other elected officials that are in the audience, as well. 

Let me begin by saying that I have long wanted to come to Galveston as a resident of New Orleans and as a senator now from the 

State of Louisiana into my third term, and particularly as I helped 

to lead our efforts to recovery after Hurricane Katrina, when Ike 

came ashore, hurting not just Texas, but the Louisiana Coast, as 

well. I could feel the pain that this community was going through, 

having basically just gone through it ourselves with Hurricane 

Katrina. Given that our ports have such similarities, our oil and 

gas interests, our historic housing, our medical complexes, the loss 

of the trees and the greenery that we are so proud of along the 

Gulf Coast, the threat to our beaches, to our tourism industry right 

here in the wonderful convention center, Mayor, and looking at 

these grand hotels up and down the coastline, we all need to do a 

much better job of understanding that we are in the middle of Hurricane Alley. We need to do a better job of hardening our defenses 

and preparing for storms, but also and equally important, attempting to recover more vigorously as soon as possible because the livelihoods and futures and dreams of our citizens most certainly depend upon it. 

As I helped to lead our efforts in the aftermath of Hurricane 

Katrina, I actually asked to form this Subcommittee of the Homeland Security Committee to form a special committee that could 

look specifically at the ways our Federal government could better 

help all communities in America, but with a special emphasis, of 

course, on the Gulf Coast that sits really in the middle of a hurricane path that can be devastating and it seems, as with these 

weather patterns, changing. 

We can only look forward, unfortunately, to more frequent and 

more ferocious storms. Making sure that FEMA is working at its 
3 

optimal level, that there is coordination at the federal level that 

really honors and respects the hard work going on at the street 

level or the local level is important to me, and having our communities work together, sharing before, during, and after each storm 

on lessons learned, best practices. This hearing is going to focus in 

large measure on some of those issues today. 

I do not have to remind you all that Hurricane Ike’s 110-milean-hour winds blew off hundreds of rooftops, and water reached 

levels as high as 20 feet flooding up to 75 percent of Galveston Island and ate through more than 17,000 homes and businesses. Not 

just the City of Galveston, but other cities in this entire region 

were impacted. About 20 percent of the residents of this city, representing about 4,000 families, are yet to return to the community 

because of all sorts of challenges associated either with housing, 

employment, health, or others. 

One of the things that I am hoping to do is to make sure that 

the Federal government realizes that local communities cannot do 

this alone and that federal help must be abundant, must be quick, 

must be reliable, and must be transparent and understandable 

through all different agencies to help communities like this. 

I also want to make sure that there is better coordination between federal agencies, whether it is FEMA, SBA, HUD, Agriculture, or Transportation. We have made some changes in the law 

and some changes in policy, but we have more to go. 

As this is a joint hearing between Homeland Security and Small 

Business, I also want to focus on the changes that SBA has made 

and implemented since Hurricane Katrina and to explore a little 

bit today. Have you all seen improvement here on the ground? We 

want to hear from our local small businesses. 

Another issue: Is the aide coming from Washington to the state 

and then distributed down to the locals? Is it being distributed on 

an equitable and objective basis, trying to get those Community 

Development Block Grant monies actually to the communities and 

to the neighborhoods that suffered the most damage? 

These are just some of the things that we want to explore today, 

and I am going to submit the rest of my testimony to the record 

so we can get right onto our panel. 

This record of the committee will be open for two weeks. Anyone 

that wants to submit records for this hearing in writing can be submitted anytime in the next two weeks. 

So, Mayor, why do not we begin with you? I understand that the 

speaker pro tem may have to leave, so, I will go to you next. But, 

Mayor, why do not we begin with you, and please take as much 

time as you need. Thank you very much. 

[The prepared statement of Chair Landrieu follows:] 
4 

Statement for the Record for Chair Mary L. Landrieu 

for the Small Business CommitteelDisaster Recovery Suhcommittee Hearing 

September 25, 2009 

"A Year Later: Lessons Learned, 

Progress Made, and Challenges That Remain After Hnrricane Ike" 

Introdnction 

Before we begin, I would like to thank Galveston Mayor Lyda Ann Thomas for 

participating in today's hearing. Mayor Thomas and her staff have also been extremely helpful 

in helping our committee organize the tour of Galveston this morning. Texas House of 

Representatives Speaker pro Tempore Craig Eiland is also joining us on the first panel. I would 

like to th,mk the Speaker pro Tempore fiJr his service to this area as he represents Texas House 

District 23 which includes Galveston. Lastly, I understand that Galveston County 

Commissioner Stephen Holmes is in the audience and recognize that he is representing 

Galveston County at today's hearing. 

Unfortunately, U.S. Senator Kay Bailey Hutchison, U.S. Senator John Cornyn, and 

Congressman Ron Paul could not attend the hearing today. Our committee has worked closely 

with them in organizing this hearing over the past few months and I wlderstand their statT is in 

the audience today. I would like to thank them lor their assistance and note that each of them has 

submitted statements for the hearing record. We have also received statements from several 

local organizations. I will include these materials in the record along with any statements that 

we receive following the hearing. The record will remain open for two weeks. 

Building Stronger and Hctter 

Hurricane Ike came ashore on September 13th, 2008 as a Category 2 storm with winds up 

to Il0mph. The storm pushed ahead of it a massive wall of water 20 feet high that damaged 

more than 45,000 homes. The storm's $24 billion toll makes it the third costliest in U.S. history 

behind Katrina and Andrew. Ike claimed 103 American lives, and 26 people are still missing. 

The impact on Galveston was severe. 75 percent of the island was inundated, and more than 

17,000 homes and businesses suffered damage. 

As I mentioned, I spent the morning touring the island with Mayor Thomas and Senator 

Hutchison. It is apparent that a great deal of cleanup and restoration work remains to be done. 20 

percent of Galveston's residents still have not returned. While the Galveston County Chamber 

of Commerce estimates that 75 percent of the area's businesses have reopened, most are only 

operating at 70 percent of their pre-storm level and 180 have closed permanently. 

1 
5 

According to the research of my committee staff, this hearing is the first Congressional 

hearing held in Galveston since Hurricane Ike struck the Texas Gulf Coast last year. There have 

of course been numerous hearings in Washington, DC which focused on this disaster, but today's 

field hearing is the first actually held in Galveston itself. With this in mind, we are here today to 

review the progress and challenges that have emerged in the year that has passed since Ike made 

landfall. We also want to detennine what steps must be taken at all levels of government to 

bring back displaeed residents, repair homes and businesses, and full restore the vitality to this 

historic Texas community and region. 

Federal Response 

Following major and catastrophic disasters like Katrina, Rita, or Ike, local communities 

cannot go it alone. Recovery requires a coordinated Federal effort: the Federal Emergency 

Management Agency (FEMA), U.S. Department of Housing & Urban Development (HUD), the 

Small Business Administration (SBA), and other agencies like the Economic Development 

Administration of the U.S, Department of Commerce must be on the same page. Communities 

also need good coordination between their Federal and State partners. However, as residents in 

my state told me after Katrina, aid is hard to get and slow to come. A senseless bureaucratic 

maze of paperwork can get in the way, as victims are directed from one agency to another only 

to find none of the agencies will help. 

Kathy Simmons is a business owner that navigated this Federal bureaucracy and has yet 

to find assistance. Kathy runs the Galveston Alternative Education Center, a school of 42 

students who are either not allowed or choose not to attend public school. Many of Kathy's 

students go from probation to community college with her help. Ike demolished Kathy's school 

and washed away the supplies. FEMA turned her away, directing Kathy to the SBA. SBA said 

that they do not loan money to schools. Kathy's school tlnally found a temporary home in St. 

Vincent's House, but she's struggling to keep it open. Kathy represents the essence of what it 

means to never give up. As she told my statT: 'How could she give up? This is the last chance 

for these kids. Everyone else has written them off.' I am here today to see why people like 

Kathy and her students have fallen through the cracks and why countless others are still 

waiting for help to pull through. 

After Katrina and Rita, the Federal response was slow; planning was insufficient, and 

stalTand funding came up short. For example, following the 2005 stonns, it took SBA 90 days 

to process a home loan and 70 days to process a business loan. After this woeful perfonnance, I 

pushed for a change in SBA leadership and changes in the way they respond to disasters. In 

2006, a new SBA Administrator, Steve Preston, took over and, at my request, he implemented a 

new SBA Disaster Response Plan in time for the 2007 hurricane season. I submit for the record 

a copy of this new response plan. This plan is a major improvement over the unwieldy, 

bureaucratic procedures that guided SBA post-Katrina/Rita. I also understand that SBA will be 

submitting to Congress in the next few weeks 2009 revisions to the Disaster Response Plan. I 

look forward to reviewing these changes in the event that additional improvements are needed. 
6 

Last year, as part of the 2008 Farm Bill, Congress also passed legislative reforms to 

SBA's disaster programs. These refoTIns, along with other key improvements: 1) increased SBA 

loan limits from $1.5 million to $2 million; 2) created new tools such as bridge loans or private 

disaster loans following catastrophic disasters; 3) required coordination between FEMA, SBA, 

and the IRS; and 4) allowed nonprofits, for the first time, to be eligible for SBA economic injury 

disaster loans. Earlier this year, our committee heard testimony from local ofticials in southwest 

Louisiana that SBA was better prepared and more responsive following Gustav and Ike. As 

evidence of this, I note that it took 5 days to process a home loan following Ike, compared to the 

90 days after Katrina and Rita. Business loans averaged a little over a week to process, 

compared to the 70 days in 2005. 

However, while agencies have seen improvements since the 2005 storms, I know that my 

committee still has work to do. While SBA is processing loans faster, there are still complaints 

from disaster victims on paperwork and bureaucracy. For example, as of August 31, SBA had 

received about 2,400 business applications for disaster assistance in Galveston County. 536 of 

those applications were approved for $84 million but, to date; only $24 million has been 

disbursed for 280 of these loans. SBA has yet to implement a few of the remaining 2008 disaster 

reforms so I would like to know if these reforms could improve loan approvals and disbursals. 

RecoverY Challenges 

In regards to FEMA, to date the agency has provided $2.5 billion in assistance across 

Texas in response to Hurricane Ike, including $677 million to the Galveston area. 13,000 area 

residents are receiving temporary housing assistance from the agency, and $150 million in Public 

Assistance funding has been obligated to restore the campus of the city's largest employer - the 

University of Texas Medical Branch. But significant stafting, policy, and coordination 

challenges remain. 

First, FEMA closed its Joint Field Office in Texas City on September 4th, and while some 

staff remains in the area, many have returned to the Region VI office in Denton, Texas. I would 

note that this oftice is about 7 hours away. UTMB estimates that it has an additional 900 Project 

Worksheets that must be written in coordination with FEMA, and other public entities in the area 

have hundreds more. With so much work still to be done in the Houston-Galveston area, it is 

critical that FEMA maintain a robust presence in the field to facilitate communication and avoid 

delays. 

Next, FEMA is not doing as much as it could to provide suil'icient temporary housing in 

the Galveston area. Congress gave the agency authority to repair existing rental units back in 

2006, but FEMA only restored one 32-unit building here after Hurricane Ike. FEMA has also 

opted not to employ waiver authority that would allow mobile homes to be placed in high 

velocity flood zone ("V-Zones") around the island on a temporary basis. DHAP-Ike has 

provided many residents with vouchers that can be used to obtain rental housing, but without 

sufticient repair efforts to boost supply, that program cannot meet the demand for at10rdable 

3 
7 

rental units on its own. As a result of these factors, many hospitality industry workers have 

migrated to Houston, and the consequent workforce shortage is hurting local businesses. 

Furthermore, funding disputes bctween Federal agencies have also delayed work on 

several critical projects. One example is the Pelican Bridge, which connects Pelican and 

Galveston Islands to one another. Both FEMA and the Federal Highway Administration have 

post-disaster repair authority, but the lack of coordination between the two seems to be a 

significant factor behind the slow progress on restoring this critical roadway and its onramps. 

I also believe that State officials must fairly distribute recovery funds and provide 

adequate technical assistance and advocacy support to local users of Federal programs. 

Continued engagement by the State's mitigation officcr and deployment of sufficient, trained, 

and knowledgeable state staff to the Galveston area are important to the region's recovery. 

There are also concerns which exist over the formula used by the Texas Department of Rural 

Affairs (TDRA) to allocate over $3 billion in Community Development Block Grant (COBG) 

funds appropriated by Congress to support recovery from damaged caused by Ike and Dolly. 

The committee will review the impact of this formula on recovery in Texas communities. In 

particular, the State has proposed a change in the way it intends to allocate the second round of 

funding from this $3 billion tranche. With this in mind, I intend to ask Judge Eckels about the 

reason behind that formula modification and its resulting impact on the Galveston area and other 

parts of the state that were heavily damaged by last year's storms. On this issue, I am submitting 

for the record a September 24, 2009 letter from the Houston-Galveston Area Council to the 

Executive Director ofTDRA, expressing concerns over this change in the formula. 

Recent Legislation to Advance Recovery 

In conclusion, I want to briefly mention two pieces of Federal legislation that will 

provide some additional support and flexibility to state and local officials who are working to 

rebuild. The first is a provision that was included in the 2009 Emergency Supplemental 

Appropriations bill enacted this summer. This provision waives the State and local cost-share 

requirement for debris removal and emergency protective measures through March of 20 I 0, and 

authorizes full Federal funding for projects in both categories. 

The second is an amendment that I successfully added, with help from Senators Cornyn 

and Hutchison and the two Senators from Iowa, to the FY2010 Transportation HUD 

Appropriations bill. This provision was adopted in the Senate last week. The amendment allows 

Texas and 10 other states to use CDBG funding that they received for 2008 disasters to satisfY 

matching requirements lmder other Federal programs, in order to support home elevations, beach 

restoration, school reconstruction, and other recovery projects. The House of Representatives 

must agree before this provision becomes law, but if enacted, it will provide Texas communities 

greater discretion and flexibility in how they use their $3 billion allotment for housing, 

neighborhood revitalization, infrastructure, and economic development. I want to note that these 

two legislative solutions are just the type of change we in Washington should be bringing to 

devastated areas like Galveston common sense. community-focused solutions. 

4 
8 

As Chairman of both the Senate Small Business Committee and the Senate Disaster 

Recovery Subcommittee, I am committed to make the Federal aid process simpler and quicker. I 

am also focused on improving coordination among Federal, State and local agencies. While 

there have been improvements since Hurricanes Katrina and Rita, getting help to Galveston's 

homeowners and businesses should not take as long as it has, nor should it be as difficult as it has 

been. 

I look forward to hearing the testimony today from Federal, State, and local officials on 

how their agencies are working together to rebuild Galveston and the Texas Gulf Coast. I also 

am interested hearing from the two local business owners who will provide testimony on the 

challenges and opportunities they have faced in the aftermath of Hurricane Ike. 

5 
9 

STATEMENT OF THE HONORABLE LYDA ANN THOMAS, MAYOR 

OF GALVESTON, TEXAS 

Mayor THOMAS. Thank you very much, Senator, and thank you 

for the opportunity that you are giving all of us to meet with you 

today, and we did enjoy meeting with Senator Hutchison this 

morning, and Senator Cornyn spoke to me earlier this morning. I 

am sorry that they are not able to be here, but I do want to express 

my thanks on behalf of the city to each of them and to our Texas 

Delegation, as well. 

The topic that you have chosen, I think, is timely. The topic is: 

A Year Later, Lessons Learned and Progress Made and Challenges 

That Remain from Hurricane Ike. 

In Galveston, we do not say if a storm comes, but when. Galveston was as prepared as we could be for Ike’s wind and rain. It 

was his surge that swamped our city, damaging 75 percent of our 

homes and businesses. Surging flood waters ripped into our aging 

infrastructure. Our sewage, wastewater treatment, and water 

plants, the city’s and the economy’s underpinnings were either 

damaged or destroyed. 

John Sealy Hospital and the entire University of Texas Medical 

Branch could not function without proper water and sewage delivery. Had necessary city infrastructure been repaired proactively as 

a part of planned mitigation by the city and UTMB with FEMA before the storm or expeditiously after the storm, it is possible that 

the hospital and UTMB would not have been threatened with drastic downsizing and subject to the turmoil it went through to recover. Nor would the city’s business interests have suffered the 

shock of economic disaster threatened by UTMB’s downsizing. Ike 

taught us that time is at essence and that time is money. 

Minimal public health and safety requirements absolutely delayed the return of our citizens, including business owners and operators, for a vital 10 days, during which time mold took hold, rust 

set in, and ground-floor furnishings, equipment, wallboard, electrical outlets, and shop inventories were destroyed. 

Because FEMA requires that the city conduct a Residential Substantial Damage Estimate Program which takes several months to 

complete and costs approximately $1 million, the city recommends 

to you that FEMA include this as a precontracted, reimbursable 

item, as treated in the Stafford Act. It is called for and it is allowed 

in the Stafford Act. 

Galveston is proud to say that we have a number of 

preconditioned contracts, and, in the future, we would like this one 

to be added to our list and paid for by FEMA. The City has tried 

to convince FEMA that, aside from quick fixes, it is more cost effective as soon as possible to redo a whole system at one time rather 

than piecemeal, as has happened at our Main Wastewater Treatment Plant and our airport pump station. 

To harden our infrastructure, the city must comply with the 

Texas Commission on Environmental Quality standards. We could 

do that if FEMA followed the provision in its rules that it will pay 

to reconstruct to new codes and standards. 

There are many faces of FEMA: The friendly, helpful Johnny on 

the spot rescue and response FEMA, the ever-changing faces of the 

FEMA occupying army of bureaucrats, the arbitrary rule-making, 
10 

changing, deadline-setting and resetting again and again, and always at the last minute FEMA, and the nay-saying, penny-pinching FEMA that stands in the way of all the help FEMA is supposedly there to provide. 

The good intentions of FEMA’s hundreds of representatives over 

the last 12 months cannot be questioned. They were here, and they 

did what they could. Especially Brad Harris and Jerry Stoller and 

Jim Feinman. They did not fail the system; it failed them, and us, 

in the process. 

What is required is consistency and coordination of command 

with decision-making authority on the ground, and dispersal of necessary funds upfront to get the job done before the costs mount. 

You are fulfilling a vital part of the Stafford Act, which calls for 

a standard of review, and I quote, ‘‘The President shall conduct annual reviews of the activities of federal agencies and state and local 

governments in major disaster and emergency preparedness and in 

providing major disaster and emergency assistance in order to assure maximum coordination and effectiveness of such programs 

and consistency in policies for reimbursement of States under this 

Act.’’ 

There has been an abysmal lack of coordination and effectiveness 

of programs. UTMB and the city operated with two different FEMA 

teams in two different universes. FEMA failed to clarify for itself 

or the city exactly where its jurisdiction began and ended. 

Examples are the confusion over repair and reconstruction of the 

Pelican Island Bridge and responsibility for our traffic signals, including school zone signals. FEMA thought they were responsible. 

Months later, it was discovered that the Federal Highway Administration has jurisdiction over the Pelican Island Bridge and our traffic signals. 

Now, with HUD CDBG disaster funding finally beginning to flow 

into city coffers, FEMA is indicating that it might pull back some 

of its funding to honor its role as ‘‘the funding source of last resort.’’ FEMA should be our first funding source, with the CDBG a 

vital backup for housing, infrastructure, and economic development. 

Now, in light of Katrina and Rita, the city looks to the standard 

of ‘‘consistency in policies for reimbursement of states,’’ and Galveston has earned your trust. We are aware that there is a discrepancy in the programs and especially the 100 percent reimbursement for all categories of FEMA public assistance granted to 

Katrina victims. 

The surge destroyed our urban forest, which we consider part of 

our infrastructure. An estimated 40,000 trees, providing protection 

from coastal erosion, energy efficiency, reduced carbon emissions, 

as well as beauty, and you were able to see those trees this morning. 

It would be cost effective for FEMA to remove the thousands of 

dead trees. Why piecemeal this project? Not only to remove the 

trees, but to also pay for the stump-grinding, which they have left 

in place, and planting of their replacements, and we ask FEMA to 

consider this request for Galveston. 
11 

Finally, the challenge for the growth in the future and for development of our Gulf Coast Region could be met by three major undertakings by the Federal government. 

One is the release of 600 acres of seawall-protected land that 

could be on the city’s tax rolls that the Corps of Engineers has used 

for dredge spoils over the last century. 

Two is the support of Galveston-Houston efforts to construct 

shoreline protection for the Texas Gulf Coast. And, three, to provide funding for high-speed commuter rail between Galveston and 

Houston. 

As we recover and move into the future, we must consider the 

challenges that we face for the future, and those are three of them, 

and we will appreciate federal help and support. 

The written testimony that is attached will amplify my statement here and provide further recommendations. And, again, Senator, thank you for this opportunity to speak to you today. 

[The prepared statement of the Mayor Thomas follows:] 
12 

WRITTEN TESTIMONY 

Of 

Lyda Ann Thomas, Mayor, City of Galveston, Texas 

Before the U.S. Senate Committee on Small Business and 

Entrepreneurship 

On Friday, September 25, 2009, at 1:00 pm, at the 

Galveston Island Convention Center, 5600 Seawall 

Boulevard 

Galveston, Texas 

Senator Landrieu and Distinguished members of the 

Committee: 

Welcome to Galveston, Texas the birthplace of our 

Senator Kay Bailey Hutchison and the proud survivor of two of 

America's most devastating hurricanes, the 1900 Storm which 

took 8,000 lives and Hurricane Ike which ranks behind Katrina 

and Andrew as the third most costly storm to sweep our 

shores. 

The topic you have chosen is timely: 

1 
13 

"A Year Later: Lessons Learned and Progress Made, and 

Challenges that Remain from Hurricane Ike./I 

While we have much to be proud of in our recovery and 

even more to be grateful for, especially to you and to the 

committees you have chaired and to our Senators Hutchison 

and Cornyn and our entire Texas Delegation, many still struggle 

putting their lives and their businesses back in satisfactory 

working order. To put it another way, FEMA, the SBA, HUD and 

the FHwA as well as the State are still much needed in our 

community. Indeed, the extent to which the City, its citizens 

and its businesses can access the programs and dollars these 

federal and state agencies command will to a large part 

determine whether Galveston, Texas will rebound to heights 

yet unseen and a future secure for generations to come. 

In Galveston, we don't say if a storm comes, but when. 

Galveston was as prepared as we could be for Ike's wind and 

rain. It was his surge that swamped our city, damaging 75 % of 

our homes and businesses. Surging flood waters ripped into 

our aging infrastructure. Our sewage, wastewater treatment 

and water plants, the city's and the economy's underpinnings, 

were either damaged or destroyed. 

John Sealy Hospital and the entire University of Texas 

Medical Branch could not function without proper water and 

sewage delivery. Had necessary City infrastructure been 
14 

repaired pro-actively as a part of planned mitigation by the City 

and UTMB with FEMA before the storm or expeditiously after 

the storm, it is possible that the hospital and UTMB would not 

have been threatened with drastic downsizing and subject to 

the turmoil it went through to recover. Nor would the city's 

business interests have suffered the shock of economic disaster 

threatened by UTMB's down-sizing. 

Ike taught us that time is at essence and that time is 

money. 

Minimal public health and safety requirements absolutely 

delayed the return of our citizens, including business owners 

and operators, for a vital ten days, during which time, mold 

took hold, rust set in and ground- floor furnishings, equipment, 

wallboard, electrical outlets and shop inventories were 

destroyed. 

Because FEMA requires that the City conduct a Residential 

Substantial Damage Estimate Program which takes several 

months to complete and costs approximately one million 

dollars, the City recommends that FEMA include this as a precontracted reimbursable item as treated in the Stafford Act, 

Subtitle F - Sec, 691. Advance Contracting (6U.S.C. 791). 

The City has tried to convince FEMA that aside from quick 

fixes, it is more cost effective as soon as possible to redo a 

whole system at once rather than piecemeal, as has happened 

3 
15 

at our Main Wastewater Treatment Plant and our airport pump 

station. To harden our infrastructure, the City must comply 

with the Texas Commission on Environmental Quality 

standards. We could do that if FEMA followed the provision in 

its rules that it will pay to reconstruct to new Codes and 

Standards. 

There are many faces of FEMA: 1 )the friendly, helpful 

/lJohnny on the Spot" rescue and response FEMA; 2) the everchanging faces of the FEMA occupying army of bureaucrats; 

and 3) the arbitrary rule-making and changing, deadline setting 

and resetting, again and again - and always at the last minute 

FEMA and 4) the nay-saying, penny-pinching FEMA that stands 

in the way of all the help FEMA is supposedly there to provide. 

The good intentions of FEMA's hundreds of 

representatives over the last 12 months could not be 

questioned. They did not fail the system; it failed them, and us, 

in the process. What is required is consistency and 

coordination of command with decision-making authority on 

the ground, and dispersal of necessary funds upfront to get the 

job done before costs mount. 

For all of the destruction, the complicated red tape the 

City and the citizens were obligated to deal with in order to 

take the simplest first steps toward recovery -- for all the delay 

and frustration sapping our energies and efforts4 
16 

Galvestonians to this day have hung tough and together, 

exercised patience mixed with persistence, and continued to 

keep faith with FEMA and in themselves in the belief that this 

federal government of ours has not lost sight of the needs of 

the City or its citizens. Your presence here today is proof of 

that. You are fulfilling a vital part of the Stafford Act which calls 

for a Standard of Review (Sec. 313) (42U.S.C. 5156) which 

states that 

"The President shall conduct annual reviews of the activities of 

Federal agencies and State and local governments in major 

disaster and emergency preparedness and in providing major 

disaster and emergency assistance in order to assure maximum 

coordination and effectiveness of such programs and 

consistency in policies for reimbursement of States under this 

Act." (underlining is mine.) 

There has been an abysmal lack of coordination and 

effectiveness of programs. UTMB and the City operated with 

two different FEMA teams in two different universes. FEMA 

failed to clarify for itself or the City exactly where its jurisdiction 

began and ended. Examples are the confusion over repair and 

reconstruction of Pelican Island Bridge and responsibility for 

our traffic signals, including school zone signals. FEMA thought 

these were their responsibility. Months later, it was discovered 

that the FHwA has jurisdiction. Now with HUD CDBG disaster 

5 
17 

funding beginning to flow into City coffers, FEMA is indicating 

that it might pull back some of its funding to honor its role as 

"the funding source of last resort." FEMA should be our first 

funding source, with the CDBG a vital backup for housing, 

infrastructure and economic development. 

In light of Hurricanes Katrina and Rita, the City looks to the 

standard of "consistency in policies for reimbursement of 

States." Galveston has earned your trust. We are aware that 

there is a discrepancy in the programs and especially the 100% 

reimbursement for all categories of FEMA public assistance 

granted to Katrina victims. 

The Surge destroyed our urban forest which we consider 

our infrastructure, an estimated 40,000 trees, providing energy 

efficiency, reduced carbon emissions, as well as beauty. It 

would be cost effective for FEMA not only to remove the 

thousands of dead trees but to also pay for the planting of their 

replacements. 

Finally, the challenge for the future growth and 

development of our Gulf Coast Region could be met by three 

major undertakings by the federal government. One, is the 

release of 600 acres of seawall- protected land that the City 

loaned the Corps of Engineers for dredge spoils in the last 

century. Two, is the support of Galveston - Houston efforts to 

construct shoreline protection for the Texas Gulf Coast, and 

6 
18 

three, to provide funding for high-speed commuter rail 

between Galveston and Houston. 

The written testimony that is attached will amplify my 

statement here and provide further recommendations. 

Thank you for this opportunity to meet with you. 

7 
19 

Chair LANDRIEU. Thank you, Mayor, for that clear presentation. 

[Applause.] 

Thank you, Mayor, for that clear presentation and excellent suggestions. 

Let me now turn to State Senator Craig Eiland, speaker pro tem. 

Thank you very much. 

STATEMENT OF THE HONORABLE CRAIG EILAND, A TEXAS 

STATE REPRESENTATIVE FROM DISTRICT 23 

Representative EILAND. Thank you, Senator, and thanks to your 

brother, the Lieutenant Governor of Louisiana, for all of his help 

in our time of need, as well. 

I am going to be very brief today. To me, it is always important 

that FEMA remembers that the ‘‘E’’ in their name stands for emergency, not eventually. 

[Laughter.] 

And that often times seems to be an issue. It is not the people, 

because, like she said, we have great people down there working 

for us, but it is the system and the process that slow things down. 

One issue that came to light early on is that jurisdictions do not 

matter after disaster. The prime example was in debris cleanup. 

The City of Galveston has a preposition to contract, the State, for 

some inexcusable reason, did not, and, so, when the debris was all 

over our streets, city streets could be picked up by the city contractor and the streets cleaned of debris, but those same contractors could not pick up debris on state roads within the City of Galveston. And, so, Broadway was trashed, the side streets were clean. 

So, if the people on Broadway pushed their debris out the side 

door, it got picked up. If it was pushed out the front door, it sat 

there rotting for actually over 45 days. 

That was inexcusable in the State of Texas not to have a debris 

contractor prepositioned, but it is also ridiculous to have such jurisdictional issues so that people have to wonder is this a state highway, is this a county road, or is this a city street to know who can 

pick the debris and get reimbursed. 

Second, insurance. Under FEMA is the Federal Flood Program. 

We have to have coordination among our states and the Federal 

government on insurance. State cat pools or catastrophe plans—it 

is called Texas Windstorm Insurance Association of Texas. When 

somebody thinks they have ‘‘full coverage,’’ they go to their insurance agent and say how much does it cost so I am insured for everything? They pay that, they have to have one policy for windstorm, one policy for homeowner’s, one policy for flood, and they 

think they are covered. 

Well, here comes the storm with wind and flood, and then they 

realize they are not covered for everything because the flood program says it is wind, the wind insurance says it is the flood, and 

then there is mismatched coverage because if it is wind, you can 

get alternative living expenses when you are out of the house, if 

it is flood, you do not. If you are a business, you can buy business 

interruption insurance for wind, but you cannot buy it for flood, so, 

you do end up caring which one it is because it impacts what coverages you have. That needs to be coordinated because, at the end 

of the day, the constituent, the policyholder just wants to get fixed 
20 

and back in place, and let the state and Federal government fight 

over whether it was wind or flood as opposed to the homeowner 

fighting over whether it was wind or flood because they were not 

there. They evacuated. 

Same issue is, the Federal government, we need to have a backstop to our state plans. Louisiana has a state plan; Texas has a 

state plan, Mississippi, Florida. It would be very good if we could 

have some type of federal coordination to back up so that we are 

not all trying to prepare for the worst case scenario because that 

gets rather expensive for all of us. We could all go to some type 

of standard, and then have the Federal government back that up 

with the federal backup or backstop like we do with terrorism insurance, that would be beneficial to everybody. 

And then, finally, these are two real kind of practical suggestions. We have had Rita and Ike hit especially the Beaumont and 

Chambers County area. It might be good if we had the Blue Tarp 

Program to change colors every storm season so that we would 

know that hey, there is still damage in this community from Rita 

three years ago that has not been repaired as a reminder to us instead of it all looking blue tarps, and we are not knowing if they 

are still damaged. 

Chair LANDRIEU. Excellent idea. 

Representative EILAND. And when there are hoards of FEMA 

people here, and I did not realize the multiple jurisdictions, the 

multiple responsibilities that all those people have because they all 

just wear a windbreaker or a cap that says FEMA, and then you 

want to go talk to them about debris, well, I do not do debris. Or 

I only do debris in the water. I do not do debris on the land. You 

are like well, then put that on your shirt or your windbreaker. 

[Laughter.] 

Chair LANDRIEU. Identify yourself. 

Representative EILAND. Identify yourselves. We know you are 

FEMA. What part of FEMA? What can you help with, so that we 

will know who to run around to and ask. Either that or do not wear 

the windbreaker. 

Chair LANDRIEU. Excellent suggestion, and I will take that directly back to Craig Fugate, the new FEMA Administrator, who is 

very experienced on the ground, from Florida, knowledgeable, and 

is trying to put some of these practical suggestions in place. 

Thank you very, very much, and I know if you have to slip out, 

please. 

Mr. David Callender. 

Dr. CALLENDER. Thank you, Senator. My mom would want you 

to know that I am also a medical doctor. 

Chair LANDRIEU. Doctor. Sorry. Doctor. 

STATEMENT OF DAVID L. CALLENDER, MD, MBA, FACS, PRESIDENT, THE UNIVERSITY OF TEXAS MEDICAL BRANCH AT 

GALVESTON 

Dr. CALLENDER. My first calling actually is as a physician and 

surgeon, and, from that perspective, I know what it looks like when 

people cannot get access to the care that they need. And that is 

what happened here after Ike’s passage. 
21 

The storm had a profound impact on our institution. I think you 

got to see an element of some of the damage that remains today. 

If you include the business interruption losses, the value of the 

damage is over $900 million. 

Our campus consists of about 7 million square feet of buildings, 

and over 1 million square feet of first floor space was damaged by 

flooding. Thanks to heroic efforts on the part of our people, our recovery has progressed more quickly than anyone expected, and I 

can certainly assure you that our outlook today is much more positive than it was a year ago. 

I do want to express my deep appreciation for the tremendous effort put forward by all agencies of the Federal government to help 

UTMB recover and rebuild. And, as Speaker Pro tem Eiland and 

Mayor Thomas mentioned, the individuals themselves have done, 

I think, as much as they can or could within the confines of the 

FEMA process. It is the process that we think needs attention. 

I mentioned to you earlier. I described an anecdote about our recovery. A couple of weeks after the senior FEMA claims writer had 

been on our campus, he looked around and estimated the amount 

of damage that was present. Now, we are months later, and almost 

4,000 project worksheets into the process, and the amount that 

damage that we have is pretty darn close to what that estimator 

first said it would be. 

So, what is the holdup? What could be done to improve the process to allow funds to flow more quickly and to allow places like 

UTMB that offer critical services, oftentimes to people that cannot 

get them elsewhere, get back on their feet as quickly as possible? 

I also want to echo the mayor’s concern about the basic infrastructure that supports our city. It needs to be sufficiently restored 

not only to help the citizens of the City of Galveston, but UTMB. 

And, of course, I am talking about services that we often take for 

granted: water flow, waste water treatment, natural gas, and electricity flows. 

Certainly thanks to FEMA in a large part and the State of Texas 

and some great supporters we know, we have been able to develop 

and resource a plan to harden our facilities at UTMB against floods 

and windstorms. But that is not going to do anybody much good 

if the City of Galveston’s infrastructure is not also similarly hardened. 

So, we suggest going forward that there be much closer coordination and communication between the FEMA teams assigned to 

UTMB and the City of Galveston. The major focus would be the 

process and plans for the rebuilding of that critical utilities’ infrastructure that supports both entities. A more holistic view of the 

infrastructure restoration would be most beneficial, and may even 

reveal ways to create greater efficiency in funding the recovery 

process. 

Finally, one of Hurricane Ike’s silver linings has been the renewed awareness of UTMB’s importance to our region’s health care 

system and economy. We are very thankful to the investment that 

you all in Washington are making in our recovery, which will allow 

us to continue our 118-year tradition of serving the health needs 

of Texas and the Gulf Coast in general. We certainly want you to 

consider ways that you can ensure that an aging municipal infra-
22 

structure’s recovery can proceed unfettered and that our own recovery is not hindered in any way. 

Again, thank you for the opportunity to speak to you today, and 

thank you for all of your efforts to help all of us who live along the 

Gulf Coast. 

[The prepared statement of Dr. Callender follows:] 
23 

Testimony of 

President David L. Callender, MD, MBA, FACS 

The University of Texas Medical Branch at Galveston 

before a hearing of the 

U.S. Senate Committee on Small Business and Entrepreneurship 

on 

"A Year Later: Lessons Learned and Progress Made after Hurricane Ike" 

September 25, 2009 

1lPage 

Testimony of David L. Callender, MD. MBA, FACS 

President, The University of Texas Medical Branch at Galveston 

Friday. September 25, 2009 
24 

Senator Landrieu and members ofthe Senate Committee on Small Business and 

Entrepreneurship, I appreciate the opportunity to share the perspective of The 

University of Texas Medical Branch on Hurricane Ike as we enter our second year of 

recovery from the storm. 

Before assuming the presidency of Texas' first medical school and academic health 

center, I served as CEO of the UCLA Health System and, prior to that, as Executive Vice 

President and Chief Operating Officer at the UT MD Anderson Cancer Center. In these 

positions, I played a key role in helping both institutions formulate responses to and 

plan for the threat of natural disasters. I can honestly say that I have never been 

prouder to be part of an institution than I am of my association with UTMB. 

Clearly, Hurricane Ike had a profound effect on UTMB. More than 1 million square feet 

of first-floor space sustained damage from salt water flooding. This included critical 

components of our health system-a major source of revenue for an academic medical 

center that is Galveston County's largest employer. 

Our recovery has proceeded more quickly than anyone expected and I can assure you 

our outlook today is infinitely more positive than it was a year ago. The written 

testimony we have submitted for the record goes into greater detail about UTMB's 

progress and what we have learned from this experience. I want to take this opportunity 

to express the university's deep appreciation for the tremendous effort put forth by the 

federal government to make resources available to help UTMB recover and rebuild after 

Hurricane Ike. 

The people who staff agencies such as FEMA have been spectacular in their efforts to 

help us get back on our feet and move beyond the storm. And we have been gratified to 

find agencies not normally thought of as having a disaster relief mission offering to help 

us. One example is the willingness on the part of the National Institutes of Health to 

extend grant deadlines so that our researchers would not be disadvantaged by 

Hurricane Ike. 

That said, we do feel that the process and length of time necessary to access critical 

funds needed for rebuilding can be improved. While we certainly understand the need 

for FEMA and other agencies to exercise due diligence when responding to a major 

disaster, we also feel it is worth exploring whether we as a nation can strike a better 

balance between fiscal prudence and timely recovery. 

But perhaps our biggest concern is that the critical infrastructure that supports our 

city-water distribution system, wastewater treatment facilities, natural gas supply and 

the electrical grid-will not be sufficiently restored to better withstand future major 

storms. Thanks to our work with FEMA, the University of Texas System and others, 

UTMB has a comprehensive plan to "harden" our facilities, especially our hospital and 

21Page 

Testimony of David l. Callender. MD. MBA, FACS 

President, The University of Texas Medical Branch at Galveston 

Friday, September 25, 2009 
25 

its critical emergency room and trauma center, against floods and windstorm. UTMB will 

not be able to resume vital operations in a timely manner after future storms if the city's 

infrastructure is not significantly improved and similarly "hardened." We are concerned 

that the current FEMA process and funding mechanisms will not allow our city access to 

sufficient resources to accomplish this. 

For UTMB, one of the "silver linings" in Hurricane Ike has been renewed awareness of 

the university's importance to our region's health infrastructure and economy. We are 

most thankful for the investment FEMA is making in our recovery, because it will allow 

us to continue our llB-year tradition of serving the health needs of Texas. We 

encourage you to consider ways to ensure that an aging municipal infrastructure not 

hinder our recovery in any future storm. 

Thank you again for the opportunity to speak to you today. And thank you for your 

efforts to protect the Texas gulf coast and other regions in our nation from the 

economic effects of natural disasters. 

31Page 

Testimony of David L Callender, MD. MBA, FACS 

President, The University of Texas Medical Branch at Galveston 

Friday, September 25, 2009 
26 

Initial and continued critical collaborations 

• Federal government - e.g., FEMA, DMAT, USN Nassau 

• State of Texas - e.g., Governor's Office, Legislature, DSHS, HHSC, National Guard 

• City/County government and community leaders 

• The University of Texas System, many UT institutions, other Texas academic 

institutions, many health care providers across the state 

• Professional organizations - e.g., AAMC, ACGME, Society for Microbiology 

• Alumni, local communities, friends 

APPENDIX 

The following comments describe our general approach to protecting and preserving 

UTMB's campus assets before, during and after Hurricane Ike. 

Preparing for weather-related events 

• Campus-wide preparation and training for hurricanes is routinely conducted at 

UTMB, consistent with our institutional disaster preparedness policy 

• A hurricane simulation disaster drill was conducted two weeks prior to the storm 

• Extensive communication channels with the Texas State Emergency Operations 

Center and local/regional emergency response teams were in place well before 

the storm's arrival 

• A comprehensive Incident Command Structure was in place and ready for 

activation prior to the event 

• A maximum of $100 million in disaster insurance coverage was secured by The 

University of Texas System Board of Regents for the Houston-Galveston region's 

campuses 

• Contracts for disaster response services were in place through UT System's 

Office of Risk Management 

• Stocks of fuel, water, food and medical supplies, as well as alternative power 

sources, were available on the UTMB campus or staged at nearby locations in 

advance of the storm 

• Employees essential to the provision of security, facility operations, emergency 

health care and emergency management functions were designated ahead of 

the event and positioned for response 

A staged approach to Hurricane Ike 

41Page 

Testimony of David L. Callender. MD. MBA. FACS 

President, The University of Texas Medical Branch at Galveston 

Friday, September 25, 2009 
27 

• Phased cessation of research activities, cancellation of clinic visits and elective 

surgeries, discharge of hospital patients able to safely return home, and the 

relocation of academic and vital support functions (e.g., finance), commenced 48 

hours before the storm 

• Campus facilities were secured according to pre-storm standards 

• Closure of the Galveston National Laboratory and all other UTMB biosafety-Ievel 

labs was completed "by the book" and without incident 

• Essential personnel were notified to make plans to be in assigned locations at 

assigned times in advance of the storm's arrival 

• Regular communications with local, state and federal officials were maintained, 

primarily through the State Emergency Operations Center under the direction of 

Chief Jack Colley and the Office of the Governor 

• Effective evacuation of non-essential personnel, students and hospitalized 

patients (including prisoners) was conducted according to protocols, with no 

significant adverse event, thanks to an incredible effort on the part of UTMB 

personnel and with invaluable support from Captain Colley, the staff of the EOC, 

and on-site representatives Charles "Boo" Walker and David Popoff, who worked 

to secure essential transportation assets and transfer locations 

During and immediately after Hurricane Ike 

• 1 million square feet of UTMB's first floor space was flooded as a result of salt 

water storm surge from the Galveston Bay; flood levels ranged from a few inches 

in UTMB's Moody Medical Library and the School of Nursing and Health 

Professions Building, to three feet in John Sealy Hospital, to eight feet in "Old 

Red," the state's first medical school building 

• UTMB's incident command team and on-site staff focused on providing 

emergency medical services and on protecting and preserving campus assets 

while securing essential emergency services for the campus-food, power, 

water, natural gas, communications 

• UTMB provided emergency medical services for community members and first 

responders who were on the island during and immediately after the storm 

• Due to the intense demands on personnel fulfilling essential duties during and 

after the hurricane, a rotating "buddy system" was implemented to ensure 

personal safety and continued fitness for duty 

• Cleaning and restoration of campus facilities began immediately, supplemented 

with contracted disaster management workers who arrived within a day of the 

storm 

• UTMB's highly trained security officers provided a safe environment for staff and 

kept the campus free of intruders 

51 Page 

Testimony of David L Callender, MD. MBA, FACS 

President, The University of Texas Medical Branch at Galveston 

Friday, September 25, 2009 
28 

• UTMB's top priorities were to attend to the medical needs of a steady stream of 

patients seeking emergency care or shelter, to provide a safe environment for 

on-site UTMB and contract personnel, and to preserve and protect campus 

facilities and equipment 

Immediate post-Ike priorities 

• Addressing the needs of patients, students and employees 

o Relocated 597 Galveston-based medical residents to alternative clinical 

training sites 

o Established off-campus student and employee support services 

o Placed 3rd- and 4th-year medical students in clinical rotations off campus 

o Provided for continuity of patient care by quickly restoring access to the 

university's Call Center, patient ACCESS line, Internet services and 

Electronic Medical Record systems 

o Implemented plans immediately after initial damage assessments to 

relocate critical patient services to mainland locations 

o Established collaborations with local hospitals to provide for UTMB 

physician privileges and practice opportunities 

o Provided support services for employees and students during the 

transition; support included housing assistance, assistance with FEMA 

registration, student financial aid, counseling services, and uninterrupted 

payroll operations 

• Protecting and preserving UTMB's research capabilities 

o Preserved critical frozen research specimens and major equipment 

o Restored research labs to functionality as quickly as possible 

o Located alternative areas to conduct vital research projects that needed 

to proceed without interruption 

• Restoring campus functions 

o Initiated a complete assessment of damages, in concert with UT System 

Risk Management 

o Began clean-up and dehumidification of damaged buildings within 36 

hours of the arrival of tropical storm force winds 

o Developed a prioritized schedule based on the damage assessment to 

return buildings to their designated use as quickly as possible 

o Note: Basic services such as water, sewer, natural gas and electricity were 

dependent upon the City of Galveston's aged utility infrastructure and 

took more than a week to restore; this significantly limited UTMB's 

restoration efforts in the immediate aftermath of the hurricane 

61Page 

Testimony of David L Callender, MD. MBA, FACS 

President, The University of Texas Medical Branch at Galveston 

Friday, September 25,2009 
29 

Initial and continued critical collaborations 

• Federal government - e.g., FEMA, DMAT, USN Nassau 

• State of Texas - e.g., Governor's Office, Legislature, DSHS, HHSC, National Guard 

• City/County government and community leaders 

• The University of Texas System, many UT institutions, other Texas academic 

institutions, many health care providers across the state 

• Professional organizations - e.g., AAMC, ACGME, Society for Microbiology 

• Alumni, local communities, friends 

Restoring services 

• Over the past 20 weeks, UTMB has been able to restore most of its research 

services: 

o 95% of research space above the first floor can be occupied 

o The Galveston National Lab was essentially unharmed; the facility was 

formally dedicated less than two months after the storm and a number of 

its containment labs are already operational 

o The Robert E. Shope biosafety level 4 lab was unharmed and is 

operational 

o The Truman Blocker Medical Research Buifding sustained very little 

damage and is operational 

• UTMB's School of Medicine returned to operations with no significant 

interruption in the students' academic experience: 

o Academic services are operational; on-campus cfasses for 15t- and 2ndyear medical students resumed October 20 

o Clinical programs for 3rd- and 4th-year students have continued through 

collaborative agreements with other health care facilities in Texas; these 

students began a phased return in January and all will be back under the 

direct supervision of UTMB faculty by June 

• UTMB's schools of Nursing, Health Professions and Graduate Biomedical 

Sciences are operational 

• All four schools are accepting applications for next year and their 2009 

commencements will take place on schedule 

• Clinical services have been restored and/or are now available at: 

o UTMB's network of Regional Maternal and Child Health Clinics (these 

cfinics began seeing patients two days after the storm); approximately 80 

cfinics on and off the island currently offer a full range of primary and 

specialty services 

o John Sealy Hospital 

Beds for women/newborns available one month after Ike 

71Page 

Testimony of David L. Caliender, MO. MBA. FACS 

President. The University of Texas Medical Branch at Galveston 

Friday, September 25, 2009 
30 

Reopened Jan. 5 with an initial configuration of 200 full-service 

beds (including beds for TDCJ patients) 

• Services include women's, infants' and children's care, 

medical/surgical and critical care, acute care for the elderly (ACE 

Unit), transplant services, burns care, among others 

o Emergency room (operating on a treat-and-transfer basis) in the John 

Sealy Hospital 

o Inpatient units at collaborating hospitals 

Christus St John (Nassau Bay) 

Clear Lake Regional Medical Center (HCA - Clear Lake) 

Mainland Medical Center (HCA - Texas City) 

• St. Joseph Medical Center (Houston) 

Why the number of beds in John Sealy Smith Hospital is lower than pre-Ike level 

• Restoring essential support services requires relocating them above the first 

floor (taking space once devoted to patient beds): 

o Inpatient pharmacy 

o Sterile processing for the operating rooms 

o Blood bank services 

o Food services 

o Radiation oncology services 

• Renovated inpatient units will require more space per bed to comply with code 

and accommodate necessary equipment 

• Reduced population (demand) anticipated on Galveston Island 

Why UTMB cannot yet reopen its Level One Trauma Center 

• Damage to critical support areas such as pharmacy, blood bank, sterile 

processing, food service 

• Loss of essential, expensive medical equipment 

• Difficulty in meeting staffing requirements (physician availability) 

• Working with Texas Department of State Health Services to determine 

appropriate trauma center designation based on current capacity 

Challenges to UTMB's recovery 

• 59% of UTMB's annual budgeted revenue was derived from patient care 

operations; that revenue stream has been significantly reduced due to 

81Page 

Testimony of David L. Callender. MD. MBA, FACS 

President, The University of Texas Medical Branch at Galveston 

Friday, September 25,2009 
31 

hurricane-related damage the John Sealy Hospital and campus outpatient clinics 

sustained 

• UTMB outpatient clinical services are operational in primary care and specialty 

services on the mainland but productivity is limited by space availability 

• UTMB's operating expenses related to campus clean-up efforts and ongoing 

payroll has resulted in rapid depletion of cash reserves; these reserves are being 

rebuilt gradually through reimbursements and expense reductions such as the 

reduction in force announced in November 2008 

• Lack of long-term source of working capital limits UTMB's ability to restore 

facilities and equipment necessary to return to full functionality in all mission 

areas, particularly the clinical enterprise 

Actions UTMB has taken to address financial challenges 

Short term: 

• Reduction in force affecting approximately 2,300 positions is enabling UTMB to 

bring its payroll in line with current staffing needs and has helped in reducing 

projected business losses from $276.4 million to $169 million 

o Employees affected by the RIF received a minimum of 60 days' notice 

with full pay, as well as continuing access to numerous programs to 

assist with their job search, including "internal candidate" consideration 

for openings at other UT System institutions 

• Ongoing work with FEMA to determine extent of damage, potential level of 

reimbursement and mitigation needs (UTMB has received $72.6 million in 

FEMA advances and reimbursements as of Jan. 31) 

• Ongoing work with state, federal and local governments and with UT System to 

determine most appropriate financing options 

Long Term: 

• Work with state leadership to determine UTMB's health care mission for the 

state, as well as the best means for fulfilling that mission 

• Kurt Salmon Associates study requested by the Governor's Office and funded by 

UT System to help determine options for structuring UTMB's health care system 

in future, including analyses of costs and potential revenues 

• Work with local communities on health care financing options, including 

formation of hospital district(s)/health service district(s) 

Possible mitigation strategies 

91 P age 

Testimony of David L. Callender. MD. MBA, FACS 

President, The University ofTexas Medical Branch at Galveston 

Friday, September 25, 2009 
32 

• Improving City of Galveston utilities infrastructure (water, sewer, power, natural 

gas, communications) to ensure rapid return to operations for UTMB 

• Raising essential services to the second floor or higher in all buildings 

• "Hardening" existing buildings where feasible (e.g., installing floodgate systems 

similar to those used in the Texas Medical Center to protect the core area of the 

UTMB campus) 

• Developing a "hardened" facility to better support animal research by 

eliminating the need to transport animals during weather-related emergencies 

• Developing a "hardened" facility with reliable power and fuel sources to 

maintain the research enterprise's frozen specimens ("Freezer Farm") 

• Relocating vulnerable services to the mainland on property already being 

developed by UTMB as an ambulatory surgical, imaging and specialty care center 

The University of Texas Medical Branch is working to protect and preserve vital 

capabilities and precious resources as we plan for the future. All avenues of potential 

funding and support are being pursued. We are working closely with state leadership 

and with the Texas Health and Human Services Commission to analyze the impact of our 

suspended clinical services on the citizens of Texas and the budget implications for the 

State of Texas. 

UTMB Hurricane Ike recovery needs (as of January 2009) 

• UTMB has identified the following needs, and is continuing to work with the 

state on timing of expenditures and methods of finance (insurance proceeds, 

FEMA, other federal funding, bonding, state funds, etc): 

• $169M - to restore business losses 

• $167M - State's share of FEMA-estimated capital repair and mitigation costs 

• Access to a source of funds over the next five years to be repaid with 

expected $500M in FEMA reimbursements for capital costs 

Factors that could adjust needs estimates 

• Ongoing FEMA negotiations regarding damage assessments and allocation of 

approximately $100 million in insurance between capital needs and business 

losses 

• External factors outside of UTMB's control (e.g., Shriners of North America's 

recent decision to close Shriners Hospital for Children-Galveston, located on 

Galveston Island and staffed by UTMB faculty) 

• State Auditor review of UTMB 

10lPage 

Testimony of David L. Caliender, MD. MBA. FACS 

President. The University of Texas Medical Branch at Galveston 

Friday, September 25, 2009 
33 

Potential sources being explored to finance UTMB's recovery and extend its success 

• An advance against expected FEMA reimbursement from the Federal 

government 

• Access to lines of credit or revolving fund to be repaid by FEMA reimbursements 

• Social Services Block Grant funding 

• Community Development Block Grant funding 

• Other federal funding (e.g., stimulus bill, changes in state-match requirement for 

FEMA reimbursement, etc.) 

• Tuition Revenue Bonds 

• State General Revenue support 

• Funding for UTMB exceptional items for programs of academic excellence 

Potential recovery support from the Galveston community 

• Sealy & Smith Foundation and other philanthropic sources 

• Formation of a County Hospital District/Health Services District 

• Continued collaboration with mainland-area hospitals for clinical care, student 

and resident education, and research 

UTMB has an outstanding track record of fulfilling its vital missions of producing a 

diverse and highly skilled health professions workforce and applying our research to 

improve the diagnosis, treatment and prevention of killer diseases like Alzheimer's, 

Parkinson's and diabetes. Our educational and research programs came through 

Hurricane Ike a bit battered and bruised, requiring us to make permanent repairs, as 

well as mitigate against future damage. That said, both enterprises are functioning well, 

are highly productive and are proceeding with their very important work. 

Unfortunately, our health system facilities were more heavily damaged. The clinical 

enterprise is critical to UTMB for two reasons. First, it is the principle training site for our 

education programs and there are no facilities nearby that can easily substitute as 

training locations. Second, the health system provides almost 60 percent of the annual 

budgeted revenues that support UTMB's primary missions of education and research. 

Additionally, UTMB provides critical health services to the entire Houston-Galveston 

region. 

We need to restore our health system and its premier programs - such as our nationally 

acclaimed trauma center - so that the region and state we serve can continue to benefit 

111Page 

Testimony of David L. Callender, MD. MBA, FACS 

PreSident, The University of Texas Medical Branch at Galveston 

Friday. September 25. 2009 
34 

from the knowledgeable health professionals we train, the research advances we make 

possible, and the patient care we so ably provide. While UTMB faculty and staff have 

worked tirelessly to restore the health system, the extent ofthe damage has limited 

recovery efforts. Without the assistance and guidance of the Texas Legislature, it will 

likely be impossible for us to restore critical facilities and reconfigure UTMB for the 

future. Both are necessary to ensure financial viability and preserve UTMB's continued 

ability to contribute to the health of Texas. 

Thank you. 

121Page 

Testimony of David L. Callender, MD. MBA, FACS 

President, The University ofTexas Medical Branch at Galveston 

Friday, September 25, 2009 
35 

Chair LANDRIEU. Thank you, Doctor. I appreciate it, and we will 

come back to this, but I will mention that on the anecdote that you 

shared about the initial estimate down, that we have subsequently 

passed at least one law that will help, and if we can expand it, it 

would cover that instance where we have required FEMA now to 

basically reimburse as a whole police stations, fire stations, and 

public schools. 

We pressed them to do the reimbursement for all public projects. 

They have resisted so far, but we are going to continue to press so 

that each project does not have to receive several thousand project 

work order sheets and some initial assessment can be made that 

would save the taxpayers money, save everyone time, and be a 

much more effective way. 

So, while we have made some progress, thank you for continuing 

to press that. It is extremely important that we eventually get that 

law changed to authorize them to do that. Thank you. 

Mr. Gillins. 

STATEMENT OF CURTIS GILLINS, CO-OWNER, Y’A BON 

VILLAGE COFFEEHOUSE 

Mr. GILLINS. Yes. Madam Chair, it is indeed an honor and a 

privilege to provide testimony to this distinguished committee regarding our experience as business owners here in Galveston during and after Hurricane Ike. It is not often that a business of our 

size gets this opportunity, and we are grateful for this moment. 

My name is Curtis Gillins. My wife and I owned a small, family 

business located in an inner city neighborhood on the north side of 

the island at one of its lowest elevations. We opened our business 

in December 2005. It took great financial and personal sacrifice to 

get to that point. 

Within three months of opening our doors, Y’a Bon Village Coffeehouse survived two arson attempts from suspected drug dealers 

who did not want us there. Between 2005 and 2008, we suffered 

from two hurricanes. Hurricane Rita damaged the building in 2005, 

just before our planned opening. In 2008, Hurricane Ike stuck and 

left four feet of water outside, five feet of water inside. It damaged 

the building and destroying everything inside, including supplies, 

furniture, fixtures, appliances, and refrigerated boxes. Although 

the building was insured for wind and flood, the business contents 

were only covered by wind. We received insurance funds to restore 

the building, but no money to restore business content. 

Hurricane Ike also destroyed the neighborhood. The public housing community across the street known as Cedar Terrace got nine 

feet of water. After the storm, Cedar Terrace was torn down, and 

suddenly hundreds of families no longer lived within footsteps of 

our business. 

The whole area was so damaged that traffic dried up going east 

to west on Church Street and north to south on 29th Street. The 

area around our business became a ghost town. The storm had not 

only damaged our business, it took away our customers. Now, we 

are faced with restoring our business in a local economy that had 

drastically changed. We do not have the money to replace our business content, and, even if we did, our customer base has dried up 

due the damage from the storm. 
36 

Our application for SBA loan assistance was denied, but we are 

hoping to qualify for grants which could only be awarded if the 

SBA loans were denied. We have not received any offer of grants 

from SBA or any other source. 

The future of our business remains unknown. We have made 

progress in restoring the building, but we simply do not have the 

money to start over in the existing economic climate. We have not 

lost hope, but we have an overwhelming need for help that will enable us to reopen a business that will survive. 

The city has also suffered, but we are encouraged by signs of development that are underway in the neighborhood. The public 

housing community that was across the street from our business 

will be rebuilt for low- to moderate-income families. Plans for the 

new community offer residents a safe, attractive, and green environment. 

Plans are also underway to expand the historic downtown Stand 

District. The plan extends to downtown historic area to 26th Street 

between Harborside and Winnie. The plan will bring improvement 

to that area such as better lighting, drainage, and green areas, as 

well as improvements in the overall economic climate for small 

businesses. The problem is plans for the development and improvement of the area do not include the three blocks between 26th 

Street and 29th Street. Leaving out the area between 26th Street 

and 29th Street means the plan for development does not include 

our business, nor the area immediately to the east of the new housing community or immediately west of the historic district. 

If this three-block area is left out of the plans for development, 

residents of the new housing community will have no shops, stores, 

or grocery stores to support their new community. Small businesses 

will not be able to come to the area because of the economic and 

personal risk required to locate there. 

That three-block area will also threaten the Strand Historic District to the east. If left unchanged, the area would, again, be dominated by crime, drugs, and prostitution that would surely spill over 

into the area serving tourists and cruise passengers. 

In short, we want to include in the overall plan for development 

of the areas so that our business will survive and our community 

will survive. We desperately need business incentives and grants 

that will enable small businesses to locate and thrive in this challenged area. We want to serve our local residents, and we also 

want to be included in plans to serve the tourists and cruise passengers that are so vital to the city’s economy. 

We appeal to you to ensure that our city and our neighborhood 

get their fair share of available funds, such as Community Development Block Grants, to enable us to be whole again. I have included 

more details in my written testimony, and I hope that the committee will have an opportunity to review my complete testimony 

and see some of the images that help to tell our story. 

In conclusion, my wife and I would like to thank Senator 

Landrieu and this committee for the opportunity to provide input 

on our personal recovery and the recovery of our neighborhood and 

our city. Thank you for your time and for your caring. 

[The prepared statement of Mr. Gillins follows:] 
37 

CURTIS GILLINS and SHARON BATISTE GILLINS 

BIOGRAPHY 

Curtis and Sharon Gillins are owners of Y'a Bon Village Coffeehouse. Both are third 

generation Galvestonians who grew up in the area in which their business was 

located. After graduating from Ball High School in Galveston's first completely 

integrated high school Class of 1969, Sharon and Curtis left home to attend college 

and start careers. Curtis moved to Los Angeles, California where he worked in LA's 

Todd Shipyards and subsequently the airline industry for many years. Curt is a 

master percussionist who performs throughout the country with "Magic of the 

Drum"; he teaches hand drumming and also facilitates drum circles for corporate 

retreats and team-building events. Sharon attended Howard University and lived in 

Washington, DC for 30 years before relocating in 1992 to Riverside, California. Over 

the last 30+ years, she has served in a variety of capacities in post-secondary career 

technical education and is currently an Associate Professor of Film & Television at 

Riverside Community College. Sharon and Curtis married in 2001. 

In 2005, the couple began making plans to return to the Island to start a business. 

Both were ready to come home and wanted to make a difference in the community 

in which they grew up. In December, 2005, y'a Bon Village Coffeehouse opened at 

the corner of 29th Street and Church (Avenue F). Most people thought them crazy to 

invest in this blighted area that was sadly referred to as "The Jungle." But as native 

Galvestonians, they remembered this area as the heart of Galveston's African 

American business district, bustling with restaurants, doctors' offices, nightclubs, 

the ILA Hall and the city's only movie theatre open to Blacks. They remembered the 

area as a village, not a jungle and saw an opportunity to open a business that was in 

a historic Galveston neighborhood, located within blocks of the Downtown Strand 

Historical District and equally close to Galveston's growing cruise ship industry. 

Village Coffeehouse was situated on the north-east corner of 29th Street. On the 

south-west corner was a densely- populated public housing complex; on the southeast corner was a vacant lot that had been turned into an open-air drug market and 

hangout for like-minded people. When the flowers went in and the sign went up out 

front, the dealers were not happy that such a place had moved into their "turf'. The 

couple's vision for the area was in direct contrast to the prevailing vision and 

problems resulted. Less than three months after opening the doors, several 

attempts were made to burn the business down. The blatant actions of a few 

mobilized the Galveston community into action. City officials, the police and fire 

departments, Galveston Chamber of Commerce business members, and just plain 

old concerned citizens rallied to improve conditions in the neighborhood. As a 

result, a single family home was built on the same lot where drug sales once 

flourished and at least 4 other homes for moderate-income families have been 

constructed on the block. The couple's vision and commitment to the area and to 

their business, led by Curt's brave determination not to be defeated, proved to be a 

catalyst for change in this inner-city community. 

1 
38 

U.S. Committee on Small Business and entrepreneurship 

Field Hearing 

Lesson Learned, Progress Made, and Challenges that Remain from Hurricane Ike 

Friday, September 25, 2009 

Galveston, Texas 

TESTIMONY 

Sharon Batiste Gillins and Curtis L. Gillins 

Owners, y'a Bon Village Coffeehouse 

Madam Chair, it is indeed an honor and a privilege to provide testimony to this 

distinguished Committee regarding our experience as business owners here in 

Galveston during and after the ravages of Hurricane Ike. It is not often that a 

business of our size and economic profile gets this opportunity and we are indeed 

grateful for this moment. 

Our profile as a small business in Galveston is one of a newly established family 

business located in an inner city neighborhood facing the challenges of urban blight. 

Despite its current condition, the neighborhood holds historic significance as the 

center of economic development for African Americans in Galveston during the '50s, 

much like Harlem held for New York City. We are located on the North side of the 

Island at one of its lowest elevations with an outdated drainage system and 

outdated infrastructure. Despite the presence of a densely populated public housing 

community, few businesses such as stores and restaurants existed in the area to 

serve residents. Although the neighborhood is in close proximity to Galveston's 

historic downtown Strand District as well as its growing cruise ship industry, the 

area has not benefited from the improved infrastructure and comprehensive 

planning that has propelled the Strand into a strong economic position on the 

Island. 

Challenges 

Within 3 years of opening our doors, Y'a Bon Village Coffeehouse survived two arson 

attempts and even more damaging, two hurricanes. Hurricane Rita damaged the 

building and delayed our opening in 2005. In 2008, Hurricane Ike dealt our 

business a crushing blow. The business was inundated with 5 feet of water, 

destroying everything inside including supplies, furniture, fixtures, appliances and 

refrigerated boxes. The historic structure in which the building is located also 

sustained significant damage. 

Hurricane Ike also devastated the neighborhood in which our business is located. 

Our business was about 3 feet above grade, but the public housing community 

across the street, Cedar Terrace, was on grade; instead of the 4 -5 feet of water that 

2 
39 

our business suffered, Cedar Terrace got 8 - 9 feet, completely inundating the first 

floor and leaving the units uninhabitable. Shortly after the storm and after much 

discussion, Cedar Terrace was torn down and suddenly hundreds of families no 

longer lived within steps of our business. The whole area was so significantly 

damaged that traffic patterns completely changed. Although it was once a major 

north-south corridor to the downtown and Strand areas, traffic along 29th Street 

died. Similarly, the east-west traffic to and from downtown that once passed our 

business on Church Street instantly dried up. The area around our business became 

a ghost town. The storm had not only damaged our business' physical plant, it 

eliminated our business' customer base. 

We were faced with restoring our business in a local economic climate that had 

drastically changed. 

• Our local customer base from the neighboring housing complex was gone. 

• Our customer base from major employers such as UTME was gone. 

• Traffic along the north-south and east-west corridors in front of our business 

was gone. 

• We were in a Catch 22 situation with insurance and federal assistance 

organizations such as FEMA and SBA. 

Although our building was insured for flood and wind, the contents of the building, 

including our business equipment and supplies, were insured under wind only. The 

damage we sustained was from "rising waters" and therefore we found ourselves 

without coverage for business interruption or business contents because our 

damage was not primarily from wind. We were able to use the insurance proceeds 

to restore the building, but we had no money to replace the thousands of dollars of 

business equipment and supplies. 

We were not able to obtain assistance from FEMA because our business had 

insurance. We were reluctant to apply for the SEA loan because we did not want to 

assume any additional debt in an economic climate that had so radically 

deteriorated. We were told that in order to qualify for any available grants that we 

had to apply for the loans first. And so, we applied for an SBA loan and we were 

denied, most likely because we were a new business and could not show an ability 

to repay the loan with our other existing debts. We did not receive any offers of 

grants to help us recover. 

The future of our business remains unknown. We have made significant progress in 

restoring the physical plant, but we simply don't have the resources or the plan to 

start a new business in the existing economic climate. As perpetual optimists, we 

have not lost hope that we will again operate a business at this location. But we 

have an overwhelming need for interim assistance that will enable us to hold on to 

the property and reopen a business that will survive in the area's economic climate 

in the face of our depleted resources. 

3 
40 

Opportunities 

The City of Galveston has been dealt a serious blow, but with great adversity comes 

great opportunity. As a result of the storm, the City will realize improvements that 

may otherwise have been impossible. 

• An impressive plan for the development and expansion of the downtown 

Strand Historic District has been advanced by the Downtown Partnership. 

The plan would extend the downtown historic area to 26th Street between 

Harborside and Winnie (Avenue G). Implementation of the plan will surely 

bring improvements to that area's infrastructure such as lighting, drainage 

and green areas, as well as improvements in the overall economic climate for 

small businesses. 

• The public housing complex formerly located on the west side of 29th Street 

between Church and Avenue I will be redesigned and rebuilt to serve as 

homes for low-to-moderate income residents. The City and Housing 

Authority are making every effort to build a community that offers residents 

a safe, attractive and "green" environment conducive to healthy inner-city 

liVing. 

• The City's Department of Recreation warehouse located on the northwest 

corner of 29th and Church is under construction, soon to be a modernized 

facility. 

• The single-family homes built in the last 2 years on Church Street between 

28th and 29th Streets are now occupied by families. 

• Cruise ship parking businesses have popped up along 29th Street between 

Market (Avenue D) and Postoffice (Avenue E), bringing tourist traffic into the 

area. 

• Wynn Funeral Home located at 31st and Church is nearing completion of an 

impressive renovation. 

• Central Middle School, formerly Central High School, is under renovation and 

has received historic designation for its structure and its recognition as the 

first high school for African Americans in the state. 

In short, development and improvements on Galveston's north side are ongoing or 

planned in the areas moving west of 29th Street and in the downtown areas from 

19th Street west to 26th Street. However, there are no plans to include the 3 block 

area between 26th and 29th Streets between Harborside and Winnie, an omission 

that leaves a void in an otherwise exciting redevelopment plan. 

If this 3 block area were included in redevelopment plans, it would give the City a 

tremendous opportunity to create a continuous development zone that starts at 34th 

4 
41 

St (where the Housing Authority has already built a very successful moderate 

income housing community) to the eastern edge of the Historic Strand District at 

about 19th Street. Located in this continuous redevelopment zone is the old Falstaff 

Brewery which has sat vacant for many years as the City searched in vain for a 

developer to realize the vision of a diverse, mixed-use residential and commercial 

complex. Surely a developer might be more inclined to invest in such a project if the 

property was part of a comprehensive plan for the area. 

Inclusion of the 3-block area between 26th Street and 29th Street also represents an 

opportunity to extend recognition to another historically-significant part of town. 

Like New York City's Harlem, this area was home to the many Black-owned 

businesses that thrived during the years of segregation in Galveston. There are still 

many architectural treasures located along Market Street and on surrounding 

streets where Black doctors and dentists had offices and where we enjoyed a 25 

cent movie on Sunday afternoon. Among the historic buildings is the 100+ year old 

storefront in which our business is located, the firehouse at the corner of 29th and 

Market and a Victorian mansion on 28th and Ball L (Ave. H), just to name a few. 

Inclusion and recognition of the historic significance of this area is an opportunity 

for the City to celebrate the rich diversity of its history and is consistent with the 

City's overall plan for the development of the historic downtown area. 

