[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
DEPARTMENTS OF TRANSPORTATION, HOUSING AND URBAN DEVELOPMENT, AND
RELATED AGENCIES APPROPRIATIONS FOR 2018
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
________
SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND
URBAN DEVELOPMENT, AND RELATED AGENCIES
MARIO DIAZ-BALART, Florida, Chairman
CHARLES W. DENT, Pennsylvania DAVID E. PRICE, North Carolina
DAVID P. JOYCE, Ohio MIKE QUIGLEY, Illinois
JOHN ABNEY CULBERSON, Texas KATHERINE CLARK, Massachusetts
DAVID YOUNG, Iowa PETE AGUILAR, California
DAVID G. VALADAO, California
TOM GRAVES, Georgia
NOTE: Under committee rules, Mr. Frelinghuysen, as chairman of the
full committee, and Mrs. Lowey, as ranking minority member of the full
committee, are authorized to sit as members of all subcommittees.
Doug Disrud, Cheryle Tucker, Carl Barrick,
Jennifer Hollrah, and Matthew Anderson
Subcommittee Staff
_______
PART 6
Department of Transportation, Federal Highway Administration--
Emergency Relief
Department of Housing and Urban Development, Community Development
Block Grant--Disaster Recovery
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
28-271 WASHINGTON : 2018
COMMITTEE ON APPROPRIATIONS
----------
RODNEY P. FRELINGHUYSEN, New Jersey, Chairman
HAROLD ROGERS, Kentucky \1\ NITA M. LOWEY, New York
ROBERT B. ADERHOLT