Inclusion of this area would give small business people an incentive to invest in an 

area of Galveston once considered to be too dangerous and economically 

unprofitable. This 3-block area that will border the new housing community 

planned to replace Cedar Terrace is the perfect home for grocery stores, hair salons, 

barber shops, walking trails, gardens and parks. This 3-block area so close to the 

Strand and to the cruise ship industry is the perfect place to build an ethnically 

diverse community of shops that would appeal to international travelers. 

Over the years, this once thriving area has fallen on hard times. When containerized 

shipping became the standard on the docks, laborers who could earn good, familysupporting wages as longshoremen were put out of work. The businesses 

supported by "screwman" wages suffered and failed. In the absence of economic 

alternatives, another type of businessman filled the void. Predators seized upon the 

opportunity to proffer a different kind of product and line of services; crime, drugs 

and prostitution proliferated. Now the City has an opportunity to rebuild. 

My husband and I have invested much in this area in an effort to build our business, 

and also to build a community. Our vision is great and we hope that others will see 

it as well. But there are many challenges to the City and to this area that must be 

overcome if the vision is to become a reality. They are challenges that we as 

business owners and citizens of Galveston cannot accomplish alone. We need your 

help. 

Challenges 

5 
42 

In order for us to rebuild a viable business and to realize a viable business 

community in this area, we must be included .. .included in plans to rebuild, included 

in plans for infrastructure improvement, included in plans for economic 

development, included as an integral part of the City's recovery plan. That is the 

first and perhaps the greatest challenge, exemplified by the areas's omission from 

the plans for the development of the historic Downtown area. 

We appeal to City, State and Federal officials to recognize that failure to include this 

3-block area in the redevelopment efforts will leave a void in the downtown area 

which threatens our ability to continue to operate a business in the area. In 

addition, this omission threatens the success of the housing community planned to 

replace Cedar Terrace and similarly, represents a significant threat to plans for the 

downtown historic district. It would be like leaving a cavity in an otherwise healthy 

mouth ... eventually the cavity will spread decay to the adjoining healthy teeth. 

In order for the Housing Authority to realize a new vision for a housing community 

that meets the needs of low and moderate income families, the surrounding area 

must provide opportunities for residents to shop, attend church, get medical help 

and other services that can be safely reached in walking distance of their homes. 

That means small businesses must be able to operate profitably. Tourists in the 

downtown area must be able to shop and explore the area safely, an opportunity for 

more small businesses. The 3-block area between 26th Street and 29th Street must 

be home to these businesses. 

Predators such as drug dealers and criminals have enjoyed a foothold in this area 

for years. Only in the last few years has their "business" been disrupted to any 

degree, due in large part to the personal sacrifice and risk we took to keep Y'a Bon 

Village Coffeehouse on that key corner. Now development is planned to the east and 

to the west of this 3-block area .. .Ieaving a void, an area that will be recognized by 

predators as their opportunity to reestablish a foothold of depravity. Although they 

are predators, they too are businessmen, and they too will seize an opportunity to 

build their business if one is presented to them. 

Our business will not survive if we are not included in plans for the economic 

development of the region .. .if we are not able to build a customer base that includes 

neighborhood locals, tourists, cruise passengers and downtown visitors. Our 

business will not survive if an economic climate does not exist that attracts other 

small businesses to the area and forms a business community that serves the 

residents and tourists alike. 

We did not qualify for loans nor can we afford them after the personal and financial 

sacrifices we have already made to establish our business in this challenging area. 

We cannot garner the kind of incentives offered to large developers to build new 

economic zones in Galveston. Yet business development is desperately needed in 

this blighted area ... an area that shows so much potential. Small businesses in this 

6 
43 

area need incentives to establish here; we need access to grants that will enable us 

to overcome the challenges of a neglected community. 

Other challenges abound, a few of which are listed below. None can be overcome 

without a cooperative working partnership between federal, state and local officials, 

business owners and citizens. Galveston alone cannot address the problems that 

residents and business owners face in this area and in many cases, the rest of the 

city. 

• Rising costs of insurances that still leave coverage gaps which threaten any 

recovery efforts and pose an enormous financial burden on small businesses; 

• Need for small business training to help increase chances for business 

success; topics include business planning and management, tax and 

insurance issues, record keeping, and marketing; 

• Aging drainage systems on the north side that leave businesses vulnerable to 

flooding even in a moderate rain. 

• Insufficient lighting, street trash cans, green spaces, and recreational areas 

that create a hostile business and residential environment; 

• Vacant and dilapidated buildings that attract vagrants and squatters; 

• An overall perception that the north side of Broadway (with the exception of 

the Strand and downtown) is not a good place to live, work or grow a 

business. 

Conclusion 

In conclusion, we would like to thank Senator Landrieu and this Committee for the 

opportunity to address you and to provide input on the critical matters related to 

our personal recovery from Hurricane Ike as well as the regional recovery 

challenges that face us. It is our sincere hope that our testimony will be of value to 

you as you craft plans to aid in the economic recovery of Galveston's small business 

community. We know that it is the pioneering spirit of the small business owner 

that builds communities and strengthens our country, and we know it is that spirit 

that will prevail as we rebuild Galveston. Thank you for your time and for your 

caring. 

7 
44 

Chair LANDRIEU. Thank you, Mr. Gillins, and I guess it is extremely appropriate, given the subject of this hearing and the nature of the work before us, that you would be sitting next to Dr. 

David Callender, one of the largest if not the largest employer in 

the community, and you being one of the smallest, that our work 

really has to reach both of you. 

Mr. GILLINS. Thank you. 

Chair LANDRIEU. And to reach it to you in a way that really 

helps you and honors your vision and your spirit of entrepreneurship and dedication to this community. That is our hope and intention, and I am very pleased that we have a representative from 

HUD on the second panel, and I will ask him specifically what 

their plans are to help the small businesses. That is important, if 

not even more important, not that one is more important than the 

other, but the numbers of businesses that are small in the communities like Galveston and the surrounding area are quite substantial. So, thank you. 

Mr. Dryden. 

STATEMENT OF FRANK DRYDEN, OWNER, ISLAND FLOWERS 

AND NEFERTITI BOUTIQUE 

Mr. DRYDEN. Thank you, Senator Landrieu, for the opportunity 

to testify as part of this panel. 

My wife, Constance, and I evacuated Houston 12 hours before 

landfall of Ike, and were not allowed to return to Galveston for a 

look and leave until a week later. It was almost two weeks before 

we returned to begin cleanup. We were too late to stop demolition 

of Nefertiti, the Boutique, long enough to salvage any items, but 

we were able to save many of our containers and wedding props at 

Island Flowers with great effort and difficulty. 

The daily confrontation with the demolition crew to give us needed time to salvage goods and the cash expense to hire workers for 

needed assistance took its toll mentally, physically, and monetarily. 

After depleting all available cash, my wife, Constance, and I 

cleaned items every day for six weeks out front from dawn until 

dusk, as there was no electric power. We stored salvaged items in 

a 24-foot rent truck and out in the open until we were able to move 

them inside the building. 

Our landlord was able to get us back into Island Flowers in December, but we did not reopen Nefertiti until Labor Day, five days 

short of one year, because of many complications. 

We were supplied with daily food, water, and ice by the Red 

Cross, Salvation Army, and other charities. The way the volunteers 

came in from across the U.S., in some cases the world, was a Godsend. 

Then began the task of trying to claim on insurance policies and 

find agencies for financial help. 

Our business interruption coverage was tied to windstorm, 

TWIA, T-W-I-A, so, we received nothing. The adjuster left much to 

be desired. When we asked for a reevaluation, we were again rejected. When I told him the building policy authorized roof replacement, window replacement, and many other items, he commented 

he would not have approved them. Another insurance company 

said we had no claim because we were not in a major disaster area. 
45 

Our personal flood contents’ coverage paid on Nefertiti and the 

HOA, home owner association, master policies on the structure, 

both flood and windstorm, are in the process of covering with a different adjuster, but not our business interruption. We are in the 

process of taking legal recourse against TWIA. 

Since we did not receive business interruption compensation, we 

turned to FEMA–SBA for assistance. The waiting lines took most 

of the day. One FEMA–SBA volunteer, after noticing my frustration with not making it to the representative after being in line for 

most of the day, said if I went to the office in Texas City, which 

was connected with the College of the Mainland, I would receive 

personal assistance in completing all forms. This would be a great 

help, as all my business records have been submerged under eight 

feet of black muck and saltwater. 

After several hours of consultation with the representative in 

Texas City, I had help with form completion. An onsite SBA representative checked the forms and submitted them overnight to the 

Fort Worth Office for approval. An SBA representative visited me 

the next week and confirmed the damage and loss. 

Within three weeks, we received a telephone call saying we were approved for $86,900 with the terms of the note and payments. I 

asked what was the next step, and I was told all paperwork would 

be forwarded to us. We waited for several weeks, and I called the 

Fort Worth Office and was informed we had been rejected because 

our new credit report contained a 60-day delinquency on our mortgage. Then they made the comment that we only had one more 

chance at the loan so our credit better be clear when we reapply. 

I called my mortgage company, as they had given us a forbearance on the loan because of Ike. The mortgage company said the 

credit report was an error and they would correct this, as well as 

write me a letter to that effect. 

I called SBA in Fort Worth and explained the situation to them, 

offering to get the mortgage company to fax this letter to the SBA 

directly, but was told we must reapply from the beginning. We 

were going to do this, but my wife’s credit record to one of the credit companies never was cleared from this error, and, to add insult 

to injury, the mortgage company did it to us again the next month. 

Added to these struggles, bank card companies raised interest 

rates and cut credit limits based on the excuse of debt ratio on 

multiple credit cards, not because of delinquency or over limits. 

One cut my credit limit, and then informed me I was now over 

limit with a charge. 

Another lowered my credit limit because I had not used the card, 

and then included a $4.50 paper statement fee to encourage online 

payment and a $35 credit-builder fee per purchase after they cut 

my credit limit for nonuse of the card. And some of these companies the public bailed out. 

And then there was the continuing battles with the power companies attempting to bill us based on estimated usage with no actual meter readings, even during the period the entire city had no 

power and threatened to disconnect us when we had no meter. We 

were not connected. 

Chair LANDRIEU. You have to laugh because if you do not, you 

will cry. 
46 

Mr. DRYDEN. We were exhausted both physically and mentally. 

Then a miracle happened. Jeff Sodjstrom from Galveston Economic 

Development Council walked in the door and offered us the opportunity to participate in a loan which was in conjunction with the 

Houston Galveston Area Council. We accepted, and the $30,000 

made available bought us a replacement flower cooler and other 

much needed items. It was like $1 million when you have no resources. 

It has been an unbelievable struggle to bring our businesses back 

after Hurricane Ike. We are opening both businesses with no outside employees except for part-time help at Island Flowers on busy 

wedding weekends. The weddings are there, but, in most cases, the 

brides are cutting back due to the economy. We attempt to keep 

limited regular hours at Nefertiti, but, for now, must work around 

the flower studio schedules. 

The support of friends and neighbors who went through Ike have 

been a wonderful blessing. We owe Mayor Thomas and her staff, 

City Government Services, and all first responders a debt we can 

never repay. 

Situations improve with time, but we could still use a cash influx 

to see us through this difficult period. Disillusionment has been 

hard to combat since, often, there is some new situation to overcome. But my wife and I love our island home, and we have made 

the choice to continue to live here and make a living in Galveston. 

Thank you for your time and kind attention to letting me speak 

before this committee. 

[The prepared statement of Mr. Dryden follows:] 
47 

09/2.1/2009 10:56 FAX -1 409 765 0500 

FRANK DRYDEN 

BIOGRAPHY 

Illi 002 

Frank Dryden, along with his wife Constance, is co-owner of two Galveston businesses, Island 

Flowers and Nefertiti. Island Flowers, a design studio which specializes in weddings and events, 

has been in business since 1999. Nefertiti, an upscale ladies boutique, has been in business 

since 2007. 

Both were totally destroyed by Hurricane Ike and had to be rebuilt. Island Flowers continued 

operations from a temporary location in Houston and was back in business on the Island by 

December. Nefertiti was not able to reopen until Labor Day. 

Prior career experience for Frank Dryden has been in petroleum, and for Constance in graphic 

design. 
48 

09/231200910:56 FAX ~1 409 765 0500 

Testimony of Frank Dryden 

Owner, Island Flowers and Nefertfti Boutique 

Galveston, Texas 

U.S. Senate Committee on Small Business and Entrepreneurship' 

A Year Later: 

Lessons Learned, Progress Made and Challenges that Remain from Hunicane Ike 

Friday, September 25, 2009 

Galveston Island Convention Center, Galveston, Texas 

I;!] 003 

Good aftemoon, Senator Landrieu, Senator Hutchinson, Senator Comyn, Mayor Thomas and 

honored guests. Thank you Senator Landrieu for the opportunity to testify as part of this panel. 

We-evacuated to Houston twelve-hours before Ike landfall, and were not allowed to return to 

Galveston for a "look and leave" until a week later. It was almost 2 weeks before we returned 

to begin clean-up. We were too late to stop demolition of Nefertiti long enough to salvage any 

items, but we were able to save many of our containers and wedding props at Island Flowers 

with. great effort. and difficulty,. The daily confrontation with the demolition crewto give us the 

needed time to salvage goods and the cash expense to hire workers for needed assistance 

took its toll, mentally, physically and monetarily. After depleting all available cash. my wife 

Constance and I cleaned items every day for six weeks from dawn until dusk, as there was no 

electric power. 

We stored salvaged items in a 24 foot rent truck and out in the open until we were able to move 

them inside the building. Our landlord was able to get us back into Island Flowers in December, 

but we did not reopen. Nefertiti until Labor Day, five days shy of one year, because of many 

complications. 

We were supplied with daily food, water and ice by the Red Cross, Salvation Army and other 

charities. The way the volunteers came in from across the U.S. and in some cases the world 

was a Godsend. 

Then began the task of trying. to claim on. insurance . policies and find agencies for fin'!nclal 

help. . 
49 

09/23/2009 10: 56 FAX +1 409 765 0500 IilI 004 

Our business interruption coverage was tied to windstorm (TWIA) 50 we received nothing. 

The adjustor left much to be desired. When we asked for a reevaluation, we were again 

rejected. When I told him the building policy authorized. roof replacement, window replacement and many other items, he commented he would not have approved them. Another 

insurance company said we had no claim because we were not in a major disaster area. 

Our personal floodcontects.coverage paid. on Nefertiti, and the HOA master policies on the 

structure, both flood and windstorm, are in the process of covering (a different adjustor.),but 

not our business interruption. We are in the process of taking legal recourse against TWIA. 

Since. we did not receive business interruption compensation,.we turned to FEMNSBA for 

assistance. The waiting lines took most of the day. One FEMNSBA volunteer, after noticirg 

my frustration from not making it to representative after being in line for most of the day, said 

if I went to the office in Texas City which was connected with College of the Mainland I would 

receive personal assistance in completing aU forms. This would be of great. help. as all of my 

business records had been submerged under eight feet of black muck and saltwater. 

After several hours of consultation with the representative at the Texas City office and help 

with form completion, an on-site SBArepresentative checked the forms and submitted them 

overnight to the Fl Worth office far approval An SBA representative .visited me the next 

week and confirmed the damage and 1055. Within three weeks, we received a telephone 

call saying we were approved for $86,900.00 with the terms of the note. I asked what was 

the next step and was told all paperwork would be forwarded to us, 

We waited for several weeks,. and l called the Fl Worth office and was .informed we had been 

rejected because our new credit report contained a 60 day delinquency on our mortgage. 

Then they made the comment we had only one more chance at the loan, so our credit better 

be clear when we reapply. I called my mortgage company, as they had given us a forbearance 

on our loan because of Ike. The mortgage, company said.the credit report was in error and 

they would correct as well as write me a letter to that effect. I called SBA in Fl Worth and 

explained the situation to them, offering to get the mortgage company to fax this letter to 

SBA dfrectly, but was told we must re-apply from the beginning. We were going to do this, 

but my. wife:s-credit report to one of the companies, never was cleared of this error. And to add 

insult to injury, the mortgage company did it to us again the next month. 

Added to these struggles, bankcard companies raised interest rates and cut credit limits based 

on the excuse of debt ratio on multiple credit cards, not because of delinquency or over limits. 

One cut my creditlimit and then .informed me J was now over limit. Another lowered my credi1 

limit because I had not used the card, and then included a $4.50 paper statement fee to 

encourage on-line payment, and a $35.00 "credit builder" fee per purchase after theY cut my 

credit limit for non-use of the 'card. And some of these are companies the public bailed out? 
50 

06/23/2006 10:56 FAX ~1 406 765 0500 ~005 

And then there were continuing battles with power companies attempting to bill us based on 

estimated usage with no actual meter readings even during the period the entire city had no 

power and threatening to disconnect us When we had no meter. 

At this point, we were exhausted both physically and mentally. Then a miracie happened. 

Jeff Sodjstrom from Galveston Economic Development Council walked in the door and offered 

the opportuniiy to participate in a loan program which was in conjunction with Houston-GalvestOll 

Area Council. We accepted, and the $30,000.00 made available bought us a replacement 

flower cooler and other much needed items. It was like a million dollars when you have no 

resources. 

It has been an unbeUevable struggle to bring. our businesses back after. Hurricane Ike. We are 

operating both businesses with no outside employees, except for part time help at Island Flowers 

on busy wedding weekends. The weddings are there, but in most cases the brides are cutting 

back due to the economy. We attempt to keep limited regular hours at Nefemti, but for now must 

work around our flower studio schedules. 

The 5IJPPori.of friends and neighbors who went througb .Ike has been a wonderful blessing. We 

owe Mayor Thomas, her staff, city government services and all first responders a debt we can 

never repay. 

Situations improve with time, but we could stili use a cash influx to see us through this difficult 

period. Disillusionment.has been hard to combat, sinCe often there is some new situation to 

overcome. But my wife and I love our island home, and we have made the choice to continue 

to live and make a living in Galveston. 

Thank you for time and kind attention to my testimony. 

Sincerely, 

~ 
51 

Chair LANDRIEU. Thank you, Mr. Dryden. Let us give him a 

round of applause. 

[Applause.] 

Mr. Dryden, both you and Mr. Gillins’ comments were very 

heartfelt, and we appreciate the spirit in which they were delivered, and the way in which you have communicated something that 

has to be extremely painful and very frustrating and very aggravating, and we have heard these stories, unfortunately, hundreds, 

if not thousands of times since Katrina until today, and we are determined to fix these systems the best that we can. 

I will have a question about the credit card issue, but I do want 

to acknowledge that a representative from the SBA will be here on 

the second panel, and we will ask him specifically what he can do 

to assist you if you intend to go forward. 

I can tell you that after Katrina, this was the SBA document 

that was presented to the Small Business Committee. It required 

all sorts of things to apply for help, like having four years of your 

last tax returns in triplicate, and, in some cases, if you had it in 

blue ink, it was rejected because it needed to be in black ink. This 

is what we found when Katrina hit. So, we forced the SBA to come 

up with a new, more comprehensive, readable plan, and now our 

job is to make sure that this plan is enforced, and hopefully that 

will help some of what you have outlined, but there is obviously a 

great deal more that we need to do, and we are very sorry to hear 

situations like this, but that is what this hearing is for, to get on 

correcting them. 

So, let me go on to some questions based on the testimony we 

have heard. 

Let me start with you, Mayor. You testified that the FEMA Rental Repair Pilot Program when you were in Washington, as you recall, in March, you talked about the FEMA Rental Repair Pilot 

Program, you said that you were hoping that it would work well 

here for the rental housing that had been destroyed. 

What is your assessment now about how well this program 

worked? What are some areas this program could be improved as 

you and your housing team work to not only bring back single family homes, but multifamily and rental units, particularly for 

moderate- and low-income, as well as workers necessary to rebuild 

the city? 

Mayor THOMAS. Well, first of all, I think we still have roughly 

4,000 people on the voucher program spread out. We do not know 

where they are exactly, but I think many of them are here and 

some on the mainland, and the problem with the program in the 

beginning had to do with—FEMA does very well as a first responder, but when they transition into dealing with human beings, 

there is a whole different policy or philosophy in dealing with citizens, and, so, just to start with, the fact that our people lost everything, had nowhere to go, and came to FEMA for a voucher of some 

kind so they could get a roof over their heads, the citizen would be 

allowed to go into a hotel, for instance, or rent an apartment. Of 

course, in Galveston, for quite some time, there was not an apartment that anyone could rent, but there was some of the hotels 

open, and then two weeks and maybe three weeks later, FEMA 

would say well, you got to get out; these are just two-week vouch-
52 

ers. Yet, two more weeks, three more weeks, and the frustration, 

but also the sadness of it all, is these are human beings. They did 

not have anywhere to go to begin with. Surely, FEMA can take one 

look at a disaster area and see that the citizens have to have a 

place to live for more than two weeks. 

And, so, when I was in Washington before and I say now that 

FEMA has got to change that program. A person should have a 

voucher for two months, three months before they are told to get 

out of a hotel room. And then on the day they are to get out, they 

have packed their bags, their baggage, which is generally in a 

paper sack. Remember, these folks had no shoes, they had nothing. 

They get down in the lobby and FEMA says okay, you can stay another two weeks. 

And FEMA has stopped that now. They have the vouchers now, 

I believe, are for longer periods of time. We still have people waiting for assistance from FEMA, and I do not have any statistics for 

you, but there are still people waiting for FEMA to say we have 

assessed your house, you can rebuild it. We have people waiting for 

FEMA to say here is some money for you to restore your business. 

It just does not work, Senator. None of the policies that apply to 

the human element after a storm, they are not consistent. There 

is no coordination. 

I think it is getting a little bit better, but all cities, I am sure, 

have a long way to go before FEMA says here is what you need, 

and it does remind me of the story that Dr. Callender told at lunch, 

where the FEMA representative came in a few days after the 

storm, took one look, and said this thing is going to cost $600 million to fix. A year later and thousands of work project things having been submitted, FEMA says to restore UTMB is going to be, 

what did he say, $6 million. 

So, my subject is, again, give us what we need in the front end, 

and that includes people who have apartments that they can fix for 

people. FEMA should be upfront with its contributions to helping 

citizens. Worry about what we have to pay back later. 

Chair LANDRIEU. And let me ask you this about paying back. 

What loans were available to the City of Galveston and any other 

communities that you care to comment about that you may know 

of after the storm in terms of just general loans to the city? What 

were the limits? What were the conditions? What were the payback 

requirements that you were afforded? Anything at all from either 

the state or the Federal government or from your local banking 

community? 

Mayor THOMAS. None from the Federal government. Because of 

our experience watching you and others go through Katrina, the 

City of Galveston was fortunate enough to have a local banking 

community who sat down with me immediately, within a day of the 

storm, and they all came together and they all agreed to loan 

money to our local businesses, whoever needed it, and I think that 

has amounted to somewhere over 60 or $75 million—— 

Chair LANDRIEU. But to businesses—— 

Mayor THOMAS [continuing]. From our local banks—— 

Chair LANDRIEU [continuing]. Not to the city? 

Mayor THOMAS. Ma’am? 

Chair LANDRIEU. To the city itself. Loans to the—— 
53 

Mayor THOMAS. Oh, to the city? 

Chair LANDRIEU [continuing]. City government itself? 

Mayor THOMAS. Nothing that I know of. 

Chair LANDRIEU. So, what is your annual budget roughly for the 

city? 

Mayor THOMAS. It is about $90 million. 

Chair LANDRIEU. $90 million. 

Mayor THOMAS. It is not a big budget. 

Chair LANDRIEU. So, your city was virtually destroyed in large 

part, and there was no immediate place for you, as the mayor of 

the city, to turn to to borrow money from any fund that the Federal 

government might have on terms and conditions that would be reasonable for you to continue to try to maintain some semblance of 

city order and city work while your thousands of businesses, your 

major medical school came by—if anyone from the staff wants to 

join to add. 

Mayor THOMAS. I am going to let Steve LeBlanc answer that 

question, because we did have an answer, and we had a process, 

but we did it ourselves. 

Chair LANDRIEU. Okay. Steve, do you want to—— 

Mayor THOMAS. And I am going to let Steve answer it. He is in 

charge of the money around here. 

Mr. LEBLANC. We were able to apply for and receive the maximum of $5 million community disaster loan for operations. 

Mayor THOMAS. And I want you to repeat that for the record. Go 

ahead and tell this group what is the maximum amount of money 

under the current federal law that you could borrow. 

Mr. LEBLANC. Five million dollars was the maximum we could 

receive. We did receive the maximum. Our budget, as the mayor 

said, is actually $96 million. 

Chair LANDRIEU. Let me just stop you right there and say I know 

that you all clapped for the Mayor, but let us clap for her again. 

[Applause.] 

Could you imagine running an operation of $90 million, and you 

turn to the Federal government and all they can offer you—the 

City of New Orleans budget, just FYI, is $265 million, and the Federal government offered us $5 million? I said you could keep it because it is not going to help, and we had to try to convince the Federal government that there must be for disasters a pool of funding 

available to cities and counties to quickly borrow and pay back over 

a long period of time. Obviously, the City of Galveston is a worthy 

creditor, and that issue reflects in large businesses within the city, 

unable sometimes to receive support at a time when they need it, 

as well as the small businesses, and I just wanted to make sure 

that was part of the record, but go ahead and continue. 

Mr. LEBLANC. Part of the process that we went through was we 

tried to get more and we asked for the formula to be changed, and 

I think there was some effort to make that happen, but the process 

and the formula was insurmountable, and, so, we were left with— 

and we certainly appreciated the $5 million and we took that, but, 

as the mayor mentioned, we helped our self with the $20 million 

through the local banks, and the rest was just through cutting. 
54 

Just for the record, we cut about 15 percent of our staff. We all 

took a pay decrease across the board, and we just scaled back as 

much as we could to make things happen. 

Chair LANDRIEU. So, you could almost argue at a time when cities like Galveston and larger and smaller communities need more 

staff because the work before it is 10 times or 20 times worse than 

what it is on a normal day in Galveston, a normal day picking up 

garbage, a normal day trimming trees, a normal day running the 

operations of the city, at a time when those efforts go up 10- or 20- 

fold, the staff after a disaster in these cities must be cut because 

there is currently nothing in the federal law that allows cities or 

counties to borrow any amount of money more than $5 million after 

a disaster hits. That would be one of the first places we need to 

start. 

This senator has tried to change that law for four straight years 

in a row. So, I hope the HUD officials will step up and give some 

voice now to this need. 

Dr. Callender, let me ask you this: Where did you all get your 

initial operating funds? Did you touch into your reserves? Did you 

go to friendly bankers? Did you go to some wealthy people in the 

community? How did you continue, if you do not mind sharing 

some of that. 

Dr. CALLENDER. We ate deeply into our reserves, and it was a 

critical issue for us following the storm. 

As I mentioned in testimony, we count on the revenues coming 

in from our health system to sustain our operations. Our budget 

before the storm was about $1.5 billion per year, and over half of 

that comes from the operation of our health system. 

Our health system was not able to return to operation as quickly 

as possible for many of the reasons I mentioned, we had people 

who had lost everything in the storm, and we did not have jobs for 

them. We were eating into our reserve. We ended up taking a very, 

very hurtful step of a significant layoff of over 2,300 people, many 

of whom had lost almost everything, or significant elements of their 

life to this storm, and that was something that was terrible, but 

it was really our only recourse because we did not have access to 

critical funds other than our reserves. 

Chair LANDRIEU. And, Mr. Gillins, did you have any offer from 

any of—obviously, you said the SBA was not forthcoming. Any local 

bank effort, any city effort, any HUD effort? Was there any place 

for you to turn for some additional capital to keep you all going or 

to tide you over? 

Mr. GILLINS. No, actually, we were told by FEMA representatives 

to apply for the SBA, and even if we are denied, they would get 

back with us, and that some kind of supposedly grant for the ones 

that were denied, but we never heard from anybody. 

Chair LANDRIEU. And, Mr. Dryden, any of your local banks step 

up or local community? 

Mr. DRYDEN. No, only the Galveston Economic Development 

Council. 

One thing I wanted to say, when you mentioned FEMA, I remember a quip on the news awhile back where the newscaster said 

Galveston, you shot yourself in the foot, and she went on to say you 
55 

did too much too fast with your own resources, and FEMA does not 

think you need hardly anything. So, I—— 

Chair LANDRIEU. Was that somebody from FEMA said that or a 

newscaster? 

Mr. DRYDEN. She was quoting. 

Chair LANDRIEU. Oh. 

Mr. DRYDEN. She was quoting a statement by someone at FEMA. 

This was a choice we had to make. 

Chair LANDRIEU. Well, you had to. You had no—— 

Mr. DRYDEN. My wife and I sat there—— 

Chair LANDRIEU. Lots of business people did that. 

Mr. DRYDEN. And we said, do we stay or do we go? And when 

we decided to stay, what resources can we pull together to try and 

do this? 

Chair LANDRIEU. And when did you start your business? What 

year? How long have you all been in that business? 

Mr. DRYDEN. The flower shop was started in 1999. The dress 

shop was started in June of 2007. 

Chair LANDRIEU. Okay, so, 10 years, and then a shorter period. 

All right. Thank you, all, very much. We are going to move to 

the second panel. We very much appreciate your testimony. Thank 

you, all. 

[Applause.] 

STATEMENT OF MR. ACHILLE ALONZI, ASSISTANT DIVISION 

ADMINISTRATOR, TEXAS FEDERAL HIGHWAY ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. ALONZI.——Between the FHWA Texas Office and TxDOT. 

Before Hurricane Ike made landfall, our division office advised the 

state concerning emergency relief program eligibility and engineering and contracting issues and shared lessons learned from prior 

emergency situations. USDOT also dispatched a member of the 

Evacuation Liaison Team managed by FEMA to provide technical 

advice in the event of an evacuation. 

As soon as it was safe and practical after the storm, FHWA deployed personnel to the effective areas to work alongside state and 

local highway officials to assess the damage and to facilitate response and recovery efforts. 

In the months after the hurricane, the Texas Division Office conducted three workshops on our Emergency Relief Program and 

claims process for joint FHWA and State Damage Assessment 

Teams and local government agencies, increasing the efficiency 

with which emergency relief program qualification decisions were 

made. 

To date, FHWA has made down payments to the State of Texas 

for emergency relief, including $2 million of quick-release emergency repair funds with the dredging of the vehicle ferry between 

Galveston Island and the boulevard peninsula. In addition to the 

immediate infusion of funds for emergency repairs, FHWA is continuing to process reimbursement claims for permanent repairs. 

FHWA has allocated $70 million in emergency relief funds to the 

Texas Department of Transportation. As of last week, TxDOT has 

submitted $73.4 million in emergency relief claims covering 38 
56 

counties. FHWA has approved $63.9 million as eligible for reimbursement and is reviewing the remaining $9.4 million in claims. 

FHWA is also involved in interagency coordination to ensure 

rapid recovery assistance. 

For example, we have coordinated with FEMA, TxDOT, and the 

Galveston County Navigation District One on repairs to the Pelican 

Island Causeway Lift Bridge. 

In March, these agencies met to discuss the repair needs for the 

bridge, and, to date, FHWA has reimbursed the navigation district 

for $1.55 million for initial and permanent repairs and contracts for 

the remaining permanent repairs are being finalized. 

As our state and local partners submit additional claims for 

Emergency Relief Program funding, FHWA will work to determine 

eligibility for projects and allocate the funding. 

The American Recovery and Reinvestment Act is also providing 

resources to repair damage caused by Hurricane Ike. Construction 

has began on the project on State Highway 87 here in Galveston 

County, using approximately $6.17 million in Recovery Act funds 

for new pavement and to raise the roadway elevation for better 

flood protection. 

FHWA is continually striving to improve its coordination and the 

assistance it provides to state, local, and tribal governments. Together with our partners, we are making progress in repairing the 

transportation systems destroyed by Hurricane Ike, but work remains. We will continue to be actively engaged with our local, 

state, and federal partners to ensure that highway recovery efforts 

are completed quickly and in a fiscally responsible manner, and we 

look forward to continuing our efforts to assist the citizens of 

Texas. 

Madam Chairman, thank you again for the opportunity to testify, 

and I am pleased to answer any questions you may have. 

[The prepared statement of Mr. Alonzi follows:] 
57 

Biography of Achille (AI) Alonzi 

Achille (AI) Alonzi is the Assistant Division Administrator for the Federal Highway 

Administration Texas Division Office in Austin. Al oversees the day-to-day operations 

of the Texas Division Office, which provides front line Federal-aid program delivery 

assistance to the State of Texas and works to ensure that program delivery and 

stewardship activities are consistent with Federal-aid requirements. 

Al joined the FHWA in 1990. Prior to becoming Assistant Division Administrator, Al 

was the Affiliate Programs Team Leader in the FHWA Office of Professional and 

Corporate Development in Washington, DC. He also held a number of field positions at 

the Kentucky and Connecticut Division Offices, as well the former Regional Office in 

Albany, NY. 

Al received a Bachelor of Sciences in Civil Engineering from Worcester Polytechnic 

Institute in Worcester, Massachusetts, and is a graduate of the AASHTO National 

Transportation Leadership Institute. He is married and has a 5 year old son and a 3 year 

old daughter. 

6 
58 

STATEMENT OF 

ACHILLE ALONZI 

ASSISTANT DIVISION ADMINISTRATOR 

TEXAS DIVISION OFFICE 

FEDERAL HIGHWAY ADMINISTRATION 

BEFORE THE 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

AND THE 

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

A YEAR LATER: LESSONS LEARNED, PROGRESS MADE, AND 

CHALLENGES THAT REMAIN FROM HURRICANE IKE 

SEPTEMBER 25, 2009 

Chairman Landrieu and Members of the Committee, thank you for the opportunity to 

appear before you today to discuss the Federal Highway Administration's (FHWA) 

assistance to the State of Texas to rebuild and recover from the damaging effects of 

Hurricane Ike. FHWA has been working very closely with the Texas Department of 

Transportation (TxDOT) to provide emergency relief support for damage from Hurricane 

Ike to Federal-aid eligible highways. 

Over a year ago, Hurricane Ike caused extensive damage as it made landfall along the 

north end of Galveston Island, and traveled through Galveston Bay east of Houston, and 

then northward across eastern Texas. Even before the storm struck, FHW A began 

working closely with TxDOT and our Federal emergency relief partners. We continued 

to provide emergency relief during and immediately after Hurricane Ike struck. The 

United States Department of Transportation (DOT) and FHWA remain firmly committed 

to continue helping the ravaged areas recover as quickly as possible. Today, I would like 

to share with you some of the details related to our response. 

FHWA PRE-HURRICANE ACTIVITIES 

FHWA is well positioned to respond proactively and rapidly to hurricane warnings in 

order to help minimize the damaging effects. We have a Division Office in each State 

that works closely with State and local highway officials on a routine basis. The longstanding history of collaboration between FHW A's Texas Division Office and TxDOT 

that predated Hurricane Ike provided an excellent foundation for a coordinated and timely 

FHW A response to the hurricane disaster. Before Hurricane Ike made landfall in Texas, 

our Division Office provided advice to State and local jurisdictions concerning 

Emergency Reliefprogram eligibility and engineering and contracting issues, and shared 

lessons learned from prior emergency situations. In addition, DOT dispatched a member 
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of the Evacuation Liaison Team, managed by the Federal Emergency Management 

Agency (FEMA), to Austin in advance of Hurricane Ike's arrival to provide technical 

advice in the event that Texas needed help with an evacuation. 

FHW A utilizes several emergency preparedness activities to help diminish the impacts of 

natural disasters on highway infrastructure. For example, each Division Office trains 

emergency coordinators, who collect information during emergency situations. This 

information provides situational awareness and information regarding the status of the 

roadway networks. FHWA's emergency coordinators report this information to FHWA 

headquarters staff, who then share the information with the DOT Crisis Management 

Center. 

Further, the Emergency Transportation Operations team, within FHW A's Office of 

Operations, provides tools, guidance, capacity building, and good practices that aid local 

and State DOTs and their partners in their efforts to improve transportation network 

efficiency and safety when a non-recurring event either interrupts or overwhelms 

transportation operations. As part of its mission, our Emergency Transportation 

Operations team routinely works with State, local, and tribal governments to improve 

their disaster-specific transportation planning and operations, including evacuation 

management. The team has also conducted four regional workshops on Evacuation 

Planning since 2007. The first workshop included the Gulf States, with participants 

focusing on a hypothetical scenario involving a hurricane event that causes evacuations. 

Since 2006, FHWA has produced numerous publications to address evacuation planning 

and operations during events with notice and events with no notice, including evacuating 

populations with special mobility needs. FHW A's Office of Policy coordinated the 

Department-wide production of the report required by section 10204 of the Safe, 

Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 

"Catastrophic Evacuation Plan Evaluation: A Report to Congress." FHWA's Office of 

Operations played a significant role in the development of the report by serving as 

FHW A's technical expert and collaborating with experts from DOT's Office of the 

Secretary, the Federal Transit Administration, the Federal Railroad Administration, the 

Federal Motor Carrier Safety Administration, and the Maritime Administration. 

Furthermore, FHWA coordinated the content of the report with the Department of 

Homeland Security, which was undertaking a parallel effort, the National Plan Review, to 

address similar assessments of emergency plans nationwide. FHW A's Office of 

Operations published and distributed the final report, supplied the report to all of the 

Division Offices, and asked them to share it with their State partners. 

FHW A RESPONSE AFTER HURRICANE IKE 

As soon as it was safe and practicable to do so, FHWA deployed personnel to the 

affected areas to work alongside State and local highway officials to assess the damage 

and to facilitate response and recovery efforts. 

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In the months after the hurricane, the Texas Division Office conducted three workshops 

on FHW A's Emergency Relief Program and claims process for joint FHW A and State 

damage assessment teams. These training sessions, which were held on October 29 in 

Beaumont, November 5 in Houston, and November 6 in Tyler, increased the efficiency 

with which Emergency Relief program qualification decisions were made. 

The Emergency Relief Program, authorized under section 125 of title 23, United States 

Code, reimburses States for expenses related to highway infrastructure damage associated 

with natural disasters and other emergency situations, such as Hurricane Ike. This 

program supplements the commitment of resources by States, their political subdivisions, 

or other Federal agencies to help pay for unusually heavy expenses resulting from 

extraordinary conditions. Examples of the type of work eligible for Emergency Relief 

program reimbursement include repairing pavements, shoulders, slopes, embankments, 

guard rails, signs, traffic control devices, and bridges, and removing debris from the 

highway rights-of-way. Reimbursement under the Emergency Relief Program is for the 

repair and restoration of highway facilities to pre-disaster conditions. However, most 

activities related to new construction to increase capacity, correct non-disaster relatcd 

deficiencies, or otherwise improve highway facilities are not eligible for Emergency 

Relief Program funding. Generally, FHWA cannot pay for betterments unless they can 

be economically justified. Furthermore, while FHWA can fund repairs to a damaged 

bridge built to current design standards, we cannot pay for repair of a deficient bridge that 

was damaged by a disaster. 

Eligible repairs under the Emergency Relief Program are classified into two major 

categories: emergency repairs and permanent repairs. Emergency repairs are those 

repairs needed to restore essential traffic, minimize the extent of damage, or protect the 

remaining facilities. Emergency repairs can begin immediately following a disastcr and 

do not require prior FHW A approval. Properly documented costs are later reimbursed 

after FHWA finds that the disaster is eligible for emergency relief funding. Permanent 

repairs are those repairs that permanently restore the highway to its pre-disaster 

condition. Permanent repairs require prior FHW A approval and authorization. 

FHWA has made down payments to the State of Texas for emergency relief. We 

provided Texas with $2 million of "quick release" emergency repair funds for dredging 

of the vehicle ferry channel between Galveston Island and the Bolivar Peninsula. 

In addition to the immediate infusion offunds for emergency repairs, FHW A is 

continuing to process reimbursement claims for permanent repairs. On September 16, 

2008, TxDOT informed the FHWA Texas Division Office that TxDOT intended to claim 

$70 million in emergency relief damages pursuant to the Emergency Relief program. 

FHWA subsequently allocated $70 million in emergency relieffunds for TxDOT. As of 

September 17, 2009, TxDOT has submitted $73.4 million in emergency relief claims 

covering 38 counties. FHW A determined approximately $21,000 to be ineligible but has 

approved $63.9 million as eligible for reimbursement, and is reviewing the remaining 

$9.4 million in emergency relief claims. We expect this review to be completed in the 

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next few weeks. Additionally, fifteen local government agencies have submitted 

claims-fourteen within the Houston District and one within the Beaumont District. 

The American Recovery and Reinvestment Act of2009, which President Obama signed 

into law on February, 17,2009, is also providing resources to this area to repair damage 

caused by Hurricane Ike. Construction has begun on a project on State Highway 87 in 

Galveston County using approximately $6.17 million in Recovery Act funds for new 

pavement and raise the roadway elevation for better flood protection. 

To ensure quality assistance and rapid recovery, FHWA is also involved in inter-agency 

coordination. For example, FHWA coordinated with FEMA, TxDOT, and the Galveston 

County Navigational District #1 (GCND) to repair the Pelican Island Causeway Lift 

Bridge. On March 25, 2009, FHW A participated in a meeting with FEMA, TxDOT, and 

GCND to discuss the repair needs for the bridge and whether the work was eligible for 

reimbursement under the Emergency Relief Program. On June 15,2009, GCND 

submitted an initial claim of $4.2 million, and on June 22, FHWA approved the claim. 

To date, FEMA has reimbursed GCND for approximately $356,000 for the initial repairs. 

FHWA has reimbursed GCND for $1.55 million for initial and permanent repairs. 

Contracts for remaining permanent repairs, including a fender system update, are being 

finalized. The estimate for this remaining work is approximately $2.5 million, and 

FHW A has already approved the work as eligible for reimbursement under the 

Emergency Relief Program. 

TxDOT has informed FHWA that it intends to submit additional claims, and the FHWA 

Texas Division Office is prepared to ask FHWA headquarters to allocate additional 

emergency recovery funds, once the additional claims have been received and deemed 

eligible. 

FUTURE PREVENTATIVE ACTIONS 

FHW A is continually striving to improve its coordination and the assistance that it 

provides to State, local, and tribal governments. Based upon our experience from 

Hurricane Ike, FHW A has begun coordinating additional studies that will lead to more 

effective debris clearance in the field since State DOTs and Public Works Departments 

work very closely at the local levels on debris clearance following natural or man-made 

incidents. The Office of Operations also worked with the Transportation Research 

Board's National Cooperative Highway Research Program to commission a study of 

debris clearance following a disaster and the role of transportation in disaster relief 

efforts. This study will commence in 20 I O. 

In addition, FHWA is finalizing a two-volume report on the use of evacuation models. 

This report will provide information to State and local governments on how to select 

appropriate model platforms for their needs. The Office of Operations will soon produce 

online training on evacuation planning and operations that will be available to all 

stakeholders. FHWA will also incorporate a unit on evacuation planning and operations 

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in its Traffic Incident Management workshops that will be held in the top 40 metropolitan 

areas over the next three years. 

CONCLUSION 

FHW A continues to seek opportunities to educate practitioners regarding conducting 

effective evacuations, debris clearance, alternate routing, or other transportation planning 

and operations practices. We are making progress in repairing the transportation systems 

destroyed by Hurricane Ike, but work remains. We will continue to work with our State 

and Federal partners to ensure that highway recovery efforts are completed quickly and in 

a fiscally responsible manner, and we look forward to continuing our efforts to assist the 

citizens of Texas. 

Madame Chairman, thank you again for this opportunity to testify. I will be pleased to 

answer any questions you may have. 

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Chair LANDRIEU. Thank you, Mr. Alonzi, and I will have two specific questions that you can be thinking about, and we will come 

back to them. One is: Is the contract in place for the debris removal 

on state highways, and, if so, could you describe it? And then what 

is the rough estimate of all of the damage of highways, bridges, 

anything under the Texas Department of Transportation, the 

rough, gross estimate of what the damage was, and what is the gap 

in funding that exists? In other words, this is the damage, we can 

see this amount of money coming from these sources, and then 

what is the gap, so we can have that for the record. 

Mr. Tombar. 

STATEMENT OF FREDERICK TOMBAR, SENIOR ADVISOR, OFFICE OF THE SECRETARY, U.S. DEPARTMENT OF HOUSING 

AND URBAN DEVELOPMENT 

Mr. TOMBAR. Thank you, Chairman Landrieu. I appreciate being 

able to—— 

Chair LANDRIEU. And you might want to pull the mike a little 

bit closer. 

Mr. TOMBAR. Yes, ma’am. 

Chair LANDRIEU. You have to speak right into it for volume. 

Mr. TOMBAR. I appreciate the opportunity to testify before you, 

and, in the interest of time, as you requested, I will shorten my 

comments, but ask that my full testimony be included in the 

record. 

My name is Fred Tombar, and I am a Senior Advisor to Secretary Donovan at HUD. And, as you are aware, Secretary Donovan has an extreme commitment to the recovery of Texas and the 

entire Gulf Coast. It is a commitment that he expressed in his very 

first days as an appointee to the Obama Administration. His first 

official visit as secretary was to the Gulf Coast, initially to New Orleans, and followed a day later here in Texas, where he had an opportunity to meet with Mayor Thomas and other local leaders. 

He followed that commitment up by subsequent visits, and most 

recently to New Orleans to mark the anniversary of Hurricane 

Katrina with his entire senior team. Unprecedented in the history 

of HUD, showing his full commitment to the recovery of the Gulf 

Coast. 

On the 23rd of July last year, Hurricane Dolly struck South 

Texas and Northern Mexico, and it was followed in September by 

Hurricane Ike. 

HUD entered into an interagency agreement, IAA we call it, with 

FEMA to provide Disaster Housing Assistance Program, assistance 

to families impacted by Hurricane Ike, and, later, amended that 

agreement to include families that were impacted by Hurricane 

Gustav. 

To date, there have been some 51,000 families that have been referred into the program, and, currently, we serve just over 12,000 

families in that program, 72 percent of which are actually here in 

Texas. 

As part of the case management and continued eligibility process 

for families, they provide information to us on their current income, 

and based upon this information, the department estimates that 

nearly 10,000 families have incomes below 50 percent of the area 
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median income in their community and may be eligible for longterm, subsidized housing after DHAP-Ike. Under DHAP-Katrina, 

as you are aware, Congress appropriated $85 million in specialpurpose Housing Choice Vouchers for eligible DHAP-Katrina families in need of long-term subsidized housing. 

While there are currently no funds appropriated to address longterm subsidized housing needs among DHAP-Ike families, the Administration is working with its federal, state, and local partners 

to develop a plan. 

DHAP-Ike terminates on March 13 of next year, and that is the 

last month that families will receive assistance payment under this 

program. 

In addition to the above measures to address devastation left in 

the wakes of Hurricanes Ike, Gustav, and Dolly, as well as a range 

of other natural disasters that occurred in 2008, Congress appropriated $6.5 billion in HUD Community Development Block Grant 

disaster recovery funding on September 30, 2008. 

After the appropriation, HUD’s goal was to get the money to the 

state grantees as quickly as possible so that the funds could properly and promptly be used in their disaster recovery. 

On February 13, HUD published an initial notice in the Federal 

Register that contained the allocation of funds and program requirements, including waivers requested by the states. Of the $6.5 

billion in the appropriation, $2.145 billion was allocated to 14 

states, with the largest allocation, $1.314 billion, going here to 

Texas. 

In Texas’ case, HUD received the state’s allocation action plan 

for the use of those funds on March 6, 2009, and approved it immediately. By March 31, the grant agreement was signed between 

HUD and the state, and shortly thereafter, the $1.314 billion in 

CDBG disaster recovery funds was released by HUD to the State 

of Texas. 

On August 14 of this year, a subsequent notice was published 

which allocated the remaining funds and granted additional waiver 

requests to Texas and several other states. The second allocation 

to the State of Texas was approximately $1.7 billion, bringing their 

total of 2008 CDBG disaster funding to over $3 billion. The state’s 

amended action plan is due to us by September 30. 

Based upon the state’s initial action plan, Texas is distributing 

the majority of its money, its initial allocation, to 11 regional Councils of Organized Government or COGs. These COGs have identified uses of funds in housing, restoration, and repair of infrastructure and economic development. 

CDBG has played a significant role in assisting states and communities with disaster recovery, especially long-term recovery. 

Over the last four years, we have identified many of the challenges 

that face our federal-state partnership in quickly administering 

grant assistance at the individual and neighborhood level. 

We are dedicated to working through these challenges, while ensuring a continued focus on both performance and accountability. 

Long-term recovery and rebuilding after a disaster is complex and 

requires tough decisions at all levels, as well as the ability to acquire additional capacity to carry them out. But I am confident 
65 

that, together, we can and will move Texas from recovery to revitalization. 

Thank you for the opportunity to appear before the committee. 

This completes my testimony, and I look forward to your questions. 

[The prepared statement of Mr. Tombar follows:] 
66 

TESTIMONY OF FREDERICK TOMBAR 

SENIOR ADVISOR 

OFFICE OF THE SECRETARY 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Senate Homeland Security Committee 

Subcommittee on Disaster Recovery 

September 25, 2009 

Galveston, TX 

Thank you, Madam Chairman and members of both the Small Business Committee and 

the Subcommittee on Disaster Recovery, for hearing my testimony today. My name is Fred 

Tombar, and I am a Senior Advisor to Secretary Shaun Donovan at HUD. It is an honor to join 

you today to discuss the implementation ofHUD disaster recovery measures in the State of 

Texas. 

I first want to express HUD's commitment to the recovery and revitalization of Texas and 

the Gulf Coast to ensuring that the resources we've provided are used in the most effective way 

to help people move back into their homes and revitalize the region. That's a message we sent 

within weeks of President Obama's inauguration, when HUD brought together partners from 

across the country to help providc Disaster Housing Assistance Program transitional rental 

assistance to more than 30,000 families. It's a message that we've continued to send over the 

past eight months, particularly when we when the Secretary, along with all of HUDs Assistant 

Secretaries, visited the Gulf Coast on the 4th anniversary of Hurricane Katrina, to view the 

situation first hand and to brain storm new solutions to help the area move from recovery to 

revitalization 

On July 23, 2008, Hurricane Dolly struck South Texas and northern Mexico. Less than 

two months latcr, on September 13, Hurricane Ike made landfall in Texas. These hurricanes 

were deadly and costly to communities throughout the Gulf Coast and particularly destructive to 

Texas. In Texas alone, unreimbursed damage was estimated at nearly $30 billion, with almost 

$3.5 billionnccdcd for housing assistance. Homes, infrastructure, and businesses were damaged 

and destroyed. Furthermore, industries benefiting the cntirc nation were deeply impacted -

agriculture, forestry, and fishery all suffered devastating losses. 

On September 23,2008, HUD and FEMA executed an inter-agency agreement (IAA) 

establishing the Disaster Housing Assistance Program (DHAP-Ike) for families impacted by 

Hurricane Ike. Later this IAA was modified to include families impacted by Hurricane Gustav. 

The DHAP-Ike program was modeled after the DHAP-Katrina program, with a number of 

program improvements added based on lessons learned from Hurricane Katrina (for example, 

continued eligibility assessments and landlord vacancy payments). Under DHAP-Ike, housing 

assistance payments are paid directly to a landlord on behalf of each family and housing case 

management is provided that C01111ects each family to services which enable them to transition 

off of DHAP assistance. 
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2 

FEMA started referring families for DHAP-Ike assistance on October 15,2008, and HUD 

officially began operating the program through its network of participating Public Housing 

Agencies (PHA) on November 1,2008. As of September 7, 2009, FEMA has referred 51,624 

families for assistance, primarily in Houston, Galveston, and Port Arthur, Tcxas and 

Southwestern and Central Louisiana. To date 24,649 (48%) families referred by FEMA havc 

agreed to participate in DHAP-Ike across 104 participating PHAs. The remaining 26,658 (52%) 

did not agree to participate. Among those that did not agree to participate, 12,627 (47%) werc 

homeowners before Hurricanes Ike and Gustav. 

For families that agreed to participate, PHAs worked diligently to quickly process and 

assist families after their referral from FEMA. There are currently 12,571 (51 %) families 

rcceiving a housing assistance payment from a PI'IA, 72% of which are in Texas. There are also 

1,334 (5%) families that have agreed to participate but have not executed documents with the 

PHA to receive a housing assistance payment. PHAs are working with these families to address 

their housing needs, however most of these families have been in this status for 90 or more days, 

are most likely no longer interested in the program, and thcrefore will end their participation. 

Finally, 10,744 (44%) families ended their participation with the program after initially agrecing 

to participate, many because their income did not qualify them for continued assistance or thcy 

changed their mind and subsequcntly rcfused DHAP-Ike assistance. 

As part of the case management and continued eligibility processes, families provide 

information to document their current income. Based on this information, the Department 

estimates that 9,837 familics have incomes below 50% of the Area Median Income in their 

community, and may be eligible for long-term subsidized housing after DHAP-Ike. Under 

DHAP-Katrina, Congress appropriated $85 million in special purpose Housing Choice Vouchcrs 

(HCV) for eligible DHAP-Katrina families in need of long-term subsidizcd housing. While there 

are currcntly no funds appropriatcd to address long-term subsidized housing needs among 

DHAP-Ike families, the Administration is working with its Fcdcral and state partners to develop 

a plan. DHAP-Ike terminates on March 13,2010, and the last month that families will reccive a 

housing assistance payment under the program is March 2010. 

In addition to the above measurcs, to address the devastation left in the wake of 

Hurricanes Ike, Gustav, and Dolly, as well as a range of other natural disasters that occurred in 

2008, Congress appropriated $6.5 billion in HUD Community Development Block Grant 

(CDBG) disaster recovery funding on September 30, 2008. While this appropriation is similar to 

prcvious laws enacted for CDBG disaster recovery, it contains several differences. Significantly, 

it forbids thc funds be used by a state or locality as a matching requirement, share, or 

contribution for any other Federal program. Unlike the CDBG statute or regulations, HUD 

cannot waive this provision as it was explicitly insertcd by Congress in the public law. In 

addition, Congress expressly stated that the Sccretary's waiver authority for these funds does not 

extend to requirements related to fair housing, nondiscrimination, labor standards, and the 

environment. HUD does not advocatc these waivers and believcs that the prerogative to change 

or modify these provisions belongs to Congress. 
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3 

After the appropriation, HUD's goal was to get the money to the state grantees as quickly 

as possible so that the funds could promptly be used in their disaster recovery efforts. This 

objective was balanced with HUD's role to ensure that the funds were allocated as necessary to 

the individual grantccs. Becausc the public law provided funds for all presidentially-declared 

disasters occurring in 2008, HUD began to gathcr and analyze data from other federal agcncics 

regarding all of the applicable states and disasters following Congress' appropriation. 

Furthermore, HUD could not determine the full range of possible grantees until the end of the 

calendar year. 

On February 13,2009, HUD published an initial notice in the Federal Rcgister that 

contained the allocations of funds and program requirements, including waivers requested by the 

states and alternative requirements. Of the $6.5 billion appropriation, $2.145 billion was 

allocated to 14 statcs, with the largest allocation of$1.314 billion going to the State of Texas. 

Even before an initial Fcdcral Rcgister notice is published, states can begin developing 

their applications called Action Plans for Disaster Recovery- plans for the use of funds, and 

then fine-tunc those plans after the notice is published and after they have carried out their 

responsibility to solicit and address comments from the public on the proposed Action Plan. In 

Texas' case, HUD received the State's Action Plan on March 6, 2009 and approved it the same 

day. By March 31,2009, the grant agreement was signed between HUD and the State. Shortly 

thereafter, the $1.314 billion in CDBG disaster rccovery funds was released by HUD and 

available to Texas. On August 14,2009, a subsequent notice was published which allocated the 

remaining funds and grantcd additional waiver requests to Texas and several other statcs. The 

second allocation to the State of Texas for approximately $1.7 billion brings thcir total allocation 

of2008 CDBG Disastcr Recovery funds to more than $3.0 billion. The State's Amended Action 

Plan for the additional funds is due to HUD by Septcmber 30, 2009. 

Based on the State's initial Action Plan, Tcxas is distributing the majority of its initial 

allocation to II regional Councils of Government (COGs). Funds not distributed will be used by 

the State for administration, planning. and the Affordable Rental Housing Stock Restoration 

Program. Each COG has facilitated its method of distribution so that it can equitably allocate 

funds to the affected communities. Local communities are, or soon will be, conducting recovery 

activities under three main categories: (I) restoration and repair of infrastlUcture and facilities, 

(2) cconomic development and revitalization activities, and (3) housing. Economic development 

includes direct grants or deferred forgivable loans to businesses that were affected by the 

hurricanes. Housing includes a wide range of activities, including, but not limited to, 

rehabilitation programs, relocation programs, homelessness prevention programs, affordable 

rental programs, and interim housing programs. 

As part of the Department's commitment to continuously improve the efficiency and 

effectiveness of our programs, we will soon be undertaking a study to assess the impact of the 

various approaches used by states in meeting post-disaster housing needs with CDBG disaster 

recovery funds. The study will take a focused look at the impact of homeowner and rental 

housing programs by examining thc dcgrec to which neighborhoods have been rebuilt and 

reoccupied at the block level. The results of the study should demonstrate thc impact and 
69 

4 

effectiveness that both compensation-based and rehabilitation-based programs have on returning 

residents to safer, stronger neighborhoods after a disaster. 

In conclusion, CDBG has played a significant role in assisting states and communities 

with disaster recovery, especially long-term recovery. Over the last four years, we have 

identified many of the challenges that face our federal-state partnership in quickly administering 

grant assistance at the individual and neighborhood level. We are dedicated to working through 

these challenges while ensuring a continued focus on both performance and accountability. 

Long-term recovery and rebuilding after a disaster is a complex process that requires tough 

decisions at all levels, as well as the ability to acquire additional capacity to carry them out. But 

I'm confident that together we can and we will move Texas from recovery to revitalization. 

Thank you for the opportunity to appear before the committee. This completes my 

testimony and I look forward to answering your questions. 
70 

Chair LANDRIEU. Thank you, Mr. Tombar. We are going to talk 

at question and answer about the distribution of that Community 

Development Block Grant funding and if it is based on damage or 

other factors, and how it is being allocated to the different parts 

of Texas. 

Mr. Gonzalez. 

STATEMENT MR. MANUEL GONZALEZ, DIRECTOR, HOUSTON 

DISTRICT OFFICE, U.S. SMALL BUINSESS ADMINISTRATION 

Mr. GONZALEZ. Good afternoon, Madam Chairman and members 

of the Texas Congregation Delegation. Thank you for inviting me 

to discuss how SBA applied the lessons learned from Hurricanes 

Katrina, Rita, and Wilma to better assist the survivors of Hurricane Ike. The process improvements that had been made, that have 

been put into place allowed SBA to assist the survivors in an effective manner. 

My name is Manuel Gonzalez, and I am the District Director of 

the Houston District Office. I am proud to lead the local team of 

dedicated staff in Houston. 

Through our Office of Disaster Assistance, ODA, the SBA is responsible for providing affordable, timely, and accessible financial 

assistance following a disaster to businesses of all sizes, private, 

nonprofit organizations, homeowners, and renters. Many disaster 

survivors have insurance, which covers part or all of their losses 

after a declared disaster, but, for uncompensated losses, an SBA 

loan is a primary form of long-term, federal financial assistance. 

This financial assistance is available in the form of low-interest 

loans, and since the SBA’s inception in 1953, it has provided 1.9 

million loans for more than $47 billion. 

The damage to the Gulf Coast from Hurricane Ike elicited a 

strong and proactive response from the U.S. Small Business Administration. The agency was prepared to undertake a multifaceted, aggressive approach in response to the storm, and provide 

millions of dollars of relief to the victims. 

The SBA approved more than $638 million in disaster loans to 

help more than 10,000 Texas homeowners, renters, businesses, and 

nonprofit organizations recover and rebuild from the damage 

caused by Hurricane Ike. 

The SBA approved over $432 million in disaster loans for 8,473 

Texas residents to repair or replace their disaster-damaged or destroyed homes and personal possessions. 

SBA approved over $206 million for 1,574 Texas businesses and 

private, nonprofit organizations to repair or replace their real estate, machinery, equipment, inventory, and other business assets 

and provide working capital to help meet disaster-related needs. 

The SBA disaster loan program also provided funds to help residents and businesses with the cost of making improvements to prevent or minimize the same type of disaster damage from occurring 

in the future. 

Additionally, SBA responded to the needs of Texas residents and 

business owners by deploying 503 SBA disaster assistance workers 

to Texas to provide one-on-one service to disaster victims. SBA representatives staffed 72 Disaster Recovery Centers, 29 Mobile Dis-
71 

aster Recovery Centers, 9 SBA Disaster Loan Outreach Centers 

and 8 SBA Business Assistance Centers. 

At these centers, SBA representatives personally met with more 

than 88,400 disaster victims to answer questions, explain SBA’s 

disaster loan program, help complete disaster loan applications, 

and close disaster loans. 

Chair LANDRIEU. Mr. Gonzalez, just try to summarize, if you 

could. Just summarize a little bit. 

Mr. GONZALEZ. Okay. 

Chair LANDRIEU. So we can keep time for questions. 

Mr. GONZALEZ. Okay. Following the 2005 Gulf Coast hurricanes, 

SBA experienced significant challenges in response to natural disasters of such a large scale. The cumulative result of the Gulf 

Coast disasters caused damage that was so extensive that the number of resulting disaster loan applications overwhelmed SBA’s capacity to process them. SBA recognized the severe challenges that 

hindered its efforts to aid recovery in a timely manner, and has 

made dramatic improvements to its process operations. 

Today, by incorporating lessons learned and process improvements, SBA’s Disaster Assistance Program and our sister federal 

agencies have overhauled the processes and response protocol. We 

learned important lessons from the 2005 hurricanes, and have significantly executed our role to support the postdisaster economic 

recovery following hurricanes like Ike. 

SBA is better prepared than ever to process loans faster, provide 

better-quality service, and be more helpful to our customers, disaster survivors. 

Some of the improvements have been—SBA has made significant 

improvements in our application processes since 2005. The average 

processing time during Hurricane Katrina was 66 days for disaster 

business loans, 74 days for disaster homes loans. 

Today, the average processing time is 14 days for disaster business loans and 6 days for disaster home loans. Additionally, on August 4, 2008, SBA introduced an electronic loan application which 

is currently in use and has capability of 5,600 applications per 

hour. 

Furthermore, we have revamped the postapproval process, improving process and tools for loan closing and fund disbursement 

by creating case management teams with staff from each key area, 

such as loan processing and legal. The emphasis is on customer 

service and accountability, with each approved loan assigned to a 

team and an individual case manager. 

On top of this, we have increased the Disaster Credit Management System capacity from 1,500 to 12,000 concurrent users, expanding our workforce to include over 2,000 reservists, along with 

enhanced training and quality assurance to ensure consistent adherence to policies and procedures, expanded infrastructure, including 210,000 square feet of surge space and equipment and better 

coordination between nondisaster field staff and improved harmonization across disaster center operations. 

In closing, we appreciate the opportunity to share with the committee the role SBA plays in small business disaster recovery efforts, and we believe that the reforms we have instituted and the 

new tools Congress has provided will allow us to more effectively 
72 

and efficiently respond to the needs of our nation’s citizens. I look 

forward to further describing these efforts and answering your 

questions. 

Thank you. 

[The prepared statement of Mr. Gonzalez follows:] 
73 

SENATE SMALL BUSINESS AND ENTREPRENEURSHIP COMMITTEE 

HEARING REGARDING 

A YEAR LATER: LESSONS LEARNED AND PROGRESS MADE AFTER 

HURRICANE IKE 

SEPTEMEBER 25, 2009 

Testimony of 

Manuel Gonzalez 

District Director 

Houston District Office 

Good afternoon Senator Landrieu, Senator Hutchinson, Senator Cornyn, and 

members of the Texas Congressional Delegation. Thank you for inviting me to discuss 

how SBA applied the lessons learned from Hurricanes Katrina, Rita and Wilma to better 

assist the survivors of Hurricane Ike. The process improvements that had been put into 

place allowed SBA to assist these survivors in an effective manner. 

My name is Manuel Gonzalez and I am the District Director of the Houston 

District Office. I am proud to lead the local team of dedicated staff in Houston. 

Through our Office of Disaster Assistance (ODA), the SBA is responsible for 

providing affordable, timely and accessible financial assistance following a disaster to 

businesses of all sizes, private non profit organizations, homeowners, and renters. Many 

disaster survivors have insurance, which covers part or all of their losses after a declared 

disaster, but for uncompensated losses, an SBA loan is the primary form of long-term 

Federal financial assistance. This financial assistance is available in the form oflowinterest loans, and since the SBA's inception in 1953, it has provided 1.9 million loans 

for more than $47 billion dollars. 

The damage to the Gulf Coast from Hurricane Ike elicited a strong and proactive 

response from the U.S. Small Business Administration. The agency was prepared to 

undertake a multi-faceted, aggressive approach in response to the storm, and provided 

millions of dollars of relief to the victims. 

The SBA approved more than $638 million in disaster loans to help more than 

10,000 Texas homeowners, renters, businesses and non profit organizations recover and 

rebuild from the damage caused by Hurricane Ike. 

The SBA approved over $432 million in disaster loans for 8,473 Texas residents 

to repair or replace their disaster-damaged or destroyed homes and personal possessions. 

SBA approved over $206 million for 1,574 Texas businesses and private, non-profit 

organizations to repair or replace their real estate, machinery, equipment, inventory, and 

other business assets and provide working capital to help meet disaster related needs. The 

SBA disaster loan program also provided funds to help residents and businesses with the 
74 

cost of making improvements to prevent or minimize the same type of disaster damage 

from occurring in the future. 

Additionally, SBA responded to the needs of Texas residents and business owners 

by deploying 503 SBA disaster assistance workers to Texas to provide one-on-one 

service to disaster victims. SBA representatives staffed 72 Disaster Recovery Centers, 29 

Mobile Disaster Recovery Centers, 9 SBA Disaster Loan Outreach Centers and 8 SBA 

Business Assistance Centers. At these centers, SBA representatives personally met with 

more than 88,400 disaster victims to answer questions, explain SBA's disaster loan 

program, help complete disaster loan applications and close disaster loans. 

SBA's Role in Responding to a Disaster: 

The Small Business Administration is not a first responder agency, but rather 

SBA is focused on the long-term economic recovery efforts in coordination with its 

government partners at the Federal, state, and local levels. In addition to its disaster loan 

program, SBA helps small businesses recover through its guaranteed lending, technical 

assistance, and government contracting and business development programs. 

Disaster loans are a critical source of economic stimulation in the affected areas 

following a disaster. As part of an overall effort to assist survivors to get back on their 

feet, SBA's disaster home loans of up to $200,000 help those employed in the local 

community return and rebuild their homes. Moreover, businesses of all sizes and non 

profit organizations are eligible for loans of up to $2 million to assist with any uninsured 

and otherwise uncompensated physical damage losses sustained during a disaster to 

repair or replace damaged physical property. 

Additionally, SBA offers Economic Injury Disaster Loans (EIDL) to small 

businesses, small agricultural cooperatives, and most private non-profit organizations 

who have suffered economic injury caused by a disaster. If a small business or 

organization is unable to meet obligations and to pay its ordinary and necessary operating 

expenses, an EIDL loan can help. These loans provide working capital to a business or 

organization until normal operations can resume following a disaster. 

An EIDL can help meet necessary financial obligations that a business or private, 

non-profit organization would have met, had the disaster not occurred. It provides relief 

from economic injury caused directly by the disaster and permits a reasonable level of 

working capital during the period affected by the disaster. The maximum loan amount is 

$2 million combined for both physical and economic injury. 

SBA's Key Improvements to Disaster Assistance since Hurricane Katrina: 

2 
75 

Following the 2005 Gulf Coast Hurricanes, SBA experienced significant 

challenges in responding to a natural disaster of such a large scale. The cumulative result 

of the Gulf Coast disasters caused damage that was so extensive that the number of 

resulting disaster loan applications overwhelmed SBA's capacity to process them. 

SBA recognized the severe challenges that hindered its efforts to aid recovery in a 

timely way, and has made dramatic improvements to its process operations. Today by 

incorporating lessons learned and process improvements, SBA's Disaster Assistance 

Program and our sister Federal agencies have overhauled the processes and response 

protocols. We learned important lessons from the '05 hurricanes and have effectively 

executed our role to support the post-disaster economic recovery following Hurricane 

Ike. SBA is better prepared than ever to process loans faster, provide better quality 

service and be more helpful to our customers, disaster survivors. 

SBA's Office of Disaster Assistance has re-engineered the process by which the 

Agency responds to disasters and disaster survivors. All of these enhancements have 

been incorporated into the Agency's Disaster Response Plan. The DRP was created to 

become a comprehensive "playbook" to ensure a broad scope of coordination, awareness, 

and support throughout the Agency. 

Under SBA's Disaster Response Plan, during all levels of disaster response and 

long term economic recovery, SBA leverages existing resource partners (Small Business 

Development Centers, Women Business Centers and SCORE) primarily to help with 

local outreach as well as collaborate to distribute disaster recovery training materials and 

information to small businesses and non-profit organizations in the impacted areas. 

Additionally, SBA's resource partners are available for management and technical 

assistance to those businesses who are recovering from a disaster, and we strongly urge 

them to access these services by contacting their local chapter. 

SBA has made significant improvements in our application processing since 

2005. The average processing time during Hurricane Katrina was 66 days for disaster 

business loans and 74 days for disaster homes loans. Today, the average processing time 

is 14 days for disaster business loans and 6 days for disaster home loans. Additionally, on 

August 4, 2008, SBA introduced an electronic loan application which is currently in use 

and has a capacity of 5,600 applications per hour. 

Furthermore, we have revamped the post-approval process, improving processes 

and tools for loan closing and fund disbursement by creating case management teams 

with staff from each key area, such as loan processing and legal. The emphasis is on 

customer service and accountability, with each approved loan assigned to a team and an 

individual case manager. 

On top of this, we have increased the Disaster Credit Management System's 

capacity from 1,500 to 12,000 concurrent users; expanded our workforce to include over 

2,000 reservists along with enhanced training and quality assurance to ensure consistent 

adherencc to policies and procedures; expanded infrastructure including 210,000 square 

3 
76 

feet of surge space and equipment; and better coordination between non-disaster field 

staff and improved harmonization across disaster center operations. 

In closing, we appreciate the opportunity to share with the Committee the role 

SBA plays in small business disaster recovery efforts, and we believe that the reforms we 

have instituted and the new tools Congress has provided will allow us to more effectively 

and efficiently respond to the needs of our nation's citizens. I look forward to further 

describing these efforts and answering your questions. Thank you. 

4 
77 

Chair LANDRIEU. Thank you very much, Mr. Gonzalez, but, obviously, I am going to ask you about Mr. Dryden’s specific case when 

I come back and why a business like this going through the process 

that he did would have been rejected by you all. Also, you have had 

536 business loans approved, only 280 dispersed in Galveston, so, 

I am going to ask you about that discrepancy, and generally how 

many businesses were destroyed and how many loans you all have 

made in the general area of Ike. 

Go ahead, Judge Eckels. 

STATEMENT OF THE HONORABLE ROBERT ECKELS, JUDGE, 

AND CHAIRMAN, GOVERNOR’S COMMISSION FOR DISASTER 

RECOVERY AND RENEWAL, STATE OF TEXAS 

Judge ECKELS. Madam Chairman, I am pleased to be here again 

to visit with you about the storm, while I wish it was not about 

storms every time we have a chance to do this. 

Chair LANDRIEU. And pull this a little closer. 

Judge ECKELS. Certainly. 

Chair LANDRIEU. Because I can hear you, but I am not sure the 

audience can. 

Judge ECKELS. It is important that I thank you, too, for your efforts and those of Senator Cornyn and Senator Hutchison for the 

use of CDBGs Relief Funds for federal match. That is an important 

one for us, while it is not really a topic here today, I thank you 

for you interest in that—— 

Chair LANDRIEU. Thank you. We just passed that amendment 

this week off the Senate floor, and we hope it stays in the bill because it will give the State of Texas a great deal more flexibility 

in how those Community Development Block Grant monies can be 

used and can leverage them well. Taxpayers, I think, will get a better outcome and better result. 

Judge ECKELS. It is particularly important in small jurisdictions, where $750,000 may seem like a lot of money, but they do not have 

the quarter million to match, and it is an important component, so, 

we do appreciate that. 

I was appointed by Governor Perry in October to chair the Governor’s Commission on Disaster Recovery and Renewal. Jeff 

Sodjstrom, he was with us earlier, was a member of that commission, and we appreciate his work and for all of those members. 

In the interest of time, I will submit my written comments earlier for the record and try to briefly cover some of those points and 

be able to answer questions, as well. 

Like you found today, we found public testimony invaluable in 

gathering the firsthand knowledge of those issues, and Mayor 

Thomas did a great job today in outlining a lot of those kinds of 

things. 

We did issue our preliminary report in March with several recommendations that needed quick action by the legislature. Again, 

we were not set up as a state-centric kind of organization here. It 

was more local-centric in response, but they did include more than 

$600 million in disaster-related appropriations to state agencies, 

departments, higher-education institutions, school districts, health 

care facilities, and probably, most importantly, a disaster contingency fund that can match federal dollars for local jurisdictions 
78 

that have specific financial hardships in the declared disaster 

areas. 

Any state or local government can request money from the Disaster Contingency Fund to pay for disaster preparation and recovery, and we can use these funds to preposition equipment, personnel, and other vital resources in future disasters so that we do 

not have the issues that came up earlier about some of the highway and debris-removal projects. 

Chair LANDRIEU. They still cannot hear you, Judge. 

Judge ECKELS. I am sorry. 

Chair LANDRIEU. Yes. 

Judge ECKELS. As you know, in November of 2008, Congress appropriated more than $6 billion in Community Development Block 

Grants for the disasters of 2008. HUD announced its first allocation of $2.1 billion dollars in disaster recovery assistance to 13 

States and Puerto Rico. Of that amount, HUD allocated $1.3 billion 

dollars to the State of Texas. 

We did have to wait more than six months, and had a lot of persistence on behalf of the governor and others, including members 

of this committee, where they made their final allocation of CDBG 

funds in 2009. Of the second allocation, Texas received $1.7 billion 

in assistance. 

The Texas Department of Rural Affairs is the lead agency in that 

partnership to administer these funds, and although HUD announced that second round of funding in June, the federal guidelines were not published until mid-August, and the TDRA has 

worked to quickly draft an amended action plan for round two 

funds, and is in the process of gathering public comment. 

After hearing the concerns about the initial round two draft plan, 

the governor directed TDRA to develop a new formula for proposed 

allocation, and that is currently pending. I have appreciated today 

in the public comments from others here today that there are concerns still out there about this, and we will convey those concerns 

back to the TDRA. 

They also received extensive feedback requesting more local control over the direction of the funds, and local officials and staff 

have felt they were best equipped to identify their communities’ 

priorities for recovery. I believe they were right, and the new proposal provides that recommended housing and the nonhousing allocations by regions, but that those regions would be able to move 

the funds between housing and nonhousing interchangeably, based 

on need. That takes off a lot of other state controls. The deadline 

for submission for this action plan is September 30th. 

In business recovery, since the Federal Emergency Management 

Agency, FEMA, and CDBG primarily addressed housing and infrastructure needs, there are limited options for business owners 

needing disaster assistance. The SBA has approved over $200 million in business loans, but many businesses are still struggling or 

have closed their doors. Population decreases and temporary relocation of people while their homes and communities are repaired 

have reduced the number of patrons and people that are able to 

keep these businesses going. That has a chain reaction that affects 

the tax base in the small communities that are already struggling 
79 

to pay their share of the FEMA projects and cover other needed repairs that are not eligible for FEMA assistance. 

You mentioned earlier, too, the—well, I have touched on some of 

the questions that you asked earlier, do you want to follow-up on 

some of those, the impact it has had and found around the state? 

Texas is rebuilding, and we are pleased with the progress in 

many areas that are being made. Although Galveston lost 180 business members of their Chamber of Commerce, they gained 130 

members. So, there is some rebound you have seen coming in, and 

you have heard Mayor Thomas and the folks earlier talking about 

how that happened. 

The General Land Office in Texas, Commissioner Patterson has 

just announced over $135 million in custom protection projects. 

As we move forward, I would encourage you to keep up your effort and for Congress to revise the Stafford Act to accommodate recovery from catastrophic events. One year after the storm, while 

there is a lot left to be done, a lot has happened, and there is a 

lot of progress, and that is a credit to the local officials who are 

caught up in much of this process. 

None of us here doubt the intentions or the desires of FEMA or 

of Congress to help our communities recover, but, as you heard 

from Mayor Thomas and others today, the process often frustrates 

the promise of help. 

I would recommend personally, and it is not a commission recommendation, but personally that Congress revise the Stafford Act 

to allow the director or the secretary to empower states to directly 

handle public assistance and individual assistance. There is really 

no reason to have to send a project worksheet to Washington for 

approval when time is of the essence. I would provide that contemporaneous audits of this process and send the money through the 

state directly to the mayors and the county judges who do the jobs. 

Again, with transparency and a strong audit trail. 

Texas faced three hurricanes, two tropical storms, and three 

major rain events in fifty-eight days last year. On top of that, we 

just come off our most devastating wildfire season in history. And 

with the efforts of the mayors and the judges and the regional 

councils of government, we are moving forward with recovery. 

You should create a process in Congress that lets those local 

leaders in the communities respond quickly to the needs of the government, the people, and the businesses who live and work there. 

I thank you again for your opportunity that you presented for us 

to be here, and we will be happy to answer questions that you may 

come up with or respond to some of those earlier questions, too. 

[The prepared statement of Judge Eckels follows:] 
80 

Testimony of Robert Eckels 

Chair, Governor's Commission for Disaster Recovery and Renewal 

Senate Small Business & Entrepreneurship Committee 

Field Hearing, September 25, 2009 

Galveston, Texas 

Good afternoon Chairman Landrieu and members of the committee. Thank you 

for the opportunity to testify this afternoon on Texas' ongoing recovery efforts. 

Specifically, I appreciate the focus on small business recovery because it is often 

overlooked in the federal assistance process. 

My name is Robert Eckels, and I was appointed by Governor Rick Perry in October 

2008 to Chair the Governor's Commission for Disaster Recovery and Renewal. I 

was previously Harris County Judge during Hurricanes Katrina and Rita, so I am 

intimately familiar with disaster recovery both in the short-term and long-term. 

appreciate the opportunity to share with you today. 

Commission 

The Governor's Commission is comprised of state and local elected officials, 

members of the business community, and other private citizens who were 

personally affected by the 2008 hurricanes. The Commission was charged with 

assisting our local communities in recovering from the 2008 storms, renewing our 

communities, and reducing the impact of future storms. 

The Governor gave the Commission some guiding principles to aid in executing 

these charges. Local governments are best equipped to assess their own damage 

and develop recovery plans tailored to their communities. But these communities 

need additional resources from an integration of private, public, and non-profit 

assistance to recover and to prepare for future disasters. 

To carry out its charge, the Commission held four public hearings, in Galveston, 

Harlingen, Beaumont, and League City, as well as work group sessions in Port 

Arthur and Houston. The Commission heard testimony from federal, state, and 

local officials, as well as private industry, private non-profit organizations, and 

citizens. Everyone who testified has been affected by the hurricanes of 2008, and 
81 

in some cases, by previous disasters. Some people sustained damages to their 

personal property or businesses. Others spoke on behalf of their constituents or 

their employees. The Commission also heard from groups who offered business 

solutions for future disasters or recommendations from previous disaster 

experience. 

Public testimony was invaluable in gathering firsthand knowledge of the issues 

that individuals, businesses, and local jurisdictions have been facing. Some of the 

issues need a local solution, while others would benefit from a coordinated 

partnership with the state. Other problems are a result of federal regulations or a 

lack of federal financial assistance. 

The Governor's Commission presented its preliminary report to the Governor and 

the Texas Legislature on March 26th, 2009, with several recommendations and 

findings for swift action. Many of the Commission's recommendations are 

incorporated in legislative changes passed by the 81st Texas Legislature and 

signed into law by Governor Perry. Included in the legislation was more than 

$600 million in disaster-related appropriations to state agencies and 

departments, higher education institutions, local independent school districts, 

healthcare facilities, and a disaster contingency fund. 

The State disaster contingency fund may be used as match dollars on federal 

projects for local jurisdictions suffering financial hardship as a result of a declared 

disaster. Any state or local governmental entity may request money from the 

disaster contingency fund to pay for disaster preparation and recovery. The State 

can use the funds to pre-position equipment, personnel, and other vital resources 

for future disasters. 

Community Development Block Grants 

As you know, in November 2008, Congress appropriated more than $6 billion in 

Community Development Block Grants (CDBG) for 2008 natural disasters. The 

U.S. Department of Housing and Urban Development (HUD) announced a first 

round allocation of $2.1 billion dollars in disaster recovery assistance to 13 States 

and Puerto Rico. Of that amount, HUD allocated $1.3 billion dollars to the State 

of Texas. After waiting more than six months, and at the persistence of Governor 

Perry and others, including members ofthis committee, HUD made their second 
82 

(and final) allocation of CDBG funds in June 2009. Of the second allocation, Texas 

received $1.7 billion in disaster assistance. 

Governor Perry has designated the Texas Department of Rural Affairs (TDRA) as 

the lead agency in partnership with the Texas Department of Housing & 

Community Affairs (TDHCA) for administration of the CDBG funds. Round 1 

awards for the $1.3 billion have already started going out the door, and millions 

of dollars in grants have reached applicants. 

Although HUD announced the second round of funding in June, the federal 

guidelines were not published until mid-August. TDRA has worked quickly to draft 

an amended Action Plan for Round 2 funds and is in the process of gathering 

public comment on the proposal. 

After hearing public concerns about TDRA's initial Round 2 draft plan, Governor 

Perry directed TDRA to develop a new formula for proposed allocation. The new 

plan allocates more than 90% of the funds to the regional Councils of Government 

(COGs) based on a model of surge, wind, and rainfall damage in disaster declared 

counties and considers the low to moderate income (LMI) population. As you 

know, HUD dollars are targeted at LMI, and this population tends to have lower 

property values and less capacity to absorb rising utility rate and tax increases to 

cover damage repairs. 

TDRA also received extensive feedback requesting more local control for the 

direction of the funds. Local officials and staff felt they were best equipped to 

identify their communities' priorities for recovery and many of the original statedirected funds in the plan were removed. The new proposal provides 

recommended housing and non-housing allocations by region, but regions will be 

allowed to move funds between housing and non-housing interchangeably based 

on need. 

The deadline for submission to HUD of the amended Action Plan is September 

30th. 

Business Recovery 
83 

Since the Federal Emergency Management Agency (FEMA) and CDBG primarily 

address housing and infrastructure needs, there are limited options for business 

owners needing disaster assistance. The Small Business Administration has 

approved over $200 million in business loans, but many businesses are still 

struggling or have closed their doors. Due to population decreases or the 

temporary relocation of people while their homes and communities are repaired, 

there are a reduced number of business patrons. This severely affects the tax 

base in small communities that are already struggling to pay cost share on FEMA 

projects and cover other needed repairs ineligible for FEMA assistance. 

A year after Hurricane Ike, according to FEMA, only about 70 percent of the 

project worksheets have been paid, and many applicants are still undergoing 

revisions to their project worksheets because of underestimation by FEMA the 

first time around. The administrative nightmare of applying to FEMA, HUD and 

private insurance to hopefully recoup a majority of damages takes a toll on 

individuals and local jurisdictions. Without housing and city infrastructure, people 

can't return to their jobs. And unfortunately, Hurricane Ike hit the Texas coast 

during one of worst economic downturns in modern history, causing an 

overwhelming burden for many families and business owners. 

But there has been rebuilding, and Texans will recover. In August, the University 

of Texas Medical Branch emergency room reopened on Galveston Island. After 

many months, miles of debris have been cleared. Although the Galveston 

Chamber of Commerce lost 180 member businesses, they have gained more than 

130 new ones. The Texas General Land Office just announced over $135 million in 

coastal protection projects. 

Federal Action 

As we move forward, I would encourage members of this committee to continue 

their efforts to revise the Stafford Act to accommodate recovery from 

catastrophic events. With the statutes as they exist now, the time between a 

disaster and when assistance reaches individuals is entirely too long primarily 

because of statutory requirements and administrative guidelines. 

In closing, I appreciate the opportunity to testify today, and look forward to 

answering questions. 
84 

Chair LANDRIEU. Thank you, Judge, so much. Thank you, all, for 

your testimony, and we will go through these questions as quickly 

as we can because I know we are somewhat limited in time, although, I will extend this hearing probably until 3:15 to make sure 

we get all of these questions in. 

Let me begin with this issue of Community Development Block 

Grant, which is really the bulk of the flexible funding that the Federal government has been using for this particular program, beginning actually with the attacks in New York on 9/11, then followedup with the hits of Hurricanes Katrina and Rita, and then with 

Hurricanes Ike and Gustav, et cetera, to help fill in the gaps that 

the general disaster programs miss. This Community Development 

Block Grant money from the Federal government is in large measure one of the largest streams of revenue that comes down from the 

Federal government. There is some transportation funding, there is 

some direct FEMA funding through private assistance, but this is 

the largest and most flexible, so, in some ways, it is the most important. 

Let us talk about this first allocation. I was actually pleased that 

this was actually my amendment, supported by several of the members of the Senate to require that one-third of the funds be dispersed within 60 days, Mr. Tombar, because what had happened in 

Katrina is the money was there, but it was never dispersed to the 

locals. We insisted, and you all responded and acted, that one-third 

of the money be distributed. That was done. 

We also insisted in this language that the money be distributed 

based on damage and unmet needs because we had seen in the 

past that some of the money in previous storms had been distributed on basis other than damage, and, obviously, if you are trying 

to recover from a storm, our view, my view in particular but it is 

shared with many members of the Congress, is that when this 

money comes down, it should come to the communities that were 

hurt the worst where the needs are the greatest. 

I would like you, Judge Eckels, to comment about how the state 

is coordinating these efforts and how you are tracking this directive, and then for HUD to comment if you generally agree with 

that directive and will you all be following it? 

So, Judge Eckels, could we start with you? 

Judge ECKELS. We appreciate your efforts to ensure that those 

funds were made quickly. On round one, the $1.3 billion have already starting going out the door, and millions of dollars in grants 

have started reaching applicants, and I think it is largely because 

of your efforts to push that process along. 

I do not have the specific numbers in front of me. I have been 

working with the policy side, but I will be happy to get that for 

you. 

Chair LANDRIEU. Texas, the $6 billion that is for all the states 

in disasters in 2008, because of the requirement that we insisted— 

and your senators fought hard for this, but so did I, having been 

on the wrong side of this formula with Hurricane Katrina—we insisted that the money be distributed as between states based on 

damage, which is why out of the $6 billion, Texas will receive $3 

billion. 
85 

It went to all states in the union with disasters in 2008, but because the damage here in the State of Texas was the greatest, you 

all will receive the greatest amount based on damage, and that objective data was used to generally distribute that funding. 

Now the question is to both the judge and to Mr. Tombar, as that money now comes to the State of Texas, $3 billion in two, big 

tranches, how is the formula being designed to make sure that that 

money then gets to the counties and the cities and the communities 

that were the hardest hit—— 

Judge ECKELS. Sure, the—— 

Chair LANDRIEU. And, Mr. Eckels, go ahead. 

Judge ECKELS [continuing]. The plan that we currently have allocates more than 90 percent of the funds to the Regional Councils 

of Government, is distributed, and they decide how those funds are 

split up within those local regions. And, again, it is an example 

probably as you go around the country and look at the nation. 

There was an earlier question about the loan funds and the 

budgets of New Orleans and Galveston, and New Orleans does different things, and because of the state law in Galveston, it is combined city, county, schools, and other things. 

We find the same issues here. Different cities have different 

needs, different regions have different needs, and we found the 

Councils of Government to be an effective mechanism with distributing these funds among the cities and through the regions. 

Chair LANDRIEU. But are the Councils of Governments around 

the whole state or are they just in the areas of the disaster? 

Judge ECKELS. No, they include the whole state. In this area, the 

damage within a region, HEAC, for example, in the first round, 

they would look at the damage estimates and distribute the funds 

into this region, and then HEAC would distribute that for projects 

among the communities. 

It works very well. There are some issues that come up. Large, 

regional projects. 

We are looking now at a storm surge study, for example, that it 

would be working with Louisiana, as well, on this because we are 

trying to take it all away from the southern Brazoria County, Galveston County, and on up the coast towards Jefferson and Orange 

Counties, and the Sabine River, you may have heard them talk 

about it here in Galveston of the Ike Dike. The governor is very 

strong on doing a surge study, but it transcends regional councils, 

it transcends the state agencies, and, so, we are looking to create 

a partnership among the local governments in this region that can 

administer and do that study because there is really no one in our 

structure that is designed to do it as you might have in Louisiana. 

So, it is the flexibility for us to be able to deal with those issues 

as our laws and process works is very helpful. 

Chair LANDRIEU. Okay. Mr. Tombar, could you comment about 

the Secretary’s and Administration’s view on principles about how 

that money should be distributed once it hits the state? 

Mr. TOMBAR. Certainly. Again, as you mentioned, the Community Development Block Grant Program is extremely flexible in its 

design. And it does not give a lot of latitude to the Federal government in determining how that money is used. But Congress directed us to take into account the extent of damage when making 
86 

distributions to the state, and we did that using data from some 

of our federal partners from FEMA and SBA and others to make 

determinations about loss and housing and business and infrastructure damage, and use that to make a determination. 

Some states, your home state of Louisiana, for example, request 

the data that we use to make our determinations about distributions across the states because we also have that at the local level 

and use that to make the determinations. That is not a federal requirement. The CDBG Program does not work that way, however, 

some do that, and we make those data available when requested. 

In the case of Texas, I am not aware that that request has been 

made to us, nor is the distribution being made necessarily in that 

way following the way that we made the distributions from a federal level. It is not a requirement. Part of the reason that local and 

state officials like the Community Development Block Grant Program is because it does provide that level of flexibility though. 

Chair LANDRIEU. Yes, and I am going to follow this up with you 

all because I do have other questions to the other panel, but I want 

to be very clear about one principle, that we are now using Community Development Block Grant at the federal level to try to respond to communities that are struck by disasters because the current programs are just not sufficient. After a catastrophic disaster 

in particular, there are so many unmet needs in the communities 

affected by the disaster. It is not necessarily meant to be a Community Development Block Grant bonanza for the entire state. 

I am sensitive to the fact that in these storms, there are many 

counties and parishes that are damaged. Some more than others, 

but it is the great hope of this Chair and I think many members 

of Congress on both sides of the aisle that that money will track 

to the communities that are the hardest hit, and I am going to ask 

HUD to look carefully, and we will work with our Texas leaders 

and the other leaders that are in other states. 

Missouri had some terrible flooding. I think Idaho had some terrible flooding. So, there were about 12 or 13 states in 2008, as I 

recall, that had some serious damage, and we saw just last week 

the terrible flooding in Atlanta, Georgia, from rains. If we send the 

Community Development Block Grant to Georgia, the idea is to get 

it to the area in Atlanta that is flooding, not other areas of Georgia 

that might have very worthy and significant projects. 

So, I hope that you receive this in the spirit because that is our 

only tool right now at the federal level. Until we are able to fine 

tune and provide other tools for the SBA, there are so many gaps, 

and we are trying to fill them with this imperfect program that 

was not even designed, as you know—— 

Mr. TOMBAR. Yes. 

Chair LANDRIEU [continuing]. To be a disaster recovery program. 

It was designed to be a revenue sharing program for local communities and their ongoing, everyday, ordinary development of roads 

and schools and bridges, et cetera, et cetera. We are using it as a 

disaster relief program now almost routinely, and HUD has a great 

position in this because you have to approve the spending plans. 

Mr. TOMBAR. If I may, you are right that, as I have mentioned, 

the State of Texas, we are expecting a plan for them on the second 

allocation by sometime next week, September 30. However, the pro-
87 

gram itself, the Community Development Block Grant Program, 

and you have heard me testify to you about this before, that it is 

sort of a square peg in a round hole. It is a program that is, one, 

meant to be incremental. It is a program that was never designed 

for a disaster context, but it is used in that context because of the 

flexibility, because of the way that money can quickly reach communities. 

What it does not provide is any type of stick or hammer, anything for the Federal government to be really directive about how 

those monies are used, beyond cajoling, beyond encouraging, we 

really—if the plan, that an actual plan that a state submits meets 

the really broad national objectives that the Community Development Block Grant has established based upon by Congress, we 

then have to approve that plan. There is no way to disapprove it. 

Chair LANDRIEU. I am going to be watching this very carefully, 

and we will work with our friends in Texas because this is our best 

effort to get money from the Federal Government to the communities that found themselves hardest hit, and there are requirements that 50 percent of these funds in the standard law need to 

go to moderate- and low-income individuals. 

Mr. TOMBAR. Yes, ma’am. 

Chair LANDRIEU. And a special requirement—that is a standard. 

Mr. TOMBAR. Yes. 

Chair LANDRIEU. That is not the Landrieu Amendment. That 

was the standard of the law. We also required specifically that 10 

percent of this funding go for, I think, rental, affordable housing. 

That has to be in the plan because it is required in the law. I am 

happy that we got the 10 percent waiver lifted so that money now 

can become very flexible, and I was happy to leave that. 

Let me ask Mr. Gonzalez a question, and then I want to get to 

you, Mr. Harris. 

Please respond to the heartfelt testimony of Mr. Gillins and Mr. 

Dryden. Two small businesses right here in Galveston. They said 

that they were never approached by the SBA. Mr. Dryden’s testimony is he finally got the application process through and was rejected. 

Could you please give us some sense that the SBA is actually aggressively reaching out after disasters to small businesses, and, if 

so, how did you miss these two? Please give us some numbers that 

help us to really understand what the SBA is doing. 

We have been able to figure out that original loans approved— 

this is for Galveston County only. Okay, I do not have the data 

with me. We have it, but I do not have it with me for others. Of 

five hundred thirty-six business loans, only two hundred eighty 

loans were dispersed. We do not know what the average amount 

of those loans were, but we know the total amount, $64 million. 

Do we even know how many businesses are in Galveston County? 

Does anybody know? Does anybody know from the city what the 

universe of businesses are? And, if you do not, that is fine. I am 

just asking for rough numbers. I do not know if we have 2,000 

small businesses. 

Mr. GONZALEZ. We can get that. 

Chair LANDRIEU. Or 1,000 small businesses, but we only went 

through the SBA 280 businesses received loans. Those loans could 
88 

have been for $10,000 or $30,000 or $50,000. We have those 

records. Please give us some idea, because this is a real problem 

we are finding in many places after storms that the smallest businesses that are really responsible in many communities for over 60 

to 70 percent of the employment. Small businesses can represent 

in some communities 90 percent or more of the employment, are 

having a very hard time getting the loans necessary to get back 

into business so that they can keep themselves employed, hire 

other people, and get the communities back rebuilding. It is virtually impossible to rebuild a community without the small business base. 

Mr. GONZALEZ. Madam Chairman, I am in total agreement with 

you of that statement. Looking at the graph, first of all, I would 

say that one of the main components that probably impact the difference between approved loans and dispersed loans is that some 

of the homeowners and business owners have received insurance 

proceeds that cover the losses incurred. The other components, I do 

not have the data, but I would be glad to get it to you, to your 

staffers. As far as the number of businesses in Galveston, I do not 

have that either, but we can get the data to your staffers. 

Chair LANDRIEU. Okay, because I am going to ask you in the assessment of Ike, which is now a year into Ike, in the areas that 

were impacted most severely, how many small businesses were 

there and how many of those businesses actually received help 

through the SBA? 

Mr. GONZALEZ. Again, I do not have a—— 

Chair LANDRIEU. I think it is a relatively small number. 

Now, we do not expect all help to come from the SBA. We could 

have more partnerships with some of the local banks, but what we 

are going to do is gather information in these disaster areas, how 

many loans, how much help came from the SBA, how much help 

came from the local banks, how much help came from national or 

international banks, and then where the gaps are. 

Mr. GONZALEZ. Okay. 

Chair LANDRIEU. So that after disasters, particularly on the Gulf 

Coast, where these small business people are putting everything on 

the line, everything on the line, they need to have confidence that 

if another storm comes, there is someone that can help them with 

a combination of loans and grants, and it does not have to be a 

complete reeducation every two or three years. 

Just like if there is an emergency in your house, you pick up the 

phone and call 911, and, for the most part, it works. Not in every 

case, but we are getting better. After a storm, they pick up the 

phone and call 311 or 611, and the Small Business Administration 

answers and says yes, Mr. So-and-So, we know you have been in 

business 10 years. We are going to help you get back in business; 

pick up your money Friday. I mean, that is where we want to be. 

We are so far from where we need to be, because our cities and 

counties are going to have a very hard time attracting people to 

come to start businesses here when they know the risks are so 

great. Their insurance will not cover their losses, and they cannot 

find the SBA when they need them. 
89 

I want to say this before I ask Mr. Harris. I want to acknowledge 

publicly the two banks that were here that helped. What is the 

small business? 

Would the bankers that are here please be acknowledged? Could 

you acknowledge the two bankers that stepped up to the plate to 

help the business we went to today? 

UNIDENTIFIED SPEAKER. [Off microphone.] Was HomeTown Bank 

of Galveston. And, just as background, we have estimated there are 

about 3,500 businesses on the island. I do not have an estimate for 

you for the county, but we provided that to your staff. And, so, 

there were four local banks that actually came together to lend $40 

million to $50 million in private loans to the businesses immediately after the storm. 

Chair LANDRIEU. A model like that, we would like to acknowledge in this public hearing. We are going to look into it more and 

potentially use it so it is a partnership between the local banks 

that actually know that the businesses were here before, they know 

the ones that were profitable, the ones that were successful, and 

can help maybe in partnership with the SBA. I mean, 3,500 businesses on Galveston Island. I hope we reach more than a few hundred, and we need to really step it up. 

Mr. Harris, I want to speak to you, and we are going to finish 

in just a minute, but can you comment about FEMA’s work with 

HUD and how you all have decided to now work together, as the 

law now requires under the new disaster plan that FEMA is responsible for housing up to what, 60 days or 90 days, and then 

when and how does HUD step in? I would like both of you to comment because we have 4,000 families in this area still having not 

been able to return. We toured a lot of neighborhoods today that 

still need to be renovated and homes, single-family, multi-family, 

et cetera. I think it would worth commenting how, under the new 

requirements, you all are working with HUD for the record? 

Mr. HARRIS. Disaster housing is always a critical issue in a 

major event, and we addressed it with multiple options. 

Sometimes and a lot of times, the victims, the survivors can find 

housing with relatives, friends, second homes, whatever. That is a 

percentage. Others need help in finding hotel and/or apartment 

units. 

We have the Temporary Shelter Assistance Program that we 

manage, and, from there, it goes into other units, such as the Disaster Housing Assistance Program, which is a HUD Program, and 

then the final things that we use is our temporary housing, mobile 

homes. 

So, it is a combination of programs that can address each individual’s needs, see where they stand in the system, and provide 

them the exact service that they need. 

Now, HUD, I mean, everyone would think that Housing and 

Urban Development would be the lead in this, but, really, they 

have only been part of disaster housing as a formal disaster response industry as in the last few years. And I think we need to 

improve this coordination bottom line because they have their way 

of doing things, and we have ours. We have people talking at the 

headquarters level and they are just not linking up to our benefit 

or the peoples’ benefit in the field because it is communication, it 
90 

is different usages of words and verbiage and they are tracking one 

number, and we are using another number, and we find out we are 

not even using the same language. 

I would suggest that a potential solution for this is that instead 

of—and we realize that they do not have budget for this. I mean, 

this is a new thing that they are stepping into, providing emergency disaster housing. 

We handle a lot of other federal agencies under a mission assignment process. Why do not we do that with HUD? And why do not 

we do that with the Highway Administration? 

Chair LANDRIEU. Well, that is a very good suggestion, but I just 

want to be clear that FEMA has been in the business of short-term 

emergency housing, but I put the emphasis on ‘‘short.’’ Prior to 

Katrina, these disasters were sort of garden variety disasters. I 

mean, Hurricane Andrew was quite large, 18,000 homes were destroyed, and the community was really topsy-turvy for 10 years, 

but, for regular storms, which come in and go out where a few hundred homes are destroyed, FEMA would put a few trailers, give out 

a few vouchers, in a year or so, and everybody was back. But what 

we have to recognize is, unfortunately, those days of garden district 

storms are over with. Garden variety storms are over. These 

storms are big, they are fierce, the damage is substantial, and the 

reason that we have asked HUD to try to step up is because we 

are rebuilding cities now. We are not just providing temporary 

housing to people, and that is what FEMA does not do, is rebuild 

cities, that is what HUD and the Department of Transportation 

and others—in the rural areas, it is Department of Agriculture— 

have jurisdiction over to try to rebuild these small towns and large 

cities, which is why we are attempting at the federal level to try 

to get these two agencies to come together. 

It has been required by amendment after amendment after law 

by law, and I am saying that our patience is running thin about 

getting it right. You are going to take the first 90 days, and then 

you all take 90 days plus, or there is a trigger. If the disaster is 

X large, you have your role, you have your role because there are 

people who are homeless who have never been homeless in their 

life, who are homeowners that have no place to live. They have 

never been on government assistance. Then you have got the whole 

other group who has been on government assistance is depending 

on the government to help them to get in a more self-sufficient 

manner. 

Mr. Tombar, can you give us any hope that this is being done in 

the new Administration? 

Mr. TOMBAR. Certainly. As you are aware, that visit that I mentioned earlier that Secretary Donovan took to the Gulf Coast in 

March just weeks after his confirmation, he was joined by Secretary Napolitano, and it signaled it is certainly a coordination between the two departments that has continued. 

I, on behalf of Secretary Donovan, in regular communications 

with people at the Department of Homeland Security and FEMA 

are working on a national coordination. In fact, we already have in 

advance of any possible hurricane or other disaster this year an 

agreement that has been all but worked out to provide DHAP assistance should it be necessary. There are a few final things that 
91 

we are working through, but that agreement essentially could be 

signed by Days Inn so that we have something in place. 

As Mr. Harris testified, there is not a permanent funding source 

at HUD for any type of disaster program. In fact, the DHAP Program is funded by FEMA under the rules of the Stafford Act, and, 

in fact, as I testified, the DHAP-Ike Program terminates in March. 

Unless there is some other provision that is made available, there 

is not assistance right now to help those families that we recognize 

under our program rules would qualify for permanent assistance. 

We have been able to transition some 12,000 families under 

DHAP-Katrina with the assistance of FEMA to our permanent 

housing program, using the $85 million that Congress made available. After the Northridge Earthquakes, Congress also provided for 

permanent housing for those families that needed it, but there is 

no such provision. 

Part of the problem is that there simply has not been a permanent program created. The Obama Administration, as you asked, 

has been working to identify in the event of a major disaster or catastrophic disaster, beyond, as you said, the garden variety disaster, 

what are some of the basic authorities and programs and funding 

that we need? And we are prepared in working with some folks 

from your staff and others on Senator Lieberman’s staff to soon 

come before the Congress and actually make a presentation of what 

is—— 

Chair LANDRIEU. Well, we are looking forward to it. This has 

been very frustrating, and I know it is extremely frustrating to the 

communities on the ground, the families who need to be given some 

direction. 

I want to ask you, Judge, and this is going to have to be the final 

question, and we could, of course, stay here for days on this subject, but under the plan that the State of Texas is putting together 

for the distribution of Community Development Block Grant, do 

you know what percentage of that plan is dedicated to housing? 

Judge ECKELS. I do not know the housing. You asked earlier 

about the CDBG funds and COGs around the state. I want you to 

understand that—— 

Chair LANDRIEU. Yes. 

Judge ECKELS. The CDBG funds will be distributed only to those 

disaster-eligible counties. So, only those COGs that are in disastereligible counties. 

The split between housing, I do not have that number. I know 

that we are providing some flexibility on that for the local levels 

because, in many cases, in our initial allocation, we had to hit to 

the hard allocation between housing and the other funds available 

for CDBG, and we found that they could not expend the housing 

funds, that it was not enough providing a little more flexibility in 

our new formula to allow the local councils and regional councils 

to be able to adapt for those areas. 

Chair LANDRIEU. Okay. Well, if you could get that to us. 

Judge ECKELS. Sure. 

Chair LANDRIEU. We would be very interested, but I am glad you 

clarified the CDBG money is not being distributed statewide. 

Judge ECKELS. It is only to those counties that are—— 

Chair LANDRIEU. It is being distributed—— 
92 

Judge ECKELS [continuing]. Disaster-eligible counties that are declared. 

Chair LANDRIEU [continuing]. To the counties where they were 

declared disasters. And then each of those regional, what do you 

call them, COGs? 

Judge ECKELS. Councils of Government, yes. 

Chair LANDRIEU. COGs are coming up with formulas as to how 

to spend that money. 

Judge ECKELS. Within their regions, they distribute those to the 

cities, and, again, there are some areas that transcend regions, and 

the governor will have a little bit out for those. 

Another issue, and it is kind of a left field here at the very end, 

and I hate to throw it in, but it was mentioned earlier, and these 

are the ones from Ike. These are the Ike funds. 

Now, we understand we are under four—the entire coast from 

the Rio Grande to the Sabine River is under disaster declaration 

today because of the hurricanes. We had three hurricanes, two 

tropical storms, four, big rain events. 

Chair LANDRIEU. So, this would extend down to the—— 

Judge ECKELS. This is Ike. But, yes, it extends all the way to the 

valley, and when you pick up the other storms—— 

Chair LANDRIEU. The valley and went all the way to the point? 

Judge ECKELS. To the border with Mexico. 

Chair LANDRIEU. To the border. 

Judge ECKELS. One issue that you mentioned specifically here 

and a little bit, is the people trying to take care of themselves. 

They bought insurance. And if you think in terms of the flood insurance and the windstorm insurance, you heard a little testimony 

before of confusion. 

The flood insurance we spent a lot of time working on that issue 

with the rising water, and it does a good job for that, but when you 

have a combined surge and wind event and the building is gone 

and there is a debate between the flood folks and the windstorm 

people, if there was a mechanism to do a combined windstorm and 

flood, and they are different programs, the state is operating the 

windstorm program and the federal is doing the flood program, if 

we could find a way to do a combined windstorm and flood in those 

areas where you have a hurricane with 150-mile-an-hour winds 

and a 20-foot storm surge, right now, both sides are denying the 

claims and saying oh, it is a flood, no, it is wind. 

Chair LANDRIEU. We have to get this straight for the economic 

vitality—— 

Judge ECKELS. But throw that out—— 

Chair LANDRIEU [continuing]. Of the Gulf Coast from Texas all 

the way really up through the East Coast, as well, because—— 

Judge ECKELS. And Mid Atlantic, as well. 

Chair LANDRIEU. Certainly through our states. 

All right, one more comment, Mr. Gonzalez. 

Judge ECKELS. Thank you again for having us. 

Chair LANDRIEU. Thank you. 

Mr. GONZALEZ. Madam Chairman, I would like to suggest something to the two gentlemen business owners that had their disaster 

requests declined, and that is to reach out to our resource partner, 

the University of Houston Small Business Development Center. 
93 

One of their satellites is here, College of the Mainland here in Galveston. To get some assistance by recrunching the numbers, see if 

we missed something, and they could pick up something. 

And, also, if they wish to apply under the Guaranty 7(a) Program 

that I lead out of Houston, especially now that we have the Economic Recovery Assistant Act of 2009, where we will guarantee 90 

percent of the loan and pay the guaranteed fees, that might entice 

some of the local lenders, especially those four that the gentleman 

mentioned, to help these two small businesses. 

Chair LANDRIEU. Thank you very much. I appreciate that. Thank 

you all. You have been very patient. Again, we could go on all 

afternoon, but thank you very much, and the meeting is adjourned. 

[Whereupon, at 3:26 p.m., the hearing was adjourned.] 

(95) 

APPENDIX MATERIAL SUBMITTED 
96 

U.S. Senator David Viner 

U.S. Senate Committee on Small Business and Entrepreneurship 

Statement for the Record 

September 25,2009 

"A Year Later: Lessons Learned, Progress Made, and Challenges that Remain 

from Hurricane Ike" 

I am glad that the U.S. Senate continues to work and examine ways to improve the federal 

government's disaster response. As we learned all too well in the aftermath of the devastating 

2005 Gulf Coast hurricanes, which destroyed thousands of homes, businesses and lives in my 

state, it is absolutely imperative that the government programs on the front lines are fully 

prepared when called upon to aid disaster victims. When Hurricanes Katrina and Rita hit, the 

Agency made too many costly mistakes, which left disaster victims waiting for months for loans 

to be processed or their money to be disbursed. 

After Hurricanes Katrina and Rita exposed that the SBA had major problems providing disaster 

loans and services, I worked with Congress and my colleagues on this Committee to address 

those failures and ensure that future disaster victims, including the people of Galveston, receive 

timely and effective assistance from the SBA. Our legislation was included in the 2008 Fann 

Bill, which was signed into law on May 22, 2008. 

While improvements have been made, I am concerned about the SBA's implementation of the 

requirements in the 2008 Farm Bill, as reported by the Government Accountability Offiee 

(GAO) in July of this year. According to the GAO, the SBA has only met 13 of the 26 

requirements of the Aet. This report is disappointing and raises serious concerns about the lack 

ofurgeney shown by the SBA to victims of catastrophic disasters. I am eager to hear plans 

established by the SBA since the July GAO report to implement the remaining provisions. 

Clearly, the Gulf Coast continues to remain vulnerable to hurricanes, as Ike and Gustav have 

shown. I am hopeful that the findings from this field hearing identify specific areas for further 

refonning the disaster response by the federal government. and I am hopeful that this Committee 

and the Congress will continue its work to improve the Federal government's disaster response, 

including the programs administered by the SBA. 
97 

Statement for the Record 

Senator John Cornyn 

U. S. Senate Committee on Small Business and Entrepreneurship 

Field Hearing 

"A Year Later: Lessons Learned, Progress Made and Challenges that Remain from 

Hurricane Ike" 

Friday, September 25, 2009 

Madam Chainnan, Ijoin the leaders of Galveston in offering you a wann welcome. Thank you 

for calling this hearing of the Senate Committee on Small Business and Entrepreneurship - as 

well as the Senate Committee on Homeland Security and Governmental Affairs Ad Hoc 

Subcommittee on Disaster and Recovery. We appreciate your leadership on disaster 

preparedness, response and recovery. 

One year ago, the Houston/Galveston region was ravaged by Hurricane Ike. The stonn 

pummeled coastal communities with II O-mile per hour winds and a 15-foot stonn 

surge. Hurricane-force winds and torrential rains caused damage across Southeast and East 

Texas. When the skies cleared, Texans mourned for their loved ones - and saw the billions of 

dollars in damage to homes, businesses and public infrastructure. 

Today, we can still see the devastation wrought by Hurricane Ike - as well as the detennination of 

this community to rebuild. Galveston is coming back strong because of local leadership. I'd like to 

recognize Mayor Thomas, Judge Yarbrough, Judge Eckels, and all the public servants they lead. 

Private sector leaders have made a difference as well- including non-profits, churches and other 

faith-based organizations. 

Together, these public and private sector leaders have helped Galveston get back on its feet. 

Approximately 75 percent of the businesses have reopened and 80 percent of those living here 

before the hurricane have now returned to the island. 

Of course, the federal government has a role to play, too. We're going to hear from representatives 

of several key agencies today, including FEMA and the Small Business Administration. The good 

news is that federal resources are coming to Galveston - and making a difference here. As of last 

week, FEMA had allocated nearly $190 million to Galveston County residents through the 

Individual Assistance Program. And the Small Business Administration has approved more than 

$240 million in loans and other assistance. 

The challenge now is to get the dollars promised in Washington to be delivered here in Galveston. 

I hope today's hearing will give us a clearer picture of what the federal government is doing right 

- and where the agencies need to improve perfonnance and be more responsive. 
98 

I look forward to hearing the testimony of all our panelists and witnesses today. Your voices will 

not only help this community recover more quickly, but also help our agencies improve their 

operations and response perfonnance for future disasters. 

I pledge to continue working with members of this community to ensure that all levels of 

govemment are providing the resources you need to rebuild and recover from Hurricane Ike. 

Madam Chainnan, thank you again for holding this hearing today. 
99 

"A Year Later: Lessons Learned and Progress Made After Hurricane Ike" 

Galveston, Texas 

September 25, 2009 

Statement of 

Senator Kay Bailey Hutchison 

In 1900, the island of Galveston was devastated by a hurricane that claimed over 

6,000 lives. To this day, it is the deadliest natural disaster in U.S. history. Growing up on 

the Gulf Coast, I heard tales and accounts of that deadly storm and how the community 

recovered and became better than ever. Today, we are seeing the same strength and 

resolve as, onee again, the people of Galveston are rebuilding their homes, businesses and 

lives after the sweeping force of Hurricane Ike. 

On September 10,2008, as Ike approached the Gulf Coast, President George W. 

Bush issued an emergency declaration for Texas and urged residents to evacuate ahead of 

the storm. Though millions of residents left their homes to seek shelter from the storm, 

many chose to stay and ride out the storm. Shortly before Ike made landfall, the force of 

the hurricane winds cut otT power for those residents who stayed in their homes. The 

rising storm surge began to spill over the 17 foot Galveston Seawall. When Hurricane Ike 

finally swept onto shore, entire communities were wiped out by winds, storm surge, and 

walls of debris, and a path of destruction was left in its wake. 

Galveston alone suffered $3.2 billion in damage, and the area's largest employer, 

the University of Texas Medical Branch. was shut down as a result of the storm. 

The impact of the storm was overwhelming. In Congress, we worked together to 

respond swiftly to Galveston's mounting needs. I led "Team Texas" to coordinate our 

state's delegation's efforts to secure federal ttillding to start the long recovery process. 

We quickly passed a disaster supplemental providing billions in Community 

Development Block Grants, transportation infrastructure funding, low income tax credits, 

and tax exempt bonding authority. Last June, as part of the FY 2009 Supplemental, I 

secured a provision to provide for 100 perccnt fcderal reimbursement for debris removal 

and increased the federal cost share for Public Assistance funding from FEMA to 90 

percent. Chairman Landrieu and I recently took the first step toward ensuring flexibility 

for our local communities' use ofCDBG funding; and I look forward to continuing to 

work with Senator Landrieu as the measure is reconciled with the House of 

Representatives. 

Team Texas is continuing to work closely with the Federal Emergency 

Management Agency (FEMA), the U.S. Small Business Administration (SBA) and the 

U.S. Department off-lousing and Urban Development (HUD) to coordinate recovery 

efTorts. With Congressional support, Texas has received over $5.5 billion in federal 
100 

assistance from these agencies. We have come a long way in rebuilding the Gulf Coast 

communities, but much work remains to be done. Rebuilding the Gulf Coast communities 

is one of my top priorities, and I will continue to work with local officials and state and 

federal agencies to ensure our residents and neighborhoods receive proper assistance. 

Structures can be rebuilt, businesses can be reopened, but lost lives can never be 

replaced. We will never forgct how thc hurricane upturncd thc lives of so many Texans 

one ycar ago. But we must also look forward. and I hope we can Icarn from Ike ways to 

mitigate future disasters. 

In the year that has passcd since Hurricane Ike hit Galveston. we have all learned 

important lessons, but there is much more to investigate. I hopc this hearing will exanlinc 

how we can work together to prcpare for and reduce the impact of future storms through 

bcttcr coordination of federal agencies. I want to cnsurc that we all work together to 

assist those impacted by the storm as they continue the process of rebuilding their lives 

and their communities. I want to thank Chairman Landrieu and Ranking Member Snowe 

for their efforts in looking for ways to improve disaster response. 

Thank you. 
101 

Statement of Congressman Ron Paul 

For the Hearing: "A year later: Lessons Learned and Progress Made after Hurricane Ike 

For the Senate Committee on Small Business and Entrepreneurship and the 

Senate Committee on Homeland Security and Governmental Affairs 

Chairwoman Landrieu and Chairman Lieberman, thank you and the other members of the 

United States Senate Committee on Small Business and Entrepreneurship and the United States 

Senate Committee on Homeland Security and Governmental AlIairs for coming to Galveston for 

this hearing on the progress of Hurricane Ike recovery. Today, the members of the committees 

will have the opportunity to hear first-hand accounts ofthe successful efforts of the people of 

Galveston to rebuild after Hurricane Ike. ' 

Today's hearing also gives the committees the opportunity to hear of the frustrations Hurricane 

Ike victims experienced when trying to obtain aid from the federal government. Needless 

paperwork and bureaucratic requirements have added to the burdens faced by people trying to 

rebuild after Hurricane Ike. In far too many cases, Hurricane Ike survivors were denied 

assistance solely because thcy failed to satisfY some arbitrary rules. In addition, changes in 

funding formulas adopted while Texas was already in the process of rebuilding have made it 

difficult for the communities hit hardest by Hurricane Ike to obtain federal aid. Anyone who 

spends substantial time dealing with this system could be forgiven for thinking that the rules 

were established to give federal agencies reasons to dcny people aid! 

The Senate Committee on Small Business and Entrepreneurship may find particularly interested 

in the fact that my office has seen very few cases where a small business damaged by Hurricane 

Ike obtained assistance from the Small Business Administration (SBA). This is no doubt at least 

partially because the SBA approval process is, as a member of my staff described it, a 

"bureaucratic nightmare." Since getting small businesses back on their feet is obviously a key 

component of disaster relief, the role of the SBA in federal disaster responses should be a central 

focus of our attention. 

These problems in no way reflect on the federal employees dispatched to Texas in the days and 

months following Hurricane Ike. With very few exceptions, these employees were hard-working 

professionals who did all they could to help the people of Texas recover from Hurricane Ike. 

Responsibility for the problems lies with those in Washington who developed the rules and 

procedures under which thcse agencics must operate. 

I know that the Federal Emergency Management Agency (FEMA), the SBA, the Department of 

Housing and Urban Development (HUD), and other federal agencies involved in disaster 

response and relief are working to improve their performance. It is my hope that today's hearing 
102 

highlight some areas where improvements are most needed and leads to more effective disaster 

relief in the future. My office is committed to continue working \\>ith federal agencies to make 

sure that my constituents receive all the assistance to which they are entitled and that the 

assistance is delivered in the most effective manner possible. 
103 

Written Statement of 

Brad Harris 

Federal Coordinating Officer 

FEMA-1791- Hurricane Ike 

Federal Emergency Management Agency 

Department of Homeland Security 

FEMA 

J'J'Hurricane Ike Recovery Efforts in Texas" 

Before the 

Ad Hoc Subcommittee on Disaster Recovery 

Committee on Homeland Security, Governmental Affairs 

United States Senate 

Washington, DC 

September 25, 2009 
104 

Introduction 

Good morning Chairwoman Landrieu, Ranking Member Graham, and other 

distinguished Members of the Committee. It is my privilege to appear before you today 

on behalf of the Department of Homeland Security and the Federal Emergency 

Managcment Agency (FEMA). As always, we appreciate your interest in and continued 

support of our emergency management mission. 

My name is Brad Harris, and I served as the Federal Coordinating Officer for the 

Hurricane Ike Recovery Effort in Texas from Feb 4, 2009, until the operation was 

transitioned to our Region VI office in Denton, Texas on Sept, 4, 2009. I am pleased to 

be here today to update you on our Hurricane Ike recovery efforts, and to discuss regional 

readiness to ensure that we can successfully respond to another event of similar 

magnitude. 

On Sept. 13,2008, Hurricane Ike made landfall in Texas as a strong Category 2 

hurricane, inundating portions of Texas with a storm surge and causing damage and 

displacement of families across the southeastcrn portion of Texas and the southwestern 

Louisiana coast. FEMA initiated response operations in partnership with the State of 

Texas, our federal agency partners, and volunteer organizations to set the stage for our 

simultaneous implementation of response and recovery programs. 

Within seven weeks of landfall, FEMA's recovery programs and efforts had 

registered over 700,000 survivors for disaster assistance, completed almost 360,000 

inspections of homes damaged, implemented a temporary housing program, and 

disbursed more than $326 million in disaster assistance funds to survivors for housing or 

other disaster-related needs. Over 16.6 million eubic yards of debris had already been 
105 

cleared, and over $15 million in low-interest loans had been disbursed by our Small 

Business Administration partners. On December 12,2008, FEMA launched the 

Hurricane Ike web site that provided the latest recovery information, updated daily, on 

Individual and Public Assistance programs. 

While we are proud of our accomplishments in the recovery mission thus far, we 

recognize that there is still much work that needs to be done to meet the needs ofthe 

survivors and communities that were devastated by Hurricane Ike. I am confident that we 

will complete our mission by continuing to work closely with our state, local, and federal 

partners, and by continuing to build on what we have collectively achieved over the past 

year. 

One Year Later: Accomplishments of the Federal, State, and Local Partnership 

Having provided the committee with a summary overview ofFEMA Hurricane 

Ike recovery efforts undertaken to date, I will now review our actions to date in greater 

depth. Immediately after landfall, FEMA, in concert with our federal, state, county, local, 

and volunteer partners, implemented emergency sheltering operations and programs for 

individuals and families who evacuated from the affected areas. The Transitional 

Sheltering Assistance program assisted nearly 35,000 Texans. This allowed FEMA to pay 

for eligible expenses incurred for hotels/motels, or incidentals, in the immediate 

aftermath of the storm. 

Simultaneously, FEMA implemented its Temporary Housing program, using a 

combination of manufactured homes and rental apartments. FEMA's primary form of 

housing assistance is to provide funds to disaster survivors to rent alternate 

accommodations. FEMA works with the state to locate available residential properties 
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that individuals can use temporarily iflhey are displaced from their damaged dwelling. 

After FEMA provided initial rental assistance to eligible households, FEMA worked in 

partnership with the U.S. Department of Housing and Urban Development (HUD) to 

implement the Disaster Housing Assistance Program (DI-IAP) on a pilot basis to carry 

forward the housing assistance. Overall, more than 21,000 fillnilies were housed under 

DHAP, and there are currently over 12,000 families still participating in DHAP. 

For areas in which rental resources are not available, FEMA utilizes manufactured 

housing units. The first manufactured home was on the ground ready for occupancy 

within 18 days ofIke's landfall. Ultimately, over 3,720 temporary housing units were 

put in place and occupied. FEMA's highest priority remains the health and safety of the 

disaster survivors In 2008, FEMA developed new, strict performance specifications for 

travel trailers, park models, mobile homes, and alternative housing units, with input 

provided to the Joint Housing Solutions Group (JHSG) from industry experts, the 

Recreational Vehiele Industry Association, the U.S. Department of Housing and Urban 

Development and the Department of Homeland Security's Office of Health Affairs. 

Included in these new specifications are requirements to eliminate the use of 

formaldehyde emitting materials; maintain continuous air exchange; venting and airconditioning (HV AC) systems that meet HUD standards and; test air quality in units to 

ensure levels are below .016 parts per million. This effort represents the agency's 

continuing commitment to identify a variety of safe housing solutions to supplement the 

array of solutions available to best meet the complex, disaster-related housing needs of 

states. 
107 

FEMA also issued a grant to the State of Texas to provide disaster case 

management in order to further assist disaster survivors with their recovery efforts. As an 

indicator of individual recovery, in less than one year since landfall, 1,595 (43 percent) of 

those temporary housing units have been vacated and returned to the federal inventory as 

survivors have returned to their re-built homes or to other more permanent residences. 

FEMA along with the State and HUD will continue to assist the 1,964 households that 

remain in the temporary housing units find permanent housing solutions. 

With an eye to the future, FEMA also utilized a pilot progranl to place several 

alternative temporary housing units at one of our community sites to assess the viability 

of the units. We are encouraged by our initial evaluation of the use of these units. 

FEMA also explored an alternative approach to providing disaster housing 

through the Rental Repair Pilot Program, which Congress authorized as part of the Post 

Katrina Emergency Management Reform Act (PKEMRA). This authority, which expired 

at the end of2008, allowed FEMA to test and evaluate the efficacy and cost-effectiveness 

of coordinating and funding the timely repair of damaged multifamily dwellings, such as 

apartment complexes. A pilot was conducted in Galveston, Texas, as an alternative form 

of providing housing assistance, and the results of the pilot will assist in determining if 

such a capability should be permanently added to our recovery tools. 

In the area of Public Assistance (PA), FEMA also took steps to streamline 

community recovery programs during our response to Hurricane Ike. Shortly after 

landfall, FEMA established a toll-free telephone number for local and county officials 

who needed additional, detailed information regarding our Public Assistance program. 

This toll-free number was staffed by senior Public Assistanee Program Specialists, and 
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we fielded more than 200 calls and queries regarding P A eligibility and contracting 

requirements. We believe this capability afforded local officials the ability to make 

timely and informed decisions about their recovery operations, and based on our 

experience, it will be a resource we can implement in futurc disaster operations. 

In coordination with local governments and the State of Texas Government Land 

Office, FEMA assisted in the reimburscment of costs related to removing debris from 

oyster and shrimp beds in Galveston and Trinity bays. Several small, individually owned 

fishery businesses bcncfitted from this process, which in turn helped maintain and 

preserve a $60 million per year industry. As a result of our streamlined initiatives to 

assist and reimburse local governments for dcbris removal, local governments instituted 

local debris removal programs that helped to speed-up the recovery process. In fact, 

Hurricane Ike represented the first major disaster operation in which 100 percent of the 

debris removal contracts were managed by the local governments; debris was cleared 

quickly and effectively, encouraging the return of residents and business. 

So far, under the auspices ofFEMA's PA program, thousands of Project 

Worksheets (PW) have been completed to help reimburse state, county, and local 

governments as well as private non-profit organizations to recover and rebuild. As of 

Sept. 4, 2009, our Public Assistance team has written 13,939 PWs. The regional office 

anticipates that the remainder will be written before the end of this calendar year. The 

reimbursements of our public partners served to assist recovery substantially at the local 

level. During the l2-week period from June 4 through the end of August 2009, FEMA 

completed an average of284 PWs and obligated over $32 million per week to the State of 
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Texas. This funding could in turn become available to county and local governments for 

repairs to infrastructure, thus defraying thc costs of recovery. 

Under FEMA's Hazard Mitigation Program, our team remains committed to 

working closely with our State partners to assist with the review, implementation, and 

consideration of several mitigation programs that will cnhancc recovery efforts. Projects 

currently undcr consideration includc buy-outs of certain residential properties which 

may be in floodways or velocity zones and construction initiatives to further hardcn and 

storm-proof structures critical to the local infrastructure. Currently, the buy-out proposal 

for the Bolivar Peninsula includes over 800 homes, which is the largest buy-out effort in 

Region VI history. However, proposed projects must mcct ccrtain critcria. Thcse criteria 

are designed to ensure that the most cost-effective and appropriate projects are selectcd 

for funding. 

Remaining Challenges to Texas Recovery One Year Later 

In the year since Hurricane Ike came ashore, FEMA has worked aggressively with 

its partners to meet the rccovery needs of individuals and families who survived the 

stonn, and to help statc and local government entities recover and rebuild. However, as I 

mentioned before, because of the magnitude of Hurricane Ike's destruction, there are 

many challenges that still remain. According to the Insurance Information Institute, 

Hurricanc Ikc was the third most expensive hurricane on record in U.S. history, causing 

significant damages to thousands of homes as well as to local infrastructure. While we 

have made great strides in assisting thc recovery process, the job is not yet finished. 

Individual Assistance 
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The devastation and destruction that follows disasters and catastrophic events can 

result in significant disruption to families and their communities. One of the most 

difficult aspects of the recovery process related to families is disaster housing. Placing 

significant numbers of eligible applicants in temporary housing units in a timely manner 

presents a real challenge. The placement of units must comply with applicable State and 

local codes and ordinances as well as guidelines pertaining to floodplain management and 

protection of wetlands, and other environmental considerations. Although some 

applicants were in FEMA mobile homes or park model trailers within three weeks, it took 

over a few months to get the last applicant in a unit, during which time FEMA assisted 

rental or transitional sheltering assistance for eligible applicants. These challenges 

intensify in catastrophic disasters where large populations require temporary housing. 

FEMA continues to work with the State and local governments to clarify roles and 

responsibilities in an effort to expedite this process and help eliminate delays in 

assistance to individuals who need it. 

FEMA also learned that the pace of recovery efforts in areas most significantly 

impacted by Hurricane Ike created a shortage of available and competent licensed 

construction contractors. We have learned that in some cases, individual home owners 

have been informed by rebuilding contractors that it may be months before some 

contractors can begin repair of a home. The concern is that a lack of contractors may 

inhibit an individual's ability to adequately repair his or her home before the end of the 

housing program. 

We recognize that these factors can delay an individual's recovery, which, in tum, 

may delay when they can leave a temporary housing unit and return to their homes. This 
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presents a challenge for FEMA but accentuates the need to further improve 

intergovernmental, interdepartmental, and interagency cooperation and communication. 

By working with the State and HUD, and with the local Public Housing Authorities 

(PHAs), we are maintaining an up-to-datc database and snapshot of rental resources that 

become available in proximity to the areas most significantly damaged. We are 

continuing to encourage survivors to accept other forms of longer-term housing, such as 

apartments through DHAP, administercd by HUD. Our Individual Assistance team will 

stay in communication with those individuals and families who remain in temporary 

housing units to help in the rebuilding process or to assist them in their efforts to locate 

more permanent housing. 

Public Assistance 

The scale of the damage that resulted from Hurricane Ike continues to present 

specific and complex challenges. As an example, the damages incurred at the University 

of Texas Medical Branch (UTMB) in Galveston covered several properties, including 

157 buildings and critical facilities, such as emergency rooms and laboratories. As of 

September 4, FEMA had completed PWs detailing 277 of these repair projects and had 

reimbursed approximately $150 million of eligible expenses. The remaining PWs are 

complicated and many require architectural drawings for the construction and this 

process will take some time. Architects are currently busy with the planning and design 

for new buildings as well as design construction for the existing structures that were 

damaged. Our P A teams have an excellent working relationship with officials at UTMB, 

and continue to streamline processes to help that critical medical facility move toward 

full recovery. While efficiency is important and has improved, it is also critical to ensure 
112 

that FEMA remains accountable to the taxpayer. FEMA ensures this by making sure 

that all PW's are reviewed by our Public Assistance Officers as well as other areas of 

review such as environmental, insurance and State review prior to obligation. The 

management ofUTMB is satisfied with our support and understands that this complex 

recovery mission will take longer than we all anticipated. UTMB has our commitment 

that we will work with them until the last eligible PW is written. To help speed the 

process, FEMA has implemented new initiatives that allow us to complete PWs and make 

obligations more quickly. Such initiatives includc the creation of an interagency debris 

task force with debris specialists to assist with gathering infoffilation to help expedite PW 

preparation and processing. FEMA also reorganized staff to set up specialized P A teams 

with specific experience in effort to focus on PWs for applicants such as UTMB, the 

Electrical Cooperatives and eligible Private Non- Profits Organization. As a result, we 

will be able to reimburse UTMB more promptly to assist in their recovery, as opposed to 

awaiting a "final" disposition on that facility in its entirety. 

Hazard Mitigation 

For some homeowners, rebuilding may no longer represent a viable option. In 

some instanccs, their home was placed at the waterfront, or in a geographical location 

identified as a severe flood or water velocity zone. We are aware that several cities or 

counties arc still deciding whether to allow rebuilding in those zones. Among the issues 

these cities may be considering are a revision of local building codes to require elevation, 

the impact on community status in the National Flood Insurance Program of rebuilding in 

those areas, or restrictions required under the Coastal Barrier Resources Act. 
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Other long-range challenges include implementation or selection of hazard 

mitigation projects designed to help lessen the potential of damages or losses from the 

next major hurricane or storm. Almost all of the designated counties have FEMAapproved local mitigation plans in place, making them eligible for mitigation assistance. 

In the year since Ike hit, the State of Texas has secured approximately 20 mitigation 

grants from FEMA for new mitigation plans to fill gaps in areas that do not currently 

have planned mitigation strategies. FEMA is working with the state to seamlessly fold 

technical assistance for mitigation planning into its expanding partnership with the state. 

We acknowledge that a decision to implement particular projects, such as a buyout of homes or private property, sometimes requires prolonged study, discussion, and 

consensus at several levels. Our hazard mitigation team is working aggressively with our 

state and local government partners to identify and select those projects that will serve to 

enhance recovery and reduce the impact of any future event. 

Region VI: Capable and Ready to Handle Disasters 

Following all major disasters, FEMA transitions its recovery efforts from our 

Joint Field or Transitional Recovery Offices to our regional offices across the nation to 

ensure continuity of operations. The extensive recovery effort for Hurricane Ike, led by 

Region VI. has gone well. Local elected officials have been supportive and appreciative 

ofFEMNs efforts, and local officials and the general public have been constantly 

informed on issues as they develop. Our Region VI office has an experienced staff and 

excellent relations with the State of Texas. 
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I am confident the Region can effectively respond to new disasters while 

continuing to meet the needs of the communities affected by Hurricane Ike. Past 

performance bolsters my confidence in the Region's ability to multitask; injust the last 

two years, from January 2008 through the present, Region VI successfully managed 78 

disaster-related events. During this period, all five states in the Region VI area of 

responsibility were affected. These events included 21 major disaster declarations for 

floods, storms, tornadoes and hurricanes, 50 Fire Management Assistance declarations 

and seven emergency declarations. 

Conclusion 

FEMA is pleased with what we have been able to accomplish with the help of our 

state, local, and federal partners since Hurricane Ike made landfall one year ago. But we 

recognize that there is still more work to do - and it cannot be done alone. I am confident 

that we can complete this short-term recovery mission by continuing to remain actively 

engaged with local officials, the State of Texas and our Federal partners. 

Thank you, Madam Chairwoman. We look forward to working with the 

Committee as we continue to build toward recovery here in Texas. I am prepared to 

answer any questions you may have. 
115 

V. S. Senate Committee on Small Business and Entrepreneurship 

Field Hearing 

"A Year Later: Lessons Learned, Progress Made and Challenges that Remain from 

Hurricane Ike" 

Friday, September 25, 2009 

Supplemental Responses for the Record 

from Achille Alonzi, Assistant Division Administrator 

Texas Division Office, Federal Highway Administration 

Question 1: Please discuss who pays for the debris removal process, how it is conducted, and 

contract administration. 

Response: The Emergency Relief(ER) Program, authorized under section 125 oftitle 23, 

United States Code, reimburses States for the repair or reconstruction of Federal-aid highways 

that have sutlCred serious damage as a result of natural disasters or catastrophic failures from an 

external cause. First pass debris removal from Fcderal-aid highways is c1igible for Federal 

Highway Administration (FHWA) ER funding. State and local agencies must consult with the 

Fedcral Emergency Management Agency (FEMA) for reimbursement for subsequent debris 

rcmoval on Federal-aid highways and any debris removal on othcr roads. 

Aftcr a natural disaster, State and local agencies make a first pass and rcmove debris within thc 

right of way of Federal-aid highways. State agencies, such as the Texas Department of 

Transportation (TxDOT), handle debris removal with their work force and via emergency 

contracts. Any given TxDOT district or local governmcnt agency mayor may not have an 

emergency debris removal contract in place bcfore a disaster event actually occurs. 

The costs of stockpiling and disposing of debris at adjacent sites, as well as costs for removing 

marketable timber from the acceptable clearing limits and transporting to adjacent stockpile sites, 

arc also eligible for ER funding. The clearing limits for debris, including downed timber, 

normally include the traveled way, cut and fill slopes, and any additional clearing required to 

assure that pavement, drainage ditches, and structures, including the clear zone for safety, are 

fully functioning. The clearing of the remainder of the full right-of-way is the responsibility of 

the agency having jurisdiction. 

Question 2: What is the current estimate ofthe highway damage caused by Hurricanc Ike? Are 

additional funds needcd to offset the differcnce in available funds and needed funds? 

Response: As of September 30, 2009, the total estimated cost of damages to all TxDOT 

maintained highways, including highways eligible under FHWA's ER program, caused by 

Hurricanc Ike is $92.43 million. This includes damage to pavement, bridges, traffic signals, 

signs, guard rails and slopes, and debris removal. We do not have a damagc estimate for locallymaintained, non-Federal-aid cligible highways, as they are ineligible for ER reimbursement. 

1 
116 

FHWA has made down payments to the State of Texas for emergency relief. We provided Texas 

with $2 million of "quick release" emergency repair funds for dredging of the vehicle ferry 

channel between Galveston Island and the Bolivar Peninsula to allow regular passenger service 

to resume and to close a critical gap in State Highway 87. 

On September 16,2008, TxDOT infonned the FHWA Texas Division Office that TxDOT 

intended to claim $70 million in ER damages pursuant to the ER program. FIIW A subsequently 

allocated $70 million in ER funds for TxDOT. TxDOT has submitted claims in excess of the 

$72 million originally allocated for TxDOT. In response, the FHW A has allocated an additional 

$13.5 million in ER funds for Hurricane Ike. 

As of October 15,2009, the estimate is broken down as follows: 

TxDOT has submitted $83.95 million in ER claims to FIIW A. 

FHW A has approved $82.54 million in ER claims as eligible for reimbursement. 

FHWA deemed $463,700 in ER claims as ineligible for reimbursement. 

FHWA is currently reviewing the remaining $954,300. 

FEMA reimbursed TxDOT in the amount of$I,819,214.38 and plans to reimburse 

TxDOT for a total amount of approximately $2.04 million, which includes approximately 

$1 million directed to local agencies. Some local agencies could not meet the cost share 

rule under the ER program and thus sought assistance from FEMA. 

TxDOT estimates that it will spend $8.59 million of its o\vn funds. 

TxDOT has obligated approximately $34.5 million in ER projects related to Hurricane 

Ike. 

2 
117 

The Honorable Karen G. Vlills 

Administrator 

U.S. Small Business j\dministration 

409 Third Street. S W 

Washington, D.C. 20416 

Dc'rtf Administrator Mills: 

Unlted ~tatcs ~rnate 

October IJ. 2009 

1 write to vou rcganjinQ the disaster respons.e or the U.S. Small BU!liness Administration 

(SBA) to Illlrricm;e Ike :)f 2008. As YOIl know. the Senate Committee on Small Business and 

Entrepreneurship held a field hearing in Galveston. Texas on Scptembt:r 25. 2009. This hearing 

reviewed the Federal and Stale responses to I Iurricanc Jkc~ as well as the clirrent s.tatus of 

business recovery in the arl.!a. By all accounts. the SBA \\'il.S better prepared and deployed stall 

quickly f()tlowing Ike - a marked dirference than its :duggish and incflectivc response It)lhnving 

HUlTiL:ancs Katrina and Rita of 2005. Also. SUA t(wk an avt:nlgc of five uays to proCC"5S home 

disaster loans and 12 days to process business disaster IOHns fotkw"'ing Ikt!. This is in contrast to 

up to iJO days {("If home lnans and 70 days for busines~ loans [(}!lowing Katrina. 

,Vhilc there ha\'c been major improvements to SBA'~ disaster programs since the 2005 

hurricanes. I helieve that there arc key areas that an: still in nc\:d of impro\'cIlH..'nL It is my 

understanding that '" or August 31. 2009 out or 0\ or 2.100 application, SBA had onl~ approved 

536 business disaster loans for Galveston Counh disbursing; 280 of those fbI' 52 LS million. 

This may be due to many olitsIde fnctors hut bllS.il~css owners at'the field hl.!aring sti!1 complained 

or bureaucracy and paperwork related to SBA disaster loans. 

I also understand that key provisions from the Small Businl!'ss Disaster [{csponsl! nnd 

Loan Improvements /lct (Public La\\' J IO-2·16j were not implemented hy the previous 

Administration ahead or liurric.ane Ike. \Vith this in Illind~ I rc~pcclfhl1y request your attention to 

the following ilcms which may help ongoing disaster efforts fi-om Ike us weil as SBA'$ response 

to futur(.!" disasters: 

Intern,,1 R."enllc Service (IRS) Coordination: Following Hurricane Katrina. one of 

the higgest frustrations that our Commith!c consistently heard from husiness O\\llcrs was 

cuordination on tax records. In pm1icular. some borrower:; signed IRS form SS2 J 

(authorizing SBA ttl get tax information dirc~tly from lhe IRS) but Wt.!rc later asked to 

also ~ubmit thn:c )'cars oftnx reH.lrn~. I undcr.slaml that. in some cases. fRSjtlstitkntio!1s 

provitkd 10 SBA did not adequately cover information Ill.'edcu to rt.'\ iew a disaster 

application. llo\\'c\'cr. this process should be as ~lrcallllinL'd as p(1$'iihlc for bu~in("ss 

ownc.:rs recovering from a disaster, Section 11066(b) rl.!quircd coordinHtioll bet\\L'cn SBA 

ami IRS to t:I1SlIre ail relevant tax f'cconJ:-. \'oulJ he shared in an l'xpl:ditJ\.)uS Inanner. ! 

urge SHA and IRS to rcvie\\ way:s. 10 better ;;;ilarc information nn futun: SUA disaster 

applications 
118 

Page Two 

October 13, 2009 

• Regional Outreach and Marketing or SBA Disaster Programs: Texas businesses and 

homeowners indicated a lack of awareness of the eligibility and availability of SBA 

disaster programs. Section 12063(b) required the creation of a marketing and outreach 

plan, including regional marketing ahead of disasters likely to occur in each area of the 

country. While SBA disaster loans are universal for every disaster, each disaster impacts 

regionslbusinesses differently. Just as disaster victims must prepare differently for each 

disaster, SBA should tailor its outreach for different disasters that may impact ccrtain 

parts of the country - including targeted outreach before annual disaster seasons. 

• Federal Emergency Management Agency (FEMA) Coordination: Tcxas businesses 

and homeowners indicated at our hearing that ongoing problems continue between 

FEMA and SBA on disaster loan applications. For example, frustrated SBA applicants 

contacted my office after Katrina when FEMA employees described disaster options one 

way, only to have SBA employees refute these options. To address this and other issues, 

Section 12062 required regulations by FEMA and SBA on a timely and coordinated 

disaster applications process. I understand that regulations are being finalized between 

SBA/FEMA so I look forward to reviewing the regulations once they are issued. 

• Disaster Response Plan: I commend SBA for implementing, at my request, a 

comprehensive Disaster Response Plan (DRP) in time For the 2007 hurricane season. By 

all accounts, this plan has greatly improved SBA's preparedness and response to disasters 

over the last few years. As required by P.L. 110-246, I understand that SBA will be 

submining its recent revisions of the DRP to Congress in the coming weeks. In finalizing 

this plan, below are my recommendations on key areas of the DRP: 

o Coordination with Federol, State and Local Government Partners: The ORP 

should clearly define SBA's role in relation to other Federal disaster panners. 

SBA should also provide to Congress any recommendations on how it can 

improve its coordination with these agencies. Similarly, Congress also required 

that the ORP outline SBA coordination with State and local governments, 

including on State-administered bridge loan or grant programs. 

o Administration Ret'iew of SBA Response to 2005 Hurricanes: To my 

knowledge, although SBA conducted an internal review on 'lessons learned' 

from the 2005 hurricanes, this review has not yet been submitted to Congress. 

Please submit that review at the time of your ORP submission. 

o Regional-Specific Disaster Information: As indicated above, I am concerned 

about regional outreach and marketing of SBA disaster programs. P.L. 110-246 

required that SBA identify, as pan of the ORP, disasters most likely \0 occur in 

each region of the country and how SSA will respond to demands for assistance 

resulting from these disasters. 1 expect that analysis to be pan of your ORP 

submission as well. 

• Executive Office or Disaster Strategic Planning and Operations (EODSPO): 

applaud SBA for establishing the EOOSPO in August 2008 to meet disaster planning 

requirements from P.L. 110-246. Thcsc changes, both administrative and required by 

Congress, have gone a long way towards ensuring SBA provides more timely and 

effective assistance to disaster victims. It would be helpful, as pan of the 2009 Annual 
119 

Page Three 

Octoher 13,2009 

Report to Congress. if SSA could note in additioll to OJ11ce of Disa~ter Assistancc 

(ODA) staffing figures. staffing levels of EODSPO. At the appmpriate time. I would 

also like to receive a briefing on recent SBA disaster operatiolls from EODSPO Chic!~ 

Rear Admiral Steven Smith, and the Acting Associate Administrator for ODA. 

(;mtrlllltced Disaster Loan Pilo! ProgrlllllS: The President's FY2010 budget rcque$t 

included S 1.7 millil111 to fund two Guaranteed DisHster Loan Pilot Programs (the $25.000 

Immediate Disaster i\ssistance Program and the $ 150.0()() Business Expedited Disaster 

Loan Program). In the FY2010 Financial St:nlt;es and General GovcDlmell! 

Appropriations bill". Congress has included necessary funds to test these programs next 

year with local lenders. I am imerested in receiving additional details on SBA's pilot 

programs as well as the expected tilllcfrarnc for piloting these programs, reviewing 

lessons learned, and promulgating finnl regulations. 

• Reports on Disaster Assistallee: 1'.1.. 110-246 included two additional report 

requirements which would be of interest to our Committee. First, the bill required for 

each declared disaster, 11 rep0l1 on Federal contract awards made, those uwtlrckd to small 

businesses, and those awarded to women and minority-owned husinesses. Second. within 

six months of enactment. the bill also requiwd a report 011 improving the SBI\ disaster 

loan program. SBA should consider including the requirt:d contracting report as pan of 

the anllual report to Congress. The second report on improving SBA's disaster loan 

progrnm would also be helpful to Congress as IVe continue onr work in the coming 

months to reanthorize SBA's core lending. counseling. and contracting programs. 

In closing. I thank you for ~ our consideration of these recommendations to enhance 

SBA', disaster assistance program. As U.S. Department of HOllleland Security Secretary .Ianet 

Napolitullo and U.S. Dcpill11llcnt of Housing and Urban DeVelopment Secretary Shaun DOnlW,\fl 

begin a six-month AdministratilHl review of all Federal disaster recovery programs, I bdiev!! that 

SBA has an important role in responding to future disaskrs. For my plln. I remain committed to 

ensuring thllt SBA has sufficient WS(lIll'CCS and toob necessary to provide timely and cflect;vc 

assistance following these disasters. 

Sincen:ly. 

't~~~. Chair 

MLL:brv 

Ce: Secrcmry lanet Napolitallo, U.S. Department of llomcland Security 

Secretary ShaUll Donovan, U.s. Dcpm1ment of Iiollsing and Urban Development 
120 

OFF!CE or TIlE AI1MIN{STRATOR 

Decembcr 3, 2009 

U.S. SMALL BUSINESS ADMINISTRATION 

WASHINGTON. D.C. 204 ! 6 

The Honorable Mary L Landrieu 

Chairwoman 

Committee on Small Business & Entrepreneurship 

United States Senate 

Washington, DC 20515 

Dear Madam Chairwoman: 

Thank you for your recent letter regarding disaster assistance. As you know, we have been 

working very diligently on improvements in thc area of disaster preparedness and in our 

responsiveness to disaster victims. We appreciate your recognition of OUf success in the timely 

processing of disaster loan applications and our quick deployment of staff following Hurricane 

Ike. 

You asked that I address the following items which will positively impact the U.S. Small 

Business Administration's (SBA) response to future disasters: 

Internal Revenue Service (IRS) Coordination: Our current procedlll'C enables SBA to process 

the vast majority of disaster loan applications with the infonnation received using IRS Fonn 

8821. However, the electtonic summary copy of the IRS tax return was not meant to replace 

getting actual copies of a tax return when it is available. Use of the Fonn was intended to 

providc docmnentation of filing and substantiation of the tax reMus provided by the applicants. 

The tax return detail is necessary to establish repayment ability in cases where the income of 

the applicant is insufficient due to non-cash expenses. We will continuc to work with the IRS 

on obtaining more electronic infonnation. 

Regional Outreach and Marketing ofSBA Disaster Programs: We have begun a very 

aggressive marketing and outreach plan to reach all potential applicants in an area before 

a disaster strikes. We plan to concentrate on areas that arc subject to recurring similar 

disasters and to provide expanded outreach enOrls of SBA disaster assistance programs 

before disaster strikes. Additionally, we have provided all SBA employees with access to 

a Disaster Tool Kit that provides detailed intonnation on the Agency's role in disaster 

assistance and preparedness outreach. along with rcsources to help them carry out that 

role. We have also instituted annual disaster training for SBA's Regional Administrators. 

District Directors, and Disaster Public Infonnation Ol1icers on disaster assistance 

responsibilities, as well as marketing and media training for both preparedness outreach 

and post-disaster assistancc and resources. Finally, wc are currently involved in an 

overall assessment of our Disaster Assistance messaging, branding, and outreach. This 

assessment includes locus groups with individuals who have received SBA disaster 

assistance in the past, as weB as individuals who havc not. The outcomes of this 

assessmcnt will help us strengthen the effectiveness of both our preparedness and postdisaster communications and outreach efforts. 
121 

The Honorable Mary L. Landrieu 

Page 2 

Federal Emergency Management Agency (FEMA) Coordination: SBA has a very close 

working relationship with FEMA. We share program information ",ith our Federal and 

State disaster partners as well as participate in interagency training efforts. We have been 

working with FEMA on regulations that wil! address the close coordination between SBA 

andFEMA. 

Disaster Response Plan: The 2009 revision to the SBA • s Disaster Recovery Plan was 

recently submitted to the Congress. The current plan is detailed, thorougb, and fully 

adequate to guide SBA operations during the 2009 Hurricane season. 

Executive Office of Disaster Strategic Planning and Operations (EODSPO): This office. 

reporting directly to the Administrator, was established in August 2008 to implement 

requirements of the Act With continued improvements in disaster loan assistance, and the 

implementation oflessons learned since the 2005 Gulf Coast Hurricanes, some of the 

responsibilities ofEODSPO have been mainstrearned into major SBA Program Offices under 

the direction of SBA's Associate Administrators. The name ofEODSPO has been cbanged to 

the Office of Disaster Planning, reporting directly to tile Administrator, with continued 

responsibility for disaster strategic planning and other duties consistent witb the roles and 

responsibilities set forth in Section 12073 (b) and (c) oftbe Small Business Disaster 

Response and Loan Improvements Act of2008. 

Guaranteed Disaster Loan Pilot Progmms: An implementation plan for the remaining 

provisions is being developed. Tbe implementation of the commercial lending provisions 

requires the participation of the banking industry and otber interested members of the 

public, as well as the promUlgation of regulations. 

Reports on Disaster Assistance: The rumual report to Congress was recently submitted. The 

SBA submitted Contract Activity Reports on mllior disasters for the periods July to December 

2008 and January to Jlme 2009. Eacb report provides a summary of contract actions entered 

into the Federal Procurement Data system for contrdCt actions awarded to small businesses, 

minority and women owned businesses, and locally owned business as a result of a major 

disaster. 

Thank you for your continued support ofSI3A's disaster loam program. Tfyou have any 

questions or comments, please contact the Office of Congressional ill1d Legislative Affairs at 

(202) 205-6700. 

KarenG.MiIls 
122 

Governor Rick Perry 

Office of the Governor 

P.O. Box 12428 

Austin, TX 78711 

Dear Governor Perry: 

rcHUM""T'" ON 

HOMELANDSECUlilfY AND GOVERNMENTAL 

September 30,2009 

I am writing to ask that you reconsider proposed changes to the State of Texas's formula 

for allocating a second round of Community Development Block Grant (CDBG) funds to areas 

impacted by Hurricanes Ike and Dolly. 

Public Law! 10-329 appropriated $6.5 billion to support disaster recovery in areas that 

were impacted by 2008 disasters, of which Texas received $3.058 billion in total. The State 

obligated $1,314,990,193 in first-round funding and is preparing to disburse the remaining 

$1,743,001,247. I understand that the State plans to submit an amendment to its Action Plan to 

the Department of Housing and Urban Development this week, which will propose a modified 

formula oriented toward weather rather than storm-related damage. 

P.L. 110-329 required HUD to allocate funding "based on the best estimates available of 

relative damage and anticipated assistance from other federal sources". In response to this 

Congressional instruction, which I authored, HUD used damage data from four sources to 

determine allocations to states: I) Housing - FEMA Individual Assistance inspection data; 2) 

Housing SBA loan data for home repair; 3) Infrastructure FEMA Public Assistance damage 

estimates; and 4) Business Loss SBA loan data for business loss of structure and contents, 

Allocations were also adjusted based on the severity and concentration of home damage using a 

research model developed after Katrina, Rita, and Wilma. Congress neither required, nor did 

BUD utilize, this type of comprehensive formula in the past to allocate CDBG funding for 

disaster recovery on the basis of damage, and it represcnt~ a significant advance in ensuring the 

overall fairness of the process. 

While the appropriations instructions did not go on to specify how states that receive 

funds should allocate them among localities, Congress's intent that damage should serve at all 

levels of government as the basis for distribution of funding is clear. I would therefore 

respectfully and strongly urge you to reconsider implementation of this formula change, request 

from HUD the damage data it compiled for the State of Texas, and base CDBG allocation 

decisions on that information. 

Under your leadership, the State of Texas has done a commendable job of advancing 

recovery in the aftermath of the third costliest disaster in United States history, I appreciate your 
123 

consideration of this request, and look forward to working in continued partnership with you and 

the people of Texas to facilitate a full and equitable recovery from Hurricanes Ike and Dolly. 

Sincerely, 

Senate Disaster Recovery Subcommittee 

MLLlbmb 

Cc: Secretary Shaun Donovan, Department of Housing and Urban Development 

Senator Kay Bailey Hutchison 

Senator John Comyn 

Mayor Lyda Ann Thomas, City of Galveston 

Mayor Bill White, City of Houston 

Jack Steele, Houston-Galveston Area Council 
124 

OCT-27-2009 14:37 FROM:TDRA EXECUTIVE DIREC 9366385 TO: 92022283912 

(')mro1l.~RlcKl'E.RKY l'DAA Govm:omm 1Io4Rll 

Dr. W~llttoe ~o.nn, Choir 

Dnv!d Aklc."n'I, \Iic:o: cmnr 

AgricultU1'C:Co~erToddStll~ RemetleFQrrnr 

Dt:. M.!ldcil!. Snba.Secrct-a1'TJ 

October 27.2009 

The Honorable Mary Landrieu 

Cbainnan, Disaster Recovery Subeonunittee 

U.S. Senate Committee on Homeland Secutity and Governmental Affairs 

6138 Hart Senate Office Building 

Washington, D.C. 20510 

Dear Senator Landrieu: 

Do~ G, Ab18 Dr. Cblll"lcs Gl'Illmm 

woOOJ M~ Jaoquin L Rodrigue:. t;lwi.rlI'AN,Butt'l Pstric::kWall!).."C 

Governor Perry's office forwarded your letter to me for response beeause the Texas Deprutrneot ofRutal 

Affairs was designated as the lead agency for coordinating tbe allocation of Community Development Block 

Grant (CDBG) funds to communities impacted by Hurricanes Ike and Dolly. 

I think it is important to note that your letter dated September 30, 2009, arrived after the State had submined its 

Amended Pian for Disaster Recovery to the U.S. Department of Housing and Urban Development (HUD). 

The State's fonnula for allocating CDBO funds was developed after a series ofpuhlie hearings in various 

communities affected by Hurricanes Ike and Dolly. The directive from the Governor's Office WlIS to develop 

an objective, fair allocation formula and to allow local officials to determine how best to spend their allocated 

funds. so long as tbeir propooals meet federal guidelines on use of CDBG funds. 

for Round I of CDBG funding. we used fEMA preliminary damage estimates in allocating $1.3 billion, de"pite 

testimony at public hearings lha.t the data was fur from accurate, in large part because FEMA damage estimates 

were lacking or incomplete for many eonununities in the impacted regions. For example, FEMA abandoned 

efforts to develop pteliminary damage estimates from Hurricane Dolly in the Rio ('.rand. Valley once Hurricane 

Ike threatened thc Gulf Coast. Thus, FEMA preliminary damage reports showed fur less damage than what the 

region actually suffered. We heard complaints from numerous other communities about FEMA's failure to 

completc damage assessments, thereby under reporting actual damage. 

FEMA damage reports also failed to capture damage to infrastructure from storm surge, a.~ many of the roads 

were underwater for days and the extent of damage could not be determined when FEMA was on the ground. 

Finally, we heard testimony that FEMA was using nonexistent, flawed, or inconsistent standards to determine 

prel\minary damage f\Ssessments. The Cameron County Judge reported huge disparities in the amount of 

assistance awarded to families with damage to their homes. For example, he cited two homes on the same street 

---------------- "".W,tdJoa,Rfate.tz. ... ----------------

1700 N.Ccrn,I;"!!L~AYf!nue. Buite 22Q 

A~", Tt!)O'l 78('(11 

P.O, Bol: I!2Rn 

AuJttiT\,T~{8j"U 

C:Jurne'l S. (Chnrlie) $rone 

""" ........ """'" J\g('.DC},::[.u"'93~1 

Toll Free: 800-1144..;1.042 

F'1lX:512"9Jr,..Qj76 

Emllil;tdl'1l@'/trltn.r..tafc.tx,w 
125 

OCT-27-2009 14,37 FROM,TORA EXECUTIVE DlREC 9366385 TO' 92022283912 

with similar damage: one hOllSehold received $19,000 in assistance, while the other received less than 10 

percent oftha! amounl A non-profit entity tbat assists low-income 1"'oplc with housing issues reported that 

ffi'-1A refused to provide assistance to many families who lost the roofS to their homes. And many people 

complained that FEMA refused to award funds to some homeo",ners because of the deferred maintenance on 

tbeir home, even though the storm had clearly done additional damage to that home, often making it 

uninbabitable. 

While prelimlllary damage estimates from FEMA might have been the appropriate formula for the federal 

government to use in determining initial award amow,t. to the stale, they do not accurately capture how best to 

allocate funding fur recovery within the state.. nor do they accurate! y portray the extent of damage in Texas. 

Therefore, the state developed an allocation formula for ROQ.nd IT funding tbat objectively aI>d consistently 

filctors storm surge, rainfall, wind speed and the percentage oflow-to modClate-income residents in the 

impacted region. This formlJ.la was developed after significant input from local residents, officials and 

legislators in the impacted communities. 

As you know, the major purpose ofCDBO funding is to address "unmet needs," particularly of low to moderate 

income populations, and there is a high correlation between low to moderate income and unmet needs in 

disaster recovery. 

We know that there are a handful of groups that prefer trurtFEMA and SBA data be the .oledetermination of 

funding aUocation because thei. community would receive significantly more funding under that method. 

Ho",-cver. today - more than a year ailer Hurricanes Ike and Dolly struck Texas - the FEMA Publie Assistance 

process remains fur from complete. There are still more than 3,000 Public Assistance project worksheets in the 

Ike region that have yet to be completed by FEMA. SBA loan data evaluates only verified losses of applicants. 

Therefore, many individua.ls and companies who chose not to apply because of the bureaucrntie process or 

knew they would be ineligible are not accounted for in SBA data. 

I think you will find the model used by tb. State of Texas is the most objective ",ay to allocate CDBO funtling 

to all regions impacted by Hurricanes Ike and Dolly. 

The State believes its model not only object\vely assesses damage in all impacted areas, b\ll also targets 

residents who have the greatest need. The State has received extensive feedback from residents, local officials 

and legislators pleased with the model and appreciative of the manner in which the Round tI funds were 

allocated. 

CS;,k.", 

Sincerely, 

Charles S. (Charlie) Stone 

Executive Director 

Cc! ~retary Shaun Donovan. IJeJ!mtment ofHousinp: and Urban D<lveiorment SenB1(Jr Kfty Bailey Hutchi~ 

Senm.or John Comyn 

CI'()YeTT1or ruck. PaT)' 

Mayor Lyda Ann 'I'homn... Cit)' ofGalvcston 

MIl)'OTSHI Whitc..CilyoftJOlL%n 

Jack SteeJe. Hou~GaJvt:mln Area COnnen 
126 

HoustOI1-Galveston Area Council 

Mr. Charlie Stone 

Exeoutive Director 

TCXlIS Department of Rura! Atrrurs 

P.O. Box 12877 

Au~1il1 

Dear~e:"'" 

September 24,2009 

I am writing with C<lOlments on TDM's revised draft plan amendment for Community 

Deve!opnlent Block Grant (CDEG) disaster recovery second round funding. Our comments 

address funding, the weather impacts model, local flexibility, affordable housing and 

implementation issues. 

Funding. We allPreciate the signifi¢Qnt increase ill funding iMl\lded in thll revised plan. 

It goes a long way to meeting our region's ilCeds and is n, step to'Wl)l'(\ It moreeqwtable funding 

allocation. 

However, lhe amolmt allocated til ollr region still does n01 IUlly represent equitable 

fundi1l!l, considering lbanne regillu bore HUttil:a!l1eJke's dl!:act iQlPllct For botll funding moods 

the revised plan now a1101$ about oOpercenl of toml .. allQlll\red::ftmdS. Our S~tember 10, 2009 

reconu;n!!ndati?l! wing ]'lEMA cfata estimated tIlafJlbQud'!~rclllJlo1'iUnd$ devoted!!) rke 

sb0ufd be allocated to our region. Other 4$;tlndicales that our reg!on e'Xperienced over 70 

percent of the total damage for both Hurrieanes Ike ood Dolly. 

The proposed second round funding to our region, inclUding state set-nsides and 

adminis1nltion, still comprises less than SO perce'll! of lo1ft1 funding to the state. While we 

appreciate the progress made we believe by any reascmable measure the region merits additional 

funding. 

~ Weather lmpacts MoBill. As yeu 'heard at the September 17, :2009 publk hearing in 

Houston tile model used to allocate funds to regklh r<llnai!lS a Slitl<)usllClttOam. While TDRAhas 

.:J:: made some adjustments, the modet does OON.I !J'!limr.. to. be n. ble .. to reP.ll.Oll1. ewhere actual damage "71\ occurred. If used,tlte model should give s<tbs!llI1tial addition!ll weigh! to storm surge, which I caused tlte most severe damage to housing and jJ\!olit infrastructure. 

I The model has other anomalies fuatconltlbute tu. IUllding dlsparWes. Adding low and 

moderate income population, is ql\,j)l.ful $,tt proxy fQfp!lt,m1i;d~y inlJjacted beoefleia~. 

Neverthele~s, there are now counties tila! show no weather Impacts. but which are allocated 

\./ 

M(ll!li'l{lA4:1rmu; 

POtkd<:lIa7T7 

t\()Ll$lt>n,lfl,l(all rnt7,271'r 

P!to:>r,n11",S::!7-!l2OO 

Pj\~MtI~~ 

:lS55Tit'l'\flllill8Lm\(dIuI1lll1LO HoualcltTImI5 J1C);l'1-6400 

Pho",,11:Hll!1<3:;<OO 
127 

~. CI!;lrlie Stone 

~emQer 24,2009 PlIge~ 

funds through the cottrpetitiv~ 

have no storm $utge, no . 

allocations fur low and In<ldernte an 

impacts floor. COWlties below tll.e Bc(lluse 

these are disaster rC(overy funds, counties· no or minimli! ,-, ..... ".,--_ •.••• should fC(eive no 

allocation and certainly should not further benefit by addition theklwand nlOderate income 

melor. 

We believl'l fIIatFEMA 

infrasll:uC/.llro ate a bettl'lr basis 

$iIlt~ impact fot Matllgorda 

!!t.~ wby this changed. The .. l'\-'hy it is .no longer 

We also remain cOIl~e,Hhal~\l"1 for allOOlting 

future disaster teCQ~!}' funding. . We l! ~d1Qlder groufllO 

look al fUnding allocatilm methods to l?e _~ file . .. . .... formula !!Sed Sbo\.lld 

have broad stakeholder input and tmlSt be ~blr ofbelng~~~~letUlil damage. 

Local Flexibility. We .tlflPt~jatethe ehange~lhat iIl!'~e.~ ability of regions and 

local govenunents to detennine fund uSe. The substantial rell\icti~l\' in st;jte set asides, taken 

with elimination of most regional set-asides, lias signitic.an\ly !ncrealledful)ding subject to 10011 

d<>tennination. These changes give the re.siollllnd local govennnents ~ater ability to allocate 

funds as needed. 

Affol'dllhle ff~")$II!J!' the funding will b¢ allo¢ated 

funding be subject to the regional 

In addition, becaU$~ the~Qtga~~OUSing am~t gov<;rnment, we believe that uSing .the \W!I!.lJ.t\imodel ~~t 

allocate these funds. Some re!liQllSmar~~ ~\)<l;!l.red 

wbien they cannot use. We reco~.fljatth. funds 

damage data or other objective measure. We Slll'flOtI theJ'~ 

of affordable housing funds that canne! bll used by any region. 

by the federal 

~tlve way to 

housing fundillg 

\0 rental housing 

ciltls for reallocation 

Impl~mentatiqn Issnes. the revisfld plan indicates that TDRA is eoncemoo that the 

state may not be able to meet the nntlql!lll. ~ll\rll~;e .. .. (lfthe funds b¢nefit 

low and moderate income persons. 'We~ieve;$ the offllllds Is at the root' 
128 

~.Cllarlie Sto~¢ 

~pttNnber 114, :1609 

Pagel 

of this potenti~ problem. We further recommend that some accountability for meeting the lowmod reql,li:rements be requited at the regi(mal level. Regions Ibat arc unable to I)leet lhe 

req1li:ftNneJ:tt Shcllld not ~pose .. ~. burden 911clltl\er regions to .~ tIP t~e shortfall Re$IDpai 

tittlb.!,'idl1 ofttistribtltion . ... ....... . . .. . . ~1~tiQflll titkB to.get&llf 

conttibuw to ~l:tg. tile low ... ... . .atthi! 

8eptemtlet .1, 20W that rPM shoJlld ~ceive... . of lllw~mod 

benefit but n.ot proeeed with funding until it can aSsure tmit ml1ntls met. 

Finally, we enco~ you to turn l}uickly to tile proc¢Ss for a\'\'lIrding seconll rOtmd 

fundmg. We i'eOOmmelld that as soon as ~sib1e you isSue gJJldance on regional melbods of 

distribution. We also suggest that you take $teps to speed up the contracting process to local 

communities so that urgently needed recove!'Y projects can move forward. 

We appreciate the subsumti~ effort rDRA has put into revising its plan 10 meet our 

region's ooneetns andll!lll~ate this opportunity to provide comments on the revised drattJ'lan 

am.eQ4m.ent. Pl~ let me htowif you have any questions. 

~Ittoerely , 

co. f:I~GAC Board ().ft>~tQts 

H-GAC HUnleane Ike R.ecovery Committee 
129 

APPI.ESEED 

.. A Year Later: Lessons Learned, Progress Made and 

Challenges that Remain from Hurricane Ike." 

Testimony of Texas Appleseed for the joint field hearing with the U.S. Senate 

Committee on Small Business and Entrepreneurship and the U.S. Senate Homeland 

Seeurity and Governmental Affairs Ad Hoc Subcommittee on Disaster Reeovery 

held in Galveston, Texas, Friday September 25,2009 at 1:00 p.m. 

Senator Mary Landrieu, D-La., Chair 

Senator Kay Bailey Hutchison, R-Texas 

Senator John Cornyn, R-Texas 

Texas Appleseed Contaets: Madison Sloan, Staff Attorney 

Deborah Fowler, Legal Director 

1609 Shoal Creek Blvd., Suite 201 

Austin, TX 78701 

(5l2) 473-2800 

www.texasappleseed.net 
130 

Introduction 

Senator Landrieu and Members of the Subcommittees, thank you for the opportunity to 

submit testimony, and for traveling to Texas to hold a hearing on "Lessons Learned, 

Progress Made and Challenges that Remain from Hurricane Ike." Your focus on Texas is 

particularly appreciated this week, as the State plans to submit its Action Plan for over $3 

bill on in CDBG disaster recovery funds Congress and HUD allocated to Texas. If this 

Action Plan is approved and implemented, you will be back in Galveston next year for a 

hearing on what went wrong with Ike recovery. 

Texas Appleseed is a non-partisan non-profit public interest law center founded in 1996. 

One of a national network of Appleseed centers, Texas Appleseed promotes social and 

economic justice for all Texans by leveraging the skills and resources of volunteer 

lawyers and other professionals to identifY practical systemic solutions to difficult social 

problems. Our mission is greater educational, economic, and social justice. 

Since the 2005 Gulf Coast Hurricanes, Texas Appleseed has worked to address the 

systemic problems created by disaster and to find ways to meet the continuing needs of 

its victims. Appleseed has worked with groups across the State and around the Gulf 

Coast on disaster recovery issues, including problems with the Federal Emergency 

Management Agency's (FEMA) application and appeal process and policies around 

Community Development Block Grant (CDR G) disaster recovery grants. This work now 

incorporates Hurricanes Dolly and Ike that struck Texas in 2008. 

The State of Texas has suffered more than four hurricanes in four years, including the 

third most destructive hurricane in U.S. history, Hurricane Ike. While preparation for and 

immediate response to disasters may have improved over time, the aftermath of 

Hurricane Ike demonstrates that some of the major problems identified following the 

2005 Gulf Coast Hurricanes remain both unsolved and critical. FEMA continues to 

unfairly deny disaster victims interim housing assistance, and these denials exacerbate 

ongoing problems with long-term recovery programs funded with CDBG disaster 

recovery grants. A ycar after Hurricane Ike, housing recovery remains a major challenge 

and a critical unmet need in Texas. 

Following Hurricane Ike, FEMA denied at least 85% of over 578,000 applications for 

housing assistance. I These denials were made under regulations that a Federal District 

Court has held failed to provide legally sufficient eligibility standards. 2 Although Texas 

has been allocated $3 billion in CDBG disaster recovery grants, less than half of the 

initial allocation of$1.3 billion is going to housing recovery, and both state and local 

governments have failed to prioritize the low and moderate income families these funds 

are intended to help - so much so that the first round allocation of funds would not meet 

J Email from FEMA External Affairs to the Houston Chronicle. June 26, 2009. 

2 LUPE v. FEMA (08-847, S.D. Texas) See Order Granting Preliminary Injunction. May 13,2009 and 

Preliminary Injunction. August 06, 2009. (Defendants filed a Nolice of Filing of Appeal on September 22, 

2009.) 

2 
131 

even the modified statutory requirement that at least 50% of CDBG disaster recovery 

funds benefit low and moderate income families. The State's proposed Amendment 

distributing a second allocation of $1.7 billion fails to correct these problems. Instead, 

Texas has switched to a funding allocation model based on weather intensity instead of 

unmet needs, or even damage, and has failed to take any steps to ensure that housing is 

rebuilt and that federal targeting requirements will be met. 

I. FEMA Housing Assistance Following Hurricane Ike 

"Even bejore Ike. we already had a shortage (?fsuitable housing and now it '.I' even 

worse. Those folks who've lost their homes can't just commute J 00 miles from wherever 

FEMAjind\' them a motel. And it '.I' not just a local issue. This affects the economy (if the 

whole state ... 3 

In November 2008, FEMA Administrator R. David PauJison admitted that FEMA's 

response to housing needs related to Hurricane Ike had been slow, and blamed the 

delayed response on the unavailability of travel trailers and the substitution oflarger 

mobile homes.4 Mobile homes are larger than travel trailers and more difficult to connect 

to existing utilities - fewer homeowners had properties large enough to site a mobile 

home, and sites for mobile home parks and "clusters" had to be found. One month after 

the storm, only 62 housing units were in place, but that was triple the number (18) that 

had been in place the week before. 5 Both federal regulations prohibiting the placement of 

trailers in a flood plain, and local zoning regulations slowed the process of providing 

housing. Several dozen jurisdictions ended up providing waivers that allowed trailers to 

be placed in flood zones, and others waived certain inspection requirements. The 

infrastructure development required to build new FEMA mobile home parks was also 

time consuming - FEMA officials estimated at least a month.6 As there were following 

Hurricane Rita, there were large discrepancies between the need for assistance reported 

by local communities and federal estimates. As of November 3, 2008 FEMA planned to 

send teams door to door in certain communities to try to resolve these discrepancies. 7 

3 Texas State Senator Tommy Williams (R-The Woodlands) quoted in "Shades of Katrina" 

4 Ryan Myers. "FEMA admits slow response to Ike housing", Beaumont Enterprise, November 6,2008. 

("It was difficult gelling started not having the travel trailers that we usually have, It took some time to get 

the mobile home process worked out. ... It's no longer a mailer of gelling the product. We have plenty of 

product. It's a mailer of getting the site. Then we have to connect water, sewer, (and) electric." David 

Paulison) (Congress appropriated $400 million to FEMA in 2006 to explore alternative housing for 

disasters, The agency missed plan deadline, July 1,2007, by almost a year: the plan offered more stringent 

formaldehyde standards, but no real alternatives to travel trailers. Cite) 

5 Ryan Myers, "FEMA triples mobile homes, but thousands of people still waiting," Beaumont Enterprise, 

October 15, 2008. 

6 Ryan Myers, "FEMA admits slow response" 

7 Margaret Toal and Christine Rappleye, "Knock knock' Who's there" FEMA'" Beaumont Enterprise. 

November 3, 2008, 

3 
132 

Like much of the Gulf Coast, Texas had a shortage of affordable and workforce housing 

before Hurricane Ike. Many of the more rural communities in Southeast Texas had little 

to no rental housing before the Hurricane, making any plan involving rental housing for 

displaced residents unworkable. The closest supply of available rental housing for most 

Ike-damaged communities was the City of Houston, a two hour drive from some of the 

hardest hit areas in Orange County, for example. Disaster victims had to choose between 

their jobs and decent housing.s Local officials repeatedly expressed concern about the 

lack of temporary housing forcing residents to move, resulting a loss of population, jobs 

and tax base. Local officials estimated that they needed over 4,000 temporary housing 

units in the Beaumont-Orange County area alone.9 Two months after the hurricane, 

2,309 households had been approved for housing assistance in the form of manufactured 

homes, but only 408 had signed occupancy agreements to move into those homes. 10 Two 

months after the hurricane thousands of residents were living in tent city shelters, 

disabled cars, or damaged homes. As of October 29, only 500 of 6,600 families approved 

by FEMA for long-term housing assistance under DHAP-Ike had been referred to the 

appropriate local housing authorities: FEMA had failed to send letters of referral to 

public housing authorities. 1 I 

Problems were not limited to direct housing assistance or the DHAP program. FEMA 

denied at least 85% of claims for housing assistance in Texas after Hurricane Ike. 

Althou~h some applications were denied for reasons as minor as an omitted middle 

initial,1 the most common denial code used (in over 100,000 cases 13) was "insufficient 

damage," particularly in low-income households and neighborhoods. Many low-income 

applicants have been told informally by FEMA that their "insufficient damage" denials 

were actually based on "deferred maintenance.,,14 Similarly, following Hurricane Dolly 

in July 2008, FEMA denied half of all applications for housing assistance for the same 

stated reasons, but FEMA has refused to disclose the rules and standards by which it 

makes these eligibility decisions. The United States District Court for the Southern 

District of Texas has twice affirmed that FEMA's failure to publish its standards and 

procedures violates the Stafford Act and issued an Order Granting Preliminary Injunction 

on May 13,2009 and a Preliminary Injunction on August 6, 2009, ordering FEMA to "(1) 

publish definitive and ascertainable criteria, standards, and procedures for determining 

eligibility for relief assistance beyond which is identified by federal law in compliance 

with the congressional mandate found in 42 U.S.C. §5174G); and (2) reconsider Plantiffs' 

applications for housing relief assistance published in compliance with paragraph 1.,,15 

The lack of ascertainable FEMA standards for equitable and impartial distribution of 

housing repair assistance, as required by federal statue, not only disadvantages low-

, Juan A. Lozano, "Many Texans calling tents home 2 months after Ike," AP, November 15,2008 

9 "Shades of Katrina", Houston Chronicle, November 2,2008 

10 Scott Lawrence, "Waivers Aimed at Speeding Up Delivery of Temporary Housing," November 3,2008. 

Available: http://www.kdfm.com 

II "Shades of Katrina," Houston Chronicle, November 2, 2008. 

12 Cite mike Snyder's article 

i3 Email from FEMA External Affairs 100,000 for insurance, 20

' most common reason FEMA webpage 

14 ConversaJion with Maria? Celli quote 

"UIPE v. FEMA (S.D. Texas: 08-487) Preliminary Injunction, August 6. 2009. 

4 
133 

income hurricane survivors, it results in arbitrary and subjective decisions about who gets 

housing repair assistance and how much assistance is provided in each case. Applicants 

for housing repair assistance are left without enough factual or legal information to 

determine whether to appeal FEMA's denial of assistance. 

FEMA denied many of these applicants unfairly and erroneously. After Hurricane 

Katrina, the City of Houston sent its own housing inspectors to New Orleans in May 

2006 and determined that two-thirds ofFEMA's habitability determinations were 

"suspect or wrong.,,16 The City of Houston believes there were similar problems with 

housing assistance denials after Hurricane Ikc, but "[t]he 'solution' that a family deemed 

ineligiblc may appeal their determination is not realistic [and that] FEMA needs staff on 

the ground in Houston [to] correct errors, identify missing and required information, and 

explain eligibility determinations.,,17 Examples of erroneous housing assistance denials 

following Hurricane Ike include: declaring homes habitable that have been condemned 

by city officials, declared unsafe by Child Protective Serviccs, and that are inaccessible to 

individuals with disabilities. A Galveston resident who is blind and confined to a 

wheelchair was denied housing assistance even though thc elevator in his apartment 

building did not work. Non-protit groups in Houston rcport entire neiwhborhoods of 

damaged home that have been deemed to have "insufficient damage,,1 . 

In the aftermath of Katrina and Rita, confusion and lack of information around disaster 

assistance programs resulted in the wrongful denial of benefits for thousands of 

households, and eventually led to numerous lawsuits over FEMA's programs and 

processcs, the majority of which were focused on problems with inadequate notice and 

appeal process. These problems were rcpeatcd after the 2008 hurricanes, and affected a 

largcr percentage of disaster victims because of high denial rates. 

In contrast to othcr Fcderal agencies that make eligibility and bcnefit determination 

decisions, FEMA continues to operate as a "black box" - applications go in and decisions 

come out, but there is no public information about how those decisions are made. 19 

Applicants faced with a letter that says "ineligible - insufficient damage" do not have 

enough information to tile a meaningful appeal. Further, FEMA refuses to make public 

the criteria and standards on which it makes insufficient damage decisions. Advocates in 

Disaster Recovery Centers reported that FEMA personnel refused to advise applicants on 

how to complete applications or how to provide required documentation, despite the fact 

that FEMA has issued numerous public statements including 16 press releases between 

16 Far From Home: Deficiencies in Federal Disaster Housing Assistance After Hurricanes Katrina and 

Rita and Recommendations for Improvement. Special Report, prepared by the Ad Hoc Subcommittee on 

Disaster Recovery of the Senate Committee on Homeland Security and Governmental Affairs, February 

2009, at 204 

17 Far From Home: Deficiencies in Federal Disaster Housing Assistance After Hurricanes Katrina and 

Rita and Recommendations for Improvement. Special Report, prepared by the Ad Hoc Subcommittee on 

Disaster Recovery of the Senate Committee on Homeland Security and Governmental Affairs, February 

2009, at 205. 

18 Cite articles 

!9 FEMA case cites 

5 
134 

September 2005 and June 200920 - to the effect that applicants should regard a denial as 

the first step of a process, "[a] denial letter doesn't necessarily mean that and applicant is 

not eligible for assistance. It might mean that FEMA does not have all it needs to reach a 

decision, such as insurance infOlmation or a complete address.,,2! Not only is FEMA's 

appeal process inadequate, any program that relies on applicant appeals in order to reach 

a correct decision as a matter of course is both broken and unfair - shifting an unrealistic 

burden to individuals that have just been through a major disaster. 

FEMA has argued that it cannot provide individualized notices that inform applicants of 

how their cases failed to meet program eligibililty guidelines, but has also resisted 

publishing the rules and procedures used to make eligibility and benefit determination 

decisions, and have implied that these rules and procedures change frequently.22 It might 

be one thing for an applicant to appeal an "insufficient damage" denial if there was a 

specific definition of what constituted insufficient damage and how the agency 

determined whether or not an applicant met that standard, but there is no such standard -

the standardized language in a FEMA denial notice has no actual point of reference in 

law or policy. FEMA should be able to provide individualized notice and an appeal 

process that goes beyond an exchange of paper, but at minimum, FEMA must have 

established, published standards that do not change without timely public notice. 

FEMA must complete and implement the administrative and institutional reforms it has 

been promising for over four years to ensure that policies and procedures are transparent, 

simple, and fair, and that they take into account the additional disaster recovery needs of 

special needs and low-income popUlations. 

While FEMA housing assistance programs are not intended to provide long-term 

recovery assistance, the emergency and interim disaster relief that FEMA provides has a 

strong impact on the ability of both individuals and communities to achieve long-term 

recovery from a disaster. Erroneous denials of assistance not only affect the ability of the 

applicant disaster victim to recover, they result in unreliable data that understates housing 

recovery needs and affects the permanent recovery of communities, states, and even 

regions. 

II. State Use of COBG Disaster Recovery Funds 

The Consolidated Security, Disaster Assistance, and Continuing Appropriations Act 

requires that, "each State shall submit a plan to the Secretary detailing the proposed use 

of all funds, including criteria for eligibility and how the use of these funds will address 

long-term recovery and restoration of infrastructure." (PL 110-329) According to TDRA, 

the proposed Amendment "adds the second allocation to the initial Action Plan and 

allows for the "mid course adjustments" as had been anticipated in the initial Action 

20 http://www.fema.gov/femaNews/releaseSearch.do 

21 FEMA Federal Coordinating Officer Albie Lewis as quoted by John Shryock. "FEMA claims denials roll 

out," WSFA 12 News Montgomery, AL, June 30, 2009. 

22 Ridgely motion 

6 
135 

Plan.,,23 Unfortunately, the "mid course adjustments" fail to address previous criticisms 

of the Action Plan, misallocate $3 billion in CDBG disaster recovery funds using a model 

inconsistent with both HUD's allocation model and the purpose of the CDBG program, 

fail to adequately fund unmet housing recovery needs, and fail to prioritize activities 

serving low and moderate income disaster victims in violation of federal law and 

regulations. 

The State's proposed Amendment, like the initial Action Plan, allocates CDBG disaster 

recovery funds among 11 COGs without specifying an amount that must be spent on 

housing recovery or providing guidance or enforcement mechanisms to ensure that local 

government subrecipients prioritize activities that primarily benefit low and moderate 

income families. TDRA has not adjusted the distribution or administration of CDBG 

funds, despite its concrete knowledge that "[j]urisdictions have prioritized projects other 

than those serving LMI residents" to the extent that "the State's ability to fulfill its 

obligation to expend 50% of the total funds to meet the LMI national objective" is 

unmet.24 

A. The proposed Amendment fails to address previous comments that the Action 

Plan does not give sujjicient structure and guidelines for communities tofollow to 

ensure that priority is given to rebuilding affordable hOUSing, and assisting lowincome and moderate-income persons in the recovery process. 

The purpose of CDBG disaster recovery programs is to target the low and moderate 

income communities that have the most difficulty recovering from a disaster. 

Low-income families and communities are disproportionately affected by natural 

disasters, and are disadvantaged again when the recovery process does not take their 

unique needs into account25 "Socioeconomic status is a significant predictor ... for 

physical and psychological impacts of disasters. [Vulnerable populations] are ... more 

likely to die, suffer injuries, and have proportionately higher material losses; have more 

23 TDRA, "State of Texas Amended Plan for Disaster Recovery" U.S. Department of Housing and Urban 

Development (HUD), Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 

Public Law 110-329, September 30, 2009," at 2. Available: 

htlp://www.tdra.state.tx.us/index.phpiHome/HURRlCANE+RECOVERY 

24 Amended Plan at 6. 

25 After Hurricane Rita, Texas spent only the statutory minimum of55% of its CDBG disaster funding on 

unmet housing needs while Louisiana and Mississippi each spent over 70%. Mississippi dedicated $3.8 

billion of its $5.5 billion total funding allocation, and Louisiana $8.0 billion of its $10.4 billion total 

funding allocation, to housing programs .. (GAO-07-574T, Statement of Stanley J. Czerwinski, Director, 

Strategic Issues, Before the Subcommittee on Disaster Recovery, Committee on Homeland Security and 

Governmental Affairs, U.S. Senate "Gulf Coast Rebuilding: Preliminary Observations on Progress to Date 

and Challenges for the Future." Thursday, April 12, 2007.) 111e State of Florida required grant recipients to 

use at least 70% of their funding specifically for the restoration of affordable housing. (Florida Department 

of Community Affairs, "2005 Disaster Recovery Initiative Action Plan addressing Hurricanes Katrina and 

Wilma, U.S. Department of Housing and Urban Development [Docket No. FR-5051-N-OI. Federal 

Register/Volume 71. Number 29] Department of Defense Appropriations Act, 2006." p. 6. Available: 

www.tloridacommunitydevelopment.org/di~a,terrecovJ'.ty""lln) 

7 
136 

psychological trauma; and face more obstacles during phases of response, recovery, and 

reconstruction.,,26 Low income families, seniors, and persons with disabilities often live 

in vulnerable housing, older homes and mobile homes, for example, and lack the 

resources to do disaster mitigation, carry sufficient insurance, or comply with evacuation 

measures.27 Low income homeowners also are more likely to take on repairs themselves, 

or hire an (unlicensed) friend or acquaintance to do home repair work in order to reduce 

costs. These repairs often are not up to building code standards, or are carried out with 

substandard materials. Low income residents of rental housing are particularly 

vulnerable: they must rely on private landlords or public housing authorities to ensure 

that their homes are well-maintained and disaster-resistant, and to rebuild and reopen 

damaged or destroyed housing after a disaster.18 When housing is destroyed by a disaster, 

rents generally increase significantly, which prevents low-income households from 

returning to their previous community?9 

Prioritizing rebuilding affordable and rental housing and associated infrastructure across 

the region will prevent permanent displacement, preserve the jobs, populations, and tax 

base of many communities, and increase the quality of Texas housing stock. 

Texas Appleseed, along with other statewide and local community organizations, 

provided both written and oral comments, including an Administrative Complaint to 

HUD, on the proposed Action Plan, expressing our belief that the proposed Action Plan 

did not meet statutory requirements that it "detai[l] the proposed use of all funds, 

including criteria for eligibility and how the use of these funds will address long term 

recovery,,,30 and our concerns that both housing recovery and activities benefiting 

primarily low and moderate income families would be underfunded. The distribution of 

Round I CDBG funds demonstrated that these concerns were well-founded. 

A. The Action Plan underfunds housing recovery. 

The total amount of CDBG funding directed at housing recovery in Round I was 

inadequate. Only 48% of the funding distributed to the COGs was allocated for housing 

recovery. If the City of Houston (which allocated 80% of its funding to housing) and the 

City of Galvcston (which allocated 60% of its funding to housing) are excluded, only 

27% of the money allocated by COGs was set aside for housing. Texas, Louisiana, and 

Mississippi all allocated at least 70% of their Katrina and Rita related eDBG disaster 

26 Fothergill, Alice and Peek, Lori, "Poverty and Disasters in the United States: A Review of 

Recent Sociological Findings," (2004), as quoted in Ballen Debra, "Vulnerable populations," The Institute 

for Business and Home Safety(IBHS}. fact sheet, March 2009. Available: 

http://www.disastersafety.org/resource/resmgr/pdfs/vulnerabIe yopulations.pdf 

27 Ballen Debra, "Vulnerable populations," The Institutefor Business and Home Sq(ety(IBHS}. fact sheet, 

March 2009. 

2' Ibid. 

29 Tim Morris, "Louisiana asks feds to extend post-disaster housing aid," New Orleans Times-Picayune, 

January 29, 2009. ("Fair-market rent in the New Orleans area is 69 percent higher than before Katrina, 

putting housing out of reach for the "average renter" in the region.") Available: 

http://www.nola.com/news/index.ssti.2009/01/la __ asks .. feds_to __ extend.JJostdis.html 

)0 H.R. 2638, Pub. 1.. 110-329 (2008). 

8 
137 

recovery funding to housing.31 Even within the COGs, the proposed home rehabilitation 

programs are underfunded and not correlated with unmet need. For example, Deep East 

Texas Council of Govemments (DETCOG) estimates that its program will serve only 99 

households out of989 with unmet housing needs (10%). Fort Bend County estimates it 

will serve 38 households out of 51 00 damaged owner-occupied homes.32 

Only three Round 1 subrecipients, the City of Houston, Galveston County, and the City 

of Galveston, set aside funds for rebuilding affordable rental housing stock, and only 

Galveston County and the City of Galveston dedicated funds for a small rental repair 

program.33 Recognizing the importance ofrebuilding affordable rental housing, Congress 

mandated by statute that a minimum of 10.6% ($342,521,992) of the State's total 

allocation "shall be used for repair, rehabilitation, and reconstruction ... ofthe affordable 

rental housing stock .. .in the impacted areas." (PL 110-329) The proposed Amendment, 

however, allocates $174 million for an AtTordable Rental Housing Recovery Program 

using the weather-based model, resulting in allocations to counties which sustained no 

housing damage.34 The City of Galveston estimates that is has $247 million in affordable 

housing needs, and the City of Houston has proposed spending $180 million on 

multifamily housing - the affordable housing recovery needs of these two cities alone are 

over $85 million more than the minimum allocation and $65 million more that the 

State's proposed total spending?5 

The proposed Amendment emphasizes that "[f]or all aspects of this Action Plan 

Amendment, local choice shall be emphasized, and the COGs shall have the right ... to 

make determinations as to the allocations of funds within their regions among housing, 

infrastructure, and economic development programs, except as provided by the 

requirements of the pooled competitions.,,36 The proposed Amendment 

"recommend[s]" that round 2 funds be split equally between housing and non-housing 

activities, but imposes no requirement that COGs meet this "goa[I].,,)7 The proposed 

Amendment in fact specifically contemplates allowing regions to utilize housing funds 

31 GAO-07-574T April 12, 2007 Testimony. (Florida, in fact, allocated 70% of its CDBG disaster recovery 

funds to affordable housing recovery.) 

32 Housing Assistance Program Plans submitted to TDHCA, September 3, 2009 TDHCA Board Book. 

A vailab Ie: http://www.tdhca.state.tx.us/pdf/agendas/090903-book -090827. pdf 

33 Owners of single family rentals are most likely not to rebuild, contributing to blight and further 

increasing the need for affordable rental housing. Margery Austin Turner, et aI., "Affordable Rental 

Housing in Healthy Communities: Rebuilding After Hurricanes Katrina and Rita," The Urban Institute, 

March 2007, at 16. Available: http://www.recoverycorps.orgimediaifiles/AffordableHousing.pdf 

34 Amended Plan at 11. 

35 Testimony of Harish Krishnaro, Executive Director of the Galveston Public Housing Authority, ORCA 

Public Hearing, Galveston, December 8, 2008, and testimony of Donald Sampley, Assistant Director of the 

City of Houston Housing and Community Development Department, ORCA Public Hearing, Houston, 

December 9, 2008. 

36 Amended Plan at II. Categorical set asides include those for healthcare facilities, some portion of the 

affordable rental housing funding, innovative housing approaches ($6 million), and title clearance and legal 

assistance ($500,000). 

37 Amended Plan at 6 and 2. 

9 
138 

for other activities "[i]f it is detennined that the unused housing funds cannot be utilized 

within the region.,,38 

The failure to prioritize unmet housing needs is exacerbated by TDRA's provision of 

extensive technical assistance only to certain jurisdictions, and only for infrastructure 

projects. This means that some jurisdictions did not have access to assistance that others 

received in applying for CDBG disaster recovery funds. 

In response to stakeholder feedback regarding the validity of FEMA damage 

assessments and concurrent with development of the MODs, TDRA engaged the 

engineering finn HNTB to identify and assess potential projects and provide 

documentation of damage, scoping and cost estimating services in 29 counties most 

affected by Hurricane Ike. HNTB's technical assistance was targeted to nonentitlement communities during the immediate aftennath of the stonn to provide 

independent analysis of damage and preliminary screening and specifications for 

selected projects. This fonned the basis for additional opportunities for requests for 

FEMA funding, documentation of urgent need, and project descriptions for grant 

applications. The 2,751 individual projects assessed by HNTB fonned a database of 

needs and overall non-housing damage for these communities.39 

HTNB (the same firm that created the weather funding allocation model) actually started 

work on the described contract on November 20, 2008, two months after Hurricane Ike.4o 

While TDRA acknowledges that "almost all communities in the region impacted by 

Hurricanes Ike and Dolly would need assistance," no assistance was provided to any 

jurisdiction affected by Hurricane Dolly, and neither the City of Galveston nor the City of 

Houston, as entitlement communities, were included in the survey.41 No explanation is 

offered for the lack of technical assistance to Hurricane Dolly jurisdictions. It is also 

somewhat difticult to credit the assumption that the City of Galveston, in particular, 

"[had] resources not available to smaller communities" simply by virtue of its status as an 

entitlement community, particularly after bearing the full force of the 3rd most 

destructive hurricane in American hi story. 42 Similarly, no explanation is offered for the 

exclusive focus on infrastructure projects to the exclusion of all other disaster recovery 

needs, though the majority of initial calls to a disaster recovery hotline set up by TDRA 

and HTNB were requests for housing assistance.43 

TDRA engaged HTNB to provide technical assistance to help some local jurisdictions 

"understand the program and identify [infrastmcture 1 projects that were critical to their 

community's recovery" because "many of the leaders of these small communities needed 

38 Amended Plan at 13. 

39 Amended Plan at 4, see also HTNE "ORCA Disaster Recovery Program: Hurricane Ike Summary 

Report," (Revised Draft) Available: 

http://www.tdra.state.tx.us/index.php/HomeIHURRICANE+RECOVERY 

40 HTNB Ike Summary Report at 7. 

41 HTNB Ike Summary Report at 2-4. 

42 HTNE Ike Summary Report at 4. 

43 HTNB Ike Summary Report, at 16. Calls for housing assistance were given the address of the TDHCA 

website. It is unclear how individuals in tents or FEMA trailers were expected to access the website. 

10 
139 

guidance to fully understand the underlying engineering, environmental, and 

implementation issues associated with their projects." 44 However, the Plan for Disaster 

Recovery assumes that these same jurisdictions have both (1) the capacity to identify, 

assess, estimate, and implement even more complex housing and economic development 

recovery programs, and (2) the capacity to prioritize community recovery needs in 

accordance with federal program requirements. TDRA continues to rely on this 

assumption in the Amended Plan, despite concrete evidence that most subrecipient 

jurisdictions do not have this capacity. 

In addition to ceding all substantive decision-making and program administration 

authority to COOs with a demonstrated lack of capacity, TDRA has also provided a 

specific set of jurisdictions with govermnent-funded services that give them an advantage 

in competing for eDna funds. Not only certain jurisdictions, but certain types of 

recovery activities, and certain popUlations have been excluded from the process.

45 

Neither housing recovery nor low income populations have received this form of 

assistance, despite their priority status under the eDna program. 

n. The Action Plan fails to give maximum feasible priority to activities benefiting 

disaster victims with low and moderate incomes. 

The primary beneficiaries of all activities conducted with eDnG funds, whether housing, 

infrastructure, or economic development, must be the low and moderate income persons 

the eDna program was developed to assist. Federal law and regulations require Texas 

to certify that its Amended Action Plan for Disaster Recovery "has been developed so as 

to give the maximum feasible priority to activities that will benefit low- and moderate 

income families," and that "[t]he aggregate use of eDna disaster recovery funds shall 

principally benefit low- and moderate-income families in a manner that ensures that at 

least 50 percent ofthe amount is expended for activities that benefit such persons during 

the designated period.,,46 

In Round I, the result of ceding decisions on allocations of funds within their regions 

among housing, infrastructure, and economic development programs to the COGs was 

not only that housing recovery was severely underfunded, but hlso that "[jJurisdictions .. 

. prioritized projects other than those serving LMI residents" to the extent that Texas 

would not meet its federal statutory obligation to expend 50% of the total funds to meet 

the LMI national objective.47 

44 HTNB Ike Summary Report at 12. 

45 TORA claims that its Public Participation plan included 149 community meetings and 14 regional 

meetings led by HTNB. (Amended Plan at 14.) However, neither the 149 community meetings nor the 14 

regional meetings included the public both types of meetings, however, included engineering and grant 

administration consultants who are potential bidders on contracts for CDBG-funded activities. (Hurricane 

Ike Summary Report at 11 and 13.) 

46 Alternative Certifications at 74 FR 7244, 7254, and 74 FR 41146, 41151-41152. 

47 Amended Plan at 6. (The 50% standard is already a downward departure from the standard 70% LMI 

requirement.) 

11 
140 

Texas Appleseed applauds TRDA's statement that "[i]fthe requirement of 

$1,528,995,720 for LMI activities has not been met TDRA will require the COGs not 

meeting the 50% LMI requirement to amend their MODs to ensure the requirement is 

achieved. All allocations made by the regional COG MODs will be conditional until the 

State of Texas reaches the 50% LMI requirement for the entire allocation.,,48 However, 

we remain concerned about the state's commitment to this requirement for several 

reasons. First, the requirement that 50% of activities funded must primarily benefit LMI 

individuals has always been attached to these funds, yet it was not enforced on 

subrecipients during Round 1. Second, Texas has already requested and been granted 

waivers for a number of program requirements related to programs serving low and 

moderate income families, including an overall waiver of the 70% LMI benefit 

requirement, one-for-one replacement of lower income housing units, and calculation of 

the LMI benefit related to economic development programs.

49 Third, local and regional 

jurisdictions have publicly objected to having to meet even a reduced LMI benefit 

requirement. For example Lufkin Assistant City Manager Keith Wright expressed 

concern to the Lufkin Daily News about the requirement because "Hurricane Ike was an 

'equal opportunity' disaster" and stated that "[t]here are projects we will not be able to do 

because we don't meet the criteria," including the extension of a highway feeder road. 50 

This statement illustrates a fundamental misunderstanding - despite DETCOG's four 

years of experience administering CDBG disaster recovery funding - of the federal 

statute's requirement that priority must go to projects serving low- and moderate- income 

persons. 

Coastal counties in Texas, which bore the brunt of Hurricane Ike, tend to have higher 

poverty rates than the state as a whole.5

! Of the thirty-seven counties where individuals 

were eligible to receive Individual Assistance from FEMA after either Dolly or Ike, 

twenty-two have poverty rates higher than the overall poverty rate for Texas (16.3%) and 

all three counties struck by Hurricane Dolly have poverty rates over 30%.52 Even within 

affected counties that have lower overall poverty rates, affected populations are often 

disproportionately low income. Galveston County has an overall poverty rate of 12.4%, 

for example, but the City of Galveston, which was devastated by Hurricane Ike, has a 

poverty rate 01'22%.53 

4' Amended Plan at 9. 

49 See, Fed Reg notices. 

50 Jessica Cooley, "DETCOG lobbied for control of hurricane funding," Lufkin Daily News, September 2, 

2009. A vai lable: http://www.lufkindailynews.com/hp/contentinews/stories/2009/09/02IDETCOG.htm I 

51 Sutter, Daniel, "Ensuring Disaster: State Insurance Regulation, Coastal Development, and 

Hurricanes," Mercatus Policy Series Policy Comment No. 14 (2007), pp. 11-12. The data collected is from 

the 2000 census and may underestimate poverty rates in light of Hurricane Katrina and the current 

recession. Texas poverty rate data from: Small Area Income and Poverty Estimates, 2007. Available: 

http://www.census.gov/cgi-bin/saipe/saipe.cgi 

52 Poverty data from the Small Area Income and Poverty Estimates, 2007. Available: 

http://www.census.gov/cgi-bin/saipe/saipe.cgi 

53 Poverty data from the Small Area Income and Poverty Estimates. 2007. Available: 

http://www.censlls.govicgi-binisaipeisaipe.c.gi 

12 
141 

As a material condition of the receipt ofCDBG funds, Texas must certify that "the 

Action Plan has been developed so as to give the maximum feasible priority to activities 

that will benefit low- and moderate income families," and that "[t]he aggregate use of 

CDBG disaster recovery funds shall principally benefit low- and moderate-income 

families in a manner that ensures that at least 50 percent of the amount is expended for 

activities that benefit such persons during the designated period.,,54 Despite the high 

level of poverty in the most hurricane affected jurisdictions, TDRA has adopted a funding 

allocation model that steers money away from these areas, and provided extensive 

technical assistance to help jurisdictions identify and fund infrastructure projects that 

generally assist mixed income communities - technical assistance denied to affected 

jurisdictions in the Rio Grande Valley and on the Gulf Coast. For these reasons alone, 

Texas cannot certify that it has "given maximum feasible priority to activities that will 

benefit low-and moderate-income families," and has demonstrated an inability to ensure 

that 50% of funds expended benefit low and moderate-income persons. 

B. Use of a weather-based model misallocates funds between disaster-affected areas 

and contravenes the purpose of the CDBG disaster recovery program. 

Traditionally, CDBG disaster recovery funds arc allocated using FEMA and other federal 

damage estimates and data. However, according to TDRA, "the 2008 Texas hurricane 

events rendered the FEMA damage assessments method inaccurate, because Hurricane 

Ike hit before the Hurricane Dolly damage assessments were complete, and FEMA 

personnel were mobilized away from conducting assessments in the area affected by 

Hurricane Dolly to attend to the needs of the region affected by Hurricane Ike."s5 

There is no dispute that FEMA damage estimates for Hurricanes Ike and Dolly are 

inaccurate, and not solely because damage estimates for Hurricane Dolly were 

incomplete. Both the State's experience with Hurricane Rita CDBG disaster recovery 

funding and publicly acknowledged problems with FEMA's housing assistance programs 

after Hurricanes Ike and Dolly demonstrate that FEMA has consistently underestimated 

housing damage, particularly in low-income communities. FEMA denied over 22,000 

applications for individual assistance out of a total of 38,000 applications after Hurricane 

Dolly. About 15,000 of these were denials of home repair assistance due to deferred 

maintenance. 56 These denials were made under regulations that a Federal District Court 

has held failed to provide legally sufficient eligibility standards. 57 Following Hurricane 

Ike, FEMA denied at least 85% of over 578,000 applications for housing assistance. 58 

In Galveston County, where three quarters of the structures on Galveston Island were 

damaged, 58.78% of the housing assistance denials were classified as "insufficient 

5. Alternative Certifications at 74 FR 7244, 7254. and 74 FR 41146, 41151-41152. 

55 HTNB, "Olffice of Rural Community Affairs (ORCA) Funding Allocation Model," at 2. Available: 

http://www.tdra.state.tx.uslindex.php/HomeIHURRICANE+RECOYERY 

56 LUPE v. FEMA (08-847, S.D. Texas) See Exhibit 2 to Plaintiffs Motion for Preliminary Injunction and 

Exhibit 14 to Plaintiffs Motion for Partial Summary Judgment (7-09) 

57 LUPE v. FEMA (08-847, S.D. Texas) See Order Granting Preliminary Injunction, May 13,2009 and 

Preliminary Injunction, August 06, 2009. (Defendants filed a Notice of Filing of Appeal on September 22, 

2009.) 

58 Email from FEMA External Affairs to the Houston Chronicle, June 26, 2009. 

13 
142 

damage.,,59 The City of Houston has also staled that the estimated number of damaged 

homes in Harris County was probably low based on FEMA's practice of denying 

applications based on "deferred maintenance.,,6o The State knows both that FEMA data 

is inaccurate, and how that data is inaccurate. 

While FEMA data is clearly flawed, Texas has chosen to use an alternative model that is 

even more problematic - a model that only looks at weather data and high water maps 

without taking into account actual damage, population numbers in affected areas, housing 

density, types of economic activity, and the demographics of a community.61 Instead of 

finding ways to adjust fOf t1aws in the FEMA data, TDRA chose not to use damage data 

at all, instead basing allocations on windspeed, rainfall, and stofm surge.

62 The model as 

used in a previous draft of the Amended Plan also included an "Impact Zone" factor "in 

order to take into account the exponential damage caused by the eye of the storm's 

impact to the Texas coastline and to adequately estimate storm damage.,,63 However, that 

factor was discarded in the revised Amended Plan and replaced with an undefined "LMI 

population" factor. The "exponential" damage experienced by coastal counties in the Ike 

eyewall is no longer accounted for in the model. It should be noted that the proposed 

Amendment distributes the full amount of Texas' $3 billion allocation ofCDBG disaster 

recovery funding, adjusting the initial allocations based on FEMA damage estimates 

between regional COGs using the weather based funding allocation model.64 

59 Phone call to the Media Desk at the FEMA JFO, Austin, Texas, November 12, 2008. 

60 Testimony of Richard Celli, Director of Housing and Community Development for the City of Houston, 

at a December 9, 2008 Public Hearing on Texas' proposed Action Plan for Disaster Recovery in Houston. 

61 Types of data and a detailed description of model development are presented in the ORCA Funding 

A lIocation Model starting on p. 4. 

62 ORCA Funding Allocation Model at 4. The panel of experts that "independently and collectively 

reviewed and confirmed that the calculations of wind speed damage, rainfall damage and storm surge 

damage were significant and are appropriate factors to use in measuring the effects of Hurricanes Dolly and 

Ike,"includes engineering, planning. public works, floodplain, and landscape architecture experts, but not 

one expert on housing, community development, or economic development. At least three of the six 

experts listed are employees of HTNB, the firm that developed the model, but that affiliation is not 

disclosed in the published "Funding Allocation Model." 

63 ORCA Funding Allocation Model at 8-9. ("For Hurricane Ike, a significant level of damage occurred 

along the coast and in the area of greatest impact, specifically where the devastating eye wall of the 

hurricane (the Hurricane Ike eye wall was 40 nautical miles in diameter). Within the eye wall, the high 

winds and the extremely high stonn surge caused tremendous damage that was more typical of a Category 

4 hurricane than the Category 2 hurricane designation received by Ike.") The revised Amendment 

substitutes an undefined low and moderate income population factor for the "Impact Zone" factor. This 

substitution does not affect the overall distribution offunds between regions, but does result in funding 

reallocation within regions. 

64 Although the Funding Allocation Model is being used to distribute the second round ofCDBG disaster 

recovery funds, TDRA applied the Model to the full allocation of $3 billion and based Round 2 allocations 

on that distribution. ("After the development of the Model and consideration of additional data gathered, 

ORCA determined that this Model would be used to determine the Round 2 allocation, including 

adjustments for each region to provide an aggregate distribution of funds that would align with the model 

results. The totals of Round I and Round 2 funding allocations will allocate 87% to Ike disaster areas and 

13% to Dolly disaster areas .... This approach allows for adjusting Round I funding allocations, which 

used the best information available at the time, to provide a fair and reasonable total allocation of funds 

from Round 2.") ORCA Funding Allocation Model at 10-12. 

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Weather intensity, however, does not predict damage, and it is an even poorer fsroxy for 

the unmet needs that the CDBG disaster relief program is intended to address. 5 For 

example, the first iteration of the TDRA model correctly reflects that the Ike storm surge 

was highest in Chambers and western Jefferson Counties, generating a surge damage 

factor of 29.19% for Chambers COlmty while Galveston County has a surge factor of 

only 17%. But the model fails to take into account that much of Chambers County is 

pasture land - according to FEMA data, Chambers County has approximately 3,700 

damaged homes while Galveston County has approximately 37,000.66 The TDRA model 

tracks where the weather was most intense, not where damage occurred or where there 

are CDBG-eligible unmet disaster recovery needs. 

Reliance on a weather based model is problematic enough to discredit the State's funding 

allocation, but TDRA's failure to make public the actual model, and its continued 

"calibration" of the model according to factors both external to the model and completely 

undefined is also troubling. The published "Funding Allocation Model" includes neither 

the input data nor the calculations on which the model is based. 67 The model also fails to 

show the basis for various ad-hoc assumptions it incorporates. 68 Further evidence of the 

ad-hoc nature of the model (and the inconsistency of its results with the stated goal of 

allocating funds by amount of storm damage) is presented in the "model calibration" 

section of the report. This section indicates that the model will be ignored for seven 

COGs because hearing testimony indicated "[these] regions would not require significant 

funding during Round 2.,,69 The model estimated these seven COGs should received 

12.4% of the funding, and the 'calibration' reduced the funding ofthese (primarily rural) 

COGs to 3.9%. Thus, the model over-estimated damages for the least-impacted COGs by 

at least 300%. This raises questions regarding the Model's use allocating funds among 

6S PL 110-329 mandates that funds be allocated "on the best estimates available of relative damage and 

anticipated assistance from other Federal sources." See also, 74 FR 41146,41147 (allocation between 

states is based on estimated unmet needs), and 74 FR 41146, 4115341156, Appendix I (detailing HUD's 

formula for allocating CDBG disaster relief funding appropriated by PL 110-239); and 74 FR 7244,7245 

("In the first quarter of calendar year 2009, HUD will make a final review of long-tenn disaster recovery 

needs for all states affected by disasters in 2008 to allocate the remaining $3.972 billion. This review will 

include unmet housing, infrastructure, and economic revitalization needs.") 

66 Gulf Coast Interfaith analysis. FEMA data available by county at 

http://www.fema.govihazardihurricaneI2008/ike/portal.shtm. 

67 "While an observer could attempt to follow the spirit of calculations outlined in this description, the 

calculation steps are not explicitly presented and may contain unstated assumptions or error. The report's 

failure to 'show the work' of the Model makes the fund allocation process non-transparent. Citizens 

impacted by this model have no way to verilY the process has not been affected by error or unelaborated 

assumption." Kevin G. lewell, Comments on ORCA Funding Allocation Model for Texas Appleseed, 

September 14,2009. (submitted as Comments on the previous draft of the Amended Plan) 

68 For example, a stann surge of 10-12 feet is assumed to be 1.7 times more damaging than one of8-10 

feet, while a storm surge of 12-14 feet is assumed to be only 1.1 times more damaging than one of 10-12 

feet. Elsewhere a wind-speed of 85-95 mph is assumed to be 4.5 times more damaging than a wind speed of 

65-75 mph. While such assumptions may be justified by empirical data, no such empirical data was 

presented - in fact, page 5 ofthe report states '[tJhis Model detennined that the higher sustained winds 

generated a greater overall wind speed damage factor.' when in actuality the presented evidence suggests 

the model assumed this fact in its construction. This wording is miSleading. Kevin G. Jewell, Comments on 

ORCA Funding Allocation Model 

69 ORCA Funding Allocation Model at II. 

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the 4 remaining COGs, and suggests the model over-allocates funds to low storm impact 

areas.70 

TDRA issued a revised proposed Amendment on September 16,2009, in response to 

obvious misallocations of CDBG disaster recovery iunding that drew public criticism 

from the coastal counties most affected by Hurricane Ike and advocacy organizations 

alike.71 The revised proposed Amendment substitutes an undefined "LMI population 

factor" for the "Impact Zone" factor used to adjust for the greater damage inflicted by the 

eyewall of Hurricane Ike in the first version of the model, and fails to deal with the 

fundamental problems of either the weather-based allocation model or the delegation of 

all substantive decisions regarding how CDBG funds will be spent to local government 

entities. The revision transfers $335 million from State administered programs to locally 

controlled programs and allocates the federally mandated affordable rental housing setaside according to the weather model. The result is that the Houston-Galveston region, 

which had more than 70% of homes damaged, received more than 70% of FEMA 

individual assistance and more than 75% of all SBA disaster loans, sees its allocation 

drop from 70% of the total funding under the Action Plan to less than 60% of the total 

allocation under the Amendment allocation model, while every other region receives an 

increased percentage of CDBG funding, and a greater percentage of total funding than the 

percentage of damage than even the weather model estimates.72 

HUD allocated Texas half of the total CDBG disaster funding appropriated by Congress 

for unmet needs related to 2008 disasters.73 For both rounds, HUD used available data on 

70 Kevin G. Jewell, Comments on ORCA Funding Allocation Model. 

71 See. e.g. Rick Casey, "Commentary: Is God good at politics?" Houston Chronicle. September 5, 2009. 

Available: http://www.chron.com/disp/story.mpl/metropolitanicasey/6604739.html; Heber Taylor, "A 

formula to heap injury on injury," Galveston County Daily News. September 23,2009. Available: 

http://galvestondailynews.com/story.lasso?ewcd=aa9272e4f7cf9839 ; Mike Snyder, "County may oppose 

storm recovery plan Allocation of$1.7 billion to fix hurricane damage is called flawed FUNDS: New 

proposal is second parcel of federal recovery funds," Houston Chronicle, August 25, 2009, Section D, Page 

I.; Mike Snyder, "HURRICANE IKE: ONE YEAR LA TER Recovery funds get second look Officials to 

review process to distribute money, " Houston Chronicle. September 15,2009, Section B, Page 3. : Mike 

Snyder, "Area welcomes change in storm recovery plan Nonprofits still see problems with distributing 

funds MONEY: Houston has special interest in rental housing," Houston Chronicle. September 17,2009, 

Section S, Page I. 

72 Amended Plan, Appendix E-2. 

73 PL 110-329 provides"[t]hat the Secretary shall allocate to the states not less than 33 percent oflhe 

funding provided under this heading within 60 days after the enactment ofthis Act based on the best 

estimates available of relative damage and anticipated assistance from other Federal sources." HUD used 

available FEMA damage estimate data, and focused on two factors to make this first round allocation: (I) 

Unmet housing needs. This is each State's relative share of estimated unmet housing need for property 

owners experiencing serious damage to their homes; and (2) Concentrated damage. To determine 

infrastructure and economic revitalization needs, HUD focused on areas of particular concentration of 

damage specifically, each State's share of seriously damaged homes in areas where more than 20 percent 

ofthe homes experienced damage. To allocate the second round offunding, HUD used FEMA Individual 

Assistance program data on housing unit damage, Small Business Administration (SDA) disaster loan 

program data on both housing and business repair and replacement loan applications, and FEMA Public 

Assistance program data. "The allocation was based on two factors: (i) The sum of estimated unmet 

housing, infrastructure, and business needs, adjusted by (ii) a HUD calculated risk level for recovery 

challenge73 HUD too used this funding allocation model for the full $6, I billion appropriation, and then 

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observed damages in a formula designed to estimate unmet need. The fIrst round formula 

used the amount and severity of un met housing need as a proxy for the state's overall 

level ofunruet need, and for the second round of funding, used available data on 

observed damages from FEMA's Individual and Public Assistance programs and the 

SBA disaster loan program to calculate unmet need not only tor housing, but for 

infrastructure and economic development as well. The eleven states that received 

additional sccond round allocations had estimated unmct needs "represent[ing] more than 

97 percent of the estimated unmet needs across all 76 disasters that occurred in 2008." 74 

Clearly, not only can a model and formula that use actual data to estimate unmet need 

and allocate CDBG funds be created, HUD has already created and used that model, and 

there is available information quantifying unruet housing, infrastructure, and economic 

revitalization disaster recovery needs in Texas. TDRA's determination to use a weather 

based model that has no validity as a model, let alone as an appropriate basis for the 

distribution of CDBG disaster recovery funds, is deeply troubling. 

Conclusion 

The scope of needs following a disaster is simply larger than the needs the CDBG 

program is designed to address, and requires more funding than the CDBG disaster 

recovery program can provide. The role of the state and federal governments in the 

CDBG process is to ensure that disaster recovery grants are (I) used to meet the most 

urgent unmet recovery needs of communities, (2) primarily benefIt low and moderate 

income families, and (3) are administered in compliance with federal law and regulations. 

Ensuring that disaster response and recovery programs meet the most urgent needs of 

disadvantaged individuals and families in an expeditious manner is not only a statutory 

mandate, but is critical to overall recovery in Tcxas. The proposed Amended Action Plan 

for Disaster Recovery does not meet these requirements or promote this goal, for the 

reasons laid out above and in previous comments and submissions to TDRA and 

TDHCA. 

The Consolidated Security, Disaster Assistance, and Continuing Appropriations Act 

signed into law by President Bush on September 30, 2008, appropriated $6.5 billion 

dollars in supplemental CDBG funds for "necessary expenses related to disaster relief, 

long-term recovery, and restoration of infrastructure, housing, and economic 

revitalization in areas affected by hurricanes, floods, and other natural disasters occurring 

during 2008." Supplemental CDBG funds to assist with disaster recovery are not exempt 

from program rcquirements, or disassociated from the primary objective of the CDBG 

program, the "development of viable urban communities, by providing decent housing 

allocated second round funding based on the model results and states' first round allocations. 74 FR 7422 

and 74 FR41146, 41147. (Appendix I) 

74 74 FR 41146, 41147. 

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and a suitable living environment and expanding economic opportunities, principally for 

persons oflow and moderate income.,,75 

Before appropriated CDBG disaster recovery funds are released to a State, the 

Consolidated Security, Disaster Assistance, and Continuing Appropriations Act requires 

that, "each State shall submit a plan to the Secretary detailing the proposed use of all 

funds, including criteria for eligibility and how the use of these funds will address longterm recovery and restoration of infrastructure." The Texas Department of Rural Affairs 

(TDRA)76, the agency designated by Governor Rick Perry as the entity responsible for 

administering these funds, made its State Plan for Disaster Recovery (Action Plan) 

available to the public on December 5, 2008. 77 

Under the proposed Action Plan, the State made preliminary allocations to eleven 

Councils of Government (COGs) using FEMA damage assessments, and "the COG 

region [was] be responsible for allocation of funds between housing and non-housing 

activities based on input from local communities.,,78 The Action Plan was approved by 

HUD March 4, 2009. 

The State's proposed Amendment to the Action Plan, which must be submitted to HUD 

by September 30, 2009, covers a second allocation of CDBG disaster recovery funding of 

$1,743,001,247 to Texas, announced by HUD on June 10,2009. Like the initial Action 

Plan, the proposed Amendment also allocates funds among 11 COGs without specifying 

an amount that must be spent on housing recovery or providing guidance on or 

enforcement mechanisms to ensure that local government subrecipients prioritize 

activities that primarily benefit low and moderate income families. TDRA has not 

adjusted how CDBG funds will be distributed, despite its concrete knowledge that 

"[s]everal trends have become evident in the review of the applications and the comments 

from stakeholders. Jurisdictions have prioritized projects other than those serving LMI 

residents in an effort to move recovery forward as fast as possible by focusing on urgent 

need projects with overall benefit to the community. This impacts the State's ability to 

fulfill its obligation to expend 50% of the total funds to meet the LMI national 

objective.,,79 

While FEMA data is clearly flawed, Tex<lS.l;\a~.~J;t9~!<A,t.O,~~!~~itti~AB}OdeL9h~j~. 

even more problematic - a model that only looks at weather data and high water maps and 

ignores actual damage, population numbers in affected areas, housing density, types of 

economic activity, and the demographics of a community. Weather intensity does not 

predict damage, and it is an even poorer proxy for the unmet needs that the CDBG 

disaster relief program is intended to address. For example, the TDRA model correctly 

75 42 U.S.c. 5301(c). 

76 Until September 1,2009, TDRA was the Office of Rural and Community Affairs (ORCA.) 

77 ORCA Disaster Recovery Division, "State of Texas Plan for Disaster Recovery, U.S. Department of 

Housing and Urban Development (HUD), Consolidated Security, Disaster Assistance, and Continuing 

Appropriations Act, Public Law 110-329." December 2, 2008. Available: 

7S 2008 Action Plan, p. 12. 

79 TDRA, State o/Texas Amended Action Plan/or Disaster Recovery (Revised), September 2009. 

Available: cite 

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147 

reflects that the Ike storm surge was highest in Chambers and western Jefferson Counties, 

generating a surge damage factor of 29.19% for Chambers County while Galveston 

County has a surge factor of only 17.%. But the model fails to take into account that 

much of Chambers and Western Jefferson Counties are pasture land according to 

FEMA data, Chambers County has approximately 3,700 damaged homes while 

Galveston County has approximately 37,000.80 The TDRA model tracks where the 

weather was most intense, not where the damage occurred. 

Reliance on a weather based model is problematic enough to discredit the State's 

funding allocation, but TDRA's failure to make public the actual model, and its 

continued "calibration" of the model according to factors both external to the model and 

completely undefined is also troubling. The published "Funding Allocation Model" 

includes neither the input data nor the calculations on which the model is based. 81 The 

model also fails to show the basis for various ad-hoc assumptions it incorporates. For 

example, a storm surge of 10-12 feet is assumed to be 1.7 times more damaging than one 

of 8-10 feet, while a storm surge of 12-14 feet is assumed to be only 1.1 times more 

damaging than one of 10-12 feet. Elsewhere a wind-speed of 85-95 mph is assumed to be 

4.5 times more damaging than a wind speed of 65-75 mph. While such assumptions may 

be justified by empirical data, no such empirical data was presented - in fact, page 5 of 

the report states "This Model determined that the higher sustained winds generated a 

greater overall wind speed damage factor." when in actuality the presented evidence 

suggests the model assumed this fact in its construction. This wording is misleading. 

Further evidence of the ad-hoc nature of the model (and the inconsistency of its results 

with the stated goal of allocating funds by amount of storm damage) is presented in the 

"model calibration" section of the report. This section indicates that the model will be 

ignored for seven COGs because hearing testimony indicated "[these] regions would not 

require significant funding during Round 2." (page 11). The model estimated these seven 

COGs should received 12.4% of the funding, and the 'calibration' reduced the funding of 

these (primarily mral) COGs to 3.9%. Thus, the model over-estimated damages for the 

least-impacted COGs by at least 300%. This raises questions regarding the Model's use 

allocating funds among the 4 remaining COGs, and suggests the model over-allocates 

funds to low storm impact areas. 82 

In addition, the proposed Amendment distributes the full amount of Texas' $3 billion in 

CDBG disaster recovery funding, adjusting initial allocations based on FEMA damage 

estimates, between regional COGs using the weather based funding allocation model, 

instead of data on actual damages, or any assessment of unmet needs. 83 

80 FEMA data obtained and analyzed by Gulf Coast Interfaith. 

81 "While an observer could attempt to follow the spirit of calculations outlined in this description, the 

calculation steps are not explicitly presented and may contain unstated assumptions or error. The report's 

failure to "show the work" of the Model makes the fund allocation process non-transparent. Citizens 

impacted by this model have no way to verifY the process has not been affected by error or unelaborated 

assumption." Kevin G. Jewell, 'Comments on ORCA Funding Allocation Model" for Texas Appleseed, 

September 14,2009. 

82 Kevin G. Jewell, "Comments on ORCA Funding Allocation Model". 

'3 Although the Funding Allocation Model is being used to distribute the second round of COBG disaster 

recovery funds. TDRA applied the Model to the full allocation of$3 billion and based Round 2 allocations 

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148 

In response to obvious misallocations of CDBG disaster recovery funding that drew 

public criticism from the coastal counties most affected by Hurricane Ike and advocacy 

organizations alike, TDRA issued a revised proposed Amendment on September 16, 

2009.84 The revised proposed Amendment substitutes an undefined "LMI population 

factor" for the "Impact Zone" factor used to adjust for the greater damage inflicted by the 

eyewall of Hurricane Ike in the first version ofthe model, and fails to deal with the 

fundamental problems of either the weather-based allocation model or the delegation of 

all substantive decisions regarding how CDBG funds will be spent to local government 

entities. The revision transfers $335 million from State administered programs to locally 

controlled programs, it does not revise the model to more accurately reflect the disaster 

recovery needs of Texans and leaves the original distribution of funds between the COGs 

unchanged. 

Texas Appleseed, along with other statewide and local community organizations, 

provided both written and oral comments, including an Administrative Complaint to 

BUD, on the proposed Action Plan, expressing our belief that the proposed Action Plan 

did not meet statutory and our concerns that both housing recovery and activities 

benefiting primarily low and moderate income families would be underfunded. These 

concerns were well-founded. 

Under the distribution process set up in the initial Plan for Disaster Recovery, the total 

amount ofCDBG funding directcd at housing recovery was inadequate. Only 48% of the 

funding distributed to the COGs was allocated for housing recovery. Ifthe City of 

Houston (which allocated 80% of its funding to housing) and the City of Galveston 

(which allocated 60% of its funding to housing) are excluded, only 27% of the money 

allocated by COGs was set aside for housing. Texas, Louisiana, and Mississippi all 

allocated at least 70% of their Katrina and Rita related COBG disaster recovery funding 

to housing.85 Even within the COGs, the proposed home rehabilitiation programs arc 

underfunded and not correlated with unmet need. For cxample, Deep East Texas Council 

of Governments (DETCOG) estimates that its program ",ill serve only 99 households out 

of989 with unmet housing needs (10%). Fort Bend County estimates it will serve 38 

households out of 51 00 damaged owncr-occupied homes. 86 

on that distribution. ("After the development of the Model and consideration of additional data gathered, 

ORCA determined that this Model would be used to determine the Round 2 allocation, including 

adjustments for each region to provide an aggregate distribution of funds that would align with the model 

results. The totals of Round I and Round 2 funding allocations will allocate 87% to Ike disaster areas and 

13% to Dolly disaster areas .... This approach allows for adjusting Round I funding allocations, which 

used the best information available at the time, to provide a fair and reasonable total allocation of funds 

from Round 2.") HTNB, Office of Rural Community Affairs (ORCA) Funding Allocation Model, 2009, pp. 

10-12. Available: cite 

84 See, e.g. articles in chronicle, public comments 

85 GAO-07-574T April 12,2007 Testimony. (Florida, in tact, allocated 70% of its CDBG disaster recovery 

funds to affordable housing recovery.) 

86 Housing plans submitted to TDHCA 

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149 

Congress mandated by statute that at least 10.6% ($139,388,960) of the State's total 

allocation "shall be used for repair, rehabilitation, and reconstruction ... ofthe affordable 

rental housing stock .. .in the impacted areas." (PL 110-329) Only three subrecipients, 

the City of Houston, Galveston County, and the City of Galveston, set aside funds for 

rebuilding affordable rental housing stock, and only Galveston County and the City of 

Galveston dedicated funds for a small rental repair program.

87. The State's proposed 

Action Plan set aside $58,834,914, or 4.47% of total grant funds, for an AfTordable 

Rental Housing Stock Restoration Program; the Action Plan anticipates that the 

remaining 6.13% of that mandate will be met at the regional level by COG allocations, 

but imposes no requirements or guidance to ensure that this takes place. (PL 110-329; 

Action Plan at 13 Recognizing the importance of rebuilding affordable housing, 

Congress mandated in the Consolidated Security Act that "not less than $650,000,000 

from funds made available ... shall be used tor repair, rehabilitation, and reconstruction 

(including demolition, site clearance and remediation) of the affordable rental housing 

stock (including public and other HUD-assisted housing) in the impacted areas.,,88 Texas 

must use a minimum of $342,52 1,9920f its total CDBG allocation for affordable 

housing.89 The City of Galveston estimates that is has $247 million in affordable 

housing needs, and the City of Houston has proposed spending $180 million on 

multifamily housing the affordable housing needs to two cities alone are greater than 

$85 million more than the minimum allocation and $65 million more that the State's 

proposed total spending.9o 

State further distorts provision of help with identifying, assessing, and estimating 

infrastructure projects in non-entitlement areas also technical assistance with 

applications for federal funds both FEMA and CDBG. HNTB. Started 2 months after 

Ike hit. "Tn response to stakeholder feedback regarding the validity ofFEMA damage 

assessments and concurrent with development of the MODs, TDRA engaged the 

engineering firm HNTB to identifY and assess potential projects and provide 

documentation of damage, scoping and cost estimating services in 29 counties most 

affected by Hurricane Ike. HNTB's technical assistance was targeted to non-entitlement 

communities during the immediate aftermath of the storm to provide independent 

analysis of damage and preliminary screening and specifications for selected projects. 

This formed the basis for additional opportunities for requests for FEMA funding, 

documentation of urgent need, and project descriptions for grant applications. The 2,751 

individual projeets assessed by HNTB formed a database of needs and overall nonhousing damage for these communities.,,91 

87 Owners of single family rentals are most likely not to rebuild. contributing to blight and further 

increasing the need for affordable rental housing. (cite policy link/LA program) 

8R P.L. 110-329 

,9 HUD No. 09-179 

90 Testimony of Harish Krishnaro. Executive Director of the Galveston Public Housing Authority, ORCA 

Public Hearing, Galveston. December 8, 2008, and testimony of Donald Sampley, Assistant Director of the 

City of Houston Housing and Community Development Depanment, ORCA Public Hearing, Houston, 

December 9, 2008. 

'>I Revised Amendment to Action !'Ian/i,r Disaster Recovery at 4. see also HTNB final repon 

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The primary beneficiaries of all activities conducted with CDBG funds, whether housing, 

infrastructure, or economic development, should be the low and moderate income 

persons the CDBG program was developed to assist. Prioritizing rebuilding affordable 

and rental housing and associated infrastructure across the region will prevent permanent 

displacement, preserve the jobs and populations of many communities, and increase the 

quality of Texas housing stock. 

Low-income families and communities are disproportionately affected by natural 

disasters, and then are disadvantaged again when the recovery process does not take their 

unique needs into account92 "Socioeconomic status is a significant predictor ... for 

physical and psychological impacts of disasters. [Vulnerable populations] are ... less 

likely to prepare for hazards ... less likely to respond to warnings; more likely to die, 

suffer injuries, and have proportionately higher material losses; have more psychological 

trauma; and face more obstacles during phases of response, recovery, and 

reconstruction.,,93 Low income families, seniors, and persons with disabilities often live 

in vulnerable housing, older homes and mobile homes, for example, and lack the 

resources to do disaster mitigation, carry sufficient insurance, or comply with evacuation 

measures.94 Low income homeowners are also more likely to take on repairs themselves, 

or hire an (unlicensed) friend or acquaintance to do home repair work in order to reduce 

costs: these repairs are often not up to building code standards, or carried out with 

substandard materials. Low income residents of rental housing are particularly 

vulnerable: they must rely on private landlords or public housing authorities to ensure 

that their homes are well-maintained and disaster-resistant, and to rebuild and reopen 

damaged or destroyed housing after a disaster.95 When housing is destroyed by a disaster, 

rents generally are significantly higher for the remaining or even rebuilt housing, which 

prevents low-income households from returning to their previous homes.96 

92 After Hurricane Rita, Texas spent only the statutory minimum of 55% of its CDBG disaster funding on 

unmet housing needs while Louisiana and Mississippi each spent over 70% of their allocations on housing. 

Mississippi dedicated $3.8 billion of its $5.5 billion total funding allocation, and Louisiana $8.0 billion of 

its $10.4 billion total funding allocation, to housing programs .. (GAO-07-574T, Statement of Stanley J. 

Czerwinski, Director, Strategic Issues, Before the Subcommittee on Disaster Recovery, Committee on 

Homeland Security and Governmental Affairs, U.S. Senate "Gulf Coast Rebuilding: Preliminary 

Observations on Progress to Date and Challenges for the Future." Thursday, April 12,2007.) 

The State of Florida required grant recipients to use at least 70% of their funding specifically for the 

restoration of affordable housing. (Florida Department of Community Affairs, "2005 Disaster Recovery 

Initiative Action Plan addressing Hurricanes Katrina and Wilma, U.S. Department of Housing and Urban 

Development [Docket No. FR-5051-N-OI, Federal Register/Volume 7/, Number 29] Department of 

Defense Appropriations Act, 2006." p. 6. Availahle: 

www.floridacommunitydevelopment.org/disasterrecoverygm) 

93 Fothergill, Alice and Peek, Lori, "Poverty and Disasters in the United States: A Review of 

Recent Sociological Findings," (2004), as quoted in Ballen Debra, "Vulnerable populations," The Institute 

lor Business and Home Sa(ety(IBHS), fact sheet, March 2009. Available: 

94 Ballen Debra, "Vulnerable populations," The Institutelor Business and Home Salety(IBHS), fact sheet, 

March 2009. 

95 Ibid. 

96 Note about rents in New Orleans post-Katrina. 

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151 

Coastal counties in Texas, which bore the brunt of Hurricane Ike, tend to have higher 

poverty rates than the state as a whole.97 Of the thirty-seven counties where individuals 

were eligible to receive Individual Assistance from FEMA after either Dolly or Ike, 

twenty-two have poverty rates higher than the overall poverty rate for Texas (16.3%) and 

all three counties struck by Hurricane Dolly have poverty rates over 30%.98 Even within 

affected counties that have lower overall poverty rates, affected populations are often 

disproportionately low income. Galveston County has an overall poverty rate of 12.4%, 

for example, but the City of Galveston, which was devastated by Hurricane Ike, has a 

poverty rate of22%. 

Governor Rick Perry's Funding Request for federal assistance related to the 2008 

Hurricane season (Texas Rebounds) estimates over $3.4 billion in housing needs alone, 

including repair, reconstruction, elevation, or relocation for single-family homeowners, 

small rental properties and multi-family rental properties.99 Almost 70% of affected 

homeowners did not have flood insurance, according to Texas Department of insurance 

average data, and 14% did not have wind coverage, meaning they will be totally reliant 

on federal and other disaster recovery grant programs to rebuild their homes. lOo 

HUD allocated Texas half of the total CDBG disaster funding appropriated by Congress 

for unmet needs related to 2008 disasters based on the amount and severity of damage to 

its housing stock. PL 110-329 provides"[t]hat the Secretary shall allocate to the states 

not less than 33 percent of the funding provided under this heading within 60 days after 

the enactment of this Act based on the best estimates available of relative damage and 

97 Sutter, Daniel, "Ensuring Disaster: State Insurance Regulation, Coastal Development, and 

Hurricanes," Mercatus Policy Series Policy Comment No. 14 (2007), pp. 11-12. The data collected is from 

the 2000 census and may underestimate poverty rates in light of Hurricane Katrina and the current 

recession. Texas poverty rate data from: Small Area Income and Poverty Estimates, 2007. Available: 

http://www.census.gov/cgi-bin/saipe/saipe.cgi 

98 Poverty data from the Small Area Income and Poverty Estimates, 2007. Available: 

http://www.census.gov/cgi-bin/saipe/saipe.cgi 

99 Oovernor Rick Perry, Judge Robert Eckles, Brian Newby, Texas Rebound,: Helping Our Communities 

Recover from the 2008 Hurricane Season, November 2008. p, 5, "Due to the timing of this report, the data 

included is preliminary and likely to underestimate the real need in ,the areas most damaged by the 2008 

hurricane season, , . .It should also be noted that several estimates will depend on decisions made by the 

federal government as to whether, and to what degree, reimbursement is awarded, For example, if FEMA 

extends the period for debris removal, some cost estimates will decline. Similarly, if the United States 

Army Corps of Engineers (Corps of Engineers) is able to fund dredging or underwater debris removal, or if 

the Federal Highway Administration funds some or all of the transportation repair projects necessitated by 

the hurricanes, then transportation and navigation needs should decline. Additionally, costs to mitigate 

future infrastructure damages are included in these estimates. Therefore, some of the numbers included 

represent the best educated guess, The State of Texas has reviewed and substantiated these numbers to the 

best of its ability, within the limited time frame and with the data available," 

100 Texas Rebounds. 10, (It should be noted, in addition to the qualitications to cost estimates identitied in 

the report, that Texas Rebounds is not a request for CDBO supplemental funding, and the needs identitied 

are not contiguous with those that can be funded by CDnO program funds, For example, the report 

identities $143 billion in economic development needs that would be addressed with tax incentives and 

could not be funded with a direct appropriation offederal funds,100 The housing needs and activities 

identitied, however, are all eligible activities that can be funded with supplemental CDBO grants,) 

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anticipated assistance from other Federal sources." HUD used available FEMA damage 

estimate data, and focused on two factors to make this first round allocation: (1) Unmet 

housing needs. This is each State's relative share of estimated unmet housing need for 

property owners experiencing serious damage to their homes; and (2) Concentrated 

damage. To determine infrastructure and economic revitalization needs, HUD focused on 

areas of particular concentration of damage specifically, each State's share of seriously 

damaged homes in areas where more than 20 percent of the homes experienced 

damagelOI To allocate the second round of funding, HUD used FEMA Individual 

Assistance program data on housing unit damage, Small Business Administration (SBA) 

disaster loan program data on both housing and business repair and replacement loan 

applications, and FEMA Public Assistance program data. "The allocation was based on 

two factors: (i) The sum of estimated unmet housing, infrastructure, and business needs, 

adjusted by (ii) a HUD calculated risk level for recovery challenge. 102 HUD too used this 

funding allocation model for the full $6.1 billion appropriation, and then allocated second 

round funding based on the model results and states' first round allocations. The eleven 

states that received additional second round allocations had estimated unmet needs 

"represent[ing] more than 97 percent of the estimated unmet needs across all 76 disasters 

that occurred in 2008.,,103 

Texas has already learned and implemented a number of lessons from its experience with 

Hurricane Rita CDBG disaster recovery funds, particularly about how to structure 

housing programs that assist individual homeowners, and Texa~ Appleseed encourages 

ORCA and TDHCA to provide guidance incorporating these lessons to help funding 

recipients avoid delays. Policies and procedures must be designed to make the programs 

accessible to the populations they are designed to assist. Among the policies and 

practices that have been adopted by TDHCA's Hurricane Rita CDBG grant program that 

should be incorporated in future programs are: 

• Defining eligibility in accordance with the income requirements of the CDBG 

program and ensuring that all Texans have access to the same benefits under the 

same requirements. 

• Allocating resources for intensive casework with special needs populations 

including the elderly, disabled, and very low-income. 

• Allowing applicants to demonstrate an ownership interest in property by 

providing an Affidavit of Heirship or other documentation rather than requiring 

applicants to go through a title clearing process that averages about two years. 

• Working closely with local faith-based and advocacy groups to do outreach and 

education in affected communities, and working with local legal services 

programs to refer applicants who needed legal assistance with property ownership 

or tax issues. 

WI HUD No. 08-179 

10' "HUD computes allocations based on data that are generally available covering all the eligible affected 

areas." 74 Fed. Reg, 41146, 41147. August 14,2009. Appendix I to the Notice includes the formula(s) 

HUD used to calculate estimated unmet need. 

103 74 Fed. Reg. 41146, 41147. 

24 
153 

• Streamlining applications in length, complexity, and reading level to make the 

process more accessible to applicants. 

• Ensuring that entities have the capacity to effectively administer programs; as was 

demonstrated after Hurricane Rita, housing programs providing assistance to 

individual homeowners require a high level of administrative capacity and require 

a large investment of resources. 

Building these best practices into Hurricane Dolly and Ike recovery programs from the 

beginning will allow Texas to take advantage of the lessons learned in the wake of 

Katrina and Rita and deliver help to affected families and communities more quickly and 

effectively. 

On an annual basis, entitlement communities spend the largest percentage of grant money 

(27%) on housing needs. The second largest percentage ofCDBG funds (24%) are spent 

on public improvements. Non-entitlement communities (those not receiving annual 

CDBG grants) spend, on average, only 17 percent of traditional state funding on housing, 

highlighting the importance ofCDBG funding in providing impoverished communities 

with affordable housing. 104 

However, the scope of needs following a disaster (e.g., rebuilding critical infrastructure 

like sewer, water, and electricity, and rebuilding housing for all income levels, etc.) is 

simply larger than the needs the CDBG program is designed to address. As a result, the 

underlying goal of the CDBG program, which is primarily to help low and moderate 

income individuals and communities, and particularly to meet those individuals' housing 

needs, can become compromised. Despite good intentions, CDBG disaster recovery 

funding is often applied to projects other than those designed primarily to benefit low and 

moderate income individuals. In addition, some of the non-waivable requirements 

attached to CDBG grants, including extensive environmental review, and the sheer 

magnitude of a disaster, can delay CDBG funding from reaching individuals and 

communities affected by disasters. 

The lack of affordable housing for survivors remains a substantial unmet need, and a 

major barrier to regional recovery four years after the 2005 hurricanes. Ensuring that 

disaster response and recovery programs meet the most urgent needs of disadvantaged 

individuals and families in an expeditious manner is critical, not only to hurricane 

recovery on the Gulf Coast, but to adequately addressing the aftennath of future disasters. 

ConcIusionlReccomendations? 

• FEMA must clarify which programs it is using for disaster relief for each disaster, 

and what the eligibility and recertification criteria for these programs are. The 

rules and regulations under which these programs are operating must be made 

publicly available on FEMA's website and from FEMA staff. 

104 See GAO Report to Congressional Committees, Community Development Block Grants, Program 

Offers Recipients Flexibility but Oversight Can Be lmproved." 

25 
154 

• FEMA must give advance and adequate notice of rule and program changes to 

avoid the confusion and wrongful denials that followed Katrina and Rita as 

households were shuffled from one program to another. Notices to recipients 

must provide clear and understandable information and explain what information 

and program criteria form the basis of FEMA's decision. 

• Many of the areas devastated by Ike and Gustav were already struggling to repair 

damage caused by Hurricanes Katrina and Rita three years ago. Disaster 

assistance must take into account cumulative damage and find ways to combine 

funding that maximize resources for rebuilding and minimize confusion and 

delay. There must be a process for accurate damage assessments that give victims 

the resources they need to rebuild their lives. 

• Thousands of Texans have been left homeless indefinitely, and because of 

FEMA's decision not to provide immediate financial assistance after Hurricane 

Ike, have no resources with which to obtain food or shelter. FEMA must 

streamline its application process and ensure that it has the resources and trained 

staff to handle the number of calls and forms it is receiving. 

• Large numbers of victims will be displaced for months, or even permanently; 

FEMA must have a plan for long term assistance and transition to permanent 

housing that does not involve poisonous trailers, substandard housing, or multiple 

programs. 

• FEMA policies and decision-making must recognize and provide flexibility 

around the needs of the low-income disaster survivors most affected by recent 

hurricanes, from money for security deposits and the problems of heir property 

home ownership, to the need for intensive assistance with application and benefits 

processes for survivors who may be illiterate, disabled, or otherwise impaired. 

• FEMA should conduct period assessments of its programs to determine whether 

they are effectively serving the entire population affected by a disaster. 

Flexibility and coordination are particularly urgent for low income families and 

communities. These populations are more severely affected by disasters, and their 

housing recovery needs can be very different than households who have resources like 

savings and insurance, and who may only need temporary help while they are displaced. 

We believe that strong and flexible collaboration with both state and local governments 

and voluntary organizations, and clear, consistent, and public program rules will reduce 

the burden on Gulf Coast residents working to rebuild their lives - and on FEMA itself. 

Hurricanes Katrina and Rita are ongoing disasters because of the poor planning, 

bureaucratic delays, and mismanagement that marked the recovery process; such 

mistakes can and should be avoided in the future. 

26 
155 

(1;1)(' ~t\lI york eim('s 

As Galveston Recovers From Hurricane 

Ike, Some Residents Feel Left Behind 

By JAMES C. McKINLEY Jr. 

September 21, 2009 

GAL VESTON, Tex. - There are many signs that this seaside town has revived a year after 

Hurricane Ike flooded more than 17,000 homes and businesses. The big resorts are humming 

again, and on hot days people throng the newly restored beaches. The port is open, and the cruise 

ships arc back. Most of the businesses on the Strand. the island's historic strip of shops and 

restaurants, have reopened. 

Yet the progress has been slow, and officials say it may be several years before the city fully 

recovers. 

With the debris cleared, the main thoroughfares appear now much as they did before the storm, 

but on the backstreets, thousands of residents - in particular the poor and elderly who lacked 

insurance - are still struggling with the lingering effects of the hurricane. 

About 20 percent of the 58,000 people who lived in the city before the hurricane have not 

returned, and one-quarter of the families whose homes were damaged by floods about 4,000 

households are still unable to live in them. 

Thousands of people are still staying with relatives or living in campers and governmentprovided trailers next to their ruined homes. About 3,000 are staying on the mainland in 

temporary apartments subsidized by the government. Many of these families are still waiting for 

more than $160 million in federal housing grants that have been approved but have yet to be 

disbursed because of bureaucratic delays in Austin, officials said. 

"We have a lot of people who didn't have insurance or who had some but not enough," said 

Mayor Lyda Ann Thomas. "It's just not fair. People arc waiting and waiting and waiting and 

waiting." 

The housing aid that has arrived has often proved to be too little. The Federal Emergency 

Management Agency has distributed emergency housing assistance to 1,300 households, but 
156 

many residents found that the grants, which were capped at $28,800, did not cover their 

damages. 

The state and federal governments have yet to take steps to protect the city from a future storm, 

beyond financing a $46 million project to rebuild six miles of beaches and dunes. But a 

multibillion-dollar proposal to create a system of dikes coupled with giant, swinging gates across 

the mouth of Galveston Bay and San Luis Pass has begun to gather political momentum. 

FEMA has distributed at least $189 million to flood victims in Galveston County for temporary 

housing or repairs, and the city has received $86 million in aid, mostly for removing debris. An 

additional $269 million in block grants from the federal Housing and Urban Development 

Department has been approved for infrastructure and repairs to houses but has not arrived, city 

officials said. 

Scars from the hurricane are sprinkled through the town. Four sprawling housing projects that 

were flooded have been razed. (There is a debate about where to rebuild them.) The system for 

storm water is still clogged with sand. More than 30,000 dead trees have yet to be removed. And 

the buildings at the state park are still little more than concrete ruins. 

Shuttered businesses dot the island, and those still open arc taking in only about 65 percent to 70 

percent of their former earnings, according to the Chamber of Commerce. 

Still, many residents say they find reasons to be optimistic. By most accounts, the pace of 

recovery here has been much better than in New Orleans after Hurricane Katrina, a more 

powerful storm. 

After flirting with moving the island's hospital and medical school to the mainland, the State 

Legislature voted at the end of the summer to spend $667 million to rebuild it, ensuring that the 

town's largest employer would stay put. 

Most of the traditional tourist destinations have reopened; the beaches have been restored by the 

state at a cost of$12 million. The city itself has avoided widespread layoffs, even though 

property taxes have plummeted, by spending money from a reserve fund, officials said. 

And while at least 180 businesses have shut down for good, more than 130 new ones have 

opened, chamber officials say. Developers have also been snapping up properties near the water 

at a rapid rate, pouncing on depressed prices. 
157 

"It's a no-brainer," said Peter Koke, a North Carolina developer who has bought a dozen houses 

in Galveston County since the storm. "It's going to come back way stronger than it was." 

If anyone embodies this seaside town's determination to rebuild after Hurricane Ike, it is Jack 

King, the white-haired candy maker whose downtown store was a fixture on the island for 

decades. 

A year ago, when Mr. King arrived at his confectionery, the floodwaters had swept through the 

cavernous parlor and destroyed everything: the antique counters and cabinets, the hardwood 

floor, the soda fountains, the gleaming counter from Italy and most of the candy-making 

machinery, including the saltwater taffy pullers that had made the shop famous. 

Though he is 72, Mr. King said he never thought once about retiring. He plundered his savings 

and fought with his insurance company to get the $500,000 he needed to rebuild. La King's 

Confectionery reopened in late July. 

"I been in the candy business all my life," he said. "I don't know how to do anything else." 

Kim Bachmeier and her husband, Steve Whitcher, decided to cash in their retirement funds and 

open a shoe store for runners, Fit to Run, near the Strand. Ms. Bachmeier said she hoped the 

store would not only provide them an income but would also inspire more people to take up 

exercise to beat their post-hurricane blues. 

"After the hurricane, a lot of people found the bottom of a lot of bottles; that was their way to 

deal with things," Ms. Bachmeier said. "It's more than just a store to us; it's the beginning of a 

positive change for the island." 

Not everyone shares Ms. Bachmeier's sanguine outlook. 

Every day, Brenda Roby tiptoes through the rubble of her house on an inlet to get the mail from 

her box, one of the few things the storm did not carry away. The storm not only wiped her twostory house off its foundation, but it destroyed a building housing her catering business, as well. 

She has collected her flood insurance, about $120,000, but it is not enough to rebuild, and the 

state-financed windstorm insurance company has denied her claim. She has lived in limbo for 

months in a FEMA trailer on her property. 
158 

"I've never been homeless or jobless in my life until after Ike," she said. "Everybody is talking 

about how everybody got back on their feet, and I said, 'O.K., I can't do anything yet. One year 

later and I'm right where I was before.' " 

Still, a grand divide exists between those like Ms. Roby who were insured against floods and 

those who were not. About 17,000 homes were seriously damaged, and 5,200 of the families in 

them did not have flood insurance. Most of the homeowners were poor or elderly, said Joe Higgs 

of Gulf Coast Interfaith, a group helping hurricane victims. 

"The people who haven't recovered are really the most vulnerable," he said. "They are low 

income, and because of that they often did not have insurance." 

Many poor residents said the $28,800 grants they had received from FEMA were insufficient to 

finish repairs on their homes. 

The floodwaters nearly drowned William and Dorothy Auzston in their home on the night of 

Sept. 13 last year. Both are retired and in poor health, living on Social Security. They had no 

insurance; the horne that Mr. Auzston, 83, built decades ago was in a flood zone, and a policy 

would be prohibitively expensive. 

Since the storm, the Auzstons have spent the FEMA grant to clear the rubble and buy a camper 

to live in. They also managed to buy blueprints and have pilings driven, on top of which they 

hope to rebuild their home. But they are out of money. 

"You are not going to rebuild no house with any $28,000," said Ms. Auzston, 60, a former 

hospital orderly who suffers from diabetes and breast cancer. "J have cried and cried and cried. 

It's just not worth it anymore." 
Y'a 50n Village CoFFeehouse 

Lessons Learned, Progress Made and 

Challenges that Remain from Hurricane Ike 

. 

I 0 e • 6 

II En 

t 

. 

I I P --

Respectfully Submi

by Sharon Batiste Gi

and Curtis L. Gi
Y'a 50n Village 

Coffeehouse 

A Little Oasis in the Inner City 

This historic structure was vacant 

and inhabited by squatters when 

we took possession of it. We 

spent three years and every 

dollar, vacation and holiday 

renovating the building. We had 

a theory that mean people didn't 

like flowers, so we made sure to 

put some in! We opened on the 

last day of December, 2005. 
A Neighborhood with 

Many Challenges 

Village CoUeehouse stood in 

stark contrast to the 

neighborhood in which the 

business was located. Years of 

neglect and despair had taken a 

toll on an area that was once an 

economic center for African 

Americans in Galveston. The 

business of drugs, crime and 

prostitution replaced shops, 

grocers and cafes. 
A Welcome Addition 

to the Neighborhood 

Village Coffeehouse was a 

welcome addition to an area that 

offered few options for residents, 

especially families and children. 

These children are from the St. 

Vincent's House Episcopal Center 

that provides child care and 

health services to residents. The 

children often stopped by on their 

daily walks to enjoy a snoball or 

to join Curt in a drum circle. On this day, they sang Christmas 

carols for us. 
Welcomed by Most, but Not By All 

Today's News 

Vandals try to burn dotv" cafe 

GALVESTON -Vandals broke five windows at 

y'a Bon Village Coffeehouse and also tried to 

set the place ablaze. Suspect: Alleged threats were part of 

.ting 

LA MARQUE The man accused of trying to 

extort money from the LMISD superintendent 

claims he was trying to catch the 

superintendent paying bribes. 

Man impri§oned for posing illS refugee 

GAL'.ESTON A judge gave a year in prison to 

A mFm who np.frFII!fiAri thA mit of 

Get your news to go w

e-mail, RSS and Avant

shop newspaper 

and weekly inse

v oS r t 

Within 3 months of opening, suspected drug dealers made several unsuccessful attemp

burn down Village Coffeehouse. Their actions strengthened Curt's resolve and mob

the community to act. The business served as a catalyst for change in the area. 
Any Day at Village Coffeehouse 

Customers were as diverse as Galveston's population. On Saturday morning

was the place to be for hot waffles, good conversation and good friends. Ch

and adults alike made it a part of their routine. It was the crossroads of the City
Inundated With Water 

No one expected the level of 

water damage Hurricane Ike would bring. With 9 feet of water 

outside, our business took on 

more than 5 feet inside. The 

damage left us in shock. 
Contents 

Insured for Wind ... 

Destroyed by Water 

The inside was unrecogniz

Everything floated up, then 

over as the water receded. 

appliances, supplies, mu

instruments, tables 

chairs ... nothing could be salva
The Area Became a 

Ghost Town 

The public housing complex 

across the street from Village 

Coffeehouse was built on grade. 

With 9 feet of water on the 

street, these units would never 

again be habitable. They were 

immediately fenced off and have 

since been demolished. With 

residents gone from this complex, 

surrounding homes, UTMB and 

the downtown, traffic patterns 

changed. Our customer base was 

gone. 
We Still Believe It! 

We struggled to get sidewalks poured in front of the business to replace the c

oyster shells that served as walkways. With the help of St. Vincent's House D

Michael Jackson, it finally happened. When it did, we wrote in the concrete, "

Good". Although obscured by the muddy remnants of the storm, that simple m

survived. We still believe something good will come from this devastating event. 
169 

Thank you for coming to Galveston to witness our damage and our 

recovery, to hear our stories and to consider past and future response 

efforts. I am sorry I am out of town and unable to be here myself. I am 

the City Council representative for the City of Galveston tree committee 

which is tasked with helping the City to reforest. The loss of our trees is 

devastating and we need help to restore the canopy which helped with air 

quality, water drainage, energy cooling, valuable habitat for migrating 

songbirds, not to mention just being able to sit in the shade of a tree and 

drink lemonade with our neighbors. 

I and all of galveston urge you to move forward with the supplemental 

funding for Forest Service programs for tree related recovery issues in 

this area. Thank you, Dr. Linda Colbert, City of Galveston City Council. 
170 

The death of so many trees is an unprecedented event. Ed Macie from 

the United States Forest Service in Atlanta, reported he has never seen 

as much destruction in the aftermath of the many storms he has 

assessed. He called it an ecological disaster. 

Our trees were part of the defining character of the Island, starting with 

the majestic oaks lining the historic Broadway Blvd. Every neighborhood 

was shaded by trees large and small, each slightly different and shaped 

by the years of weathering on the Island. In many areas none survived 

the salt water flooding, leaving people to experience summer without 

shade, rising electric bills, and less storm water drainage. The migratory 

and resident birds are left without habitat damaging the natural resources 

and our nature tourism economy. 

Contractors for the City reimbursed by FEMA have been removing the 

trees that did not survive, as they pose greater safety issues as they 

become more and more brittle. The removal work has occurred over the 

summer with Broadway removal beginning this weekend and private 

property debris removal after that. We are appreciative of the funding 

that has allowed removal of these dangerous dead trees. 

Galveston will begin to replant in the fall. But we need help. and we are 

not the only area in the region whose trees were hard hit by Ike. 

Hundreds of thousands trees were damaged by Ike. You have been able 

to see clearly the damage in Galveston- it is in your face- actually - the 

lack of trees in in your face. In houston there are hundreds of damaged 

trees with broken limbs hanging over park play areas and street scapes. 

this is not a selfish plea. this is a regional effort. Ike was the third most 

expensive storm in the US history and the only one where the Forest 

Service did not receive a supplemental recovery fund to deal with the 

forest issues. Houston was 3 weeks without power after the storm much 

of that due to fallen trees. Galveston has lost 70 % of its canopy. 

Please advance the Forest Service supplemental recovery request. I 

have copies of it here for you. 

On the state level the City Council voted to appropriate $300,00 of the 

CDGB money for tree restoration because we consider the trees part of 

our infrastructure, not landscaping. However, ORCA did not allow trees 

as eligible appropriations. So we have been left reeling with how to 

restore part of our very fabric completely by ourselves when recovery 

projects form other storms have been funded. We appreciate your close 

attention to this issue very close to our hearts. Thank you, Donna 

Leibbert, City of Galveston Tree Committee 
171 

Texas Forest Service 

Emergency Hurricane Supplemental Budget Request 

Introdyction 

On September 13th, 2008, Hurricane Ike swept into Southeast Texas resulting 

in significant damage to community trees in numerous communities. Officially 

listed as the third mostly damaging hurricane in US history, sixty-five (65) Texas 

counties were affected by this natural disaster. Of these, eight (8) counties (pop. 

5.8 million) sustained severe damage and fifteen (15) counties (pop. 595,210) 

received moderate to heavy damage to their community forests. 

Emgram Need 

Immediately following the hurricane, many affected communities secured public 

assistance funding through FEMA to dispose of tree limbs and debris. 

Unfortunately, this critical short-term program was not designed to address 

three long-term tree problems caused by Hurricane Ike. 

The first long-term need is urban tree safety. Affected communities are in need 

of additional resources and expertise to help them assess and respond to 

surviving storm-related urban tree safety issues. The second long-term 

mitigation issue is the loss and reduction of the tree canopy in affected 

communities. As a result of the storm, numerous towns and cities will 

experience related consequences such as lower property values, increased 

storm water runoff and erosion, reduced energy conservation, poorer air quality, 

and reduced human health benefits. Funding and expertise is needed to help 

these communities restore the urban forest canopy. 

Finally, Hurricane Ike created a great need for public information and education. 

The general public would benefit from an effective public education program to 

insure that good science-based information and technical assistance is used to 

help municipal employees, green industry professionals, and citizens properly 

assess hurricane-damaged trees, repair damaged trees, and plant trees that 

will better resist future storms and hurricanes. 
172 

fmgram PescriRfuW. 

The Texas Forest Service seeks $8.5 million to help Texas communities 

mitigate the damage from Hurricane Ike to the regions community forests. This 

funding will implement activities that directly address specific storm related 

mitigation needs. Fundable recovery project categories include the following: 

Urban Tree Assessment - Hiring, contracting, or training personnel to collect 

comprehensive information on trees in communities. Information will be used to 

establish a baseline of information that can be used by a community to 1) locate 

and make recommendations on treatments of storm damaged trees, 2) identify 

locations in need of storm mitigation and/or remediation, 3) determine storm 

related policies, 4) set tree mitigation goals, strategies and activities, and 5) 

measure future progress. 

Urban Tree Remediation - Hiring, contracting, or training personnel to 

eliminate storm damage concerns through tree repair or removal. Priority will be 

given to storm damaged trees that pose a risk previously identified through a 

proper assessment. 

Information and Education - Activities that inform, train, and/or certify 

appropriate municipal employees, professionals, nonprofit personnel, 

educators, and the general public on topics that would build their capacity to 

respond to storms that damage the urban forest. In addition, activities that 

develop urban forestry messages, training, and educational resources of value 

to the broadest and most diverse target audiences affected by Hurricane Ike. 

The Texas Forest Service will cooperate with the Texas Cooperative Extension 

on Information and Education activities. 

Urban Tree Mitigation - Activities that incorporate urban trees in local 

government storm mitigation policies, plans, and procedures. These efforts will 

seek to use knowledge and experiences from Hurricane Ike to improve the 

quality of public and private urban planning decisions affecting people and 

places. 

Urban Treff Rep!acemtmt - Hiring, contracting, or training personnel to plan, 

select, purchase, plant, and/or maintain replacement trees on public and private 

property. Urban tree replanting will be limited to communities where Hurricane 

Ike destroyed urban trees or caused them to be removed. 

Tjmeline 

The project will begin once a contract agreement is secured with the USDA 
173 

Forest Service (FS). The award period will terminate on September 30, 2012 

unless officially extended for additional time. 

The Texas Forest Service will award funding for recovery activities through a 

competitive process that seeks to fund projects with the greatest need and that 

have the potential for maximum impact. Priority for recovery activities will be 

given to local municipal governments and other eligible groups in the eight (8) 

counties that suffered severe damage. Projects with local community 

involvement including local cash or in-kind match that maximize leverage of 

federal funding will be given higher priority. Where appropriate, the Texas 

Forest Service will carry out this program with assistance from various public, 

private, and nonprofit cooperators. 

We assume at this time that funding will be through the USDA Forest Service, 

State and Private Forestry Program. The Texas Forest Service, with support 

from the Region 8 USDA Forest Service office, will develop technical standards, 

protocols, and specifications to ensure the quality and effectiveness of each 

direct recovery activity. 
174 

Park Board 

Tourism industry and convention visitors bureau 

Beaches and Beach Parks - Seawolf mostly destroyed, Stewart 

Beach operating, Apffel Park destroyed, Dellanara RV Park mostly 

destroyed and the Pocket parks destroyed. 

Park Board has over 20 million in FEMA project worksheets signed and 

have received just over 340,000 and 231,000 was for Ashton Villa. We 

are told the money is in Austin and has not been obligated. How much 

red tape do we need to go through before we can finally rebuild our 

lives and livelihood? 

Since Aug. we have more signed PW in the system but no money. 

To make matters more complicated our FEMA team was transferred 

after we had worked with them for 8 months, a new team was put in 

place and the prior team instead of passing on our information to the 

new team they lost all their paper work and we are beginning again. A 

good example is Apffel Park pavilion which was deemed more than 50% 

damaged by FEMA engineers which took months to determine, we 

were able to take the building down as it was a hazard and now we are 

being told by the new team that they cannot say the building was more 

than 50% damaged because we tore it down. 
175 

CONFIRMED PROJECT WORKSHEETS (PWI AS OF August 28,2009 

'IIOI£cr Il1KIIlfIl!lII TOTAL ..... ..... BOARD AMOUNT DArt 

!IllI!Il8lm IO!!Il rni WI AK£MD AECEMD 

'WBIHOI EAST BEACH OEMOUnON-BAJA IlBiG REEF $4,861.13 ,,,. $3,64S.85 $1.215.28 

"W8R·lOO BfGREEfWAl.lOVfR $163,9811» ",. $122.585.75 S40.995.25 

"'WOP·tOl SITE UlllmE5 $1,383,171.09 

'W'DP·I02 ROADWA'tS & PARKING $307,725.00 

1WDP-IOl PARJ:PAV\UION $32,179.69 

f11WDP·I06 OEUANEAA Ii PP1· SURFACE DfMDLmON $17,479.00 S13.109.2S $4,369,75 

f'WDP-I07 CAWING Sin SURFACe $59,357.85 

~WDP·I08 ~M SEWAR COU£01ON $4,994.09 

PWEB-IOB U APFf'El- PICNIC TABlES $15,966.56 75% $11,974.92 $3.991.64 

'w G \01 RfACI-I pi\rH0l8UOv ll.OXf::' $22,038.49 75% $16,528.87 $5,500.62 S16.5Z8 ~7 7!2S/WQ'J 

,,% $1,305.n 1'5~ iO~ l71 SU0517 il{12JlC'll'l 

PWlG·I02 lifEGUARD TOWERS $138,112.00 $103,5.84.00 $)4,528.00 

PWlG·t03 BEACH PA.TROl· PERSONAl WAltRCRAFT $4,946.00 1., $3,709.sa $1,216.SO 

IS $741.90- ;;741."0 'a/1l/1OOq 

PWlG-I04 BEACH PATRTOl- SPfCtAllY SIGNS $14,450.24 75% $10,&37.68 $3,612.56 

15% $2.16754 67)4) SUfi"!S,. fl/1l/1DO'J 

SIGNAGE ON BEAOiE$.- Stewart Beadl-RAApft8-

PWlG-1OS Debneta Park-Pocket Pam $56,091.00 75 .. $42,068.25 $14,022.75 ,1I1,068h 7!2S!20W! 

15% S8,413.65 i5~ ,1 \3 bS1 $fI"H3G<' ";!l2/?O.fl'~ 

::>\1.,<\(,·108 bEACH PATROl <;IG~AG~ $46,92130 75% $35,190.98 $11,730.33 $15,19091:1 S/1'>j20<)<j 

15% $1,038.20 ,SIC138W) $J.[H810 1l/1l/!r}{l" 

PWMF·104 A'JV'S & GOLF CARTS $69.00S.OO 75% $Sl.7Sl.75 $17.251.25 

FWMF·l0S P8 DAMAGlD V£HIClES $l78,914.oo $284,185.50 $94,72850 

PWRHl-oZ7 Stewart Beach JRA Apffft SAND STOCKPILE $l89.99S.oo $292,496.25 $97,498.7S 

PWSA>-009 SEASCAPE & DEUANERA BEACHES $2,185.961.00 S1,639,47U.75 $546,490.25 

PW$A5-019 SEASCAPE Il DEllANERA DUNE $293,834.00 $220,375.50 $73,458.50 

PWSAS-012 SAND RENOURlSHMENl. 21ST 5T $211,094.00 $162,SlQ.SO $54.173.50 

PWSAS.041 BEACH RENOURISHMENT· 61ST5lTO 17TH 5T $5,108,734.00 $3,831,565.S0 $1,271,188.50 

PWSAS<\4' B£ACH RENOURiSHMENT -17TH STTO lOTHST $169.777.00 $127,332.75 $42,444.25 

PWSB-101 STEWAAl B£ACH PAVIUJOH $413,112.00 

PW·SB-1D1 55 5nWART· MOORING $8!.,889.15 S64.416.94 $21.472.31 

W ..... ....., 

FW5B-105 SlIWART BEACH - neKET BOOTHS & DUMPSTER $18,519.50 75% $13.889.61 $,U29 . .88 

55 5nWART· RIGHTlNG THE SHIP , TfMPORAAV 

ftWSP-l00 FENCING $339,491.00 $254,618.25 $&4,872.75 

PW5P-104 SEAWOLfPIER $307,654.1)0 5230.740.50 $76,913.50 $107,665.'1-'> 7/2.9/2009 

PWSf'-105 5EAWOLF· U5S 5TiWARTRfPAIR5 510,992,00 15% $8,244 00 S2.748.00 

ftW5P-1a7 SEAWOLfPARKGRQUNOS $149,131.00 

FWSP·U1 SEAWOLf PMK • CONTENTS $46,606.00 $34,954,50 $11,651.50 

PWSP·113 HAV1 DISPlAY ARTlFACTS 517.766.00 

PW5P·1l4 SECURfTY/WEB CAMERA SYSTEM S22,646.00 "" $l6,984.5O 55,661.50 $16.984"~O 8.'11!2009 

15% $3,396.90 ,,;,j%,}O) 5L1%90 8/11IU)O'I 

PW5P·1l6 5W - WOOD BUILDINGS $18,189.00 75% $13.&41.75 $4,547.25 

PWSP·119 USS CAVAUA -RlPlACE CATKOOIC SYSTEM $17,091.00 $12,818.25 S'I,272.75 

PWSP-UO USS STEWART· MOLD ABATEMENT $132,971.00 $99,729.00 $3l,243.00 

PWSP·121 USS CAVAUA· POTfNllAl MOLD DE\lELOP SO.OO SO.oo SO.OO 

PW5T-150 DEllANERA GEOTUBE Sl,153,234.oo $1,014,925.50 $338,3(18.50 

PWAV-ICO ASI .. nO'''''VltlA S308,95278 523 1 .7145'1 SllBS]O 527B,057:'0 ,12

'

(2('0<) 

TOTAL COST ~ IU!LIt.IJ,I u.mm.!! $3-0,503.00 
176 

/ 

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United States 

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177 

Small Business Administr.tion Disaster Recovery Plan 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY ................................................................................................................................. 5 

L INTRODUCTION ................................................................................................................................... II 

SBA's Role in Disaster Recovery Efforts .............................................................................................. 12 

The National Response Plan, Presidential Directives, and FEMA Guidance ......................................... 13 

Enabling SBA to Meet Future Challenges .............................................................................................. 14 

Key Improvements ................................................................................................................................. 15 

II. DISASTER RECOVERY FRAMEWORK: THE PROCESS ...................................................................... 18 

Process .................................................................................................................................................... 19 

Pre-disaster Planning and Preparation ................................................................................................ 19 

Disaster Declaration and Notification ................................................................................................ 21 

Application Intake .............................................................................................................................. 22 

Loss Verification ................................................................................................................................ 23 

Loan Processing .................................................................................................................................. 23 

Closing and Loan Disbursement ......................................................................................................... 23 

III. DISASTER RECOVERY FRAMEWORK: OPERATIONAL SUPPORT ..................................................... 25 

Scaling Operational Support ................................................................................................................... 25 

Human Capital and Training Overview .................................................................................................. 25 

Current ODA Stafe ............................................................................................................................ 26 

Disaster Reservists ......................... '" .................................................................................................. 26 

Cross-Training Existing ODA PersoIlllel ........................................................................................... 26 

Non-ODA Surge Staff ........................................................................................................................ 26 

Activating Non-ODA Surge Staff in Phases ...................................................................................... 27 

SBDCs, SCORE, WBCs ..................................................................................................................... 27 

External Hiring ................................................................................................................................... 28 

Quality Assurance ............................................................................................................................... 28 

Information Technology Overview ........................................................................................................ 28 

Infrastructure Overview .......................................................................................................................... 29 

Deploying District office Employees - The Disaster Hub Concep!. .................................................. 29 

Partnerships Overview ............................................................................................................................ 30 

Strategic Support .................................................................................................................................... 30 

Budgeting ............................................................................................................................................ 30 

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N. ORGANIZATIONAL ROLES AND RESPONSIBILITIES ........................................................................ 33 

Overview ................................................................................................................................................ 33 

Office for Disaster Assistance (ODA) Headquarters .............................................................................. 34 

ODA's Customer Service Center ............................................................................................................ 34 

ODA Field Operations Centers (FOCs) .................................................................................................. 35 

ODA's Loan Processing and Disbursement Center ................................................................................ 36 

ODA's Personnel and Administrative Support Center (PASC) ............................................................. 36 

Human Resources ............................................................................................................................... 36 

Disaster Credit Management System (DCMS) Operations Center .................................................... 36 

ODA's Field Inspection Team (FIT) .................................................................................................. 37 

V. BUSINESS PROCESS IMPROVEMENTS ............................................................................................. 39 

1. Accelerated Loan Application Decision Processing ........................................................................... 39 

2. Improved Processes and Tools for Loan Closing and Funds Disbursement ...................................... 39 

3. More Transparent, Meaningful Performance Data to Manage Operations ......................................... 40 

4. More Consistent Adherence to Policy Through Training and Internal Quality Assurance ................ 40 

5. Improved Coordination across Disaster Center Operations ............................................................... 40 

VI. FORECASTING AND MODEUNG ..................................................................................................... 42 

Modeling and the Surge Process ............................................................................................................ 44 

VII. SURGING TO ACCOMMODATE NEED .............................................................................................. 45 

Core Capabilities .................................................................................................................................... 45 

Surge Capacity ........................................................................................................................................ 46 

Disaster Recovery Decision Tree ........................................................................................................... 47 

SBA's Level I Plan ................................................................................................................................. 49 

SBA's Level II Plan ................................................................................................................................ 50 

SBA's Level III Plan .............................................................................................................................. 51 

SBA's Level N Plan .............................................................................................................................. 52 

Detailed Surge Plan ................................................................................................................................ 53 

VIII. SIMULATIONS ................................................................................................................................. 55 

IX. COMMUNICATIONS PLAN ............................................................................................................... 56 

Target Audiences .................................................................................................................................... 56 

Roles and Responsibilities ...................................................................................................................... 56 

Pre-Disaster Communications Outline ............................................................................................... 57 

Communications Plan: Surging to Accommodate Need ........................................................................ 58 

Level I Disaster Communications ...................................................................................................... 58 

Level II, III, and N Disaster Communications .................................................................................. 59 

Improving SEA's Capabilities ............................................................................................................ 60 

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X. PATH FORWARD ........................................................................................................................... 61 

Ongoing Initiatives: ................................................................................................................................ 61 

Next-Generation Modeling and Simulation ........................................................................................ 61 

Updated Standard Operating Procedures and Training ...................................................................... 61 

Continued Business Process Improvements ....................................................................................... 61 

Expanded Public-Private Partnership ................................................................................................. 62 

XL APPENDICES ................................................................................................................................... 63 

Appendix A: Lessons Leamed ............................................................................................................... 63 

Lesson # 1: SBA must have a surge plan for scaling to respond to disasters of the level of the 2005 

Gulf Coast Hurricanes or greater ........................................................................................................ 63 

Lesson # 2: When scaling to respond to large disasters, communication needs to be improved at all 

levels ................................................................................................................................................... 64 

Lesson #3: SBA must increase capacity, reduce errors and rework, provide better customer support, 

and have tools in place to support operational adjustments ................................................................ 64 

Lesson #4: To respond to future disasters, ODA must improve its computer systems ..................... 65 

Appendix B: Acronyms ......................................................................................................................... 67 

Appendix C: Scope and Methodology ................................................................................................... 68 

Scope .................................................................................................................................................. 68 

Methodology ....................................................................................................................................... 68 

Appendix D: Disaster Scale Down Process ........................................................................................... 69 

Appendix E: Roles and Responsibilities of Other SBA Offices that Support Disaster Recovery ......... 70 

M&A ................................................................................................................................................... 70 

OCPL .................................................................................................................................................. 70 

ocro .................................................................................................................................................. 70 

SBA District Offices ........................................................................................................................... 71 

Appendix F: The Accelerated Disaster Response Initiative (ADRI) ..................................................... 72 

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LIST OF FIGURES 

FIGURE ES-l: SBA'S DETAILED SURGE PLAN FOR MANAGING DISASTER LOAN ApPLICATIONS (MAY 

15, 2007) .......................................................................................................................................... 8 

FIGURE ES-2: SCALING TO MEET THE LEVEL OF DISASTER ............................................................... 9 

FIGURE ES-3: DISASTER RECOVERY DECISION TREE.. .................................................................... 10 

FIGURE 1: ODA FUNCTIONAL CENTERS .......................................................................................... 13 

FIGURE 2: FRAMEWORK FOR SCALING OPERATIONAL SUPPORT.. .................................................... 15 

FIGURE 3: DISASTER RECOVERY FRAMEWORK ................................................................................ 18 

FIGURE 4: REGIONAL NATURAL DISASTER RISK .............................................................................. 20 

FIGURE 5: FRAMEWORK FOR Sc ALING OPERATIONAL SUPPORT.. ..................................................... 25 

FIGURE 6: ODA FUNCTIONAL CENTERS .......................................................................................... 33 

FIGURE 7: OVERVIEW OF DISASTER LEVELS Focus ON CORE CAPABILlTIES ................................ 46 

FIGURE 8: SCALlNG TO MEET THE LEVEL OF DISASTER ................................................................... 47 

FIGURE 9: SBA's DISASTER RECOVERY DECISION TREE ................................................................. 48 

FIGURE 10: SBA'S DETAILED SURGE PLAN FOR MANAGING DISASTER LOAN ApPLICATIONS (MAY 

15,2007) ........................................................................................................................................ 54 

FIGURE 11: DISASTER SIMULATION PROCESS .................................................................................. 55 

FIGURE 12: CONCEPT OF OPERATIONS FOR SURGE COMMUNICATIONS ............................................ 60 

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EXECUTIVE SUMMARY 

Since its inception in 1953, the U.S. Small Business Administration (SBA) has served to aid, counsel, 

assist and protect the interests of small businesses. While SBA is generally known for its financial 

support of small businesses, the Agency also plays a critical role in assisting the victims of natural and 

other declared disasters. Specifically, SBA provides disaster assistance through its Disaster Loan 

Program (DLP) to help homeowners, renters, and businesses of all sizes recover from disasters such as 

earthquakes, hurricanes, and terrorist attacks. 

Subsequent to the Katrina, Rita, Wilma disasters (also known as the 2005 Gulf Coast Hurricanes) SBA 

experienced significant challenges in scaling up its capacity to respond to the loan applications of many 

disaster victims. The cumulative damage of the Gulf Coast disaster cycle caused damage that was so 

extensive that the number of resulting disaster loan applications overwhelmed SBA's capacity to process 

them. The stonns caused nearly $100 billion in estimated damages and over 1,400 deaths.' As of May 

15,2007, SBA had approved more than 160,000 disaster assistance loans for a total of $6.9 billion in net 

approved loans ($5.7 billion disbursed) to individuals and businesses since the 2005 Gulf Coast 

Hurricanes. 

SBA recognized the severe challenges that hindered its efforts to aid recovery, and has made dramatic 

improvements to its business processes. The Agency is prepared to process loans faster, provide better 

quality, and be more helpful to its customers in future disasters. This recovery plan identifies the 

framework and processes that SBA has in place that enable it to effectively respond to disasters. It 

incorporates lessons learned from its response to the 2005 Gulf Coast Hurricanes and recent business 

process improvements. It also lays out the proven processes and b'Uiding principles that enabled SBA to 

respond effectively in the past to disasters having a smaller scale than the 2005 Gulf Coast Hurricanes. A 

collaborative, cross-disciplinary team within SBA met for several months to share best practices and 

lessons learned and to develop a methodology for scaling its operations to an acceptable performance 

level. 

SBA's response to catastrophic disasters has five guiding principles. These principles allow the Agency 

to effectively execute surge plans involving the whole Agency, and mUltiple others across the United 

States. They are as follows: 

• SBA is prepared to respond. Based on process improvement and lessons learned, SBA has 

a much-improved organizational infrastructure to respond to catastrophic disaster activity, 

swiftly and effectively. 

• SBA is trained to respond. Training and coordination are the keys to preparedness. The vast 

majority of employees involved in SBA's catastrophic disaster response have been trained 

and will continue to be trained in their roles. They also will receive clear guidance on how 

the recovery plan will be implemented. 

• SBA's response requires an "all hands on deck" approach. Employees across the entire 

SBA organization will have key roles to play in core functions and will be valuable assets to 

help SBA achieve the level of performance America requires and expects. 

• SBA takes pride in quality assurance and customer service. The Agency will 

continuously strive to deliver the highest level of quality in service. Customers will be 

4 White House Report: "Katrina Lessons Learned," Chapter 1, Figure 1.1. see: http://'WV.'W.whitehouse.gov/reportslkatrinalessons-learned/chapter I. html 

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provided with the necessary support and communication channels to minimize confusion and 

ensure a positive experience during their time of greatest need. 

SBA's response will be coordinated with its government partners. The Agency will 

communicate with local, state, and federal government agencies, including Congress, to 

deliver timely assistance. 

SBA's Disaster Recovery Plan supports the following outcomes: 

• Support of long-term economic recovery by providing capital to help disaster victims rebuild 

and withstand economic injury; 

• Faster decisions on disaster loan applications, closing and disbursement; 

• A customer-focused, transparent, outcome-driven model of performance; 

• A strong, standing, Core Capability supplemented by Surge Capacity; and 

• Processes coordinated with federal guidance and protocols for disaster recovery (e.g., the 

National Response Plan (NRP) and the National Incident Management System (NIMS), 

where applicable). 

SBA's Disaster Recovery Plan (DRP) is applicable Agency-wide to ensure a broad scope of coordination, 

awareness, and support throughout its organization. The DRP comprises the following key sections, 

summarized below: 

SBA 

? Section I, Introduction, gives a background on SBA and its role in supporting disaster recovery, 

according to national policy. 

? Section II, Disaster Recovery Framework: The Process, discusses SBA's process for preparing 

for and processing disaster loan applications, including: 

Pre-disaster Planning & Preparation; 

• Disaster Declaration & Notification; 

• Application Intake; 

• Loss Verification; 

• Loan Processing; and 

• Closing & Loan Disbursements. 

? Section III, Disaster Recovery Framework: Operational Support, delineates SBA's five 

functional components that scale: (1) human capital, (2) infrastructure, (3) technology, and (4) 

pUblic/private partnership, all reliant on streamlined (5) communications. SBA has prepared to 

scale each of these components, depending on the level of response needed for a given disaster. 

Furthermore, SBA leaders have designed an efficient and cost-effective means for making the 

best strategic decisions during their surge implementation plan. These components are 

surrunarized below: 

• Human Capital (personnel): Utilize current staff; enlist Active Reserve and Ready 

Reserve; leverage aDA contractors; train aDA personnel in loan processing functions, 

then SBA (non-ODA) staff; engage SBDCs, SCORE, and WBCs in non-loan processing 

functions (local outreach); hire externally. 

• Infrastructure (Facilities): Expand office space, staff to meet anticipated workload, 

adjust schedules as needed to accommodate various time zones, employ a double-shift 

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SBA 

approach to maximize usage of facilities, and leverage assets within the Agency and its 

resources/partners to respond. 

• Information Technology: Leverage DCMS core capabilities with oversight measures to 

ensure that system capacity remains stable. 

• PubliciPrivate Partnerships: Utilize contractors and leverage relationships with other 

organizations. 

• Communications: Inform citizens of the SBA resources available to them; listen to 

businesses, chambers of commerce, and citizens; reach out to state, local, and federal 

partners. 

).> Section IV, Organizational Roles and Responsibilities, describes the organizational structure and 

roles and responsibilities ofSBA's main offices that support disasterrecovery, including: 

• ODA Headquarters; 

• Disaster Customer Service Center; 

• Disaster Field Operations Centers (East and West); 

• Loan Processing and Disbursement Center; and 

• Personnel and Administrative Services Center, which includes: 

o Administrative and Human Resource Function, 

o Disaster Credit Management System Operations Center, and 

o Field Inspection Team. 

).> Section V, Business Process Improvements, highlights the changes SBA has made to accelerate 

responsiveness and improve quality in its loan processing function 

).> Section VI, Forecasting and Modeling, describes the models SBA uses to predict the number of 

disaster loan applications that will be generated by a particular disaster. Because SBA uses these 

forecasting tools, it has enough time to obtain and deploy the resources needed for processing 

loan applications subsequent to a disaster. 

).> Section VII, Surging to Accommodate Need, explains the resources SBA will deploy in response 

to disasters of different sizes. SBA categorizes disasters into levels based on the number of 

anticipated applications. This categorization enables SBA to determinc an appropriate surge level 

for scaling resources and operations to meet the needs of disaster victims. Levels I and II are 

within ODA's core capabilities; for Levels III and IV necessitate an SBA-wide response. The 

disaster categories are as follows: 

• Level 1-100,000 applications received and below; 

• Level II-I 00,000 to 250,000 applications received; 

• Level III - 250,000 to 500,000 applications received; and 

• Level IV - 500,000 applications received and above. 

Figure ES-I (below) graphically depicts SBA's plan for accommodating Levels I - IV, in terms 

of Personnel, Facilities, and Information Technology. The surge plan for Personnel (Human 

Capital) first leverages current ODA staff, then deploys Active Reserves, Ready Reserves, 

existing contractor relationships, Cross Trained ODA personnel, Non-ODA Surge Staff, and then 

externally hired personnel, as necessary. SBA maintains the facilities to process 500,000 disaster 

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loan applications, before needing to locate additional space. SBA's Information Technology 

capacity supports 8,000 concurrent users. 

iPer:sGi'li!i1&i {Loan PrO(e~~ing Disbursement. 

and Ve-rificatlonj 

F!i!:!ir.~~f~~~§ II! 

~1I301pe!SO(melareouj Irllt!e~l!1d 

verlyingproperty~ma~e,so ~yoorol 

need a wcm.~ In a faclilty 

11I~II!!.iil~1I 

Technology 

Figure ES·1: SBA's Detailed Surge Plan for Managing Disaster Loan Applications (May 15, 2007) 

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SBA 

The following graplric, Figure ES-2, is another view of SBA's surge plan, particularly the scaling 

of Human Capital!Personnel. Note that as SEA's response moves from a core response (Levels I 

and II) to a surge response (Levels ill and N), more and more cross-SEA resources are deployed. 

Figure ES·2: Scaling to Meet the Level of Disaster 

Lastly, Section VII addresses SEA's leaderslrip decision-making structure for deciding how to 

best respond to a given disaster or series of disasters. Figure ES-3, Disaster Recovery Decision 

Tree, depicts the flow of decisions that SEA executives make: Initially, they decide whether a 

disaster can be handled by SEA's Core Capability, or whether the Agency must move to Surge 

Capacity. If SBA decides that Core Capability will initially suffice, the Disaster Executive 

Oversight Council continually monitors loan applications, and elevates to Surge Capacity if the 

number of applications will exceed 250,000. 

When Surge Capacity is required, the authority for the disaster response is elevated from the 

Associate Administrator of ODA to the Disaster Executive Oversight Council. At this point, there 

is a chain of mechanisms to ensure appropriate Surge Capacity resource allocation, as shown in 

Figure ES-3. As a surge response unfolds, SEA's functional and support centers actively respond 

as directed by the Disaster Management Operations Council. 

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SBA 

Figure ES-3: Disaster Recovery Decision Tree 

:» Section VIII, Simulations, describes the exercises SBA has perfonned and will continue to 

perfonn, which test their readiness for disasters. Preliminary exercises have tested SBA 

Headquarters' ability to surge to respond to large-level disasters; future simulations will test other 

offices throughout the organization. 

:» Section IX, Communications Plan, sets forth the mechanisms for communicating with citizens, 

state and local officials, federal officials, the media, national business organizations, and other 

strategic partners during disasters. Although the specific communication plan will vary for each 

disaster, SBA will apply the same principles for all levels of disaster. The two major objectives 

guiding the Communications Plan arc clear: 

SBA will infonn citizens of SBA services and how to obtain them, and 

SBA will coordinate operations with other recovery partners. 

:» Section X, Path Forward, recognizes that SBA continues to refine its disaster response 

capabilities. It describes SBA' s ongoing initiatives for enhancing its operations: 

Next-Generation Modeling and Simulation to augment SBA's current capabilities; 

Updated Standard Operating Procedures and Training across the entire organization 

in addition to adopting regular simulation and tabletop exercises; 

Continued Business Process Improvements to streamline the ways in which citizens 

interact with SBA in the disaster loan application process, including the ability to file 

disaster loan applications online; 

Expanded Public-Private Partnership for improved local outreach, planning, and 

processing capability for a surge response. 

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I. INTRODUCTION 

The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency 

of the federal government to aid, counsel, assist and protect the interests of small businesses, 

to preserve free competitive enterprise, and to maintain and strengthen the overall economy of 

our nation. SBA's mission is to promote small business development and entrepreneurship 

through business financing, government contracting, and technical assistance. SBA also 

works with other federal agencies to reduce the regulatory and paperwork burdens of small 

businesses. In addition, SBA serves as the government's long-term lender to homeowners, 

renters, and businesses damaged by disasters. 

SBA recognizes that small business is critical to the nation's economic recovery and strength, 

to building America's future, and to helping the United States compete in today's global 

marketplace. Although SBA has grown and evolved in the years since it was established in 

1953, its bottom line mission remains the same. SBA helps Americans start, build and grow 

businesses. Through an extensive network of field offices and partnerships with public and 

private organizations, SBA delivers its services to customers throughout the United States, 

Puerto Rico, U. S. Virgin Islands, Guam, Northern Mariana Islands, Federated States of 

Micronesia, and the Republic of the Marshall Islands. 

While the Small Business Administration (SBA) is generally known for the financial support it provides 

to small businesses, the Agency also plays a critical role in assisting the victims of natural and other 

declared disasters. Specifically, SBA provides disaster assistance through its Disaster Loan Program to 

help homeowners, renters, and businesses of all sizes recover from disasters such as earthqUakes, 

hurricanes, and terrorist attacks. SBA faced unprecedented demand for its disaster loan assistance 

services in the wake of Hurricanes Katrina, Rita, and Wilma, which devastated the U.S. Gulf Coast region 

across five states.' The storms caused more nearly $100 billion in estimated damages and over 1,400 

deaths. As of May IS, 2007, SBA had approved more than 160,000 disaster assistance loans for a total of 

$6.9 billion in net approved loans ($5.7 billion disbursed) to individuals and businesses since the 2005 

Gulf Coast Hurricanes. 6 The cumulative damage of the Gulf Coast disaster cycle caused damage that was 

so extensive that the number of resulting loan applications overwhelmed SBA's capacity to process them. 

In the disaster recovery period, SBA, Congress, and the general public recognized that SBA's response to 

the hurricanes was impaired by several challenges, leaving many disaster victims without the timely 

assistance that they needed. 7 

SBA faced a series of cascading challenges as ramped up its loan processing operations subsequent to the 

2005 Gulf Coast Hurricanes. The scope of the disaster was widespread and unprecedented. There were 

extraordinary numbers of disaster victims to counsel and applications to process. There were ongoing 

operational transitions in progress within SBA. In summary, challenges and lessons learned surfaced in 

the areas of operations, human capital, infrastructure, communications and technology. Through process 

5 Hurricanes Wilma, Katrina, and Rita are collectively referred to as the 2005 Gulf Coast Hurricanes. 

6 SBA.gov _ Disaster Recovery Daily Update. 

http://www.sba.gov/localre.';;ources!disasteroffices/disaster recov/hurricanesiudf/Recoycrv-Updatc-072606.pdf 

7 GAO, SBA: Additional Steps Needed to Enhance Agency Preparedness for Future Disasters, GAO~07~114, Feb 2007. 

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improvements, enhanced internal and external coordination, and refined capabilities to surge and scale 

operations, SBA is better prepared to face future disasters with expeditious, personalized, quality service 

for its customers. 

This document identifies the critical steps SBA has taken, in conjunction with its Federal partner 

agencies, to prepare for, respond to and recover from disasters. This docwnent will be reviewed 

periodically, and updated as appropriate. 

SBA's ROLE IN DISASTER RECOVERY EFFORTS 

SBA, through its Office of Disaster Assistance (ODA), is 

responsible for providing affordable, timely and accessible 

financial assistance to homeowners, renters, and businesses 

following a disaster. ODA has been a part of the Agency 

since its inception in 1953, and has provided more than 1.8 

million disaster loans totaling $46 billion to disaster 

victims. In addition to its disaster loan program, SBA helps 

small businesses recover from disasters through its 

guaranteed lending, teclmical assistance and procurement 

programs. 

Disaster losses are unexpected and create financial 

hardships for disaster victims. Fortunately, many disaster 

victims in America have insurance which covers part or all 

MISSION 

To help people recover 

from disasters and 

rebuild their lives by 

providing affordable, 

timely and accessible 

financial assistance to 

homeowners, renters and 

businesses. 

of their private property losses due to tornadoes, hurricanes, floods, earthquakes, wildfires and other 

disasters. However, for disaster losses not covered by insurance or other recoveries the primary form of 

federal financial assistance is a disaster loan from SBA. Disaster loans for property damages are 

available to homeowners, renters, non-farm businesses of all sizes, and private-nonprofit organizations. 

Certain small businesses are also eligible for Economic Injury Disaster Loans (EIDLs) to help with 

ongoing operating expenses until they recover from the disaster. For many, SBA disaster loans with low 

interest rates and long repayment terms make recovery possible. 

The disaster loan program is administered through a coordinated effort among ODA's headquarters and 

functional centers: Customer Service Center, East and West Field Operations Centers, Processing and 

Disbursement Center and the Field Inspection Team, and its support centers: Disaster Credit Management 

System (DCMS) Operations Center and the Personnel and Administrative Support Center (See Figure 1). 

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Figure 1: aDA Functional Centers 

THE NATIONAL RESPONSE PLANS, PRESIDENTIAL DIRECTIVES, AND FEMA 

GUIDANCE 

As a signatory to the National Response Plan (NRP), SBA is a part of the federal government's single 

comprehensive approach to domestic incident management to prevent, prepare for, respond to, and 

recover from major disasters, terrorist attacks and other emergencies. The NRP, using the national 

Incident Management System (NIMS), provides the structure and mechanisms for national-level policy 

and operational direction for domestic incident management. The NRP applies to all incidents requiring a 

coordinated Federal response as part of an appropriate combination of Federal, State, local, tribal, privatesector, and nongovernmental entities9 In May 2007, the White House published National Security 

Presidential Directive (NSPD) 51, updating and reinforcing national continuity policy. 

SBA has one Primary Mission Essential Function (PMEF), which is to collect and disseminate disasterrelated information from declared disasters and be prepared to process disaster loan applications. The 

Agency has a comprehensive Continuity of Operations Plan (COOP), which ensures it will be able to 

perform this essential function even in the event of a disaster that adversely impacts SBA's operations. 

8 In Homeland Security Presidential Directive (HSPD)-5, President Bush directed the development of a new National Response 

Plan (December 2004) to align Federal coordination structures, capabilities, and resources into a unified, all-discipline, and a11-

hazards approach to domestic incident management. See: http://www,dhs,goy/xlibrary/assetsfNRPbaseplan.pdf. The NRP 

designed to integrate the efforts and resources of multi-levels of government, the private sector, and non-governmental entities 

and includes planning assumptions, roles and responsibilities, concept of operations, incident management actions, and protocols 

for plan maintenance. The NRP also assigns crisis responsibilities to specific federal agencies. 

9 Infonnation taken from NRP Quick Reference Guide. 

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In response to the National Response Plan, Presidential Directives, and FEMA Federal Preparedness 

Circular 65 prescriptions, SBA has taken the following COOP measures: 

• Incorporated continuity requirements in its operational COOP planning, so that if an event 

occurs without warning, SBA can continue its one essential function, with an emphasis on 

geographic dispersion of leadership, staff and infrastructure; 

• Documented orders of succession and delegations of authority; 

• Acquired resources necessary for continuity operations; 

• Continued to train staff to continue to support the PMEF in an emergency; 

• Transferred all COOP coordination functions to the Deputy Administrator and appointed a 

senior accountable official as COOP Coordinator; 

• Identified and submitted to the N1MS Integration Center the disaster recovery PMEF and 

continues to develop viable and effective plans to implement this function; 

• Planned, programmed and budgeted for continuity capabilities consistent with NSPD 51 

directives; and 

• Planned to perform annual tests of portions of plans and training of staff to evaluate program 

readiness and ensure adequacy and viability of plans and communications systems. 

ENABLING SBA TO MEET FUTURE CHALLENGES 

This recovery plan describes SBA' s ability to scale its existing operations to effectively respond to 

disasters requiring varying levels of support. By building on a solid foundation of experienced 

professionals, proven processes, operational improvements and lessons learned from the Agency's 

response to the unparalleled 2005 hurricane season, SBA has strengthened its disaster recovery capability 

in response to different disaster scenarios. 

This recovery plan ensures that SBA's departments, field offices, and governmental partners seamlessly 

work together to respond quickly to disasters and help communities recover. SBA has scalable systems 

and the infrastructure in place, including a core steady state of capabilities that can be enhanced based on 

needs projected through risk modeling. 

SBA faces future disaster scenarios with new resolve and the institutional knowledge gained from 

overcoming the challenges of the Gulf Coast Hurricanes. SBA has five functional components that scale: 

human capital, infrastructure, partnerships, and technology, with communications ensuring appropriate 

responses in each. Each component can scale, separately or in concert with the others, according to the 

surge that is required to meet various levels of disaster (See Figure 2). 

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Figure 2: Framework for Scaling Operational Support 

KEy IMPROVEMENTS 

SBA has improved its business procedures for scaling its operations to address catastrophic disasters. 

SBA increased its capacity for processing loan applications from victims of catastrophic events and also 

streamlined its ability to respond to smaller scale disasters by implementing several key improvements. 

Consequently, SBA is better prepared to provide service to its customers in any situation. 

As described in this recovery plan, SBA approaches disaster seasons with a strong sense of commitment, 

a set of programmatic improvements and enhancements, and a cohesive concept of operations. SBA is 

prepared to coordinate internally, as well as with FEMA, other government entities, and the private sector 

to leverage SBA's resources and respond accordingly. SBA has made the following key improvements: 

• Upgraded System Capacity. To accommodate a larger workforce to process loans, SBA has 

expanded the capacity of the ~isaster Credit Management System (OCMS) to support 8,000 

concurrent users. This expansion represents a four-fold increase in capacity over peak usage 

during the 2005 Gulf Coast Hurricanes. The system also enables users to work remotely, thus 

expanding the geographic alternatives for recruiting the workforce. 

• Expedited Referrals to Grant Providers. Focusing on the need to render more decisions in 

a timely and efficient manaer, SBA is using tools to enable it to refer applicants to grant 

providers much more quickly, with less work for the applicant and a significantly reduced 

processing burden for SBA. These improvements will reduce the volume of files pending a 

decision, minimize the aging of such files, provide funds to disaster victims more quickly, 

and ease the processing burden on OCMS. 

• Operational Reengineering and Oversight. Based on a review of customer feedback and 

internal performance indicators, SBA identified multiple inefficiencies and quality issues in 

its processes. This review led to a full redesign of its internal production and support services 

operations that established integrated tearns with case managers, attorneys, loan experts, and 

other support staff working together in a collaborative unit on cases assigned to each team. 

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Under this new approach, each borrower is assigned a case manager who provides 

personalized, one-on-one service, assisting the disaster victim by explaining the process, 

answering questions, and clarifying outstanding issues, which has resulted in less confusion, a 

reduction in crrors, and a minimization of duplicative or additional work. This new process 

has yielded improved coordination and communication not only with the disaster victims but 

also among employees. Integrated teams accounted for faster response times, decreased error 

rates, and improved customer service and support. In addition, multiple IT improvements, 

policy modifications, and control enhancements have led to a faster, higher-quality operation. 

• Business Intelligence Tools. The expanded use of performance metrics and reengineering 

tools significantly improves management's ability to establish clear timelines for initiatives, 

clarify performance goals, recognize individual accountability, and provide greater insight 

into the issues that SBA must address as they arise. 

• Enhanced Disaster Workforce. SBA's Disaster Assistance capability expands and 

contracts in size based on the level of disaster activity. Prior to the 2005 Gulf Coast 

Hurricanes making landfall, ODA had about 800 employees on the payroll but quickly surged 

to over 4,300 employees in response to these unprecedented storms. Today, ODA has 

roughly 1,800 employees across all key functions. Recognizing the benefits and effectiveness 

of the ability to immediately supplement its workforce, the Agency expanded its Active and 

Ready Reserves (described further in Section III). This capability allows the Agency to 

activate this specialized group of trained personnel to report for duty within 48 hours. The 

number of trained employees on board and in the Disaster Reserves increases the Agency's 

capacity to quickly respond to disasters, including catastrophic events in 2007 and beyond. 

Partnered with Private Sector. As a result of the unprecedented application volume 

received, SBA created the Disaster Loan Partners Initiative and awarded three private sector 

contracts to assist with SBA's loan processing and loan closing activities. This unique 

partnership with the private sector provides the Agency with additional experienced 

personnel to enhance program delivery to disaster victims. This model can be expanded to 

include additional service providers to support various aspects of the lending operations, and 

SBA is actively evaluating the alternatives for expanding private sector support in serving the 

needs of disaster victims. 

• Leveraged SBA's Nationwide Infrastructure. During its response to the 2005 Gulf Coast 

Hurricanes, the Agency utilized SBA's nationwide District office infrastructure to handle 

increased disaster activity. In addition, the Agency expanded the role of its District offices 

through a plan to utilize District employees in future disasters in such activities as processing 

support, media outreach and coordinating local resources through Small Business 

Development Centers (SBDCs), Chambers of Commerce, and other local professional and 

charitable organizations to improve outreach and accelerate response in the field. 

• Expanded Office Space for Surge Capacity. As a result of the Gulf Coast Hurricanes, the 

Agency has more than doubled its capacity for loan processing and disbursement in the Fort 

Worth, TX center. In addition, SBA maintains backup and Surge Capacity in Sacramento. 

These facilities offer sufficient capacity to process 500,000 disaster loan applications; any 

further space requirements can be addressed by working closely with GSA in the event it is 

required. 

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• Bolstered Forecasting Ability and Risk Monitoring Procedures. The Agency has 

enhanced its capability to forecast application volumes when disasters strike. These new 

models which include a flexible tool for forecasting - provide a more robust methodology 

for predicting application volume based on risk and disaster characteristics, allowing SBA to 

better gauge its response to a catastrophe. Based on the status of systems, facilities, and 

trained personnel at the time of the disaster, the models enable SBA to forecast the level and 

method of escalation necessary to respond in a timely and effective manner. Recognizing the 

benefits of forecasting, SBA is reviewing external disaster models to determine the value of 

linking the expected scope of potential disasters with its preparedness estimates. 

• Developed Disaster Scalability Preparedness Tool. The Agency now has the ability to 

determine resource needs - fmancial, human capital (by function), and logistics - required to 

maximize SBA's response against a number of different application volume scenarios. It is 

using this tool to ensure that resources are available under various scenarios. 

Improved Ability to Help SmaU Businesses Win Federal Contracts. SBA has been 

working with federal partners to make sure that small businesses were able to compete for 

contingency contracts subsequent to the 2005 Gulf Coast Hurricanes. SBA has also been 

working with the Chief Acquisition Officer's Council on an integrated acquisitions 

community for responding to an incident of national significance. SBA developed a plan 

following the 2005 Gulf Hurricanes to use procurement center representatives and District 

Directors across the country to identify contracting opportunities for small businesses in 

affected areas. 

The next two sections on the Disaster Response Framework describe SBA's process for helping disaster 

victims rebuild, including the organizational support functions that enable the process. 

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II. DISASTER RECOVERY FRAMEWORK: THE PROCESS 

SBA accomplishes its mission of supporting disaster recovery efforts by providing affordable, timely and 

accessible financial assistance to eligible homeowners, renters, and businesses following a disaster. 

Financial assistance is available in the form of low-interest, long-term loans to assist individuals and 

businesses in their long-term recovery efforts, As discussed in detail in Section VII, Surging to 

Accommodate Need, SBA has established categories for its disaster response based on the number of loan 

applications projected. Level I and Level II disasters, in which SBA receives up to 250,000 loan 

applications, can be processed effectively using current processes and capabilities. Disasters categorized 

as Level ill (250,000 - 500,000 applications) and Level IV (500,000 applications and above) will require 

additional surge support, which is detailed in Section VII of this document. 

Figure 3 illustrates the Disaster Recovery Framework, which portrays the process and operational support 

systems that enable SBA to deliver loans to eligible disaster victims. The processes and support functions 

outlined below are valid for all categories of disaster. However, the scope and scale of operations as well 

as the necessary resources will vary depending on the size of the disaster. 

SBA 

Disaster Recovery PI.n 

Technology 

Partnerships 

Quality Assurance 

Figure 3: Disaster Recovery Framework 

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PROCESS 

PRE-DISASTER PLANNING AND PREPARATION 

SBA's role in a disaster response is different from that of first responders: The agency plays a 

disaster recovery role and is primarily concerned with the number of loans generated by a given 

disaster, whether the disaster is a hurricane, earthquake, or terrorist attack. This section describes 

the different types of disasters and how SBA prepares to face them. SBA regularly incorporates 

historical data, to increase the accuracy and efficiency of its pre-disaster planning efforts. Section 

VI, Forecasting and Modeling, further describes the modeling tools SBA uses to predict loan 

volume and the corresponding resources needed for loan processing. 

Pre-disaster planning for catastrophic disasters helps in the following ways: 

Allows SBA to position resources in a more efficient manner; 

Increases the speed of SBA's response by having advance information about specific 

types of disaster scenarios; 

• SBA learns from each disaster response, incorporating lessons learned to improve 

future responses. 

Most disasters requiring SBA's response are natural disasters, and the following graphic (Figure 

4) illustrates which regions are at greatest risk for various natural disasters. The destructiveness 

of disasters varies.lO While SBA does not dramatically alter its processes based on the type of 

disaster, the circumstances of the disaster will affect application volume. SBA's Disaster 

Recovery Plan is based on historical data and analysis. 

10 lnstitute for Business and Home Safety (rBS), A Disaster Planning Toolkit/or the Small 10 Mid-Sized Business CMmer, p,. 8, 

http://ibhs.org/docs/OpenForBusiness.pdfA Disaster Planning Toolkit 

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Q SeismIc: 

o HighTofnado 

II HighWtnds 

• Hurrkane 

~ Severe Winter Weather 

Floods and wildfires are potential risks throughout the United States. 

Figure 4: Regional Natural Disaster Risk 

Seismic Activity causes damage near fault zones, most frequently on the West Coast. Once an 

earthquake has occurred, SBA can estimate the number of disaster loan applications that will be 

generated based on the magnitude. SBA makes forecasts in enough time to surge its human 

capital, technology, infrastructure, and other resources. 

Tornados are difficult-to-predict weather phenomena that occur primarily in the Midwest each 

summer. Tornados generally cause less damage than other types of natural weather and they are 

frequently covered by private hazard insurance. Consequently, SBA's tornado lending is 

substantially less than that for other types of damage. 

High Winds destroy natural and man-made structures, both directly and via material carried 

through the air that collides with other obj ects. Such events are typically smaller in scale. 

Hurricanes cause damage by a combination of high winds and flooding. Historically, hurricanes 

have varied substantially in tbe combination of wind and flooding damage. Damage can be 

predicted by the amount of rainfall and the strength of the wind in the affected area and the assets 

at risk. SBA has ample historical data on hurricanes that it uses for pre-disaster planning and 

forecasting. 

Severe Winter Weather, occurs primarily in the northern United States, and includes extreme 

snow and ice. Such events are typically smaller in scale. 

Floods have been eitber wide-area flooding based on substantial rain, sometimes in combination 

with the run-off from melting snow. Damage can be predicted by the amount of rainfall in the 

watershed area and the assets at risk. SBA has ample historical data on floods that it uses for predisaster planning and forecasting. 

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SBA 

Other disasters, include riots, or terrorist attacks. These disasters are generally one-of-a-kind 

events. Once such a disaster occurs, SBA quickly assesses the situation and employs the means 

necessary to respond. Sections III and VII describe SBA's plan for scaling human capital, 

infrastructure, partnerships, technology, and communications. 

ODA prepares for anticipated disasters through forecasting, pre-positioning resources (when 

possible), and projecting employment needs. There are many different kinds of models for 

potential impacts based on various types of disasters and SBA will employ models to estimate the 

number of loans particular scenarios will generate. 

Forecasting and Modeling - The primary goals of forecasting and modeling are to predict as 

accurately as possible the loan volume that will result from a disaster and the timing of when the 

applications will be received. The timing of when loan applications arrive subsequent to a 

disaster depends on the type and scale of the disaster. SBA's prediction model includes historical 

intake patterns for the categories of disaster type mentioned above. SBA prepares both before 

and after disasters occur to apply the appropriate staff and resources. These modeling tools are 

described more fully in Section VI, Forecasting and Modeling. 

Pre-positioning resources - ODA participates in the U.S. Department of Homeland Security's 

Federal Emergency Management Agency (FEMA) Regional Response Coordination Centers 

(RRCC) when they are activated, as a standard operating procedure. These centers operate 

around the clock at their highest operational level to prepare for the potential effects of chart able 

events. 

Representatives from all the federal and volunteer agencies that support state and local 

governments with disaster assistance work out of the RRCC. Staff orchestrates the massive preevent staging of personnel, resources and relief supplies across the potentially affected area in 

anticipation of the chartable event. 

Employment projections - ODA periodically makes employment projections to estimate the 

number of staff it will need to respond to disasters. Additionally, when a disaster occurs, Center 

Managers, with input from their Department Managers and data from internal SBA modeling 

tools, proj ect staffing needs to adequately respond to the disaster. The staffing proj ections are 

based on the number of disaster loan applications expected, which is based on the number of 

disaster-damaged homes and businesses and the geographic range of the damage zone. 

ODA continually varies the number of Disaster Reservists, depending on the need. ODA's 

Disaster Reserve personnel fall into two categories: Active Reserve and Ready Reserve. ODA 

first deploys Active Reservists to provide the staffing required to manage and process the influx 

of loan applications following a disaster. Then ODA reviews Ready Reserve Lists to contact 

former temporary employees, used in the past. 

DISASTER DECLARATION AND NOTIFICATION 

SBA disaster loans are available when one or more government entities declare that a disaster has 

occurred. SBA publishes the availability of assistance in the Federal Register. The published 

notice identifies the kinds of assistance available, the date and nature of the disaster, and the 

deadline and location for filing loan applications. 

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There are six ways disaster declarations are issued that make SBA disaster loans possible: 

I. Presidential Disaster Declarations - The President declares a Major Disaster or an 

emergency and authorizes Individual Assistance (Assistance to Individuals and 

Households Program) or Public Assistance. The Federal Emergency Management 

Agency (FEMA) provides a disaster declaration summary to SBA after it is signed by 

the President. At that point, SBA's Office of Disaster Assistance issues a disaster 

declaration notice (after both of the above actions are complete). 

2. Agency Phvsical Disaster Declarations - SBA makes a physical disaster 

declaration, based on the occurrence of at least a minimum amount of physical 

damage to buildings, machinery, equipment, inventory, homes and other property. 

SBA reviews Agency disaster declaration criteria to make an appropriate Agency 

Disaster Declaration. 

3. Governor Certification (7b2D) Declarations - SBA makes an economic injury 

declaration following a state certification that at least five (5) small business concerns 

in a disaster area have suffered substantial economic injury as a result of the disaster 

and are in need of fmancial assistance not otherwise available on reasonable terms. 

4. Secretary of Agriculture Declarations - SBA makes an economic injury disaster 

declaration in response to a determination of a natural disaster by the Secretary of 

Agriculture. The Department of Agriculture - Farm Service Agency (FSA) provides 

notifications to SBA that it has made emergency loans available. 

5. Secretary of Commerce Declarations - SBA makes an economic injury disaster 

declaration (EIDL) in response to a declaration issued by the Secretary of Commerce, 

regarding fishery resource disasters. 

6. Military Reservist Economic Injury Disaster Loan - SBA may make a Military 

Reservist Economic Injury Disaster declaration as authorized by the Veterans 

Entrepreneurship and Small Business Development Act of 1999. SBA makes low 

interest, fixed rate loans available to a small business employing a military reservist 

if the reservist is called up to active military duty during a period of military conflict, 

and he or she is an essential employee critical to the success of the business daily 

operation whose call-up has caused or will cause the business substantial economic 

injury. 

ApPLICATION INTAKE 

Application Screening - SBA disaster loan applications are available at disaster recovery centers 

and through the mail. When completed loan applications are received, they are first screened for 

acceptability. Loan officers also review the application to determine repayment ability based on 

the minimum income level and debts as reported on the application. 

Application Entry - Once an application is accepted by Screening, it is sent to Application Entry 

and recorded in DCMS. The loan application is assessed for credit and repayment ability. Then, 

a determination is made to advance the loan or decline the loan. Applications that meet the initial 

credit and repayment threshold are sent on to Loss Verification. After application entry, all 

application documents are sent to Scanning. 

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Scanning - The Scanning Department receives input from the Application Entry group, Loan 

Processing, Loss Verification, Mail Association, inbound faxes and the Legal Department. After 

scanning the documents, they are sorted, counted for reporting purposes and prepared for longer 

term storage as a backup to electronic records consistent with the record-keeping 

requirements currently in place. 

Loss VERIFICATION 

All approved applications for physical disaster loan assistance require on-site inspections. 

Physical disaster loans are for permanent rebuilding and replacement of uninsured, or underinsured, disaster-damaged, privately owned real and/or personal property. 

ODA's Field Inspection Team (FIT) performs inspections to establish the cause and extent of 

disaster damages. The FIT verifier views disaster-related damages for both real and personal 

property, and records observations in a report form contained on a portable personal tablet 

computer. FIT submits the report to guide the Loan Department in establishing eligibility. 

Section IV, Organizational Roles and Responsibilities, further describes FIT's loss verification 

duties. 

LOAN PROCESSING 

Loans are processed in accordance with the regulations and policies that govern the disaster loan 

program. SBA lends taxpayer funds to disaster victims and must base their decisions on a 

balance between the needs of the victim and prudent underwriting. Because the interest rate on 

loans to most borrowers is below the Treasury rate, and the term of the loans goes out as far as 30 

years, the loan service cost are often significantly below market loans, thereby broadening the 

pool of applicants who are able to pay back SBA loans. Nevertheless, SBA can only make 

disaster loans to those victims that can demonstrate a reasonable ability to repay the loan. 

Loan decisions are based on repayment ability, damage eligibility and credit-worthiness, all of 

which are analyzed during loan processing. In processing disaster loans SBA can incur risks that 

many private lenders will not and applies more lenient credit standards than private lenders. At 

the same time, SBA must adhere to fundamental credit standards and must thoroughly process 

loan applications to ensure that each loan is likely to be repaid. In Presidential declarations, loan 

applications that are declined in processing are referred to the Federal Emergency Management 

Agency (FEMA) for possible grant assistance. 

CLOSING AND LOAN DISBURSEMENT 

Once a loan is approved and signed off by the appropriate parties, loan closing documents are 

completed and sent to the borrower. Borrowers have several options for completing their loan 

documents, such as: 

• Completing the documents by themselves and returning them to SBA. 

Scheduling a loan closing appointment to execute the documents with an SBA 

representative. 

Contacting SBA by phone to review the loan closing documents. 

Secured loans are disbursed in stages that correspond with the borrower's needs. SBA also 

monitors the use of disaster loan funds to ensure compliance with program guidelines and the 

terms and conditions of the loan authorization and agreement as these loans are subsidized by the 

Federal government and the law establishes severe civil penalties for misuse of disaster loan 

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proceeds. When disbursing the real estate portion of a disaster loan, SBA personnel maintain 

contact with the borrower as necessary to determine an appropriate disbursement schedule and to 

confirm that construction is progressing as planned. As noted in the Loan Authorization and 

Agreement the disbursemcnt period on the disaster loan is limited to 6 months; however, SBA 

can extend this period on a case-by-case basis for ongoing proj ects. 

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III. DISASTER RECOVERY FRAMEWORK: OPERATIONAL SUPPORT 

While Section II addresses ODA's primary customer-facing process, this section addresses the operations 

that support the process. 

SCAUNG OPERATIONAL SUPPORT 

SBA's operations have five key disaster recovery components that scale: human capital, infrastructure, 

partnerships, and technology, with communieations ensuring appropriate responses in each. Each 

component can scale, separately or in concert with the others, according to the surge that is required to 

meet various levels of disaster (See Figure 5). These components scale to ensure that SBA can achieve a 

level of performance consistent with both internal goals and external expectations. Consistent with a 

surge approach, functional requirements across the key components of the framework increase as the 

Agency is called upon to respond to the larger application scenarios associated with each catastrophic 

disaster level. To illustrate this approach this section provides: 

• A surge overview by each key component (i.e., human capital, infrastructure, technology, and 

public/private partnership); and 

• Communications are addressed separately in Section lX. 

Figure 5: Framework for Scaling Operational Support 

HUMAN CAPITAL AND TRAINING OVERVIEW 

Human capital is the cornerstone of the Agency's disaster response. SBA's human capital augments 

ODA's staff and ActivelReady Reserve, and stands ready to help as the need expands beyond ODA's 

resources. SBA's framework recognizes the critical role that disaster employees play in the 

organization's response capability and the expanding role for the entire SBA organization in a Surge 

Capacity. By building on the framework in place, SBA will be able to respond to catastrophes even larger 

than the 2005 Gulf Coast Hurricanes. 

SBA 

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CURRENT ODASTAFF 

At the onset of hurricane season 2007, aDA has approximately 1,800 employees on staff. Their 

roles and responsibilities are described fully in Section IV, Organizational Roles and 

Responsibilities. 

DISASTER RESERVISTS 

aDA's Disaster Reserve is composed of two groups: Active Reserve and Ready Reserve. The 

Active Reserve employees, except for Attorneys, are selected and appointed through competitive 

procedures to term seasonal/on-call appointments. The Ready Reserve consists of former aDA 

employees whom management has identified as a key resource to call back to service at time 

when the Active Reserve is not sufficient to respond to large scale events. 

Approximately 900 Active Reservists are currently on SBA's rolls; SBA will add more in the 

near-term, as needed, to respond to hurricanes and other disasters. This represents the most robust 

Active Reserve since the inception of SBA's Disaster Program. The additional personnel for the 

Active Reserve will have the necessary skills to perform key functions in the processing of 

disaster loans. 

When former employees join SBA's Active Reserve, they commit in advance to report for duty 

within a 48 hour timeframe. For planning purposes, SBA anticipates that 70 percent of Active 

Reservists will honor that commitment (70% of 900 630). By having a large Active Reserve 

list, the Agency has better positioned itself to handle a catastrophic disaster situation, and 

augmented its ability to quickly ramp up and meet the needs of disaster victims. Funds have been 

allocated for training to ensure each and every reservist maintains their required level of core 

competency. 

In addition, approximately 2,100 Ready Reserve employees are currently on SBA's list as 

potential sources of human capital. For planning purposes, SBA anticipates that 55% of Ready 

Reservists will report to duty if asked (55% of 2,100 = 1155). These individuals provide SBA a 

base of potential employees that can easily be re-integrated into SBA's operations, leveraging 

existing familiarity with SBA systems and processes to save resources and expedite the surge 

process. 

CRoss-TRAINING EXISTING ODA PERSONNEL 

In the initial stages of a disaster, aDA will hire and train customer service representatives to staff 

Disaster Recovery Centers, meet with disaster victims, and screen applications. As the disaster 

activity in the field wanes, these customer service representatives will be cross-trained to process 

loans in the Dallas-Fort Worth and Sacramento locations or to continue in the fleld working with 

disaster victims to help close their SBA disaster loans. aDA has produced training material for 

loan processing and loan closing surge training. SBA estimates that it can train 400 customer 

service representatives to perform these functions, as needed. 

NON-ODA SURGE STAFF 

Beyond the aDA, SBA's response to the 2005 Gulf Coast Hurricanes also included contributions 

from SBA's District Field Office structure and program areas such as the Office of Capital 

Access. In total, over 7,000 loans were processed by District offices. Additionally, Capital Access 

employees processed loans at the PDC and PDC Surge Facility in Sacramento, California 

following the 2005 Gulf Coast Hurricanes. 

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This internal Surge Capacity was employed for the fIrst time in response to the 2005 Gulf Coast 

Hurricanes. For the 2007 hurricane season and beyond, SBA will deploy a larger complement of 

internal surge personnel for short-term periods of time, as required. ODA is training some of 

these non-disaster field staff in loan processing and other disaster assistance functions. 

By employing this approach, SBA will have 400 pcople ready for service in temporary roles 

while the ODA uses its primary rcsources - the Active Reserve and Ready Reserve lists, contract 

support, and existing advertising and hiring procedures - to fill positions. This approach allows 

SBA to respond more quickly to catastrophic disaster than it has in the past, being ready to 

process disaster loan applications when they arrive. 

ACTIVATING NON-ODA SURGE STAFF IN PHASES 

SBA leverages internal surge support in a phased approach (see Figure ES-l). Thc first phase of 

utilization will encompass internal SBA skill sets that are capable of providing Surge Capacity in 

SBA's core functions ofloan processing and post-approval processing. Specifically, this includes: 

District office personnel across the nation that (1) have been identified as having 

processed disaster loans during the Gulf Coast Hurricanes, or (2) have been identified 

as having loan processing experiencc. The majority of these individuals currently 

hold positions within the Agency as business opportunity specialists and lender 

relations specialists. 

Office of Capital Access personnel who are located in centers across the nation and 

who display the skill-set necessary to process disaster loans. The majority of these 

individuals currently hold positions within the Agency as loan servicing assistants 

and/or loan specialists. 

The second phase of utilization leverages internal SBA skill sets that are capable of providing 

Surge Capacity in SBA's support functions, as wcll as additional support in SEA's core 

functions. Specifically, this will include utilizing staff across SBA's support areas in the Office of 

Management and Administration (M&A), CFO and CIO, as well as support from offices such as 

the Office of Government Contracting and Business Development (GCIBD), and personnel 

located throughout SBA headquarters. 

Cross training for these personnel (approximately 400) will employ materials that have been 

adaptcd for nationwide training of non-disaster fIeld office staff in cost-effective locations, as the 

need arises. ODA will also train surge legal and paralegal staff in loan processing, as necessary. 

SBDCs, SCORE, WBCs 

During Level I Level IV responses, SBA leverages SBDCs, SCORE, and Women's Business 

Centers (WBCs), as needed. These groups primarily help with local outreach: 

Making potential applicants aware of SBA' s services and handing out disaster loan 

applications; 

Screening and interviewing - helping applicants complete documents and collect 

requisite background information; 

Application assistance 

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EXTERNAL HIRL'IG 

When SBA cannot meet staffmg projections based on the pool of Active Reserve, Ready Reserve 

and other staffing resources, it inunediately begins advertising for positions using Public Service 

Announcements (PSAs) in the locality where employees are needed, If the PSAs do not 

inunediately generate an adequate response, ODA places classified ads, and recruits at local 

colleges and job fairs. If local recruitment is not sufficient, then ODA performs a national hiring 

initiative, placing classified ads in publications throughout major U.S. metropolitan markets. 

During the 2005 Gulf Coast Hurricanes SBA successfully hired over 4,000 employees using this 

approach. 

Additionally, SBA is creating public/private sector partnerships that SBA can call upon for 

assistance for Level III and IV catastrophic events. For more information, see the "Expanded 

Public-Private Partnership" in Section X, Path Forward. 

QUALITY ASSURANCE 

SBA has revamped its application processing system since the 2005 Gulf Coast Hurricanes, as 

described fully in Section V, Business Process Improvements. Consequently, SBA's quality 

assurance methods, both at its Processing and Disbursement Center and Customer Service Center, 

have also evolved. 

At the Processing and Disbursement Center, quality assurance focuses on monitoring that the 

staff has been processing loan applications in accordance with SBA Policy, DCMS processing 

changes and overall enhanced focus on customer support. 

A Quality Assurance Team looks for exceptions or departures from stated policy. Each month 

the Quality Assurance review team performs a standard monthly review. Additionally, the team 

conducts any specific reviews requested by management. The Quality Assurance Team currently 

consists of two Loan Officers and two Attorneys that conduct the reviews. 

The purpose of the Quality Assurance Team is to provide management with accurate and 

meaningful reports that reflect how the staff has complied with the policies and procedures that 

govern the disaster loan program. In addition to the ongoing daily reviews that are completed, the 

Quality Assurance staff also conducts a semi-annual loan charge-off review. Audits are 

conducted monthly with a report issued to management. 

The Customer Service Center also has a quality assurance plan for monitoring the various 

functions of its operation, identifYing areas for improvement and identifYing training 

opportunities. ODA provides checklists, job aides and other training materials to each customer 

service representative. The CSC monitors conununications with customers, in an effort to assure 

courteous, accurate and professional customer service. 

ODA continues to build on the above described quality assurance methodology, employing 

Quality Assurance/Training Specialists who study and refine ODA's case management system. 

INFORMATION TECHNOLOGY OVERVIEW 

At the time of the 2005 Gulf Coast Hurricanes, the DCMS was newly developed and only provided the 

capacity to acconunodate approximately 2,000 concurrent users. After it became apparent that the system 

could not acconunodate the Agency's need, ODA implemented the DCMS Hardware Upgrade project. 

Since that time, the DCMS has been tested and verified to now support 8,000 concurrent users. This 

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represents a four-fold increase in capacity from peak usage during SBA's 2005 response, putting SBA in 

a much better position to face future catastrophic disasters. 

DCMS now provides a broader range of geographically-dispersed SBA employees access to the system. 

Specifically, SBA employees performing surge processing across the Agency's nationwide infrastructure 

have access to the system to maximize efficiency. 

INFRASTRUCTURE OVERVIEW 

SBA has retained Field Operations Center West in Sacramento, CA. While currently being used for 

field operations West of the Mississippi River, it also serves as an alternate geographic location for loan 

processing if a disaster requires a larger response, or if an incident renders the Dallas/ Fort Worth facility 

inoperable. While SBA has taken additional steps to ensure robust capacity in Dallas/Fort Worth for core 

functions, current estimates indicate that if the Agency has a catastrophic disaster that will yield a large 

amount of applications (250,000 or more), SBA seeks additional support for the Agency's core functions 

in a Surge Capacity. 

The Sacramento facility allows SBA to offer training in its core functions in an additional facility to 

complement DallaslF ort Worth. By leveraging Sacramento, SBA is positioned to simultaneously grow 

two pools of disaster reservists (in core functions) in two geographic locations. 

In addition to the Disaster facility currently housed in Sacramento, SBA has a district office and a loan 

servicing center in the area. With the SBA brand name firmly established in this geographic location, 

SBA is able to call upon a robust disaster reserve foree. Further, the Sacramento facility is currently fully 

functional, requiring no additional infrastructure ramp-up or potential down time. 

In sum, as shown in Figure ES-I, SBA approaches the 2007 hurricane season with the office facilities 

required to receive, process, disburse, and verify 500,000 applications, without having to procure 

additional facilities through GSA. Including only "active space" - the PDC (1750 workstations), PASC 

(242 workstations), FOC-E and FOC-W (156 total workstations), and CSC (240 workstations) - SBA has 

facilities to process in excess of 250,000 disaster loan applications. Adding a double-shift approach" at 

the PDC and a double-shift approach at the Sacramento PDC Surge Facility (350 workstations), SBA 

scales its operations to accommodate 500,000 disaster loan applications. While at first glance it appears 

that SBA has fewer workstations than necessary to house the upwards of 6,000 employees required to 

respond to a 500,000 application disaster within 21 days, loss verifiers - who perfonn their primary duties 

out in the field - do not require office space (see: "Facilities" bar in Figure 10). 

DEPLOYING DISTRICT OFFICE EMPLOYEES - THE DISASTER HUB CONCEPT 

The Office of Field Operations (OFO) provides executive direction and oversight to SBA's ten 

regional offices, 68 district offices and 12 branch offices. This extensive field network provides 

SBA programs and services to small business communities all aeross the country. OFO and the 

Office of Disaster Assistance have successfully and collaboratively responded to disasters in the 

past. 

l! A '''double-shift'' approach means that one set of loan processors works during the day and another at night. So, for ex.ample, 

the PDC, which has 1,750 workstations, is capable of having 3,500 workers (1,750 x. 2) during a given period. 

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When all other facilities are at their capacity, SBA will employ the Disaster Hub Concept. Surge 

personnel who have been identified will either report to the Processing and Disbursement Center, 

Sacramento Processing Facility, or "Disaster Hubs" located in one of the above mentioned district 

offices (SBA headquarters in Washington DC is also available for surge loan processing as well.) 

Disaster Hubs are available to house district office employees to perfonn disaster loan processing 

for short-tenn (30/60/90 day) periods of time. This approach augments ODA's existing staff 

levels while ODA uses its primary human capital methods to hire permanent staff. Disaster Hubs 

have been identified bascd on analysis of vacant workstations, offices, IT factors (e.g., network 

and hub capacity, complement of outfitted workstations, authentication requirements), and 

conference and training rooms suitable for processing disaster loans. By utilizing the Disaster 

Hubs on double-shifts, it is estimated that SBA has an equivalent of 400 workstations (200 actual 

workstations) available for loan processing activities. 

The benefits of using Disaster Hubs in this capacity are many: 

First, regardless of where the disaster occurs, district offices can be a significant 

contributor to SBA' s overall disaster response effort because they are dispersed 

across the country. The SBA district office is a known-commodity in the 

community. District offices have contacts and resources which will help in 

facilitating interagency relief efforts and communicating effectively with the 

community. 

Secondly, each identified site has a minimum of ten fully cabled workstations/offices 

which are available to host disaster loan processors. Many of the sites have more 

than ten workstations/offices, as well as training andlor conference rooms. 

Third, every district office that can host a Disaster Hub site in the event they are 

needed is staffed with employees who possess thc necessary skill set to process 

disaster loans. 

PARTNERSHIPS OVERVIEW 

SBA has begun the process of expanding agreements with resource partners in order to define and predict 

the external support, both public and private, that will be available in supporting surge efforts. This effort 

will continue. Additional information is available in Section X, Path Forward. 

STRATEGIC SUPPORT 

The previous se<..iions have explained SBA's process for operational support functions, according to its 

Disaster Recovery Framework (see Figure 3). The last component of SBA's Disaster Recovery 

Framework, Strategic Support, includes Communications, and Forecasting and Modeling, and Budgeting. 

SBA's Communications Plan is addressed in Section IX, and Forecasting and Modeling in Section VI. 

Budgeting is discussed below. 

SBA 

BUDGETING 

Securing sufficient funding for SBA's disaster program administration and lending is a key 

strategic support function. This process involves two main components: completing the original 

demand forecast and then carefully monitoring all available data as the situation progresses to 

determine whether the original forecast needs updating. 

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SBA 

SBA's process for tracking disaster fund usage involves a coordinated effort between the Office 

of Disaster Assistance (ODA) and the Office of the Chief Financial Officer (OCFO). ODA 

develops the initial estimates of disaster loan demand based on the following sources of 

information: 

• Estimated number of referrals from the Federal Emergency Management Agency 

(FEMA); 

Historical average rate of applications received as a percentage ofFEMA referrals; 

Historical average rate of applications approved; 

• Historical average loan size for comparable disaster type ( e.g. hurricane); and 

• Results from the Internal Demand Forecast Model described in Section VI of this 

report. 

After initial demand levels are established using this approach, SBA determines whether 

additional (supplemental) funds are needed. If so, SBA works with the Office of Management 

and Budget (OMB) to request supplemental funds from Congress. 

As SBA begins to process loans following a disaster, SBA tracks the following information for 

home loans, combination business & economic injury disaster loans (EIDL), and stand-alone 

economic injury disaster loans: 

Total applications received 

Approved applications 

Withdrawn applications 

Pre-processing declines 

Declined applications 

Applications remaining in process 

Loans closed 

Loans disbursed 

From these numbers SBA calculates percentage rates and average loan amounts that can be 

compared to historical averages and recent trends. It also projects actions on applications inhouse but not yet processed, and applications projected to be received. Progress on application 

processing and related activities is tracked weekly or even daily in the case major disasters. The 

frequency of reviews and updates to the original forecast depend on the magnitude of the disaster 

and the availability of funds. For major disasters, assumptions are updated as often as weekly. 

The original assumptions and latest data are reviewed and revised by ODA and then reviewed by 

OCFO. If significant, they are then shared with SBA senior management. Any substantial 

variances are researched and can trigger an immediate review of the key forecast assumptions if 

necessary. For minor events where sufficient funds are available, assumptions are only updated 

every few months. 

Following the unprecedented pace of loan approvals for the 2005 Gulf Coast Hurricanes, SBA 

instituted a daily tracking report of all disaster loans which we continue to use for all disaster 

activity. This report allows us to see on a daily basis net loan approval amounts, net numbers of 

loans approved, average loan size, estimated days remaining of funding availability at CUlTent 

average daily rates, program and subsidy amounts used to date, and program and subsidy current 

available balances. This report is distributed within the agency and to congressional staff upon 

request. 

SBA uses these tracking methods to closely monitor disaster funding requirements and provide 

timely infolTOation to OMB and the congressional offices on disaster budget issues as appropriate. 

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Section III has addressed SBA's high-level framework for responding to disasters. The next Section, 

Organizational Roles and Responsibilities, explains the operational deployment of SBA' s Office of 

Disaster Assistance (ODA) during all disasters. 

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IV. ORGANIZATIONAL ROLES AND RESPONSIBILITIES 

OVERVIEW 

Upon declaration of a disaster, the U.S. Small Business Administration's assets are immediately put into 

motion to help with recovery. As an event unfolds, SBA's Office of Disaster Assistance expands office 

space, calls on staff and active reservists to meet the anticipated workload, and adjusts schedules to 

accommodate the increased workload and various time zones. 

The ODA organizational structure and assets are functionally-based and geographically dispersed, 

minimizing reliance on a single region. While there are additional offices within SBA that support 

disasters (see Appendix E), the primary offices that support a disaster response are as follows: 

• ODA Headquarters at SBA's Central Office in Washington, DC. 

• A full-service Customer Service Center (CSC) located in Buffalo, New York. Disaster 

victims contact this center when they have questions about their loan application. Services 

for disaster victims include a call center, e-mail response, disaster application mailing 

capabilities, and pre-application entry, and the center provides services to the other centers as 

needed. 

• Two disaster Field Operations Centers (FOC): FOC-E (East) is located in Atlanta, Georgia 

and FOC-W (West) is located in Sacramento, Califomia. The two FOCs are responsible for 

the coordination of preliminary damage assessments, field operations, information 

dissemination, and disaster loss verifications outside of the continental United States 

(OCONUS). 

A centralized Loan Processing and Disbursement Center (PDC) located in Fort Worth, 

Texas. The PDC receives applications, evaluates them, and disburses funds to eligible 

borrowers. The backup location is in Sacramento, California. 

The Personnel and Administrative Services Ceuter (P ASC), housed in Herndon, Virginia, 

includes the Administrative and Human Resource functions, the Disaster Credit 

Management Systems (DCMS) Operations Center, which oversees the DCMS system, and 

the Field Inspection Team (FIT), which provides the loss verification/inspection function 

within the continental United States (CONUS). 

Figure 6: aDA Functional Centers 

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OFFICE FOR DISASTER ASSISTANCE (ODA) HEADQUARTERS 

ODA coordinates and leads disaster responses for Level I and Level II. Level I disasters are smaller in 

scale and do not generally require SBA Headquarters to be actively engaged on a day-to-day basis. For 

Level I and Level II disasters, the ODA Headquarters staff performs the following functions: 

• Coordinate with FEMA, Congress, and Office of Communications and Public Liaison 

(OCPL). 

• Coordinate and lead information-sharing with all Centers, ODA management, SBA senior 

management, Regional and District staff, and SBA Resource Partners. 

• Participate in or lead meetings and activities with the National Response Coordination Center 

(NRCC), FEMA, Emergency Support Function Leaders Group (ESFLG), and Interagency 

Incident Management Group (IlMG), and other relevant disaster response teams. 

• Activate Emergency Support Function (ESF) under the National Response Plan where SBA 

is a support or lead agency, as appropriate. 

• Assess programmatic needs and project level of activity and budget. Damage estimates are 

based on surveys, historical information for similar types of events in the state and/or region, 

information from imaging, state and local reports, media, insurance in force, demographics, 

and timing of event (e.g., local events, festivals, off season or in season). 

• Prepare and pUblish SBA disaster declaration in the Federal Register following disaster 

declarations. 

• Approve or decline requests for disaster declaration submitted by ODA's Field Operations 

Centers. 

Review and set policy, procedures and guidelines for all ODA operations. 

ODA's CUSTOMER SERVICE CENTER 

Frequently, disaster victims have questions about how to file or fill out a disaster loan application. Many 

disaster victims have little experience in completing loan applications. Operationally, ODA supports this 

need through its Customer Service Center, located in Buffalo, New York. It is a single point of contact for 

disaster victims who have questions about SBA disaster loans. It provides them with the following 

services: a call center, e-mail response, disaster application mailing capabilities, and pre-application entry. 

The CSC baseline state of readiness allows it to adequately respond to Level I and II disasters, 

representing a workload of approximately 2,000 calls per day or less. 

ODA's CSC is responsible for the following tasks: 

• Determining staffing requirements using 'New Disaster Forecasting Model" based on FEMA 

workload projections. This forecasting tool provides detailed call pattem estimates and 

staffing needs for the initial 90-days of a disaster. 

• Based on the forecasted call volume for the new disaster, projecting hourly call patterns using 

the CSC's Daily Call Forecasting tool. 

• Requesting activation of specified number of Disaster Reserve Techs/Specs in the local 

commuting area in a disaster, when necessary. 

• Ensuring Mailbox team and Problem Resolution teams are in place. A specialized team of 

customer service agents is dedicated to respond to email inquiries received through ODA's 

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Customer Service mailbox (disastercustomerservice@sba.gov). The mailbox team typically 

has a dual responsibility of manning the Disaster Recovery Center line, a dedicated 800-line 

for exclusive use by field personnel. 

A "Problem Resolution" team works to research issues and facilitate resolution through 

points-of-contact in other centers. 

• Coordinating with Administration regarding the supply of English and Spanish applications 

on hand. 

• Updating the Disaster Information Gateway (DIG) and the CSC's public folders. The Disaster 

Information Gateway and Public Folders are utilized by the CSC as resources to store and 

disseminate important information to the CSR staff. The DIG and public folders are central 

locations for items such as: Declaration Information, Fact sheets, DRC locations (by state and 

declaration), news clips, work schedules, numbered memos, forms, phone lists, and other 

general information. 

ODAFIELD OPERATIONS CENTERS (FOCs) 

Field Operations Centers (FOCs) coordinate disaster field operations and reach out to ODA's external 

partners to publicize ODA's Disaster Loan Program in advance of and following disasters. Outreach 

targets include FEMA Regional Offices, State Offices of Emergency Services, SBA's Regional 

Administrators and District Directors, Congressional offices, and SBA's resource partners (SBDCs, 

SCORE, WBCs, Private Sector Professional Organizations, etc.). 

FOCs are responsible for: 

• Establishing, staffmg, and maintaining field operations onsite in declared disaster areas, 

including Disaster Recovery Centers (ORCs) and SBA Disaster Loan Outreach Centers 

(DLOCs). DRCs are partnerships between FEMA and SBA. 

• Conducting disaster surveys with FEMA, state, and local officials. 

• Performing original loss verifications for OCONUS disasters. 

• Performing onsite loss re-verifications for CONUS and OCONUS disasters. 

• Communicating with media outlets. 

• Communicating with Congressional District offices and other elected officials, including 

proactively conveying SBA's disaster response accomplishments. 

Field Operations Center East (FOC-E) is located in Atlanta, Georgia and serves the states east of the 

Mississippi River, plus Minnesota, the U.S. Virgin Islands, and the Commonwealth of Puerto Rico. 

Field Operations Center - West (FOC-W) is located in Sacramento, California and serves the states west 

of the Mississippi River (except Minnesota) plus American Samoa, Commonwealth of the Northern 

Mariana Islands, Federated States of Micronesia, Guam, and Republic of the Marshall Islands. 

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ODA's LOAN PROCESSING AND DISBURSEMENT CENTER 

Loans are processed and funds are disbursed at the Disaster Assistance Processing and Disbursement 

Center (PDC). PDC employees access the same systems as Customer Service Center employees. 

The PDC is responsible for the following functions: 

• The mailing of all disaster loan applications requested by victims of a declared disaster. 

• The screening for acceptance of all receivcd disaster loan applications. 

• Reviewing and processing all accepted disaster loan applications. 

• The closing of all approved SBA disaster loans and the disbursement of the disaster loan 

proceeds. 

If the size of a disaster requires a larger response, or if an incident yields the Dallas/Fort Worth PDC 

facility inoperable, SBA's Sacramento, California location provides backup capability. 

ODA's PERSONNEL AND ADMINISTRATIVE SUPPORT CENTER (PASC) 

The Personnel and Administrative Services Center (P ASC), includes the Administrative and Human 

Resource function, the aDA's Disaster Credit Management Systems (DCMS) Operations Center, and the 

Field Inspection Team (FIT). 

SBA 

HUMAN RESOURCES 

Human Resources provides the necessary administrative support functions during a disaster 

response, including: 

Executing payroll, including filing of all time and attendance forms generated in the 

field. 

Handling day-to-day procurement needs of aDA centers, with an emphasis on 

purchasing from local small businesses whenever practicable. 

• Making travel arrangements and processing travel vouchers for personnel involved in 

the disaster response. 

DISASTER CREDIT MANAGEMENT SYSTEM (DCMS) OPERATIONS CENTER 

The DCMS Operations Center supports aDA's information technology requirements. The 

systems supported by the operations center are essential to aDA employees' ability to help 

disaster victims recover. 

The DCMS Operations Center has three departments. The Technical Operations group is 

responsible for the infrastructure, hardware, network, database, system administration and 

security issues. The Functional group is responsible for the software applications, planning, 

development, testing, training and communications, and reports. The third is the Help Desk which 

is the front line interface to users. The Help Desk is responsible for handling requests, primarily 

from aDA staff, for assistance with DCMS operational questions and issues. 

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Much of the activity at the center is monitored through automated routioes!2; the level of support 

to maintain this capability is currently in place. 

DCMS is responsible for the following functions: 

Monitoring, tracking, and analyzing system metrics to keep the system up and 

operational. 

Procuring, maintainiog, and supporting portable computer tablets for FIT and Loss 

Verification to use in disaster locations. ODA currently has 1,600 tablets. 

Closely monitoring tablet inventory for FIT in order to procure additional units, with 

sufficient reserve if needed. 

Completing upgrades and reprogrammiog requests to address operational needs and 

process improvements 

Assessing system capacity during a disaster and executing surge plans to expand 

capacity if necessary. Specific triggers have been identified to indicate when system 

is reaching capacity (e.g. approximately 4,000 concurrent users, CPU usage at 50% 

of capacity on a consistent basis during peak times, memory usage at 50% of capacity 

on a consistent basis during peak times; or a combination of these factors). 

Ensuring connectivity of disaster recovery satellite offices. 

The DCMS Operations Center in Herndon, V A gives 8,000 personnel the ability to use the 

system simultaneously. A redundant DCMS Operations Center in Tempe, Arizona serves as a 

backup, should the Herndon Center be incapacitated. The Tempe DCMS facility has capacity for 

2,000 concurrent users. 

ODA's FIELD INSPECTION TEAM (FIT) 

FIT verifies the cause and extent of physical damages to borrower's property. It is responsible 

for completing all original loss verification reports in the continental United States. All approved 

applications for physical disaster loan assistance require on-site inspections. Physical disaster 

loans are for permanent rebuilding and replacement of uninsured, or under-insured, disasterdamaged, privately owned real and/or personal property. SBA's physical disaster loans are 

available to homeowners, renters, businesses of all sizes, and nonprofit organizations. The FIT's 

verification report is an essential element in the loan making process that guides the Loan 

Department in establishing eligibility. 

The FIT verifier views disaster-related damages for both real and personal property, and records 

observations in a report form contained on a portable personal tablet computer. The FIT verifier 

has specific responsibilities that include, but are not limited to: determining the estimated cost of 

repair or replacement of real, personal and business property; providiog information gathered 

during the on-site inspection to guide SBA loan officers in establishing eligibility within program 

guidelines; and estimating replacement and pre-disaster Fair Market Value of property. 

12 A routine is a series of computer instructions for performing a specific, limited task. 

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This section has detailed SBA's ability to respond to disasters through its ODA; Appendix E addresses 

other SBA offices that playa role. The following section, Business Process Improvements, addresses key 

improvements that SBA has made since the 2005 Gulf Coast Hwricanes. 

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V. BUSINESS PROCESS IMPROVEMENTS 

SBA's core process in its disaster recovery role is loan processing and disbursement (see Section II). 

Since August of 2006 SBA has (and continues to be) engaged in a comprehensive reengineering of the 

processes, tools and policies that directly impact disaster victims' experience with SBA and the ability of 

SBA loan processing employees to provide customer-focused service. 

The Accelerated Disaster Response initiative (ADRI) focuses on improving the disaster victim's end-toend experience from disaster loan application, through approval and closing, to final disbursement of 

funds: a complete overview is provided in Appendix H. The driving principles behind ADRI are speed of 

response, customer support and quality. 

The cornerstone for achieving this goal is SBA's Case Manager Model - the assignment of a case 

manager to each approved disaster loan. The case manager is the single point of contact and personal 

advocate for getting loan funds disbursed when the borrower needs them. 

Introduced to accelerate disbursement on backlogged disaster loans after the 2005 Gulf Coast Hurricanes, 

the case manager model proved its value by enabling SBA to get faster, more accurate and more 

customer-friendly action on more than 93,000 loans. As of July 2006, these loans had been approved but 

not fully disbursed. The case management approach was also instrumental in accelerating SBA's focus 

on making end-to-end process improvements. 

These improvements, spanning across five key success factors, are being addressed by cross-functional 

reengineering teams operating with the Illi!ndate to design, test and implement solutions as quickly as 

possible. Highlights of improvements deployed and in process, include the following: 

1. ACCELERATED LOAN ApPLICATION DECISION PROCESSING 

SBA has implemented a comprehensive set of improvements to give disaster victims a faster answer on 

their qualification for a loan post application, including; 

In collaboration with FEMA, installing mechanisms that ensure that only the disaster victims 

with the necessary income qualifications are directed to apply for an SBA disaster assistance 

loan, allowing for the immediate referral of individuals to other assistance programs. 

• Redesigning the application receiving, data input and screening process to ensure rapid and 

accurate transfer of applicant information into loan approval processing at all incoming 

volume levels. 

• Using more automated processing tools to screen ineligible applications in order to more 

quickly direct these disaster victims to other assistance programs and to free-up SBA 

resources to focus on qualified applications. 

• Increasing the authority level of SBA loan officers to approve applications with high 

crediUhigh repayment scores without the need for secondary review, speeding response to 

low default risk borrowers and freeing time for in-depth review of other applications. 

2. IMPROVED PROCESSES AND TOOLS FOR LOAN CLOSING AND FUNDS 

DISBURSEMENT 

In order to streamline the process of getting funds into the hands of approved disaster loan recipients, 

SBA has instituted a number of improvements, inclUding: 

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• Positioning more SBA staff and equipment to enable the disaster victims to close their loans 

on site, thus avoiding delays associated with mail delivery and corrections to closing 

documents. 

• Simplifying and standardizing loan closing documents to make these documents easier for 

disaster victims to understand and less likely to result in errors. 

• Overhauling the entire mail receiving and sorting process including bar coding of documents 

to speed the delivery of information needed by case managers to disburse loan funds. 

3. MORE TRANSPARENT, MEANINGFUL PERFORMANCE DATA TO MANAGE 

OPERATIONS 

To better equip managers and supervisors to monitor, coach and improve performance ofloan processing 

operations, SBA continues to develop a new generation of performance reports pulled directly from its 

Disaster Credit Management System (DCMS) that will provide daily information on loan officer and case 

manager productivity and disbursement activity for borrowers. This "real time" performance reporting 

will help SBA executives detect bottlenecks in loan processing before they result in large backlogs. 

4. MORE CONSISTENT ADHERENCE TO POLICY THROUGH TRAINING AND 

INTERNAL QUALITY ASSURANCE 

To mitigate the risk of discrepancies in loan officer and case manager actions as processing volumes and 

staff increase during large disasters, SBA has established a standing Policy Communications Team to 

quickly respond to areas of concern and give any employee an outlet for raising questions and concerns. 

In addition, a training, certification and ongoing internal quality assurance audit program continues to be 

refined for all loan processing jobs. 

5. IMPROVED COORDINATION ACROSS DISASTER CENTER OPERATIONS 

To bring a renewed focus to the concept of "operating as one team", SBA's Office of Disaster Assistance 

senior leaders have been working together to break down communication, goal alignment and other 

barriers that hinder coordinated and effective response during disasters. This effort has resulted in a 

number of important changes in the way aDA governs its continuous improvement efforts, including: 

• The integration of technology personnel into business process reengineering teams to 

improve the definition of system change requirements and reduce the cycle time for 

deploying system enhancements. 

• Cross-center improvement tearns established to review, and where necessary, redesign 

Administrative and Personnel support services. These teams are reducing waste and 

implementing standards in backroom processes that can or break the smooth functioning of 

core loan processing. 

• The installation of a weekly, monthly and quarterly discipline for reporting progress on all 

improvement activities, capturing results and launching new improvement projects. 

The Accelerated Disaster Response initiative has yielded significant dividends for SBA and will continue 

to do so as more solutions are deployed. The case manager model will continue to be refined to ensure 

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customer focus and find efficiencies in resource utilization. aDA senior leaders will continue to integrate 

ADRI projects into daily operations. 

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VI. FORECASTING AND MODELING 

The primary goal of forecasting and modeling is to predict as accurately as possible the loan volume that 

will result from a disaster, so that SBA can plan an appropriate disaster response effort. Obtaining 

reliable information about the number of disaster loan applications a given disaster will generate will have 

positive outcomes throughout SBA's disaster response process. Modeling, simulating potential damage 

and effects of disasters and leveraging historical disaster information, provides SBA with insight to the 

necessary, appropriate, and most efficient response. 

For disaster planning, SBA employs two internal models. The first model draws on readily available 

economic and demographic data from outside sources and combines this information with historical SBA 

experience to predict loan volume demand expected from a given disaster. This information is used as a 

source of data for decision-making regarding whether SBA has sufficient disaster loan authority available 

or will require a supplemental appropriation. The loan demand forecast from the first model will also be 

used as an input to the second internal model. The second model forecasts the amount and timing of 

staffing requirements. 

The assumptions in these forecasting models are actively updated throughout an event as conditions 

change and more information about the specific situation becomes available. SBA recognizes the added 

value of external modeling approaches, and will use information from FEMA's HAZUS modeling 

process to provide additional, event-specific information that will refine and improve SBA' s ongoing 

response. SBA has further incorporated HAZUS into its overall modeling process to independently 

validate the outputs from its internal modeling tools. Where internal modeling and HAZUS are 

insufficient, such as in projecting the effects of terror acts or analyzing the presence of insurance in a 

particular community, SBA will turn to additional external modeling resources to augment its capability. 

The data outputs from the models described below inform SBA leaders in making decisions in the areas 

of human capital, infrastructure, technology, partnership needs, and communications. These tools are 

critical to SBA in designing a surge implementation plan that is both successful and cost-effective. 

SSA 

Internal Demand Forecast Model- This model is designed to estimate the dollar amount of 

disaster assistance loans that will be made in response to the next large disaster, based on the 

information available at the time the disaster occurs. 

When a disaster takes place, reliable information is available about the counties likely to be 

affected. To translate these geographical areas into likely loan volume estimates, the model 

has an internal database of economic, demographic, and physical data for each of 3,300 

counties (or equivalents), including a proxy for the assets at risk, and equations to estimate 

loan volumes from measures of assets at risk and disaster severity. It also has historical 

information about the loan volumes and characteristics for each of the large historical 

disasters to provide a basis for comparison. 

Using the database and equations allow the agency to identifY one or more scenarios 

involving the individual counties affected and the severity of the disaster. Then, this 

information is translated into alternative estimates of the potential loan volumes than might 

result. As more information about the size of the impact area becomes available, the 

estimates can be refined. 

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SBA 

.. Internal Resource Requirements Model - This model is designed to forecast the staffing 

levels necessary for SBA to handle a wide range of disaster events. Key assumptions and 

inputs to the model include the following: 

o The target application review and decision timeframe (e.g. SBA's current goal of 

21 days); 

o The requirements for specialized staff skills such as loss verification, loan 

processing, and legal review in the application process; 

o Staff productivity and training requirements; 

o The total expected loan volume; and 

o The type of disaster. 

Using this information, the model forecasts the staff necessary, by specific skill area, to meet 

the targeted loan application review time on a weekly basis following the disaster event. The 

model can also be reversed to show the backlog in applications generated by a given set of 

available staff. 

The most critical assumptions in the model include the estimate of applications expected, the 

expectation regarding the tinting of the receipt of the applications (the "intake curve") and the 

staff productivity. The estimate of expected applications leverages the information from the 

initial risk assessment that is led by FEMA and includes input from other agencies, including 

SBA. Equally important to knowing the total volume of loan applications is having a strong 

understanding the timing of application receipt. SBA's analysis has shown that the loan 

application "intake curve" depends on the type and scale of the disaster. Therefore, the 

model includes historical intake patterns for six categories of disaster type and scale (e.g. 

disasters with less than 5,000 applications, earthquakes, floods, etc.). This timing 

information is an important factor in determining when staff will be needed and how the 

resources will be deployed. Finally, staff productivity is a significant factor in the model but 

difficult to measure. The productivity estimates are based on a mix of data and expert 

opinion. The available data is still being explored to gain insight as to how productivity 

varies with the type or size of the disaster, or with technology advances. 

SBA's staffmg modeling is based primarily on the notion that the entire SBA loan volume is 

not received immediately. Particularly given the variable nature of catastrophic disaster 

events and their effect on populations, each disaster will have its own characteristics and the 

application flow will reflect those. SBA's modeling has looked at historical disaster events to 

determine the most likely application flow that will result from various events. At the onset of 

a disaster scenario, SBA will apply its initial modeling results against the staffing model in 

order to determine the resource and staffing needs as well as the appropriate, situationspecific surge plan. 

FEMA's HAZUS Model - HAZUS is a Geographical Information Systems (GIS) based 

system created by FEMA that enables decision-making in disaster preparedness, response, 

and recovery by projecting the impact of disasters and also by projecting potential losses that 

will result from these disasters. SBA uses HAZUS to evaluate the various impacts that 

hurricane, flood, and earthquake disaster scenarios will have on different parts of the United 

States. The results from the evaluation of these scenarios provide essential information that 

SBA uses to determine the scope of its disaster response effort and to further refine its 

disaster response processes. Specifically, starting during the hurricane season 2007 SBA will 

cull information about disaster scope; uninsured property loss; persons displaced; businesses 

displaced; physical property loss; and demographic information. This information will be 

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Small Business Administration Disaster Recovery P1an 

useful both for relative adjustments to the specific disaster response and for long-term 

refinement to the entire SBA disaster response process. 

Further, HAZUS helps SBA integrate with the operations of other governmental 

organizations (such as FEMA and many state governments and local governments that use 

the program for their emergency response). It provides SBA a real-time ability to track 

disasters as they occur and rapidly react to changes in scenarios. In certain "what if' 

scenarios (i.e., "what if a Category 4 hurricane hit Jacksonville, Florida?"), SBA will use 

information from HAZUS that will be useful in predicting what SBA's response must be in 

situations like these. 

MODELING AND THE SURGE PROCESS 

Modeling the impacts associated with catastrophic disasters is a fundamental element of the surge 

process. Modeling takes place leading up to and during a catastrophic event and continues to have a role 

throughout the surge process. 

When a disaster appears to be so large that it will overcome the core capabilities of the ODA, modeling 

techniques are essential in gauging the level of surge and scale needed to enhance SBA's core. 

The following are areas in which modeling will be used to spur and support the surge process: 

Initial Severity Assessment - SBA uses internal modeling to conduct a severity assessment 

of any disaster situation. This will take place prior to surge (and, when possible, prior to the 

disaster event) and will be used to determine the expected level of surge that will be required. 

Early Return Modeling - Within the first two weeks of surge, SBA will use internal 

modeling as well as information from HAZUS and external modeling providers to determine 

the accuracy of initial estimates and any unforeseen circumstances that have resulted from the 

disaster activity. This will be particularly important in catastrophic scenarios in which SBA 

must concurrently manage the influx of loan applications from multiple disasters. SBA will 

use this early return modeling to help plan staffing and other requirements. 

Location ModelinglResource Allocation - SBA's modeling capabilities will be useful in 

determining the ideal physical locations at which to locate surge employees and will assist 

SBA in focusing its efforts in the appropriate geographic regions. 

Real-Time Assessment - Throughout the surge process, modeling will continue to be 

performed to provide real-time assessment of the efficiency of the SBA surge response and to 

provide suggestions and opportunities for streamlining the response and improving the surge. 

End-of-Surge Modeling - Modeling will bc instrumental in determining the appropriate time 

to "end" the surge phase of SBA disaster response and also to discern any "Lessons Learned" 

or best practices that resulted from the surge effort. 

While this section has addressed how SBA prepares to help with recovery, Section VII, Surging to 

Accommodate Need, details the order in which SBA appropriates resources to meet various levels of 

disasters. 

SBA 

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VII. SURGING TO ACCOMMODATE NEED 

The size of a disaster affects the number of loan requests SBA receives, and consequently the resources 

SBA must activate to serve its customers. While the 2005 Gulf Coast Hurricanes represent the highest 

level of catastrophic disaster activity that SBA has faced to date, the Agency is now prepared to serve the 

needs of disaster victims at even greater levels of catastrophic disaster activity. 

Disasters are categorized into levels based on the number of anticipated applications. This categorization 

enables SBA to determine an appropriate surge level for scaling resources and operations to meet the 

needs of disaster victims. The disaster categories are as follows: 

• Level I - 100,000 applications received and below 

LevellI 100,000 to 250,000 applications received 

• Level III - 250,000 to 500,000 applications received 

Level IV - 500,000 applications received and above 

CORE CAPABILITIES 

In an average year, the majority of disasters result in fewer than 100,000 loan applications. As a general 

practice, and based on the experience ofSBA's disaster assistance program, SBA can address the needs of 

disaster victims for incidents up to catastrophic Levels I and II using its current Core Capability. 

Catastrophic Level III and Level N represent scenarios that will require SBA to leverage strategies and 

solutions across the SBA organization, or outside of the SBA organization. 

aDA will use modeling tools to determine shortly after a major event whether the volume of loan 

applications from any given disaster will overwhelm its Core Capability. Scaling the SBA operation to a 

Level III or N will require Agency-wide support to adequately fulfill the needs of SBA's customers 

within desired performance parameters. With an understanding of current capacity levels and potential 

activity increase, aDA immediately and proactively requests additional SBA resources and support from 

the SBA Administrator. This section further specifies the surge plan that SBA will employ at each 

defined level of catastrophic disaster. 

SBA 

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Page 45 of 72 

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Small Business Administration 

Plan: 

• Leverage current ODA starr 

• Cal! up AdiYe Reserves. 

as necessary 

• Engage SBOCs. SCORE, and 

WBes in local outreach 

Plan: 

Disaster Recovery Plan 

500,000 

and Above 

Applications 

• LevemgecummtODAstaif 

• Call up Active Reserves;Ca1l up 

Ready Reserves, IiIS necessary 

• Engage SBDCs, SCORE, and 

\/UBCs In local outreach WBes in local outreach waCs in local 0IItr'aadl 

• leverage exiSting/oan pmcessing • leverage existing Joan proc:essirlg • leverage existing IoaJ1 processing 

conlractc1'5, as necessaIY contractonl, as necessalY COI'\trac:tors, as necessary 

• Cross train exfsting ODA PenIOnnel, • Cross traln existing ODA Personnel, • Cross train existing ODA PeI'$OOnel, 

as necessary BS necessary 

• Loan processing staff move to 

double-shifl: approach 

• Begin 10 hire new personnel 

• 0IJer1lcrw to Sacramento, CAas necessary 

• Ac:tivateDisasterEx@cutivlil 

Oversight Counr::!l 

as necessary 

• loan processing starr move 10 

doobie-shJft approach 

• Hire new personnel, as necessalY 

• Ov81flow to Sacramento, CAas necessary 

• Activate Disaster Execuirve 

Oversight Counci! 

• Disaster Hub Concept 

• Procure space through GSA, 

as necessary 

Figure 7: Overview of Disaster Levels - Focus on Core Capabilities 

SURGE CAPACITY 

As discussed in Section II, Disaster Recovery Framework: The Process, there are six types of disaster 

declarations; any of which make SBA disaster loans possible. When a disaster declaration occurs, SBA 

will experience an increase in the number and amount of loan applications. The more widespread or 

severe a disaster, the larger the number of homeowners and business that will be impacted, and the larger 

the level of operational surge for which SBA must plan. 

The following graphic (Figure 8) illustrates SBA standards used to defme catastrophic disaster levels and 

a snapshot of how SBA scales to meet the requirements of each level". More detail on the specific surge 

activities can be found in the detailed descriptions of each level. 

!3 While this section only addresses SBA's process for scaling up its operations, it also has a set process for scaling down once 

resources are no longer needed. The scale down process is a reflection of the scale up process. Appendix D provides more 

infonnation on how SBA prepares for and executes the scale down process. 

SBA 

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Small Business Administration 

Plan: 

Up to 100,000 

Applications 

• Leverage current OOA staff 

• Caltup.A.t:tlYeRe5ervss, 

as necessary 

• Engage SBDCs. SCORE, and 

'WBCs 11'1 local outreach 

100,000 to 

250,000 

Applications 

LEVELl! 

Plan: 

• Lewrage current aDA staff 

• Cafl up Active Reserves: Call up 

Ready Reserves, as necessary 

• Engage SBDCs. SCORE, and 

'WBCs in JocaI outreach 

• Leverageexistlngloanproc;essing 

contractors, as necessary 

• Cross train existIng aDA Personnel, 

as necessary 

250,000 to 

500,000 

Applications 

• Begin to Itire new pernonne! 

• OYerflow Ie Sacramento, CAas necessary 

• Activate Disaster ExecutIVe 

OYer~ghtCounci! 

Figure 8: Scaling to Meet the Level of Disaster 

DISASTER RECOVERY DECISION TREE 

Disaster Recovery Plan 

500,000 

and Above 

Applications 

as necessary 

• ActiVate Disaster Executive 

o...ersightCouncll 

• DISaster Hub Concept 

• Procure space through GSA, 

as necessary 

SBA's Disaster Recovery Decision Tree (see Figure 9) depicts the decisions that SBA executives make in 

responding to a given disaster, First, they decide whether a disaster can be handled by SBA's Core 

Capability, or whether the Agency must move to Surge Capacity, SBA's Core Capability suffices for 

Level I disasters (fewer than 100,000 applications) and Level II disasters (between 100,000 and 250,000 

applications), The Disaster Executive Oversight Council continually monitors loan application volume in 

Level I and II disasters and will elevate to Surge Capacity when the application intake exceeds its 

threshold of 250,000, SBA operates at Surge Capacity for Level III (between 250,000 and 500,000 

applications) and Level N (more than 500,000 applications) disasters. 

When Surge Capacity is required, the authority for the disaster response is elevated from the Associate 

Administrator of ODA to the Disaster Executive Oversight Council. At this point, there is set of 

procedures that ensure appropriate Surge Capacity resource allocation, as shown in Figure 9, The Disaster 

Executive Oversight Council consists of SBA's Administrator, Deputy Administrator, Chief of Staff, 

CFO, General Council, and the head of the Office of Congressional and Legislative Affairs. The Disaster 

Executive Oversight Council ensures that the Disaster Management Operations Council, comprised of 

relevant SBA program heads and executives, executes the Disaster Recovery Plan. Specifically, the 

Disaster Management Operations Council consists of the following individuals: 

Disaster Recovery Plan June 1, 2007 
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Small Business Administration 

Associate Administrator ofODA (AAJODA), 

Associate Administrator ofthe Office ofField Operations (AAJOFO), 

Associate Administrator of the Office of Capital Access (AAJOCA), 

Disaster Recovery Plan 

Associate Administrator ofGoverrunent Contracting and Business Development (AAJGCBD), 

Associate Administrator of Entrepreneurial Development (AAlED), 

Associate Administrator of the Office of Communications and Public Liaison (AAJOCPL), 

Associate Administrator of Human Capital Management (AAJOHCM), 

ChiefInforrnation Officer (CIO). 

During Surge Capacity, the Disaster Management Operations Council directs and supports ODA's centers 

and all of SBA's resources to ensure an adequate response. Accordingly, SBA rapidly expands office 

space, augments staff to meet the anticipated workload, adjusts schedules, employs a double-shift 

approach, and works with resource partners (SBDCs, SCORE, Women's Business Centers) as necessary 

to respond effectively. 

Decision 

owners in bold 

Disaster Recovery Plan 

Figure 9: SBA's Disaster Recovery Decision Tree 

June 1, 2007 
225 

Small Business Administration Disaster Recovery Plan 

SBA's LEVEL I PLAN 

The combination of SBA's on-board strength, reengineered operations and expanded infrastructure 

capacity, positions SBA to handle Level I disasters within its Core Capability at a performance goal of 21 

days (from receipt of the application to decision).!' Historically, SBA has had tremendous success 

reaching this performance goal at this level. The business process reengineering efforts described in 

Section V position the Agency to achieve this performance goal with even greater efficiency. Subsequent 

to approval ofloan applications, SBA has sufficient staff to perform post-processing functions. 

For Level I disasters, aDA will activate the Ready and Active Reserve only if necessary to ensure that the 

proper balance of staff is readily accessible to respond to disasters at this level where the flow of 

applications tends to occur more rapidly. While SBA is fully prepared at this level, the occurrence of 

numerous disasters of this size would result in the deployment of SBA resources associated with higher 

levels of the catastrophic framework. 

D 

,..Leverage current composition of SBA's disaster buildings 

,.OCMS core capabiUty provides adequate capacity 

,Engage SBDCs, SCORE, and WBCs in local outreach 

,.CLA communicates with affected congressional offices 

..... OOA PIO's communicate with the affected SBA regional and district offices and with the media 

1(£,imrn,u""_~1 :,.. The public affairs personnel at the regional and district levels inform local officials of the classification of 

the disaster and the services SBA 'Nill provide; listen to local needs 

",ODA and OCPL constantly communicate 

14 SBA uses a modeling formula for calculating the various staffing needs to process a certain number of loans under a given 

condition for the maximum allowable aging time:fi"ame. In this model. multiple variables are in place; however, the number of 

applications and the number of allowable days aging drive the staffing requirement. Under normal business conditions with 

existing staff levels and workloads, the current SBA performance metrics for the maximum allowable aging time for loan 

processing are 12 days for home loans and 17 days for business loans (Again, days allowable drives staffing needs). However, 

for the purposes of Surge Capacity planning, SBA uses a 21 day maximum allowable aging timeframe as its perfonnance goal 

(up to 30 for modeling Level IV). This number allows SBA to respond to the influx of loan applications, while maintaining 

control of the variables for staffing needs and time for processing applications, both of which playa significant role in driving 

costs. The SBA model can be adapted to calculate the staffing needs and associated costs by adjusting the maximum allowable 

aging time:fi"ame for a given number of applications. 

SBA 

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Small Business Administration Disaster Recovery Plan 

SBA's LEVEL II PLAN 

A Level II response (100,000 - 250,000 applications) is still within SBA's Core Capability. It does 

require SBA to leverage the Active Reserves, and possibly the Ready Reserves, to ensure adequate 

processing capability. SBA's Active Space (PDC, PASC, FOCs - East and West, and CSC) provides 

enough workstations for the necessary loan processing personnel. 

While SBA has the Core Capability to achieve pre-set performance goals at Level II, it will closely 

monitor and anticipate disaster loan application volume: Once the volume is anticipated to reach 250,000 

(due to a single disaster or due to multiple disasters), ODA's Associate Administrator and the Disaster 

Executive Oversight Council trigger Surge Capacity (see Figure 9, Disaster Recovery Decision Tree). 

;"-Call up Active Reserves; Call up Ready Reserves, as necessary 

,Cross train existing aDA Personnel, as necessary 

;"-Leverage current composition of SBA's disaster buildings 

m 

;"-Surge Facility in Sacramento on Mstand-by" should the flow of applications proves to be a challenge, or if 

the agency finds benefit in running concurrent operations 

"'OGMS core capability provides adequate capacity 

:'-Engage SBDCs, SCORE, and WBCs in local outreach 

.... Leverage existing loan processing contractors, as necessary 

,CLA communicates with affected congressional offices 

:'-ODA PIO's communicate with the affected SBA regional and dismct offices and with the media 

,The public affairs personnel at the regional and district levels inform local officials of the classification of 

I«!<>mmunlo_>ll the disaster and the services SBA will provide; listen to local needs 

SBA 

Disaster Recovery Plan 

:'-ODA and OCPL constantly communicate 

,OCPL activates the Disaster Assistance InfOlmation Center (DAIC) at SBA Headquarters, if Levell!! or IV 

response anticipated 

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Small Business Administration Disaster Recovery Plan 

SBA's LEVEL III PLAN 

Once disaster loan application volume is anticipated to reach 250,000 (due to a single disaster or due to 

multiple disasters), SBA's Disaster Executive Oversight Council triggers Surge Capacity. According to 

SBA's disaster planning modeling tools, SBA will experience peak application inflow in or around the 

second month of processing. This will require SBA to employ surge strategies in the loan processing and 

loss verification functional areas to achieve a performance goal of 21 days. 

In addition to the Disaster Reserves (Active Reserve and/or Ready Reserve), SBA will leverage the 

contractors that are ready to process loans, as well as the Non-ODA Surge Staff located primarily in the 

District Offices and the Office of Capital Access. ODA will employ hiring strategies in key functions to 

ensure that the full complement of staff are deployable in the week in which SBA's modeling activities 

indicate that they are required to be productive on SBA's front lines. 

With respect to infrastructure, Level ill may require employees of the Processing and Disbursement 

Center in Fort Worth to work double-shifts, as they did during the Gulf Coast Hurricanes. This doubleshift approach yields an equivalent of 3,500 available workstations (1,750 actual workstations, deployed 

at double the standard number of hours per 24-hour period) for application intake, loan processing, and 

disbursement activity. SBA's surge loan processing and disbursement facility in Sacramento may also 

employ a double-shift capacity, as needed, which yields an additional equivalent of 700 workstations (350 

actual workstations) for loan processing and disbursement activity. SBA will prepare pre-positioned 

Disaster Hubs to be used, should the volume be anticipated to exceed 500,000. 

SBA 

;"Activate Surge Facility in Sacramento 

;'Operate a double-shift approach to maximize resources 

, Utilize Disaster Hub Concept, as necessary 

;"OCMS core capability provides adequate capacity 

,Closely monitor OCMS utilization & capacity 

;.. Closely monitor tablet inventory for FIT in order to procure additional units, with sufficient reserve 

,Engage SBOCs, SCORE, WBCs tn local outreach 

:"'Leverage existing loan processing contractors 

:'-OCPL activates the Disaster Assistance Information Center (DAIC) at SBA Headquarters 

I«:omn,oo"".,.~ I ;;,. DAIC communicates with affected congressional offices, partner agenaes, media 

,AAJCPL deploys personnel to JIC, as necessary 

Disaster Recovery Plan 

DB 

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228 

Small Business Administration Disaster Recovery Plan 

SBA's LEVEL IV PLAN 

A Level IV disaster (more than 500,000 disaster loan applications) will be larger, and generate more loan 

applications, than any previous event, including the 2005 Gulf Coast Hurricanes. This number of 

applications (due to a single disaster or due to multiple disasters) will require SBA to leverage disaster 

planning modeling tools to determine if it is necessary to adjust the performance goal for processing 

beyond 21 days. 

In addition to the Disaster Active and Ready Reserve, SBA will leverage all available surge human 

capital available across the Agency. Moreover, ODA will employ hiring strategies in key functions to 

ensure that the full complement of staff are deployable in the week in which SBA's modeling activities 

indicate that they are required to be productive on SBA's front lines. It is anticipated that hiring will begin 

immediately to ensure that the peak application periods are well staffed. Finally, SBA recognizes that 

draft legislation is pending in Congress that would prove to be most applicable to disaster activity 

associated with this catastrophic level. SBA awaits further direction from Congress, and will adapt 

pursuant to enacted legislation. 

With respect to infrastructure, a Level IV response requires employees of the Processing and 

Disbursement Center in Fort Worth to work double-shifts. SBA's surge loan processing and disbursement 

facility in Sacramento will also employ a double-shift capacity (see Level m description for details). 

Further, SBA will leverage Disaster Hubs, as needed, to augment ODA's existing staff levels while it uses 

its primary human capital methods to hire permanent staff. By utilizing Disaster Hubs with a double-shift 

approach, it is estimated that SBA has an additional equivalent 400 workstations available for loan 

processing activities. 

Finally, through the application of SBA's disaster planning tools, the Agency will be in a position to 

determine in the early weeks of a catastrophic response if the Agency possesses adequate infrastructure to 

house the required amount of staff to meet a 21 day process to decision goal. Should SBA estimate that it 

will requires additional capacity for a given surge, the Agency will immediately leverage pre-existing 

relationships with GSA to negotiate the procurement and utilization of additional infrastructure. GSA is 

aware that SBA may need to acquire space quickly when a Level IV disaster occurs. SBA continually 

monitors available space throughout, in case of such a need. 

SBA 

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Small Business Administration Disaster Recovery Plan 

>Leverage current ODA staff 

~Cal! up Active and Ready Reserves 

~Cross train existing ODA personnel, as necessary 

~Employ Non-ODA Surge Staff (District Offices, etc .. ) 

~Loan processing staff work double-shifts 

~Hire new personnel, as necessary 

~Leverage current composition of SBA's disaster buildings 

~Operate a double~shift approach to maximize resources 

~If necessary, execute contingency plan to expand DeMS capadty 

~Procure additional tablets inventory for FIT, as necessary 

>Engage SBDCs, SCORE, WBCs in local outreach 

>Leverage existing loan processing contractors 

>OCPL activates the Disaster Assistance Information Center (DAle) at SBA Headquarters 

>DAIC communicates with affected congressional offices, partner agendes, media 

>AA1CPL deploys personnel to JIC, as necessary 

DETMLEDSURGEPLAN 

Figure 10 (below) graphically depicts SBA's plan for surging to accommodate the receipt of 500,000 

disaster loan applications within its current composition of assets and resources. The numbers in the 

graphic are accurate as of May 15, 2007. While the above charts show the surge plan Level-by-Level, 

Figure 10 shows the surge plan as a continuum, spanning Levels I through N. Particularly for the first 

two components Human CapitaVPersonnel, Facilitiesiinfrastructure - there is an order to how the 

resources scale. 

The surge plan for Personnel (Human Capital) first leverages aDA staff, then leverages employees from 

across the SBA organization. SBA leverages Active Reserves, Ready Reserves, existing contractor 

relationships, aDA staff, SBA staff, and then hires externally as necessary. 

SBA maintains the facilities to process 500,000 disaster loan applications, before needing engage GSA to 

locate additional space. Space is measured in tenus of workstations. Fully a third of the personnel during 

Surge Capacity are out in the field verifying property damage and therefore do not use workstations in 

one of the facilities. These loss verifiers log onto the OCMS system remotely, from their location in the 

field. The main loan processing and disbursement centers are in OallaSIFort Worth, Texas and in 

Sacramento, California (Surge Facility). Each of these centers can employ double-shifts, one during the 

day and one at night, if necessary (as was done subsequent to the 2005 Gulf Coast Hurricanes). 

Disaster Recovery Plan June 1, 2007 
230 

Small Business Administration 

Personnel (Loan PrOCes!illlg. Disbul>ement. 

and VerifICation) 

Facilities' *113 01 personnel are out in the fie/d 

vefflyingpropertydctmage,50lheydonol 

nee:la\¥Olblalionlllalaciijly' 

Disaster Recovery Plan 

Information 

Technology 

Figure 10: SBA's Detailed Surge Plan for Managing Disaster Loan Applications (May 15, 2007) 

This section described how SBA will adjust its strategy for responding, based on the size of a disaster. 

Section VIII, Simulations, describes the exercises SBA has conducted and will conduct in order to give its 

employees practice in responding to different surge scenarios. 

SBA 

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Small Business Administration Disaster Recovery Plan 

VIII. SIMULATIONS 

Simulations are tools SBA uses to test and evaluate both personnel and protocols integral to efficient 

disaster response. An ideal simulation will allow SBA not only to test participants but also will highlight 

short comings and areas of concern in the SBA Disaster Recovery Plan. Effective implementation of postsimulation "Lessons Learned" will improve the SBA disaster plan and maximize performance in a real 

disaster scenario. 

SBA's disaster simulations will be part of the normal SBA training program, but scheduled during times 

of minimal disaster activity so as not to exert undue pressure on SBA staff. Simulations can be tailored to 

specific program offices (e.g. Communications, Office of Field Operations, etc.) or can be implemented 

with a top-down approach that will encompass the entire Agency, including senior management. SBA 

staff will also participate in other Federal simulations and select state, tribal and local exercise as time 

allows. 

Simulations will include systems testing at maximum levels including application processing and call 

center volume. They will also include ramp-up tests of hubs and backup processing facilities. 

SBA DISASTER SIMULATION 

Figure 11: Disaster Simulation Process 

Jn May 2007, 35 employees from SBA's Headquarters performed a tabletop exercise to test key 

components of this Disaster Recovery Plan. This exercise was the first of a series of exercises and 

simulations SBA will perform in order to prepare for disasters. It was directed toward the Senior 

Management of SBA, as well as management members of Office of Disaster Assistance and Office of 

Field Operations. It identified three operational areas (Communications, Governance, and Training) that 

SBA must drill in the future. 

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IX. COMMUNICATIONS PLAN 

In a disaster situation, SBA plays an essential role in restoring the affected area's economic health and 

vitality, Each year SBA handles tens of thousands of disaster loan applications for small businesses, 

homeowners, and renters to help them return to their pre-disaster standard of life, Ensuring accurate, 

timely, and consistent information exchange between disaster survivors and the government institutions 

upon which they rely is a vital part of SBA's disaster recovery mission, 

The 2005 Gulf Coast Hurricanes have profoundly impacted SBA's disaster recovery planning, One 

important lesson is the need to interact with an increased number of customers, disaster victims, and state, 

local, and federal stakeholders in the event of a widespread disaster. SBA has developed a graduated plan 

that brings greater communications resources to bear as the event size increases. 

TARGET AUDIENCES 

SBA will provide accurate, timely, and consistent information to several audiences simultaneously, 

Stakeholders have been classified in the following categories, including the communication objective for 

each constituent group: 

Disaster Victims and SBA Customers: Provide accurate, timely, and consistent information on 

contacting SBA, Agency services (especially about how to apply for disaster loans) and how to 

simplifY the application process, 

State & Local Officials: Provide accurate, timely, and consistent information about SBA's 

services, how to access them, and the status of SBA operations in their area (with ongoing status 

reports throughout the process), 

Federal and Congressional Officials: SBA's Office of Congressional and Legislative Affairs 

(CLA) and Office of Intergovernmental Affairs have partnerships with FEMA, DHS, and other 

federal partners to ensure smooth recovery operations for customers, These partners understand 

SBA's role in supporting disaster recovery; as necessary, CLA and Intergovernmental Affairs 

will explain how SBA is responding to particular events and coordinate with its partners. SBA 

will coordinate with agency partners that offer other financial assistance programs that would 

impact SBA benefits, 

National, Regional, and Local Media Outlets: Enhance strong relationships with media to 

facilitate dissemination of SBA's message, provide an accurate picture of SBA operations, and 

encourage reasonable expectations as to what the Agency can and cannot do, 

• National Business & Government Associations: Partner with economic development 

organizations, non-profits, and government associations to provide additional channels for 

increasing awareness of SBA services and aid in economic recovery, 

Strategic Partners: Partner with economic development organizations, non-profits, and SBA 

resource partners to provide additional chatmels for increasing the awareness of SBA services and 

aid in economic recovery. 

ROLES AND RESPONSIBILITIES 

The Assistant Administrator for Communications and Public Liaison (AAlOCPL) is responsible for all 

connnunications, and creates the Agency's communications-related policy, for both normal and disaster 

recovery operations. As part of this responsibility, OCPL creates the Agency's core messages to ensure 

SBA Page 56 0172 

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Small Business Administration Disaster Recovery Plan 

customers and government entities understand SBA's mission, capabilities, and services. OCPL 

disseminates the messages at the national level, and to SBA Field and Disaster Offices for local 

distribution. 

The Assistant Administrator for Congressional and Legislative Affairs (AAICLA) is responsible for 

SBA's communications with members of Congress and their staffs. CLA responds to Congressional 

inquiries and seeks to keep members informed of SBA's recovery activities. CLA focuses on members of 

the districts affected by the disaster to ensure their constituents' needs are addressed, as well as members 

of the authorizing and appropriating congressional committees to ensure resource needs are well 

understood. 

SBA's interaction with its customers and state and local stakeholders is led by regional and district public 

affairs personnel. These personnel maintain up-to-date contact with state, county, and municipal officials 

to educate them on SBA' s role in disaster recovery prior to a disaster, and to facilitate recovery operations 

afterwards. They also maintain contact lists for local media outlets to ensure the public is aware of SBA's 

services and how they can be accessed. Field Office personnel have established relationships with local 

development organizations and professional organization (e.g., civic organizations, Chambers of 

Commerce), so will be the fust point of contact for local business leaders in the event of disaster. 

SBA also retains a robust crisis communications capability within its ODA, with dedicated Public 

Information Officers (PIOs) at its Field Operations Centers (East & West). When a disaster occurs, these 

experienced professionals deploy to the on-site Joint Information Center (ITC) alongside personnel from 

FEMA and other federal agencies to facilitate intra-government communications. ODA Field 

Communication Managers also lead the interaction with the local media outlets to answer inquiries and 

inform the public of SBA activities. 

SBA employees have received significant training in crisis communications and public relations and are 

well prepared to interact with affected customers, federal, state and local officials, and the media. SBA 

has created communications materials, which will be disseminated immediately in the event of a disaster. 

SBA 

PRE-DISASTER COMMUNICATIONS OUTLINE 

Pro-active communication, before disasters occur, is central to SBA's strategy. These "predisaster" communications are not specific to anyone disaster, but are general preparations. To 

this end, OCPL: 

1. In coordination with ODA, 

a. Initiates SBA-wide training for all public affairs staff related to handling 

disasters in their districts; 

b. With DHS and FEMA, establishes seasonal pen and pad briefings for 

national media on disaster-related issues; 

2. In conjunction with ODA, CLA, and Intergovernmental Affairs, 

a. Develops and disseminates basic materials explaining SBA's disaster services 

to all levels of government and media; 

b. Enacts an earned media campaign (media tour) with a paid media option 

(advertisements) 

i. FOCs circulate tips and relevant information to hurricane states 

during the month before hurricane season, in coordination with 

OCPL. 

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Small Business Administration Disaster Recovery Plan 

COMMUNICATIONS PLAN: SURGING TO ACCOMMODATE NEED 

SBA developed this conununications plan with two major objectives; 

1. Informing customers of SBA services and how they can use them; and 

2. Facilitating operations with other recovery partners. 

The plan outlines the course of events for conununicating prior to and during the execution of recovery 

operations. It identifies the assets to be called upon to respond, according to disaster severity (Level IIV). SBA has develoged this plan to be in alignment with the Emergency Support Function-15 Standard 

Operating Procedure' established by the Department of Homeland Security, enabling conununications 

through the National Incident Management System (NIMS). Below is a summary of the concept of 

operations for reaching out to customers and other stakeholders in the different levels of disasters. 

LEVEL I DISASTER COMMUNICATIONS 

In the case of disasters such as hurricanes, where there is the opportunity to prepare for a disaster 

before it occurs, the ODA PIO reviews the communications operating procedures, sets an initial 

communication strategy, and creates requisite disaster-specific materials. For other disasters, such 

as tornadoes, SBA begins its recovery operations once the disaster declaration has been issued. 

ODA PIOs are responsible for contacting the affected regional and district offices at the onset of a 

disaster once a disaster has been declared. The public affairs personnel at the regional and district 

levels immediately reach out to local officials to inform them of classification of the disaster and 

what services SBA will provide to assist in the recovery. SBA has developed a Disaster Toolbox 

for the field representatives to use in the period inunediately following a disaster that contains 

ready-to-use materials providing basic information on SBA services. 

The PIOs entering the area to begin recovery operations and SBA's field assets coordinate 

communications to the media in order to deliver a coherent message to the local population. 

These communications occur daily until recovery operations end and at conununity events. 

Once in the affected area, the PIOs lead the communications efforts with federal, state, and local 

stakeholders from the JIC. They provide trained spokespeople to interact with local media outlets 

in order to further disseminate SBA's message. The PIOs interact closely with FEMA's 

Community Relations staff to coordinate outreach actions. ODA personnel also interact with 

congressional officials visiting the affected area. 

During Level I disasters, the OCPL provides conununications oversight in order to ensure SBA's 

customers and stakeholders receive accurate, timely, and consistent information. When required, 

OCPL staff interacts with national media. The OCPL also sen'es as an additional conununications 

resource to internal SBA operations such as Processing and Disbursement Center (PDC), and 

other federal agencies, primarily with contacts in the Washington, DC area. 

CLA retains oversight of responses to congressional inquires, interacts directly with members and 

their staffs in the Washington, DC area, and ensures that members visiting the affected area 

lS ESF~ 15 is an Interim guidance document at this time. 

SBA 

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SBA 

receive an accurate picture of SBA operations. The PIOs provide information to members of 

Congress who are visiting the affected area. 

LEVEL II, III, AND IV DISASTER COMMUNICA nONS 

Disasters classified above Level II require SBA to bolster its communication resources with a 

more expansive team: The scale of the recovery efforts in these events multiplies the number of 

stakeholders. Consequently, SBA has developed a Surge Capacity that employs SBA 

headquarters communications assets. This plan for increasing communications assets follows the 

principles of the overall Disaster Recovery Plan. 

For Level II disasters, the same concept of operations and basic sequence of events applies. 

However, the AAlOCPL will activate the Disaster Assistance Information Center (DAlC) at SBA 

headquarters in Washington, DC (or other necessary locations) in response to any disaster on the 

high end of Level II and for all Level III and N events. The DAiC increases the Agency's ability 

to conduct recovery operations and reach out to its customers. The purpose of the DAiC is to 

create a clearinghouse for Agency communications to create a clear picture of SBA recovery 

operations. The DAiC consists of representatives from the OCPL, CLA, ODA and other SBA 

offices, so as to collect information from across the organization. The AAlOCPL can also deploy 

headquarters personnel to the JIC to facilitate information flow between the DAiC and on-site 

activities. The DAiC is responsible for creating and maintaining a single, unified and accurate 

picture of recovery operations. The DAiC can then create clear, cohesive messages that all SBA 

personnel deliver to customers, state and local officials, and federal partners. 

One of the DAiC's main roles is to take on communication responsibilities that could decrease 

the ability of ODA to conduct recovery operations. To that end, the DAiC will respond to 

inquiries regarding the laws and policies that govern SBA recovery operations and all media 

inquiries that do not originate from the affected area. The DAiC will serve as the main 

communications hub within SBA, for federal partners, and for members of Congress. 

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236 

• Citizens (direct) 

• On-site Federal 

assests 

• State & local Officials 

• Developmental 

Organizations & 

Non-profits 

• local & On-site media 

• Disaster victims 

• Thepublic 

Disaste, Recovery Plan 

• SSA .e,vices 

ope,atiOns 

• SSA services 

• SSA locations & 

operating hours 

Figura 12: Concept of Operations for Surge Communications 

Level ill and IV disasters assistance from SBA's headquarters assets. 

Experience shows that such significant resources and oversight to establish a 

clear picture of the situation and the stale of In these 

cases, the AAlOCPL takes direct control connnurucation. 

the DAlC to the affected area while staff to manage ,xr.,"hinn+An 

area connnunications. on need, the will leverage surge support 

offices in unaffected to efforts in the disaster area. As disasters 

of this magnitude attract significant national media attention, the AAlOCPL will interact with the 

media from SBA Headquarters or from the affected area. 

IMPROVING SHA's CAPABILITIES 

SBA's plans are dynamic: the Agency will continue to learn and improve its operations as it 

responds to hurricanes in 2007 and other disasters. Lessons learned during and after the 2005 

Gulf Coast Hurricanes shaped the disaster recovery plan and how the Agency 

connnunicates with customers and other OCPL, ODA, and Field Offices will test 

their capabilities, connnurucations plan, and existing SOPs exercises and simulations. 

SBA will adjust its plan and SOPs over time to reflect learning, and ultimately to 

Disaster Recovery Plan June 1,2007 
237 

Small Busine •• Administration Disaster Recovery Plan 

X.PATH FORWARD 

SBA continues to develop and refine its disaster recovery capabilities. This section describes ongoing 

initiatives that will further improve its disaster recovery ability over time. 

ONGOING INITIATIVES: 

SSA 

• Next-Generation Modeling and Simulation 

• Updated Standard Operating Procedures and Training 

• Continued Business Process Improvements 

• Expanded Public-Private Partnership 

NEXT-GENERATION MODELING AND SIMULATION 

SBA already uses FEMA's HAZUS model to assist in projecting the impact of disasters and the 

number of disaster loan applications that will be likely to be generated by a particular 

disaster. SBA has used proprietary data - particularly historical disaster loan records - to 

augment and customize HAZUS to suit and support SBA's purposes. 

During the past year, SBA launched a significant effort to examine leading-edge modeling and 

simulation developments in the private sector that could further improve its ability to forecast 

disaster recovery needs, loan volume, and total costs. SBA may incorporate some of these 

external modeling products into its risk modeling process. The actuarial and insurance industries 

have in-depth assessment techniques and models that could augment SBA's risk modeling 

process, and could potentially expand the variety of disasters that SBA's models address. Not 

only do these tools allow for an understanding of future disasters based on similar past disasters, 

they also provide for "what if' -type scenarios, for which there is little historical data from which 

to make projections. Implementation of such models would allow SBA to even more accurately 

predict loan amount and volume, and consequently to make funding requests to Congress that 

more truly reflect the size ofthe response needed. 

UPDATED STANDARD OPERATING PROCEDURES AND TRAINING 

Standard Operating Procedures have long been in place, along with corresponding training, for 

the SBA's core competencies regarding disaster recovery. The 2005 Gulf Coast Hurricanes 

provided incentive for multiple process improvements and updated standard operating 

procedures, particularly regarding SBA's surge response. These have been implemented over the 

past two years. A comprehensive approach to enhancing standard operating procedures, training, 

and coordination will continue. In addition, SBA will perform annual simulation and tabletop 

exercises to test and further upgrade its core and surge disaster response procedures. 

CONTINUED BUSINESS PROCESS IMPROVEMENTS 

SBA continues to improve and automate business processes to bring about greater responsiveness 

and efficiencies. Section V, Business Process Improvements, addresses the business process 

improvements that have already been made. 

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SmaU Business Administration Disaster Recovery Plan 

SBA 

Currently, SBA is focused on defining functionality and system requirements for an online 

disaster loan application. By empowering homeowners, renters and business owners to begin the 

loan-application system on their own, delays will be reduced significantly. When displaced 

disaster victims reach any location with Internet access, they will be able to initiate the loan 

process, check on the status of their request, and receive automated updates at certain milestones 

events. Online filing will increase customer satisfaction, and reduce errors. The electronic 

application intake program will create other internal process improvements, such as reduce cycletimes and increase productivity of SBA employees. 

SBA is actively involved in the planning for a government-wide single portal for disaster victims 

to submit electronic applications for assistance, as directed by Executive Order: Improving 

Assistance for Disaster Victims (August 29, 2006). This FEMA-Ied initiative is currently referred 

to as the Disaster Assistance Improvement Plan and includes 14 other Federal agencies and 

departments. The focus of the current plan is to provide application services following major 

disaster declarations to homeowners and renters, most of which are typically referred to SBA for 

a loan. The current plan proposes changes and improvements to both the FEMA NEMIS and 

DOL GovBenefits programs to meet the objectives of the Executive Order, and for other agencies 

to fund their supporting infrastructure. 

The on-going SBA effort to release an online disaster loan application is necessary to support the 

internal infrastructure requirements of the government-wide single portal. The SBA effort 

includes addressing a gap in the single government portal by including online application services 

for business owners and to victims of disasters not declared by FEMA. SBA will closely 

coordinate with FEMA as it designs the functionality to be included in the government-wide 

portal and will incorporate the common data collected by this process. Using the same 

module and web service developed for the online loan application, SBA will feed its data into the 

other planned internal process improvements for a single integrated and efficient loan process 

solution. 

Another potential component of the business process improvements is next-generation 

information technology capabilities that can assist SBA in its mission. In particular, SBA is 

considering strategies for developing systems-supported models that leverage public records for 

more rapid responsiveness to victims of disaster, while observing privacy and security statutes 

and regulations. The Agency is pursuing further time savings by partnering with the IRS to speed 

the transfer of tax return data needed for loan processing as well as contracting with commercial 

companies to reduce delays in securing property titles. 

EXPANDED PUBLIC-PRIVATE PARTNERSIDP 

SBA is actively engaging with a number of government, private, and non-profit organizations. 

The Agency aims to achieve the following objectives, particularly for Surge Capacity; 

Improved local outreach following disasters 

o Examples of major potential partners; U.S. Chamber of Commerce, 

International City and County Managers Association, National 

Association of Counties 

• Improved planning capahility 

o Examples of major potentia! partners; U.S. Chamber of Commerce, 

International City and County Managers Association, National 

Government Finance Officers' Association, Private Sector Council) 

• Bolster processing capability 

o Examples of major potentia! partners; U.S. Chamber of Commerce, 

International City and County Managers Association 

Disaster Recovery Plan 

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239 

:::S:::m:::.I:..:1 Bu=s:::ln"'es:::s.:cA:::d:::m:::ln::::ls:::I"':::I::::lo::" ______________________ .::IJi='s=.s:.:le:.:'.:.R,ecovory Plan 

ApPENDICES 

ApPENDIX A: LESSONS LEARNED 

The volume of loan applications subsequent to the 2005 Gulf Coast Hurricanes overwhelmed SBA's 

workforce, infrastructure, and loan processing system, At that time, SEA was not sufficiently prepared 

for a catastrophe of this magnitude, As a result, many disaster victims in the Gulf Region did not receive 

timely assistance, SBA has identified four previous challenges or primary lessons learned and 

corresponding resolutions, 

LESSON # 1: SBA MUST HAVE A SURGE PLAN FOR SCALING TO RESPOND TO DISASTERS 

OF THE LEVEL OF THE 2005 GULF COAST HURRICANES OR GREATER 

The Gulf Coast Hurricanes of 2005 highlighted SBA's need for a surge plan to respond to 

disasters of this magnitude Of greater. The number of loan requests from disaster victims 

generated by the Gulf Coast Hurricanes was approximately three times the number that resulted 

from any other instance in SBA's 50 year history, The quantity of loan applications after the Gulf 

Coast Hurricanes exceeded SBA's existing processing capacity, Additionally, SBA's Office of 

Disaster Assistance (ODA) was undergoing an organizational restructuring that further taxed its 

resources and operations, SBA had not fully developed a pervasive internal support mechanism 

to leverage all internal and external resources, SBA has now developed a surge plan, as described 

in Section VII of this report, Surging to Accommodate Need, for addressing increases in loan 

applications, 

Lesson Learned 

SBA learned that to effectively address the magnitude of loan applications created by the Gulf 

Coast Hurricanes 0[2005 (or greater); the entire Agency must mobilize, Only lfthis happens can 

SEA supply ample resources in Surge Capacity, Section VII of tbis report, Surging to 

Accommodate Need, details SBA's plan to surge and provide resources for different levels of 

disaster based on the estimated nwnber of loan applications, with the goal of enabling the Agency 

to meet performance standards regardless of the scope ofthe disaster. 

Disaster Recovery PI.n June 1, 2001 
240 

LESSON # 2: WHEN SCALING TO RESPOND TO LARGE DISASTERS, COMMUNICATION 

NEEDS TO BE IMPROVED AT ALL LEVELS 

In the Agency's surge following the 2005 Gulf Coast Hurricanes, there was insufficient 

communication among all of ODA's Centers and the rest of the Agency. Although the Centers 

have specific functions, they lacked an information-sharing network or platform and did not share 

information with each other as fully as should be expected: the result was that it was difficult to 

fully serve the disaster victims. Additionally, SBA's communication with ext=al stakeholdersCongress, federal, state, and local agencies fell short of expectations. 

SBA has implemented procedures to improve communication among ODA's Centers, throughout 

SBA, and with external stakeholders. This plan is detailed in Section vn, Surging to 

Accommodate Need, and in Section IX, Communications Plan, of this report. 

LESSON #3: SBA MUST INCREASE CAPACITY, REDUCE ERRORS AND REWORK, 

PROVIDE BETTER CUSTOMER SUPPORT, AND HAVE TOOLS IN PLACE TO SUPPORT 

OPERATIONAL ADJUSTMENTS 

As a result of the 2005 Gulf Coast Hurricanes, SBA received an unprecedented 420,000 loan 

requests. This massive volume exposed the weaknesses in the business process and key 

operations. Because of inflexibility in the operational model, the Agency lacked throughput 

capacity, resulting in a large backlog. At one point the average request took 75 days to process. 

While there are some borrowers that remain in the process (as of May 2007), the preponderance 

have issues with insurance, utilities, or obtaining documents issues unrelated to SBA's 

response. 

SBA has made significant progress in reengineering its processes and expediting referrals to grant 

programs to be prepared tor future disasters. Through dialogue and operational improvements 

since the 2005 hurricanes, the Agency has become more adaptive. 

Business Process Improvements and Oversight 

A chief complaint of loan applicants after the hurricanes of 2005 was the complex process of 

interaction with multiple SBA representatives. Based on a review of customer feedback and 

internal performance indicators, SBA has identified inefficiencies and quality deficiencies in its 

processes. 

SBA performed an in-depth review of its processes, which led to a full redesign of SBA's internal 

production and support services operations. Integrated tearns now work together in collaborative 

units, focusing on cases assigned to them. They respond to customers faster, make fewer errors, 

Disaster Recovery Plan June 1, 2007 
241 

Small Business Administration Disasler Recovery Plan 

and generally provide better sen.~ce, The new process has yielded improved communication with 

disaster victims and better collaboration among ODA employees, 

Now, at the time of a loan approval, each borrower is assigned a case manager who is his or her 

point of contact throughout the process, This streamlined 'lifecycle' case management system 

helps the borrower navigate the process more efficiently, and thus receive the service they need in 

a timelier manner. 

SBA has contacted over 90,000 borrowers in the Gulf to introduce them to the new process and 

has recorded the challenges encountered, SBA has used this information to create a database that 

provides insight into borrowers' needs and concerns, 

Expedited Referrals to Grant Programs 

SBA is using automated tools to expedite applicants' referral to grant programs, which results in 

less work for the applicant and a burden reduction for SBA, By using these tools, SBA can 

process a larger number of loans in a shorter period of time and refer ineligible loan applicants to 

grant providers much sooner. This improvement has reduced the volume of files pending a 

decision, minimized the aging of such files, and eased the processing burden on DCMS, 

LESSON #4: To RESPOND TO FUTURE DISASTERS, ODA MUST IMPROVE ITS COMPUTER 

SYSTEMS 

When Hurricanes Katrina, Rita, and Wilma hit the Gulf Coast, SBA was in the process of 

upgrading its ODA loan processing computer systems, Prior to the Gulf Coast Hurricanes, ODA 

used Automated wan Control System (ALCS) and Loan Officer Reporting (LOR), These 

systems were deconunissioned due to severe resource, security, and scalability limitations, 

Therefore, a new computer system was in the process of being inlplemented, 

ODA's new computer system, the Disaster Credit Management System (DCMS), was not 

completely deployed when the first of the three hurricanes struck. Consequently, the new system 

could only accommodate approximately 2,000 concurrent users, In addition, because the system 

was new, the workforce had a limited knowledge of the efficient use of the system's tools, SEA 

was in the process of expanding system capacity, network capacity and scanning infrastructure 

during the response, However, the volume of loan applications stressed the new system's 

capacity, causing significant backlogs, 

Upgraded System Capacity 

Since the Gulf Coast 2005 Hurricanes, SBA has completed the DCMS Hardware Upgrade 

project, significantly expanding DCMS' capacity, This expansion represents a four-fold increase 

in capacity over peak usage during the 2005 Gulf Coast Hurricanes up to 8,000 concurrent users, 

The current system also allows users to work remotely, expanding the geographic alternatives for 

workforce recruiting, 

Advantages of DCMS 

Now that the DCMS technology has been fully implemented and enhanced, SBA efficiently 

processes disaster loan applications by allowing data to be captured and reused throughout the 

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242 

Small Busin ... Administration Dis.ster Recovety PI.n 

SBA 

process -- much of the process is now automated. DCMS underwent extensive performance 

testing prior to release to production. SBA intends to continue to enhance the DCMS software 

and hardware components to further improve performance and capabilities and will perform 

additional stress testing, as necessary, to assess the impact ofthese changes to the new baseline. 

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Small Business Administration Disaster Recovery Plan 

APPENDIX B: ACRONYMS 

HR Human Resources 

ANOCPL Assistant Administrator for HSIN Homeland Security Information 

Communications and Public Liaison Network 

ANODA Assistant Administrator for the Office IA Individual Assistance 

of Disaster Assistance 

ANOFO Associate Administrator of the Office IFA InteIjurisdictionai Fisheries Act 

of Field Operations 

ADRI Accelerated Disaster Response lIMG Interagency Incident Management 

Initiative Group 

ALCS Automated Loan Control System MOU Memorandum of Understanding 

BPR Business Process Re-Engineering NACo National Association of Counties 

CLA Congressional and Legislative Affairs NIMS National Incident Management 

System 

COBRA Coastal Barrier Resources Act NPSC National Processing Service Center 

CONUS Continental United States NRC National Capital Region 

CSC Customer Service Center NRCC National Response Coordination 

Center 

DAlC Disaster Assistance Information Center OCIO Office of the Chief Information 

Officer 

DCMS Disaster Credit Management System OFO Office of Field Operations 

DGR Delegated Government Representative OCON Outside the Continental United 

US States 

DHS Department of Homeland Security OCPL Office Communications and Public 

Liaison 

DLP Disaster Loan Program ODA Office of Disaster Assistance 

DLV Disaster Loss Verification OMB Office of Management and Budget 

DLOC Disaster Loan Outreach Center PASC Personnel and Administrative 

Services Center 

DRC Disaster Recovery Center PDA Preliminary Damage Assessment 

EIDL Economic Injury Disaster Loans PDC Processing and Disbursement Center 

ESF Emergency Support Function PIO Public Information Officer 

ESFLG Emergency Support Function Leaders PMO Project Management Office 

Group 

FEMA Federal Emergency Management PSA Public Service Announcement 

Agency 

FIT Field Inspection Team PWS Performance Work Statement 

FOC Field Operating Center RRCC Regional Response Coordination 

Centers 

FOC-E Field Operating Center East SBA Small Business Administration 

FOC-W Field Operating Center West SBDC Small Business Development 

Centers 

FSA Farm Service Agency SME Subject Matter Expert 

GFOA Government Finance Officers SOP Standard Operating Procedures 

Association 

GCIBD Government Contracting and Business WBC Women's Business Centers 

Development 

GIS Geographical Information Systems VTC Video Conference Calls 

GSA General Services Administration 

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Small Busine •• Administration Disaster Recovery Plan 

APPENDIX C: SCOPE AND METHODOLOGY 

SBA faced unprecedented demand for its disaster loan assistance services in the wake of Hurricanes 

Katrina, Rita, and Wilma. The scale of the demand forced SBA to reexamine its Core Capabilities, Surge 

Capacity, and means for communicating, both internally and externally, in times of disaster. This 

document has identified the critical steps that SBA has taken and will take, in partnership with other 

agencies, to prepare for and respond to disasters. 

SCOPE 

Although this document identifies the critical path for moving forward, it does not set forth 

Standard Operating Procedures. SOPs have long been in place, along with corresponding 

training, in SBA's core competency to respond to disasters. Based upon the comprehensive 

Disaster Recovery Plan that SBA has now developed, it will upgrade SOPs and training across 

the organization, particularly with regard to responding to large-scale disasters. 

METHODOLOGY 

A collaborative tearn within SBA met for several months to develop the Disaster Recovery Plan. 

The tearn shared lessons learned and developed a methodology for modeling and meeting the 

needs of future disaster victims. Regarding each element of the surge response (Human Capital, 

Infrastructure, Technology, Communications, and Partnerships), SBA employed the following 

methodologies: 

• Human Capital - employed detailed models based on productivity metrics to 

determine the staffs need relative to various levels of disaster loan application 

requests: 

• Infrastructure - Analyzed productivity metrics, levels of Surge Capacity, and 

double-shift approaches employed subsequent to the 2005 Gulf Coast Hurricanes. 

• Technology - Finished implementing and testing the DCMS system. Received input 

from SBA's CIO and the manager ofSBA's DCMS Operations Center. 

Communications - Reviewed stakeholders' requests, analyzed contact points, and 

issues that arose subsequent to the 2005 Gulf Coast Hurricanes. 

Partnerships - Initiated an outreach campaign to build partnerships with government 

(federal, state, and local) and private sector entities. 

SBA has disseminated internally generated products to key external stakeholders, including GSA, FEMA, 

and DHS in order to obtain additional information and enhance ongoing communications. It is important 

that all of the government agencies involved in responding to disasters do so in concert. SBA 

acknowledges that being prepared for large-scale disasters has a significant cost. Before frnalizing the 

budget for the Disaster Recovery Plan SBA has vetted it with its stakeholders. The Agency's partners, 

GSA, FEMA, and DHS, understand its core capabilities and support its surge plans and readiness 

measures. 

SBA 

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APPENDIX D: DISASTER SCALE DOWN PROCESS 

As part of SBA's cost-effective, application-driven staffing model, levels of staff vary according to the 

number of applications needing processing services. SBA maintains employee types, which allow for a 

flexible and fair staffmg model that can scale and surge when needed, while maintaining fiscal 

responsibility during down times. 

As previously discussed in the Surging to Accommodate Need section, SBA can scale up its operations 

and increase manifold in size according to the level of a catastrophic event. However, as the recovery 

phase draws to a close, SBA must resume its normal operating protocols and gradually scale down its 

staffing, equipment, and resource needs. 

According to its written procedures, when workload decreases cause a surplus of employees, decisionmakers within SBA can estimate the continuing need for each job group (e.g., screening & applications 

entry, scanning, loss verification, loan processing, legal, etc.) and calculate the personnel reduction 

necessary for each job group. By using the surge modeling processing, SBA can determine an expected 

point at which the peak of loan volume and processing needs for various skill areas wiJI be reached and 

can subsequently make decisions about releasing surge staff. 

The scale process closely reflects the scale up process. Whereas, the screening and application job group 

is the first scale up, it is likely to be the first to scale down. Several factors affect the actual order of 

scaJing up and down of the disaster staff; the presence of multiple disasters, the number of loan 

modifications, and the number of relocations. Multiple disasters or a large number of loan modifications 

may require the Office to retain screeners and scanners while stiJI releasing other support staff or others 

sooner. 

SBA 

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Small Business Administration Di.aster RecovlllY Plan 

APPENDIX E: ROLES AND RESPONSmILITIES OF OTHER SBA OFFICES THAT 

SUPPORT DISASTER RECOVERY 

While Section IV addressed the primary offices that support disaster, there are other offices that playa 

role. Below is a brief description of these offices, including their roles and responsibilities in SBA's 

disaster response. 

M&A 

The Office of Management and Administration (M & A) is responsible for the oversight and 

management of the Office of Human Capital Management (OHCM) and the Office of Business 

Operations (OBO). 

In the event of a major disaster, M & A, through the OBO, provides the necessary support to 

ensure that adequate space and facilities are available and that urgent acquisition needs are 

addressed expeditiously. To ensure the availability of adequate space and facilities, OBO works 

closely officials from the General Services Administration to maintain the relationship, 

communication, and commitment needed to make certain of the immediate availability of space 

and facilities in those areas of the country most likely to be subjected to natural disasters 

The Division of Procurement and Grants Management (DPGM), within OBO, is responsible for 

meeting the acquisition needs of the Office of Disaster Assistance (ODA) during a disaster 

response. To facilitate ODA's needs in an expeditious manner, a senior Contracting Officer will 

be assigned to support their needs on an ongoing basis. That individual will work very closely 

with ODA to handle both routine and emergency requirements. That individual will also work 

closely with the Federal Emergency Response and Recovery Contracting team to utilize 

contracting vehicles developed specifically for disaster needs. When a disaster strikes, DPGM 

will provide additional contracting support as needed. DPGM will work closely with ODA to 

help them define their requirements, effect a streamlined acquisition process, and procure the 

right solution for their needs within budget and on time. 

M & A, through OHCM, will coordinate with ODA to determine if there is a need to augment 

ODA disaster personnel staff. If a disaster goes to a Level ill, OHCM will work with ODA and 

other program areas to implement the surge procedures. Specifically, OHCM will notify 

employees who are being affected and notify the SBA's union of activation of surge procedures. 

Depending on the severity and location of the event, OHCM is able to move its operations to the 

OHCM Denver Personnel Center. Should the OHCM Payroll Operation be impacted by the 

disaster, OHCM has measures in place with the National Finance Center (NFC) to ensure that 

SBA employees continue to be paid. OHCM would activate its "go teams" to a NFC backup 

location to manually input time and attendance data into the NFC. NFC has measures in place 

and emergency back up facilities to ensure payroll will be processed in a timely manner. 

OCPL 

See Section IX, Communications Plan, for OCPL's roles and responsibilities during each level of 

the disaster response. 

OCIO 

The Office of the Chief Information Officer is responsible for developing and implementing 

Information technology policy, standards and procedures in accordance to applicable laws and 

regulations for use throughout the Agency. It provides oversight, management and operational 

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support of SBA's IT units, including the Agency's continuity of operations, disaster response and 

recovery capabilities for the infrastructure and critical systems. OCIO manages and monitors the 

Agency's network to ensure a fast response to any problems that may arise during critical times, 

regarding stability, reliability and availability of all critical systems. 

OCIO and ODA work collaboratively in developing a paperless disaster loan application, which 

upon deployment will allow victims of natural disasters to complete the required paperwork 

online more expediently. OCIO manages SBA's websites, and ensures they are made available 

for accessibility at all times, so those affected by disasters can get to disaster related information 

from the first responders phase through to the recovery phase. 

SBA DISTRICT OFFICES 

While the Office of Disaster Assistance (ODA) has the primary responsibility for the delivery of 

SBA's disaster loan program, non-disaster field offices must playa role in Level ill and IV 

disasters to ensure a seamless and effective response to our customers. The extent to which a 

regional, district or branch office will be called upon to support a disaster recovery operation (for 

example, as a Disaster Hub) will be determined largely by the severity of the disaster and how 

widespread it is. Many local offices lack sufficient staff to support a large endeavor and in many 

cases their own employees may be suffering the effects of the event and need to take care of their 

own families and home situations. 

As a part of the Accelerated Disaster Recovery Initiative (ADRI), the ten Regional 

Communications Directors, or other highly qualified persons, have been designated by the 

Regional Administrators to work with ODA to support media and public affairs activities and 

coordinate support for SBA disaster programs from district offices within their region. These 

regional disaster designees will serve as points of contact when catastrophic disasters are 

declared. 

Disaster Recovery Plan 

Page 71 0172 

June 1, 2007 
248 

Small Business Administration Disaster Recoyery Plan 

APPENDIX F: THE ACCELERATED DISASTER RESPONSE INITIATIVE (ADRI) 

SBA's Administrator Preston, by executive appointment, established the Accelerated Disaster Response 

Initiative in September 2006. Its goal is to modernize and improve the business processes that SBA uses 

to assist disaster victims while providing for an integrated technology solution that eases the burden on 

the disaster loan applicants. An ADRl Team supports the initiative and reports directly to the 

Administrator. 

ADRI's main goal is to improve the speed in which disaster victims receive assistance while improving 

the manner in which disaster loans are approved and distributed. It has four main initiatives: an integrated 

case management approach to loan processing; an automated system for more rapidly collecting applicant 

data; private sector loan processing support for Surge Capacity; and broader SBA-wide integration. 

Section Y, Business Process Improvements, addresses the improvements already brought about by ADRI. 

In addition, the Accelerated Disaster Response Initiative Chief sits on a Presidential Task Force that was 

established in August 2006 to improve "the promptness and efficiency with which disaster victims obtain 

access to eligible Federal disaster assistance." This task force is charged with inventorying and assessing 

the effectiveness of disaster assistance programs, integrating a "single point" disaster application for use 

by multiple federal agencies, and the development of ways to eliminate or reduce duplication of efforts or 

requirements while minimizing fraud and waste. 

SBA 

Disaster Recoyery Plan 

Page 72 of 72 

June 1. 2007 
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City of Galveston 

Images, Statistics, and Facts 

from Hurricane Ike 

September 25, 2009 
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City of Galveston 

Fact Sheet: Galveston Island After Hurricane Ike 

Revival and Reflections: Marking the First 

Anniversary of Hurricane Ike 
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Fact Sheet: Galveston Island After Hurricane Ike 

• Hurricane Ike made landfall at 2: 1 0 a.m. September 13, 2008, with a 17-20 foot storm surge 

and 110 mph winds, flooding 75% of Galveston Island. 

• Hurricane Ike is the third most destructive hurricane to ever make landfall in the U.S. 

• An estimated $3.2 billion wOlih of damagc was caused on the Island. 

• 1.7 million cubic yards of debris has been removed from Galveston. 

• 21,000+ building permits have bcen processed with a construction value of more than $327 

million. 

• 110,000+ voluntcer hours have been spent on recovery projects. 

• $28,500,000 in stimulus money received or eannarked for city projects. 

• $267,000,000 of Community Development Block grant funds received for housing and 

infrastructure projects. 

• FEMA funds allocated to the City of Galveston of 814/09 Obligated: $82,671,078; Received: 

$66,032,857.90% of these funds are debris related. 

• Approximately 80% of Galveston's population has returned. However, City officials 

estimate that 25-30% of citizcns with flood damaged residences are still living out of their 

homes. 160 FEMA mobile homes are still occupied on the Island. 

• 3,381 storm damaged trees have already been removed accounting for 48,202 cubic yards of 

debris. An estimated 30,000 more trees were killed by Ike's salty storm surge. 

• 75% of Galveston's businesses have returned, but many are still operating at a reduced 

capacity. 

• 95% of all tourism related businesses have opened with only the Railroad Museum and 

Galveston County Historical Museum remaining closed. 

• Phase one of a $12 million beach nourishment project was completed March 31 st from 17'h 

St. to 61 s, St. along the Seawall. 500,000 cubic yards of sand was placed along the beach. 

• Three Galveston Island School District schools remain closed: Scott and Burnet Elementary, 

and Central Middle School. September '09 Enrollment: 6,099; September '08: 7,724. 

• The University of Texas Medical Branch Emergency Room reopened August 1,2009. 

### 9/4/2009 
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Testimony Overview and Recommendations 

presented by 

Mayor Lyda Ann Thomas, 

City of Galveston 

to U.S. Senate Committee on Small Business 

and Entrepreneurship 

Galveston, TX 

September 25, 2009 
266 

Landrieu Hearing. Galveston. Texas 9/25/09 

A Year Later: Lessons Learned, Progress Made, and Challenges that 

Remain from Hurricane Ike 

City of Galveston Testimony 

FEMA's Many Roles and Challenges 

After a significant storm event such as Hurricane Ike, affected citizens 

look to FEMA to assist them in their recovery efforts. Few citizens 

understand large bureaucracies and expect FEMA to respond to their 

needs in what the citizen expects as an organized response. FEMA 

also makes available flood insurance to those who wish to purchase it. 

The flood insurance underwriter for FEMA sends a Flood Insurance 

Adjuster out to address what flood insurance will cover. The FEMA 

National Flood Insurance Program (NFIP) has its own procedures, has 

an on-site review, and its own discrete results. However, to the 

affected citizen it appears that FEMA has multiple personalities due to 

differences in approach by FEMA requirements and programs. 

Individual Assistance Program Challenges 

FEMA's primary citizen response is through the FEMA Individual 

Assistance (IA) Program. The IA program has its own registration 

requirements, has its own procedures, has a face-to-face interview 

process, and its own discrete results too complex and convoluted to 

cover at this hearing geared to business and infrastructure recovery. 

Recommendations 

The entire Federal Assistance Calendar to individuals needs to be 

coordinated so that there is a master plan or oversight that offers a 

timely schedule of benefits either through the IA program, the 

availability of HMGP Buyout or Elevation Funds and HUD CDBG 

Federal Housing Assistance. Citizens need to have all options 

available to them so that they can make the most intelligent decision 

on whether to repair, elevate, or tear down their properties. 
267 

An example is that Hazard Mitigation Grant Program (HMGP) Housing 

Buyout and Elevation Assistance was available from FEMA through 

the State of Texas for discussion well before CDBG Housing 

Assistance. Because of this, there was enormous pressure to use the 

HMGP buyout and elevation funding no matter the end result. HMGP 

elevation funding was not pragmatically available to us following this 

storm ... no homes would qualify, leaving the HMGP buyout program. 

This program is designed to be effective for riverine situations and is 

not tailored to be effective for coastal communities. To use HMGP 

buyout funding in most places on Galveston Island would destroy 

neighbors and promote urban blight. However, since these funds were 

announced first it placed the Council and Staff in the very difficult 

position of deciding to use these funds or wait for promised CDBG 

Recovery Funding. 

CDBG recovery funding should be released prior to or concurrent with 

the HMGP buyout funds, and both should be available within weeks 

after a storm. We are now over a year past the storm, and funding for 

neither has actually been produced. 

The housing voucher system should take into account the amount of 

destruction done to housing. In the case of Galveston, vouchers 

should have been issued on a three month or six month cycle. The 

fewer deadlines and last minute extensions, the better. Citizens need 

help right after the storm. It has now been 1 year and housing 

assistance is just now becoming available. 

Residential Substantial Damage Estimate Program Challenges 

As a participant in the National Flood Insurance Program (NFIP), the 

City of Galveston is required to issue permits for all construction within 

the community. 

FEMA requires all cities that participate in the National Flood 

Insurance Program, which Galveston does, to have an ordinance that 

includes the Residential Substantial Damage Estimate (RSDE) 

program. The City has no choice but to implement it or the citizens of 

the city cannot have flood insurance at all. The program also has its 

own procedures, has an on-site review, and its own discrete results. 

Also, this program is to be paid for by the City itself. The cost of this 

endeavor is significant (on the order of $1.0Million). FEMA was 

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gracious enough to provide staff to conduct the RSOE process for the 

City, but it took weeks to get the process started, and weeks to finish 

it. 

It is important to note that no FEMA assessment assistance is 

available to commercial properties, which includes businesses and 

industries. 

No one whose residence is under RSOE review may receive a building 

permit from the city to start reconstruction activities. The review 

process involves color-coding residences as Green, no significant 

damage, Yellow, questionable damage, and Red, substantial damage. 

Structures coded Yellow and Red have obvious repair requirements 

that must be further inspected and permitted. Should a property be 

coded Red, it may go through a reassessment process, but in the long 

run, property owners either must tear down or elevate .. 

Finally, the RSOE process is inherently discriminatory. Because the 

ratio of calculated damages to value calculation is the determinant of 

whether significant reconstruction must take place, the lower the value 

of the home, the more likely it is that it will be considered "substantially 

damaged" and the more likely the city can release the more expensive 

homes from further review. 

Recommendations 

These programs need to be integrated and coordinated; they are not in 

any way. Citizens appearing at the City of Galveston City Council had 

a very difficult time understanding if a flood insurance adjuster came 

by their home and calculated the loss, that this loss was not the same 

as the calculation of damage to their home associated with the RSOE 

Process, and that this process is not coordinated with needs met by 

the IA Program for temporary housing. 

There are additional considerations. Substantial damage data is the 

basis for many HMGP and COBG grant application processes. Yet, 

because substantial damage data for commercial properties is not 

captured in a similar process, an accurate assessment of business 

needs was not available for calculation for first round COBG Funding 

and was not used in the 2nd round weather formula devised by ORCA.. 

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Obviously, undue stress is placed on the City Planning Department 

which must continue its normal functions of building inspection, 

permitting and code enforcement. Additional staff -- trained in damage 

assessment as well as the City's building codes and FEMA's 

regulations -- is essential. Additional space and IT equipment is 

required. 

It is highly recommended that local governments have the option of 

entering into a pre-positioned contract that is eligible for 

reimbursement to complete SUbstantial Damage Assessments 

required for NFIP permitting. 

FEMA's Public Assistance Program Challenges 

FEMA's response through Public Assistance is wholly inadequate due 

to Stafford Act restrictions and over-interpretation of rules by FEMA 

employees. The City suffered significant damage to its Main 

Wastewater Treatment Plant. The estimate to repair this facility is 

approaching $70 Million. 

According to Texas Law, any construction activities of a public work 

such as this treatment plant in excess of $8,000.00 must be designed 

by as licensed professional engineer. Any design by a licensed 

professional engineer also must be designed to meet Texas 

Commission on Environmental Quality standards. FEMA also has a 

provision in its rules that it will pay to reconstruct to new Codes and 

Standards; however, interpretation of that rule by FEMA is that it does 

not apply to the Main Wastewater Treatment Plant. It is expected that 

FEMA's calculated cost to repair the plant may be as low as $1.0 

Million; however, it is not actually possible to repair the plant with that 

little funding. 

The City has received an allocation of $109 Million in Community 

Development Block Grant Disaster Recovery Funds from Texas' 

Phase 1 allocation. Of that $109 Million, $69 Million must now be used 

to supplement the funding needed to actually reconstruct the plant in 

accordance with rule and law. 

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To make matters even more complex, FEMA views themselves as the 

"funding source of last resort". However, the CDBG funds mentioned 

above are truly the funding source of last resort. This confusion could 

lead to the withdrawal of FEMA funding from this and other similar 

projects. 

Recommendations 

• Re-Work the Hazard Mitigation Grant Program Buyout & 

Elevation Program 

The HMGP Housing Buyout and Elevation program needs to be fully 

re-worked, and not in the direction that FEMA has moved over the last 

year. The HMGP Buyout and Elevation Program is tailored for 

"riverine" situations, with the end goal to eventually clear the river 

floodway and floodplain of housing hazards. However, the program is 

actually detrimental to coastal areas. 90% of the City of Galveston is 

eligible for "buyout", which is an absurd notion for us. Galveston's goal 

cannot be to clear the entire Island of residential structures. The 

actual result would be to create a checkerboard pattern of bought out 

homes and lots resulting in irreparable damage to the neighborhood 

and actually promoting urban blight. 

In addition, due to the supposed infrequency of flooding here, 

elevations are almost impossible under the current benefit cost 

calculation. Coastal communities should have the ability to promote 

elevation of structures rather than buyouts to avoid this situation. In 

the interim prior to any re-write of the program, coastal communities 

need the ability to define what our hazards are and buyout or elevate 

as needed to address those goals. 

• Clarify Confusion Over Responsibility 

There is a basic misunderstanding among initial FEMA recovery staff 

regarding the role of the FHwA in storm recovery. An example of this 

is FEMA staff led City Staff to believe that they were responsible for 

the recovery of about % of the traffic signals on the Island; however, as 

it turns out, FEMA is responsible for none of them. The City had to 

advise FEMA staff of this after reading FEMA's own literature. Had 

this not been caught by City Staff, the result could have been des 
271 

obligation of funding my FEMA Auditors. The traffic signal issue was 

not an isolated issue as indicated with the confusion of funding at the 

Pelican Island Bridge. FEMA worked with the Galveston Navigation 

District for months regarding the recovery work needed at this bridge 

before it was determined that the Federal Highway Administration had 

jurisdiction. 

There appears to be no overall Federal coordination regarding 

recovery funding, leaving the strategic coordination of such activities to 

the local government. At some appropriate level of federal 

government, acting in cohesion with State administrators, FEMA PA 

funding, FEMA Mitigation Funding, FEMA I State HMGP Funding, 

Federal Highway Administration Funding, and Community 

Development Block Grant funding (to name the top available funds) 

should be coordinated with clear jurisdictional understandings of 

responsibilities. 

• Provide Proactive Pre-Storm Mitigation Funding 

Proactive federal mitigation funding should be made available though 

analysis of critical nodes expected through storm impacts relative to 

the impact it could have on critical facilities. An example is the 30th 

Street Water Pump Station as it relates to the University of Texas 

Medical Branch. The failure of this pump station caused catastrophic 

problems throughout the City and especially at UTMB. The City 

recognized this as a concern prior to the storm, and a replacement 

station was being constructed prior to the storm; however, federal 

assistance in protecting those critical nodes prior to a major event 

could save literally hundreds of millions of dollars proactively. A 

portion of the damage to UTMB and other residences and businesses 

could have been avoided had the pump station been operational prior 

to the storm. 

• Provide Proactive Post-Storm Expected Latent Damage 

Funding 

Funding for pro-active repairs to storm damaged, but not -yet -failed 

facilities should be considered. It is our understanding that FEMA has 

anecdotal information from previous storms where their own 

employees expect certain failures, but until the failure actually 

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happens, no action is taken. An example of this is the Airport Water 

Pump Station. This pump station failed approximately 11 months after 

the storm. The pump station is a critical node that left 2/3 of the Island 

without water. Further, statements by FEMA field employees indicated 

that this is about the time such failures happen. Where indicated 

provision for addressing latent damage in advance would save the 

government millions of dollars .. 

• Use COBG Funding for Local Match of other Federal 

Programs such as FEMA and FHWA 

The City of Galveston just this past week had to raise our tax rate by 

12.5% in order for us to raise funds to meet local match requirements 

for various federal programs. We have been able to get 90/10 match 

for FEMA projects, 80/20 for FHWA projects and 75/25 for HMGP 

projects as examples of matching requirements. These matches are 

very much appreciated, however providing a local match of millions of 

dollars for many different projects is overwhelming and is an additional 

burden that our citizens have to carry. The annual CDBG allotment 

that the City of Galveston receives is allowed to be used for local 

match. We also understand that New Orleans has been allowed to 

use their relief CDBG funding for local match. Galveston is requesting 

the same consideration. This would be an enormous relief and would 

save us with having to drain our reserves which are needed for the 

next storm and to bolster our financial strength and bond rating. 

• Rework Round 2 COBG Funding Formula 

The proposed formula still is using weather as the basis for distribution 

of the funding with a very small recognition Oust recently added) for 

low to moderate income communities. There is no real recognition of 

the damage to homes and property that Galveston actually sustained 

as a percentage relative to other communities. 

City Cash Flow Challenges 

All FEMA programs are on a reimbursement basis. We understand 

that the process and programs need to have a high level of 

accountability as well as protection against possible fraud. The City of 

Galveston was able to secure a $5 million Community Disaster Loan 

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for operations and that was appreciated. However with an annual 

budget of $96 million; this funding did not go very far in helping us. All 

of our revenue streams suffered greatly; most funding streams were 

down about 15% to 25% down. At one point our water fund was down 

about 40%. Galveston was in many ways fortunate to have built up its 

reserves prior to the storm to help carry us for a three-month period .. 

We lost 130 employees out of 825 or about 16% of the workforce. We 

implemented a hiring freeze, and all remaining employees took a 3% 

salary cut in order to help the City survive the immediate financial 

crisis. We will continue to have cash flow problems for the next 

several years while we rebuild our city. 

Recommendations 

• Advancement of Federal Funding to Help Communities 

The City recommends a cash advance of half of the estimated 

damages so that a community can address immediate needs before 

they become more costly and businesses and their employees and 

their families can get back on their feet quicker. 

Population Loss and Count Challenge 

Galveston had a population of approximately 57,500 people before 

Hurricane Ike. It is hard to determine at this point, but we believe that 

our population is now somewhere between 45,000 and 50,000 

people. If we are correct, we will have lost approximately 15 to 20% of 

our population. Our citizens have not had a chance to return to their 

community and with the new census count tol be in early April 2010, 

just 6 months away, we fear that the new census will show our 

population dropping below the 50,000 mark. This is significant 

because much of our annual federal funding for housing, community 

development and public transportation comes from formulas that rely 

on our population being over 50,000. We fear that if we do not reach 

this mark that we could loose future federal funding for many years to 

come which will continue to hurt Galveston's recovery. 

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Recommendations 

The City seeks relief for the 2010 Census count in the form of a waiver 

until our citizens registered with FEMA or taking part in HUD's DeHAP 

program can be counted as Galveston residents again, regardless of 

their temporary location in April 2010. 

The Challenge of Shifting Deadlines for Debris Removal and 

Housing Vouchers 

The City of Galveston and its citizens were continually told that the 

deadline for removal of debris was going to end and then at the last 

moment or in most cases after the deadline had passed there would 

be a continuance of the FEMA funding. And although 100% funding is 

greatly appreciated, the last minute financial shifting that was 

necessary and the added emotional stress at a time when we did not 

need that additional stress was not appreciated by the City of 

Galveston or its citizens. We knew that FEMA would have the last 

word; we just did not know which or when that would be. This one 

point alone reduced FEMA's credibility. 

Recommendation 

FEMA should gage its deadlines to match the extent of damage and 

debris caused by a disaster and establish more realistic time-lines for 

all programs that are time-limited 

The Challenge of Tree Removal and Replacement 

FEMA will cut down dead trees at 100% reimbursement; however, 

FEMA will not remove stumps. If removal is not flush cut, a tripping 

hazard remains. Another problem with not removing the stump is that 

tree replacement is difficult. Presently, re-forestation of the 

community is not available through any federal program, either FEMA 

or CDBG. Trees are a very important part of any community. In 

Galveston, they are an essential part of our infrastructure. 

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Recommendation 

Just as maintenance of our seawall and our wetlands is a function of 

government at the federal level, the City recommends that 

reforestation of Galveston be regarded as a subject to be covered by 

FEMA's Public Assistance program for necessary infrastructure 

replacement. This is especially appropriate as an energy-saving move 

and a means to reduce carbon emissions. 

Galveston Economic Development Partnership Report. 9/25/09 

Business Development 

Galveston's private sector responded and is in process of recovering -

primarily - due to the resources made available locally for business 

recovery following Hurricane Ike. 

Through the facilitation of the Galveston Economic Development 

Partnership and Mayor Lyda Ann Thomas, the local banks of 

Galveston Island created the Hurricane Ike Recovery Loan Program 

for businesses needing "gap financing" immediately following Ike. 

Created as a short-term (180 day) low interest (5% single pay note), 

Galveston banks relent somewhere between $40-$50 Million to 

businesses located on the Island prior to Ike, with a commitment of 

staying and rebuilding following the storm. 

In addition, the GEDP created the Hurricane Ike Recovery Loan Fund, 

worked with the City to allocate CDBG dollars for business recovery, 

coordinated with the Regional Planning Council (Houston-Galveston 

Area Council) for the awarding of a $10 Million regional Revolving 

Loan Fund from EDA and continues to provide local technical 

assistance for business recovery purposes. 

The U.S. Small Business Administration was extremely responsive 

following Hurricane Ike. On site within days of the storm, SBA 

personnel performed comprehensive outreach efforts in publicizing the 

availability and eligibility criteria for business loans under their program 

offerings. 

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Now one-year after Ike, the following needs remain unmet: 

• Available capital for small businesses. 

• Parity with other states with respect to incentives/inducements 

available for leveraging the costs of destruction, displacement 

and reconstruction. (ie GO ZONE). 

• Consideration from the State and Federal agencies on the 

importance of business/job retention (as opposed to job 

creation). Most programs are designed for job creation purposes 

and greater credit needs to be allowed for retaining those 

companies and those jobs left after a catastrophic event 

attempting to rebuild/recover. 

Barriers that need to be addressed: 

• Greater coordination/guidance for small businesses impacted by 

a catastrophic event (programs available, registration/application 

processes, parameters of programs available, etc ... ) 

• SBA must be given greater leverage for the 20% of disaster 

funds that are dedicated to small businesses to allow for greater 

leeway in the requirements of collateral and credit worthiness. 

Greater partnerships with local business development 

organizations could be beneficial pre-event for activities postevent. 

• HUD program dollars (CDBG) for economic development need a 

higher priority and greater adaptability for the needs of 

communities devastated by a catastrophic event. For example, 

make revolving loan funds truly revolving for a realistic term and 

rate. (6 years allows for glorified car loans, not the rebuilding of 

a local business base). Also, consideration should be given to 

those entitlement communities that commit to the establishment 

of a revolving loan fund in perpetuity, not artificially returned 

then, to leave the community vulnerable for another such event. 

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Actions deserving of praise or greater acknowledgement: 

• The response and actions of Galveston's local lenders. They 

provided a hand-up, not a hand-out and this could serve as a 

national model for hurricane recovery. 

• SBA for the improvements made in response to Hurricane Ike 

• U.S. Department of Commerce - EDA for their regional 

leadership in responding to Hurricane Ike and this Gulf Coast 

area. (consideration should be given to increasing the resources 

available to the regional offices for personnel expenses when 

grant dollars are awarded). 

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Written Testimony presented by 

Mayor Lyda Ann Thomas, 

City of Galveston 

to U. S.House Committee on Homeland 

Security Subcommittee on Emergency 

Communications, Preparedness and Response 

Washington, DC 

March 3, 2009 
279 

Written Testimonv presented bv Mavor Lvda Ann Thomas, City or Galveston 

To U. S. House Committee on Homeland Security Subcommittee on Emergency 

Communications, Preparedness and Response, Washington, DC, March 3. 2009 

City of Galveston Finance and Cash Flow Challenges 

Immediately after Hurricane Ike hit Galveston, revenues to operate the city plummeted. Citizens 

were not on the island and therefore water consumption dropped dramatically. Five months after 

the storm water consumption has somewhat stabilized to a level that is 40% less than pre-stonn 

levels, a level that could remain relatively constant for many years. Additionally, almost every 

business in town was closed, and 5 months after the storm only 35% of the businesses have reopened. Sales tax revenue took a significant dive. Although sales tax has rebounded with the 

rebuilding effort, long term our proj ections are for such revenues to remain at far less than prestonnlevels for an extended period of time. 

Despite these challenges, the city must continue meeting payroll and operational expenses after 

the storm. On top of that we are expected to pay in advance for the clean up, response and 

repairs of all our systems and then seek reimbursement from FEMA that will not come for many 

months, and as experience has taught us in the past it can sometimes be years. 

The City has to cover the 25% non-federal cost-share for FEMA assistance. Unto themselves 

these cost-share expenses are far greater than our normal annual operating budget, at a time when 

revenues are significantly depressed and both workload and other expenses that must be borne by 

the City are far greater than before the storm. The City of Galveston was very well prepared 

financially going into this storm with all of our reserves above target levels as well as a prenegotiated loan agreement in place. We have reduced our budget by 15% which included 

reducing salary's to every employee as well. We have lost about 10% of the workforce and are 

still faced with having to layoff employees at a time when we need their help. These financial 

challenges, and the loss of critical personnel that result, threaten the pace and success of our 

recovery. 

Recommendations: 

FEMA needs to develop a funding mechanism based upon a community'S fiscal responsibility 

and typical operating budget and advance an appropriate level of funding to help to carry them 

for a sustained period of time to allow for adequate recovery and rebuilding. Galveston was the 

only community to receive a cash advance for debris only, which was appreciated but only 

scratches the surface of what is needed. 

FEMA should also work with Congress to develop the ability to provide upward adjustments for 

cost-share for catastrophically-impacted areas like Galveston, irrespective of the situation and 

resources available elsewhere in the state. For areas hurt as badly as Galveston, the normal rules 

for recovery are often insufficient, and the resource needs that can be absorbed by communities 

experiencing "garden variety" disasters can cripple a catastrophically-impacted jurisdiction like 

ours. 
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Extensions of Funding Assistance Challenges 

Category A (Debris) 100% funding was extended in advance through October 26, 2008. It was 

not until a few weeks after the expiration of 100% Category A funding that the City received an 

extension through April 26, 2009. This time of uncertainty of whether we could get 100% 

reimbursement or just 75% reimbursement caused the City to have a great deal of stress due to 

the extreme cost of debris removal relative to our city's budget. We appreciate the extension of 

Category A at 100% through April 26th; however, we need another extension, and we need to 

know whether we will get it or not, sooner rather than later. 

Unlike essentially every other storm we have studied, Category B (Emergency Protective 

Measures) 100% funding has not been extended and we have only been assured of75% 

reimbursement for the bulk of our recovery. We need extension of Category B work at 100% to 

be granted and to be extended as requested for Category A. We are experiencing continual latent 

defects in our infrastructure that require continual expansion of Category B work. 

Recommendation: 

Categories A and B should be set for an extended period of time immediately after the storm 

based upon the severity of the event. Every community should have enough time to properly 

recover without having to worry about these two most critical areas of recovery. Again, this 

should be somehow codified in the Stafford Act or in regulation, to provide communities like 

Galveston predictability and surety of resources for their recovery. 

Additional After Storm Assistance Challenges 

The FEMA first responders did very well in their assistance to us. Where we could have used 

additional help is from FEMA Public Assistance Staff immediately after the storm to proactively 

assist the city is making certain the paperwork the city is creating to substantiate its 

reimbursement claims will be satisfactory months later, rather than have to argue with staff 

members regarding documentation exceptions. FEMA rules indicate that if another Federal 

Agency has funding responsibility for a particular item, a city must work with that agency for 

assistance. In many instances, the other agency has a totally separate set of rules and timelines 

for assistance, and may not even have any funding available under the responsible program to 

fund the project. An example is traffic signals. Of our 116 traffic signals, it turns out that 

FEMA can only assist us with I. The Federal Highway Administration must assist with the other 

115. 

Recommendations: 

Provide more public assistance help immediately after the storm so that we are ahead of the 

game, instead of behind. 

FEMA's Rule of Other Federal Agencies funding tirst needs modification to be more inclusive. 

An integrated approach through FEMA would be helpful and would lessen the confusion. It 

would be helpful if FEMA could fund the repair effort when another agency's programs have 
281 

insufficient funding or cannot provide the assistance within normal recovery timelines, and then 

seek reimbursement from the responsible agency as appropriate. 

Sheltering and Transitional Housing Challenges 

More than 75% of the housing stock in the City of Galveston sustained damages resulting from 

hurricane Ike. Residents either evacuated prior to the storm or were evacuated after the storm. 

In order for citizens to return to their jobs, check on their uninhabitable homes, cleanout their 

houses, pack their belongings, and meet with FEMA representatives and/or insurance agents, 

citizens needed to be able to stay close to the City. Hotel accommodations were scarce and 

where there were accommodations, they were often filled with Red Cross, Salvation Army, or 

FEMA representatives. 

As much as FEMA made itself available to the public, the difficulties met with in the application 

process for assistance were compounded by requirements for citizens to reapply for their 

vouchers every two weeks. 

Also, FEMA's rule that prohibits the placement of temporary housing in coastal V-zones has 

made it nearly impossible to place sufficient housing stock to meet community and business 

needs. 

Recommendations: 

It would be helpful if these major national entities came with self contained living 

accommodations, or committed to stay in housing and hotels away from catastrophically 

impacted areas like Galveston, in the immediate aftermath of a disaster until such time sufficient 

housing is available to serve both displaced residents and others. 

Vouchers should be issued for no less than 30 days. 

FEMA should consider providing waivers to their policies related to the placement of temporary 

housing in V -zones when there are insufficient options available to get people back to their 

communities. Said housing, however, should be engineered to withstand strong winds and 

elevated on temporary foundations, to better protect from loss in future events, and require 

evacuation planning (and resident commitments to evacuate when orders are given) in the event 

another hurricane approaches during the temporary housing period. 

Shelter Operations Challenges 

The City has a contract with the Red Cross to operate a shelter following a disaster. However, 

the Red Cross came prepared only to operate a shelter in one of several schools. There were no 

undamaged schools that could house a shelter. There was confusion between FEMA and the Red 

Cross as to who could authorize a tent shelter. After a week of debate, the Red Cross hired the 

contractor then was told by FEMA that they would not be reimbursed and that the City needed to 

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contract with the Vendor. In the end, the City signed the agreement with Vendor after the 

vendor had been here for six weeks. The vendor took all directions from the Red Cross who 

were operating the shelter. However, the City holds a bill for $3 million with supporting 

documentation held by the Red Cross and no clear solution as to how to get this bill paid. 

Recommendation: 

That the Red Cross negotiate with vendors in advance, so that when this type offacility is 

required and that FEMA reimburse the Red Cross directly. Further, FEMA should utilize the 

flexibility it has in the Stafford Act to address unique situations like this quickly and to simply 

pay the bill because it was necessary, is allowable and is the right thing to do. 

FEMA Program for Homeowners vs. Renters Challenges 

Galveston has a large (over 60%) population of renters. FEMA has very good programs set up 

for homeowners with adequate insurance and also for homeowners with no insurance. Although 

the process is very tedious, if you follow all the steps the program works. However, there is 

minimal assistance for renters. It would be helpful, if there were assistance for owners of rental 

property to get them back in operation. In addition, when apartments were placed back in 

operation, FEMA set a rental rate which created an increase in the cost of living for renters. 

FEMA rental rates were in many cases 10- 30% higher than was being charged for the same 

property prior to the storm. 

When insufficient housing exists to handle displaced residents, the pace of recovery for rental 

properties directly impacts how quickly people can return to Galveston and support both their 

personal as well as community recovery efforts. This creates a public-sector imperative to assist 

rental property owners, so that people can get out ofFEMA trailers and government-provided 

housing and back into their communities. 

Recommendation: 

Develop FEMA's pilot program that assists apartment owners to fix their property for the 

purpose of housing displaced homeowners and renters. Look at variable rental rate schedule. 

Not a flat rate based on the number in the household. 

Volunteer Housing Challenges 

We had many faith based volunteer groups and also many civic groups from around the country 

that came to assist with the cleanup of community. There were no churches in Galveston able to 

house volunteers after the storm since most had been seriously damaged. We finally arranged to 

use a vacant school to house volunteers, however, the city was asked on numerous occasions to 

assist with operating costs and also stilling costs of the facility which is being run by 

volunteers. We were told on several occasions that there was funding available through FEMA 

for this type of operation. However, by going through the chain of command that was necessary, 

none of the intermediary levels knew anything about the program. Volunteer efforts have been 

and will continue to be a key to clean up the community and also to restorc homeowner property 

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to its pre-IKE state. This is particularly true with senior citizens, handicapped, and single parent 

families many of whom were underinsured or had no insurance. 

Recommendation: 

Develop or make available through FEMA some type of funding for volunteer housing, as was 

done in Louisiana after Hurricane Katrina. The availability of this assistance should be codified, 

so that delays and disagreements do not impact communities impacted by future disasters. 

Individual Assistance/Federal Assistance Challenges 

FEMA assessments process leaves homeowners in limbo. Despite repeated requests by the City, 

the FEMA Assessment Team did not come to the City until 4 to 6 weeks after Ike, causing 

citizens to pay rent and mortgages, simultaneously when they could have been in their homes. 

Assessment Team members were poorly trained, inexperienced and inconsistent in their 

assessments. Homeowners did not know for weeks whether their homes had to be demolished, 

rehabilitated or elevated. Some are still waiting for a final decision. FEMA seems to have an 

unwritten policy that a large number of people are initially turned down and then told to reapply 

or appeal, not once but two or three times. 

The Residential Substantial Damage Estimate (RSDE) process (determination of 50% or more 

damage, triggering elevation of structures) is an entirely separate process from the National 

Flood Insurance Program estimates of damage through Flood Insurance. In several instances, 

this yielded very different results to the property owner's detriment An example would be a 

situation where the RSDE process caused a home to be considered substantially damaged; where 

the NFIP process indicated it was not. This split process does not make much sense to the 

homeowner. 

Similarly, the estimates of whether a structure that's eligible for assistance under the Public 

Assistance Program is 50% or more damaged (and thus eligible for replacement) is not done 

consistently with substantial damage determinations under the NFIP. This again can result in 

serious problems, with some buildings being required to be elevated under NFIP (thus increasing 

reconstruction costs dramatically), but those costs are not considered when determining whether 

the damages are sufficient to allow for building replacement. 

Recommendations: 

Federal Assistance needs a more integrated approach through FEMA as the overall coordinator. 

This entire program needs to be revamped so that FEMA can come in immediately after the 

storm with a much simpler, less cumbersome program that will give citizens and communities 

answers to their personnel situation so that they can determine what they should do. Consistency 

should be the goal for determining damage estimates or in the evaluation of whether the 50% 

threshold is met. 

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In addition, RSDE teams that are trained in advance, in adequate numbers to handle a regional 

disaster, should be pre-positioned. 

FEMA VOAID Program Challenges 

The FEMA VOAID representative was only authorized to communicate with public service 

agencies. Unfortunately, the local public service agencies Salvation Army, Red Cross, Food 

Bank, Catholic Charities, Family Services, and local agencies were unable to function after the 

storm due to loss of facilities, lack of communication, and undefined roles. The City took on this 

operation because of the large number of volunteers coming into the area and also the amount of 

donations. The City was coordinating volunteers, donations, and citizen concerns with 

assistance from Americorp volunteers who were under the direction of the FEMA VOAlD. 

Recommendation: 

The City would have willingly released the responsibility for these programs to another agency; 

however, there was none. It would have been helpful if the VOAlD had been a little more 

flexible to recognize all parties participating in the process to initiate recovery of the community. 

Hazard Mitigation Grant Program (HMGP) Funds (Section 404) Challenges for Coastal 

Communities: 

The rules for use of HMGP funds typically require the calculation of a benefit/cost analysis in 

strict accordance with FEMA guidelines. One available program is for buying homes. The 

guidelines are such as to promote the removal of homes from river or creek floodplains and 

floodways, and actually provide a waiver of the need for benefit/cost calculation if the home is 

determined through the RSDE process to be Substantially Damaged. Such a waiver does not 

exist in coastal communities such as Galveston, which have coastal floodplains and not riverine 

floo dplains, and have no floodways at all. 

Given the high costs to coastal communities nationwide from severe storms and hurricanes, this 

makes no sense. The only way to break the cycle of damage is to encourage the elevation of 

homes along the coast when future storms are predicted, as in the case of Galveston. 

Unfortunately, the normal benefit-cost calculations do not help a community like Galveston, 

which faces significant future risk but which has experienced few storms of any consequence 

over the past 50+ years. Because of the extremely limited flooding history during that period, 

coastal community homes that are Substantially Damaged need to be elevated but cannot meet 

the blc calculation. In our case, none of our Substantially Damaged neighborhood homes qualify 

for elevation, which has left over 1,000 of our homes ineligible for funding under this program. 

The City was left with a choice of assisting the individual citizen with the buyout and destroying 

the neighborhood. or by refusing the individual citizen access to a program that would relieve 

their burden. 

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Recommendations: 

Modify the HMGP program so that it will benefit coastal communities, in light of their actual 

risk. Past losses can certainly be a good indicator of risk, but it is not the only one. Coastal V 

zone properties should be included in the FEMA waiver ofbenefitlcost analysis, in recognition 

of their significant risk. 

FEMA Operational Challenges following a catastrophic event 

Continual staff changes (every 4-6 weeks) create an unstable arena in which local planners, 

elected officials and residents constantly have to re-explain their situation. Also, institutional 

learning is lost on the processes. 

Recovery resources need to be developed which are consistently applied from one event to 

another and from one geographic area to another. Frustration grows when one area learns that 

the rules are not the same or that other areas received greater benefit than theirs. 

Similarly, every time staff rotates in or out, many decisions and directions already agreed-to by 

prior FEMA staff are re-evaluated, and new decisions are made related to project eligibility, 

funding, and policy interpretation. This causes significant confusion and delays, resulting in a 

delayed recovery. 

Recommendation: 

Provide consistent, stable and long-term very knowledgeable staff, especially the key personnel, 

to help guide the community out of the disaster and through the recovery process. And if 

personnel do change, increased efforts should be made to ensure adequate transition time to 

avoid the confusion, delays, re-evaluation of prior decisions and problem resolutions, and loss of 

documentation that has characterized the recovery efforts in Galveston when personnel rotated 

out. 

Business support Challenges following a catastrophic event 

There is no clear direction on the role ofFEMA and the Small Business Administration as it 

relates to the private sector in recovery/rebuilding stages. There are too many different stories 

and rumors relating to what the private sector hears on how to do business with FEMA and SBA, 

how to become a part of the rebuilding process and what assistance might be available to the 

business community, and not enough answers that can be relied upon. This lack of transparency 

and inability to get reliable information has confused and lengthened the recovery period, and 

causes many businesses to not seek or obtain help available to them. 

Recommendation: 

Do a better job of communicating with the business community, both directly and by leveraging 

local resources (communities, chambers of commerce, business leaders, elected officials, media, 

and others). In addition, information provided should be in writing, be more comprehensive, and 

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be reliable - statements by inadequately or incompletely trained FEMA program staff, 

Community Relations personnel, and telli-registration staff is not sufficient. 

Galveston Public Housing Challenges 

Public housing is essential. Four large project units were so heavily damaged they need to be 

replaced. Keeping track of our displaced citizens and assisting them with proper documentation 

to fulfill eligibility requirements for FEMA assistance has been a challenge. 

Recommendations: 

There needs to be a pre-existing lAA (Inter Agency Agreement) between FEMA and HUD. 

HUD is the appropriate federal government entity with its sub-contracting Housing Authorities 

to respond to Public Housing Issues after a disaster. FEMAlHUD needs to have the local housing 

data, population data ahead of time or at the time ofthe storm to respond to a disaster. FEMAI 

HUD must explore options to deal with the tenants and landlords rather than dealing with just the 

landlords after a disaster. 

FEMA's Rental Repair PILOT program worked well after hurricane IKE and this needs to be 

part of the housing solution after a disaster. This is a program in which FEMA works with the 

landlord directly to fix their damaged units in exchange for landlords to allow eligible families to 

live in those units after a disaster. This program should be expanded, however, to also include 

assistance for owners of single-family rental properties when other housing resources are 

insufficient, to further enhance the pace of restoration of housing after a disaster occurs. 

FEMA must explore pre-fabricated housing options to replace some of the housing stock as part 

of the long-term housing solution. 

FEMA needs to have better operating procedure to educate the local media and publish its own 

newsletters to better provide proper news rather than fabrication of stories by the local media and 

misinformation. 

FEMA needs to re-evaluate its policy to only allow temporary housing outside of coastal V 

zones when there is insufficient ability to place needed easily be used for temporary housing 

(including some with infrastructure in place), and options to elevate said units above anticipated 

flood levels and protect them against high winds exist, but FEMA's policy interpretations won't 

allow them to place such housing on Galveston Island due to the V -zone problem. 

Closing Summary: The Need for Cooperative Pre-planning and Long-term Continuity 

for Business/Community Recovery 

Currently programs are initiated only following a catastrophic event. In areas like Galveston 

where Hurricanes are likely to occur, it would be beneficial if communitieslbusinesses could be 

pre-planning or proactively working with FEMA to improve contingency planning efforts, 

application forms, contact information, pre-event educational outreach, etc .. .In addition, if 

federal policy following a natural disaster came in post-event with a longer time- frame for 

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planning and response activities, and included up-front funding to support local efforts so that 

seriously impacted communities can assume greater responsibility and leadership in their own 

recovery planning and implementation efforts, this would be most helpful. The continual rush 

for a pre-set time line, of which the deadlines continue being extended, is frustrating and 

psychologically exhausting for residents and those affected on a routine basis. 

Recommendation: 

Our nation's emergency management system needs to place greater value, and dedicate greater 

resourcing, to the encouragement of pre-event planning for response and recovery efforts. A 

grant program for states, designated to support community efforts in this regard, would be 

critical to making this happen, as would increased development of planning tools and guidance 

that can be used in support of the expenditure of said funds. In addition, in the post-disaster 

environment, it is not enough for the federal government to provide a handful of technicians to 

support long-term recovery planning and implementation efforts. Particularly for 

catastrophically-impacted communities like the City of Galveston, resourcing is needed to allow 

the community to take ownership for its recovery and lead its own recovery planning process. 

And that planning process (to include both funding and technical support) should not be 

arbitrarily limited to impossibly short timelines; they should be provided for a duration deemed 

appropriate given the magnitude of the disaster in question, as determined in consultation with 

State and local officials. Lastly, shoreline protection is the long-range answer to coastal security. 

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Written Testimony Presented By 

Mayor Lyda Ann Thomas, 

City of Galveston 

to the Ad Hoc Subcommittee on 

Disaster Recovery of the U. S. Senate Committee 

on Homeland Security and Governmental Affairs 

Washington, DC 

September 23,2008 
289 

WRITTEN TESTIMONY 

Of 

Lyda Ann Thomas, Mayor, City of Galveston, Texas 

Before the Ad Hoc Subcommittee on Disaster Recovery of 

the U.S. Senate Committee on Homeland Security and 

Governmental Affairs 

On Tuesday, September 23,2008, at 10:00 am, at the 

Dirksen Senate Office 

Building, in Washington, D.C. 

Senators Landrieu and Domenici and Distinguished members of the 

Committee: 

Thank you for the opportunity to discuss with you Galveston's most 

immediate needs in response to Hurricane Ike, one of the City's most devastating 

natural disasters since the 1900 Storm which took 8,000 lives. 

The City's structures - it's port, University of Texas Medical Branch, 

historic downtown business district, and east end, even it's condominiums and 

second homes built according to our strict building codes -- have withstood a surge 

equal to a Category 4 hurricane, virtually submerging the entire island in depths 

ranging from 3 to 18 feet. Although damaged, these structures stand testimony to 

the fact that Galveston Island is a viable, valuable piece of real estate that proudly, 

this day, flies the flag of The State of Texas and the United States of America. 
290 

The seawall that was built by the United States Corps of Engineers, in 1902, 

has proven its worth numerous times, and is a constant reminder of the close 

relationship and deep appreciation Galvestonians feel for the government which 

came to their rescue at that time. 

My grandfather, Issac H. Kempner, served the city's government then and 

sought federal, state and New York banking assistance for the shattered city. 

Lessons learned from him and his generation of Galvestonians form the basis of 

today's hurricane recovery plan. 

I must tell you that chills ran up my spine when I saw the name Ike selected 

for this year's Hit List. The irony, on the one hand, is that I, his granddaughter, 

might bear the God-awful responsibilities of helping my citizens dig out and bear 

up against a similar tragic event. 

The greater irony is that my grandfather, 1. H. Kempner, was commonly 

called 'Ike'. If I feared before, I instinctively feel now, that Ike symbolizes much 

more than the destruction of Galveston. Ike represents the rebuilding of our city. 

I appear before you to ask your help in giving Galveston and Galvestonians 

a new beginning, just as the U.S. government did after the 1900 Storm. 

We will require billions of dollars to rebuild all our infrastructure which 

took a terrible beating, strengthen our Port and repair and shore up the University 

of Texas Medical Branch, its hospital, medical school, research labs, and especially 

the Galveston National Laboratory. 

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These are the city's economic engines. Are they worth saving? Is Galveston 

worth saving? That is the question you must decide. Here are some reasons why 

Galveston is worth saving: 

Our island has a proud record of national security and coastal defense. Pirate 

Jean Lafitte took advantage of its location. It was part of America's defense system 

in the Civil War, Spanish American War, World War I and World War II. It 

possesses a natural deep water harbor closest to open sea lanes. The Pelican Island 

side provides frontline major offshore Oil rig repair an invaluable component in 

the nation's major petrochemical producing and refinery region encompassing the 

GulfofMexico and East Texas. 

With adequate rail and bridging, the Port can continue to serve this nation; 

especially it's exporting and importing of vital materials which will increase when 

The Panama Canal widening and deepening is complete. 

Mr. Gerald Sullivan, Chairman of the Port of Galveston Board of Trustees 

will be happy to answer any of your questions regarding the port, and DrDavid 

Callender, President, will stand ready for UTMB. 

I want to conclude my remarks with an appeal from my heart to yours. The 

citizens of Galveston have suffered severe losses. One whole section of town north 

of Broadway may be uninhabitable. An estimated 10 to 20,000 citizens lost their 

homes and their possessions. 

We need help - lots of it - but, first and foremost, we need you to continue 

your support and cooperation extended from the President, members of congress, 

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Homeland Security, FEMA, the Corps of Engineers, HUD, Red Cross, Salvation 

Army, Small Business Administration, volunteers and many others as well. 

Together, taking the comprehensive approach you have taken since Ike 

appeared in the Gulf, we can address human as well as strategic and economic 

needs. 

Lastly, I want to thank and commend FEMA. Had it not been for FEMA, the 

city would not have recovered as well as it has to allow me to leave only 10 days 

after the storm. Our representative, Jaime Forero, was at our side from day one, 

facilitating our response and recovery. His resourcefulness and ability helped to 

coordinate men and machinery, secure generators, PODS, DMAT, fuel and a 

Disaster Recovery Center, to mention a few. 

Communication is always a deficit on Galveston Island. We have no radio or 

TV stations; only a public service channel on cable TV. We had no power, no 

water, no natural gas, and no sewage. FEMA was our lifeline working 

synergistically with state emergency management under Jack Colley and Sandy 

Coachman, the Federal Coordinating Officer. The Governor of Texas, Rick Perry, 

our senators, our representatives, and all our volunteers have done themselves and 

our nation proud! 

I look forward to having another opportunity to come before you as we 

continue our recovery efforts and face new challenges that will undoubtedly 

require your support. 

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Because of the damage to Galveston's infrastructure -- our water, sewer and 

electrical systems, roads and bridges, hospital, government buildings, etc. we had 

to prevent our citizens from returning to the Island until we could bandage and 

triage our city. Our Island was simply not safe enough to reliably support the basic 

city services of our 60,000 citizens. We still have serious concerns about the 

ability of our water and sewer system to support the population, but we could not 

keep our citizens out of their city and their damaged personal property any longer. 

Housing 

Fifty percent of Galveston households make less than $50,000 per year. It is 

estimated that eighty percent of the households in Galveston received some level 

of damage from the rising water from the stonnlbay surge. As a result of the 

catastrophic damage to the infrastructure, we could not let our citizens into the city 

for 10 days, because their health, safety and general welfare could not be protected. 

This unavoidable delay in the beginning of clean- up will add costs to the repairs 

and increase mold and other health issues. Most insurance companies are claiming 

that their policies do not cover mold. 

In addition to the direct assistance needed for citizens to repair their homes, 

the city will need funds to clean up and eradicate abandoned and dilapidated 

homes. Estimated related costs $200 million 

Water System 

Galveston Island gets its fresh water supply from the mainland via the Gulf 

Coast Water Authority. The water arrives via a pipeline built in 1890. We have 90 

miles of water distribution lines. A third of this distribution system is still asbestos 

cement pipe. We have three main pump stations which need to be elevated and 

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reconstructed. Our pumps were all overwhelmed with water and the electrical 

systems were fried with seawater and the pipes were filled with sand. When we 

started receiving water again after the storm, we had hundreds (and probably 

eventually thousands) ofleaks and we leaked out as much as we were taking in. 

Estimated related costs $100 million 

Sewer System 

Our sewer system was full of sand and we need to reconstruct the system to 

prevent this. We have 4 sewer plants, only one is elevated and protected. On the 

un seawall-protected West End, our water treatment plant was hardened and 

elevated and protected by a concrete levee. This plant had little damage. 

However, our other sewer treatment plants were not elevated and protected and 

suffered significant damage. We have 50 lift stations. One is hardened and lifted. 

Prior to the storm, city council had authorized a contract to harden and lift eight 

more. It is now evident that it will take 10 years to complete this phased program, 

leaving our city too vulnerable. Much of the Island is still on septic tanks. Many 

ofthem were destroyed and some found floating in the Bay. This is obviously not 

environmentally friendly for our bay or beach water quality, and all septic systems 

need to be replaced and tied into the city sewer system. Estimated related costs 

$75 million 

Drainage System 

The City of Galveston's Drainage System is antiquated and has been 

completely clogged by sand and debris from Hurricane Ike. We need help in 

quickly cleaning and restoring the System to prevent further flooding and 

subsequent health and safety concerns. Estimated Related Costs $75 million 

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Traffic Controls 

We have approximately 130 signalized intersections. After Tropical Storm 

AIlison and Hurricane Rita, we began modernizing to a hardened standard and had 

reconstructed 30 out of the 130 intersections. All of the upgraded and modernized 

signals weathered the storm well. The others did not. For the reentry of our 

citizens, we had to put up over 1,000 temporary stop signs. For public safety, 

evacuation and traffic flow management, we need to modernize and synchronize 

all of our traffic signals in the City. Estimated related costs $50 million 

City Facilities 

After Hurricane Ike, the City of Galveston had no city facilities from which 

to operate. Our Emergency Operations Center had to double as City headquarters. 

The City had to commandeer and take over a fortified seawall hotel. Like the 

whole city, firehouses were flooded and little fire protection was available. Before 

the storm hit, firemen had to watch from the upper stories of the hotel while over 

10 homes and businesses could be seen on fire with no protection available. Over 

40 structures burned with no fire protection or impaired protection available. All 

critical city service facilities need to be elevated and hardened. Estimated related 

costs $50 million 

Roadways and Bridges 

Our roadways and bridges are strategic assets. We have a brand new 8 lane 

causeway connecting Galveston to the Mainland. The ribbon cutting for the grand 

opening was scheduled for mid-September. 

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FM 3005 is the only artery that runs the entire length of the West End with 

47% of our tax base. It must be elevated, hardened and (in a few places) relocated 

further inland. 

Harborside Drive is the main route for our industrial, port, educational and 

medical facilities. This roadway easily floods and needs to be elevated and 

hardened. 

Pelican Island Bridge, built in 1958, connects Galveston to Pelican Island 

where Texas A&M Galveston is located as well as strategic maritime and offshore 

support installations. Most, if not all, of the major oil companies have facilities 

there. The Port of Galveston and the Port of Houston will soon begin developing a 

1,100 acre site for the largest container terminal on the Gulf Coast to relive the 

congestion that is building in the Houston Ship Channel and Port of Houston. The 

bridge suffered damage in Hurricane Ike. Temporary repairs at the cost of 

approximately $500,000 has the bridge temporarily back in service. 

With the new causeway completed, a second west bay crossing and a 6l st 

street flyover would ease evacuation off the island and relieve traffic congestion to 

our beaches and tourist sites such as Schliterbahn and Moody Gardens. Estimated 

related costs $300 million 

Beach Erosion 

Galveston has several of the top ten tourist attractions in the state of Texas. 

Moody Gardens is the #3 tourist attraction in the state and sustained substantial 

damage. Schliterbahn Waterpark is the # 7 tourist attraction in the state. The Texas 

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Aviation Hall of Fame and Flight Museum is the #11 tourist attraction in the state. 

However, the #1 reason people come to Galveston is for our beaches. As evident 

from the unprecedented storm surge that hit the Texas coast our beaches suffered 

significant erosion. Without beach restoration and erosion protection, our 

economy will suffer greatly. HotellMotel taxes contribute significantly to our 

island's economy. In addition, the beaches protect the integrity ofthe seawall. 

Estimated related costs $100 million 

Port of Galveston 

The Port of Galveston is an enterprise of the City of Galveston. The Port 

serves the offshore oil industry and the shipping industry. In 2006, the Port was 

ranked as the No.4 Cruise port in North America and No.1 0 in the world and is 

home to both Carnival and Royal Caribbean Cruise Lines. 

In 2007 The Port of Galveston provided $1 Billion in economic impact to 

the State of Texas and created over 13,000 jobs statewide and over 3,000 jobs 

locally. 

The port suffered serious damages as a result of Hurricane Ike. These 

damages include missing fenders, broken pilings, collapsed wharf decking, 

warehouse and cruise terminal damages, mud and debris must be cleaned up, 

perimeter security fencing is compromised and security cameras are missing. The 

levees located at the dredged material disposal area on Pelican Island have been 

severely compromised. The port facilities require emergency dredging to return the 

port to currently authorized depths. The volume of material to be removed is in 

excess of2 million cubic yards to restore the channel to pre-hurricane conditions. 

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The previously mentioned Pelican Island bridge is vital to the Port of 

Galveston as it provides the connection between the Port's operations on Pelican 

Island and Galveston Island. In addition to the temporary repairs, the bridge needs 

to be widened and strengthened. Estimated related costs $500 million 

University of Texas Medical Branch at Galveston 

UTMB is the economic engine for the City of Galveston. UTMB employs 

12,500 FTEs throughout Galveston County and the State of Texas. UTMB is 

home to the new Galveston National Laboratory where critical national security 

research is conducted. UTMB generates approximately$11 0 million annually in 

federal grants. It enrolls approximately 2500 students in critical areas of nursing, 

medical school and other health care professionals. Additionally, it operates one of 

the largest medical complexes in the Gulf Coast Region and is the only Level- one 

Trauma Center serving a 9-county population 

Prior to the arrival of Hurricane Ike the patient population was evacuated 

and placed throughout the State. The loss of revenue and ramping up of population 

of displaced patients and return of clinic patients is significant. Damage to the 

buildings, equipment and clean up cost will far exceed the approximate $115 

million in insurance coverage. Estimated related costs of $609 million 

Business/Economic Recovery 

Assistance is needed for business recovery. Galveston is home to 2,500-

3,000 businesses and 40,000 jobs. Direct assistance, incentives and low interest 

loans will be necessary for the business community to recover. Flood damage 

insurance is limited in amount and coverage. Estimated related costs $350 

million 

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With 47% of our tax base (but only approximately 10-15% of our 

population) in the decimated "unseawall protected" West End, our ability to repair 

the storm damaged infrastructure is severely limited and will depend a great deal 

on federal help. 

One of the first and easiest things that the Federal Government could do to 

help Galveston recover, without providing direct financial assistance is to release 

the 600 acres of seawall protected, 20 foot elevation land that the City loaned the 

Corp of Engineers for dredge spoil deposit in the early 1900s. Galveston has been 

requesting the remediation and return of this now valuable land for years. This 

elevated and protected land is exactly what we need to progress through this 

century. 

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Federal Emergency Management Agency 

Hurricane Ike 

Response and Recovery 

Statewide Activity Report 

September 25,2009 
301 

Hurricane IKE Response and Recovery Statewide Activity 

DATE Brief Description of Event or Decision 

09012008 Tropical storm Ike develops over the eastern tropical Atlantic near 17.6N 

39.5W. 

09032008 Tropical storm Ike strengthens into a category 1 hurricane located near 

21.6N 52.7W. 

0912208 Governor Perry requested that the President declare an expedited major 

disaster for the State of Texas as a result of Hurricane Ike. 

Texas Task Force Ike consisting of 500 vehicles and 1000 

personnel are staged in San Antonio to conduct response and 

recovery missions post hurricane Ike landfall 

Aviation re-entry assessment teams are staged and ready and will 

09122008 start conducting missions post hurricane Ike landfall 

Public works assessment teams are staged and ready and will start 

conducting missions post hurricane Ike landfall 

USAR has staged 527 personnel and 120 vehicles in Houston at 

the Reliant Center 

09122008 201 shelters are open with total population of 29,456 

09132008 Hurricane Ike made landfall on Galveston Island as a strong Category 2 

hurricane. 

118 shelters are open with a total population of 41 ,513. 

09132008 Extensive Search and Rescue (SAR) missions are initiated 

TX SOC Power Team initiates power restoration missions 

09132008 Community Relations teams in the filed 

The President signed a Major Disaster Declaration 1791-DR-TX 

authorizing Individual Assistance and assistance for debris removal 

(Category A), including direct Federal assistance, under the Public 

Assistance program designating Angelina, Austin, Brazoria, Chambers, 

09132008 Cherokee, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, 

Jasper, Jefferson, Uberty, Madison, Matagorda, Montgomery, 

Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San 

Jacinto, Trinity, Tyler, Walker, Waller, and Washington Counties. 

All counties in the State ofTexas are eligible to apply for assistance under 

the Hazard Mitigation Grant Program. 

09132008 Hurricane Ike made landfall on Galveston Island as a strong Category 2 

hurricane. 

09132008 118 shelters are open with a total population of 41 ,513 

Amendment No.1 to Major Disaster Declaration 1791-DR-TX authorizing 

09132008 Federal funds for assistance for debris removal (Category A) under the 

Public Assistance program, including direct Federal assistance, at 100 

percent of the total eligible costs for a period of up to 72 hours. 

09132008 lOR issued for JFO established at Highland Mall, 6001 Airport Blvd. 

Austin, TX 78723 
302 

Amendment No.2 to 1791-DR-TX added emergency protective 

measures (Category B), including direct Federal assistance, under the 

Public Assistance program (already designated for debris removal 

[Category A], including direct Federal assistance, under the Public 

09142008 Assistance program) for Angelina, Austin, Brazoria, Chambers, Cherokee, 

Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jasper, Jefferson, 

Liberty, Madison, Matagorda, Montgomery, Nacogdoches, Newton, 

Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, 

Waller, and Washington Counties. 

09142008 FEMAlState Agreement signed 

09142008 Housing Inspections begin 

09162008 AEAO contacted all Elected Officials 

09162008 Debris Hotline established 

Amendment No.3 to 1791-DR-TX to authorize Federal funds for 

assistance for debris removal and emergency protective measures 

09162008 (Categories A and B), including direct Federal assistance, under the 

Public Assistance Program, at 100 % of the total eligible costs for a 14 

day period retroactive to the date of the major disaster declaration. 

09172008 (3) of (9) Mobile Response Information Centers open on Galveston Island 

09182008 PA PDAs begin 

09192008 First blue roof installed 

09222008 Applicant Briefings began 

09262008 Opened AFOs in Houston, Galveston and Beaumont 

Amendment NO.4 to 1791-DR-TX adds Galveston County for Public 

Assistance [Categories C-G] (already designated for Individual Assistance 

09262008 and debris removal and emergency protective measures [Categories A 

and B], including direct Federal assistance, under the Public Assistance 

program). 

09282008 IA PDAs began 

10032008 Amendment NO.6 to 1791-DR-TX closes the incident period effective 

October 2,2008. 

Amendment No.7 to 1791-DR-TX amends declarations of September 13, 

2008 and September 16, 2008 and authorizes Federal funs for assistance 

for debris removal and emergency protective measures (Categories A-B), 

10082008 including direct Federal assistance, under the Public Assistance program, 

at 100 percent of the total eligible costs for an additional 30 days beyond 

the previous 14-day period, retroactive to the date of the major disaster 

declaration. 

Amendment NO.8 1791-DR adds Gregg, Harrison, Rusk and Smith 

Counties for Individual Assistance, Shelby County for Individual 

Assistance and Public Assistance, Angelina, Brazoria, Fort Bend, Hardin, 

10092008 Newton, Polk, and Tyler Counties for Public Assistance [Categories C-G] 

(already deSignated for Individual Assistance and debris removal and 

emergency protective measures [Categories A and B], including direct 

Federal assistance, under the Public Assistance program). 

The States request to extend Transitional Shelten'ng Assistance for 

10092008 Displaced Individuals and Households for 1791-DR-TX for an additional 

period of time through November 30, 2008 was approved. 

2 
303 

10102008 First PW obligated for $1,000,006 

10132008 RPA deadline extended to November 11, 2008 

Amendment NO.9 to 1791-DR-TX adds Aransas, Burleson, Nueces, and 

San Patricio Counties for Public Assistance, Rusk County for Public 

Assistance (already designated for Individual Assistance), Cherokee, 

10162008 Harris, Houston, Liberty, Matagorda, Montgomery, Orange, San 

Augustine, and Trinity Counties for Public Assistance {Categories C-GJ 

(already designated for Individual Assistance and debris removal and 

emergency protective measures [Categories A and B], including direct 

Federal assistance, under the Public Assistance program). 

Amendment No. 10 1791-DR-TX adds Anderson, Bowie, Leon, and Milam 

Counties for Public Assistance, Grimes, Jasper, Jefferson, Nacogdoches, 

San Jacinto, Walker, and Waller Counties for Public Assistance 

10242008 [Categories C-G] (already designated for Individual Assistance and debris 

removal and emergency protective measures [Categories A and Bj, 

including direct Federal assistance, under the Public Assistance 

program). 

11012008 The States request to extend IA registration deadline to 12/12/2008 was 

approved. 

The States request to extend the deadline to submit requests for 

11012008 additional county designations for 1791-DR-TX to 11/16/2008 was 

approved. 

11052008 Last Blue Roof installed 

Amendment No. 11 to 1791-DR-TX adds Brazos, Calhoun, Cass, Marion, 

Morris, Panola, Robertson, and Upshur counties for Public Assistance, 

Gregg, and Harrison counties for Public Assistance (already designated 

for Individual Assistance), Austin, Madison, Sabine, and Washington 

11052008 Counties for Public Assistance [Categories C-G] (already designated for 

Individual Assistance and debris removal and emergency protective 

measures [Categories A and BJ, including direct Federal assistance, 

under the Public Assistance proQram). 

11082008 Last shelter closed 

11112008 RPA deadline extended to 11/25/2008 

11212008 Amendment No.13 to 1791-DR-TX adds Wharton County for PA. 

11252008 RPA deadline for 1791-DR-TX 

Amendment No. 14 to 1791-DR-TX authorizes Federal funds for 

assistance for debris removal (Cat. A) , including direct Federal 

11262008 assistance, under the PA program, at 100 percent of the total eligible 

costs for and additional six months immediately following the previous 44 

d~p~riod. 

11302008 The request for an extension of the Transitional Sheltering Assistance to 

January 3'd 2009 was approved. 

12122008 The Individual Assistance deadline for registration was extended until 

January 12th 2009. 

12162008 Applicant briefs were completed 

12232008 The request for an extension of the Transitional Sheltering Assistance to 

March 13th 2009 was approved. I 

01062009 The Individual Assistance deadline for registration was extended until i 

February 6th 2009. I 

01312009 Deadline for Registrations extended until February 20th, 2009. I 

02122009 State extended Hazard Mitigation Grant Program (HMGP) Application I 

I 
304 

02202009 

4 
305 

City of Galveston 

Hurricane Ike Orders 

Index 
306 

I. 9/10/08 

2.9/10/08 

3. 911 0/08 

4.9/11/08 

5.9/11/08 

6. 9/12/08 

7.9/12/08 

8.9/12/08 

9. 9/12/08 

10.9113/98 

II. 9/13/08 

12.9/13/08 

13. 9/14/08 

14.9/14/08 

15.9/14/08 

16.9/15/08 

17.9/15/08 

18.9/1 5/08 

19.9/15108 

20.9/15/08 

21. 9/15/08 

22.9115/08 

23.9116/08 

24.9/16/08 

25.9/17/08 

26.9/16/08 

HURRICANE IKE ORDERS 

INDEX 

Revised March 18,2009 

Emergency Mtg. Agenda 

08-051 Ordinance declaring local state of emergency & local state of 

disaster 

Declaration of Local State of Disaster 

Order of Mandatory Evacuation for West End of Galveston (7:00 

a.m.) 

Order of Mandatory Evacuation (9:30 a.m.) 

Order Restricting Ingress, Egress & Access 

Notice of Mandatory Curfew between 8:00 p.m. and 5:00 a.m. 

Declaration of Necessity to Disconnect Water and/or Sewer Utility 

Connections to Affected Properties Located with the City of Galveston 

Notice of Disconnection of Water and/or Sewer Service 

Mandatory Order No Ingress/Access to the City 

FEMA Notice of Major Disaster Declaration for the State of Texas 

dated 9/13/08 

FEMA Notice of Major Disaster Declaration for the State of Texas 

Amendment No.1 dated 9/13/08 

FEMA Notice of Major Disaster Declaration for the State of Texas 

Amendment No.2 dated 9/14/08 

Notice of Extended Mandatory Curfew 6:00 PM until 6:00 AM until further 

notice 

Request for Cruise Ship Assistance 

Notice of Mandatory Prohibition of Access to South Side of Seawall and 

use of Beaches 

Microsoft letter of Disaster Response Assistance & Agreement 

Order Establishing San Luis Resort Hotel as Base Camp and 

Convention Center at the San Luis Resort as City Command Post for 

Operations 

Notice to Proceed Debris Clearanee Monitoring R.W. Beek 

Notice to Proceed with Debris Clearance DRC Emergency 

Services, LLC 

Agreement Btw. COG and State of Task Force Operations use of 

Designated Areas at Scholes Airport as Command Post 

Mandatory Order of Evacuation of All Persons at the Flagship Hotel due 

to Structural Concerns. 

Temporary Suspension of all Ordinances and City Code Provisions 

Regulations Towing Vehicles, Wrecker Regulations, Abandoned and 

Junked vehicles 

FEMA Notice of Major Disaster Declaration for the State of Texas 

Amendment No.3 dated 9/16/08 

Emergency Meeting Agenda 

Notice of "Look and Leave" for Galveston Residents and Business 

H:lHurricane IkelMayor's 3-3-09 DC testimony packetlINDEX . Hurricane Ike Orders.doc 
307 

27.9116/08 

28.9/17/08 

29.9/17/08 

30.9117/08 

31. 9118/08 

32. 9/18/08 

33.9119/08 

34.9120108 

35.9120108 

36.9/20/08 

37.9/20108 

38.9121108 

39.9121/08 

40.9121108 

41. 9121108 

42.9121108 

43.9/21108 

44.9121108 

45.9121108 

46.9/22/08 

47.9122/08 

48.9/22/08 

49.9122/08 

50.9122/08 

Owners Btw. 6 am-6 pm 

Agreement Between The COG and Peninsula Sanitation Service, Inc. 

Disaster Response for Hurricane Ike 

Extension of a Local State of Disaster 

Extension of Declaration of State of Emergency 

Order Removing Competitive Bidding Requirements & Procedures 

Boyer Contract to Install Electric Motors for Water Plant @ 59th Street 

Notice to Proceed with Engineering Services Boyer Inc. 

Mandatory Order Authorizing Non Essential Civilian Employees Use of 

Sick Time for No Pay Status suspending Chapter 14, Sec. 3C of the COG 

Employee Personnel Manual of2004 

Order Establishing the Property commonly referred to as the Old K-Mart 

Parking Lot Stewart Road as a State Point of Distribution and a FEMA 

Registration Location 

Notice to Proceed with Debris Clearance Ashbritt Environmental Inc. 

Agreement Between. COG and FEMA Use of Designated Areas at 

Scholes Airport as a Base Camp. 

Posting of Agenda for City Council Meeting on 9/24/08-posted 9/20108 

First Contract Amendment for Debris Clearance Ashbritt Environmental 

Inc. 

First Contract Amendment for Debris Clearance DRC Emergency 

Services, LLC 

Notice of Mandatory Prohibition of Open Burning and improper Use of 

Flammable Materials Near Electrical Sources & Failure to thoroughly 

Extinguish Smoking Materials 

Order Waiving all Bldg Permitting Fees and. Building, Mechanical, 

Plumbing, Electrical, and Fire Permit Fees for Sixty Days Unless 

Terminated Earlier until 11120108 

Mandatory Order Restricting Water Usage to Essential Needs of Cooking, 

after Water Purification and Showering, Implementing Water 

conservation Measures Within the COG 

Notice of Lifting of Mandatory Prohibition of Access on the South Side of 

Seawall Blvd But Continued Mandatory Prohibition of Recreational Use 

of the Gulf of Mexico, 

Lifting Mandatory Evacuation Order Except for the West End 

Munter Letter to Lloyd Unsigned 

Order Suspending all Temporary Licenses to use the Public Right of Way 

and Those Associated License Fees for 60 days as ordered by the Mayor 

of the COG until 11121/08 

Order Dismissing Civil Action No. 11-08-280 Griffm vs. Thomas et al 

Order waiving City Charter Procedural Requirements for adopting the 

Budget at least 7 days prior to beginning of the fiscal year, ordering a 

special city Council meeting for Monday 9129/2008 

Order Controlling Prices Terminates upon the indefinite expiration of the 

declared state of emergency 

Mandatory Order that destroyed non conforming use of off prcmise 

H:IHurricane IkelMayor's 3-3-09 DC testimony packetlINDEX - Hurricane Ike Orders.doc 
308 

51. 9122/08 

52.9/22/08 

53.9/23/08 

54.9/23/08 

55.9123/08 

56. 9/23/08 

57.9/23/08 

58.9/23/08 

59.9/23/08 

60.9/23/08 

61. 9/23/08 

62.9/23/08 

63. 9124/08 

64.9124/08 

65.9/24/08 

66.912008 

67.9125/08 

689/24/08 

69.9/24/08 

70.9/25/08 

71. 9126/08 

72. 10/1/08 

73. 1012108 

74.10/3/08 

75. 10/3/08 

advertising signs shall lose its non conforming status and he removed by 

the owner effective immediately 

Notice of City Council meeting for 9/26.2008 posted on 9/2212008 

Notice of "Look and Leave" for West of the end of the seawall to San 

Lnis Pass 

Short Term Gross Lease at Scholes IntI Airport parking area. 

Second Contract Amendment for Debris Clearance Ashbritt 

Environmental Inc. 

Second Contract amendment for Debris Clearance DRC Emergency 

Services Inc. 

Order temporarily establishing a 10 day waiting period for impoundment 

of stray or abandoned animals 

Ordel' Revoking the State of Emergency for the COG effective 

9/24/2008 at 6 am under the Charter, Continuation of Declaration of 

Local State of Disaster ordered by the Mayor. 

Munters Moisture Control Services quote for Wright Cuney (dehumidifY); 

Island Transit Admin (dehumidifY); Island Transit Admin (clean-up) 

Memo from Eric Wilson Re: Emergency Purchase Due to 

Hlurricane Ike 

Hillmann Environmental Group, LLC Contract Agreement 

Order Revoking the State of Emergency for the City of Galveston 

Effective Wedncsday, Septcmber 24, 2008 at 6:00 A.M. 

Mayor Thomas Senate Testimony 

Ordinance 08-052 Continuing the Declaration of a Local State of Disastt.'f 

for one year 

Ordinance 08-053 Extending a Mandatory Curfew Effective between 8:00 

P.M. and 6:00 AM. 

Munters Moisture Control Services for restoration at City Hall 

Lone Star Legal Aid- Assistance for Hurricane Ike 

Patton Boggs LLP representation obtaining Federal Financial Assistance 

Munters MCS - Model Remediation Work Plan 

Post Watcr Intrusion Microbial Investigation and Mold Remediation 

Protocol 

Memorandum of Understanding Between Copart, Insurance Auto 

Auctions, Manheim (Total Resource Auctions) and the City of Galveston 

FEMA Notice of Major Disaster Declaration for the State of Texas 

Amendment No.4 dated 9126/08 

Letter to Galveston County Health District regarding health threat of 

debris from Hurricane Ike 

FEMA Notice of Major Disaster Declaration for the State of Texas 

Amendment No.5 dated 10/2/08 

FEMA Notice of Ma.jor Disaster Declaration fOl' the State of Texas 

Amendment No.6 dated 10/3/08 

Request for FEMA Assistance in Private Property Debris Removal, 

Demolition of Private Structures and Water Way Debris 

Removal 

H:IHurricane IkelMayor's 3-3-09 DC testimony packetlINDEX - Hurricane Ike Orders.doc 
309 

76. 10/3/08 

77. 10/3/0S 

78. 10/3/08 

79.10/3/08 

SO. 10/3/0S 

SI. 10/3/0S 

S2. 10/5/0S 

83. 10/6/0S 

84. 1018/08 

85. 10/9/08 

S6. 1011 O/OS 

S7. 10/10108 

88.10/6/08 

S9. 10/6/0S 

90. 10/S/OS 

91. 10/9/0S 

92. 10/9/0S 

93. 10/16/08 

Interlocal Agreement on Temporary Debris Site within City of Galveston, 

Texas 

Request for State Assistance (General Land Office) for Debris 

Removal on Pnblic Beaches and Relocation and Placement of Beach 

Sand Displaced by Hnrricane Ike 

Request for State Assistance (Texas Department of Transportation) 

for Debris Removal on all State Highways Located Within the City of 

Galveston, Texas 

Request for State Assistance (Texas Department of Housing and 

Commnnity Affairs) for Temporary Housing Units for Residents 

Displaced by Hurricane Ike 

Ordinance OS-05S Amending Mandatory Curfew to 12:00 AM to 5:00 AM 

Ordinance OS-060 Waiving the imposition or collection of late fees for 

Municipal utility accounts. 

Follow-up Request for State Assistance Emcrgcncy Housing, Shelter, and 

Mass Care Hurricane Ike 

Fax to Jack Colley Re: Statement of Understanding between The City of 

Galveston Emergency Management and The Greater Houston Area 

Chapter of the Amcrican Red Cross - Council Approved 1126/06 

FEMA Notice of Major Disaster Declaration for the State of Texas 

Amendment No.7 dated 10/8/08 

FEMA Notice of Ma.ior Disaster Declaration for the State of Texas 

Amendment No.8 dated 10/9/08 

Notice of Lifting of Mandatory Prohibition of Recreational Use of the 

Gulf of Mcxico, Effective Friday October 10, 200S 

Notice of Lifting of Mandatory Order Restricting Water Usage to the 

Essential Needs of Cooking, After Water Purification and Showering, 

Implementing Water Conservation Measures Within the City of Galveston 

Effective Friday, October 10, 200S 

Order Establishing an Additional FEMA Disaster Recovery Center 

Fixed Facility Location at Alamo School for City of Galveston 

Emergency Public Assistance - Establishing Additional FEMA 

Mobile Emergency Registration Intake Centcrs at Shields Park, 927 

Broadway, and 6327 Stewart Road 

Pcrmission to Enter private propcrty to determine if property has suffered 

substantial damagc 

Request for State Assistance Long-Tcnn Community Recovery ESF #14 

Hurricane Ike 

Ordinance OS-062 to temporarily suspend all regulations relating to trailers 

and recreational vehicles located on residential and commercial properties 

due to widespread damage caused by Hurricane Ike. 

Ordinance OS-063 Amending Mandatory Curfew to remain in effect from 

midnight to 5 a.m. from 20th Street to 25th Street from Harborside to 

Winnie. 

Ordinance OS-067 Adopt temporary regulations regarding temporary 

storage units 

H:IHurricane IkelMayor's 3-3-09 DC testimony packetlINDEX - Hurricane Ike Orders.doc 
310 

94. 10/20108 

95. IO/20/0S 

96. 10/23/08 

97. 1O/23/0S 

98. 10/29/08 

99. II/l3!OS 

100.11/17/08 

101. 11120108 

102. 12/5/08 

103. 1I13/09 

104. 1115/09 

105. Jan/09 

106. 1112/09 

107. 1113109 

Mutual Aid Agrecment for Public Assistance Betwccn City of Galveston 

and Asset Group, Inc. 

Rick Perry letter to President Bush requesting federal assistance 

Ordinance 08-068 Granting variance until 4/30/2010 from Flood Elevation 

Requirements for FEMA manufactured homes in floodplains to provide 

temporary housing 

Order lifting the Look and Leave Policy for the West End of 

Galveston Island Effective 6:00 A.M. Thursday, October 23, 200S by 

the Mayor of the City of Galveston 

Memorandum of Understanding Regarding Temporary Provision of Fire 

Protection Services on Bolivar Peninsula 

FEMA responses to concerns regarding private, cluster and 

community temporary housing sites for Hurricane Ike victims. 

Authorization from Local Government for GLO to Clear Ike Debris. 

Ordinance 08-073 adopting a private property debris removal and 

demolition policy in compliance with rules established by FEMA 

Governor Rick Perry's Proclamation to extend the disaster proclamation 

of September 8, 2008. 

Letter to FEMA requesting funding for commercial debris removal 

and extend to March 31, 2009. 

Order Lifting Temporary Suspension of all Ordinances and City Code 

Provisions Regulating Towing Vehicles, Wrecker Regulations, 

Abandoned and Junked Vehicles Effective Midnight January IS, 2009 

The Senate Subcommittee on Flooding and Evacuations Interim 

Report (Report to the SIst Legislature .January 2(09) 

House Seleet Committee on Hurricane Ike Devastation to the Texas 

Guld Coast Texas House of Representatives Interim Report 200S 

(Report to the House of Representatives Sist Legislature) State 

Representative Sylvester Turner, Chairman 

James Lee Witt Professional Consulting Services Agreement 

a. Task Order No. I Notice to Proceed 

b. Revised Task Order No. I Notice to Proceed 

H:lHurricane Ike\Mayor's 3-3-09 DC testimony packetlINDEX - Hurricane Ike Orders.doc 
311 

Testimony Snmmary: Brad Harris 

Federal Coordinating Officer - Hurricane Ike 

Federal Emergency Management Agency 

Accomplishments ofthe Federal, State, and Local Partnership: 

Nearly 35,000 Texans assisted by the Transitional Sheltering Assistance program. 

More than 21,000 families were housed under DHAP with over 12,000 families still participating. 

Over 3,720 temporary housing units were put in place and occupied. In less than one year since 

Hurricane Ike, 1,595 (43 percent) of the tcmporary housing units havc been vacatcd and returned to 

thc federal inventory, 1,964 still remain in temporary housing units. 

Rental Repair Pilot Program (authorized by PKREMA) FEMA repaired one 32-unit rental property in 

Galvcston. The pilot program expired on Decembcr 31, 2008. 

Public Assistance (PA): 

a Debris Removal- A streamlined process was implemcntcd to reimbnrse local governmcnts 

allowing the utilization oflocal dcbris rcmoval programs which spcd-up the recovcry process. 

a Projcct Worksheets - As of September 4, 2009, 13,939 Project Worksheets were written. The 

rcmainder will be written bcfore the cnd of thc calendar ycar. 

o Hazard Mitigation Program- Projects currently undcr consideration includc buy-outs of 

certain residential properties which may be in floodways or velocity zones and construction 

initiativcs to further hardcn and storm-proof structurcs critical to the local infrastructurc. 

Remaining Challenges to Texas Recovery: 

Individual Assistance 

Placing all eligible applicants in temporary housing units in a timely manner is challenging. Unit 

placement must comply with applicable Federal, State and local codes and ordinances. 

Not cnough qualitied contractors were available to handle all of the rebuilding needs. Lack of 

contractors may inhibit an individual's ability to adequately repair their home before the end of the 

housing program. 

With greatcr coordination FEMA can continue to maintain an up-to-date databasc and snapshot of 

rental resources that become available in the areas most significantly damaged. 

Public Assistance 

Many remaining Project Worksheets are extremely complex. The University of Texas Medical 

Branch (UTMB) covered several properties, including 157 buildings and critical facilities, such as 

emergency rooms and laboratories. 

The remaining Project Worksheets require architectural drawings for the construction and this 

process will take some time. 

FEMA has implemented new initiatives for the timely completion of Project Worksheets: 

o Created an interagency debris task force with debris specialists to assist with gathering 

information to help expedite Project Worksheets preparation and processing. 

o Reorganized stalflo set up specialized Public Assistance teams with specific experience in 

effort to focus on Project Worksheets for applicants (i.e. UTMB and Electrical Cooperatives). 
312 

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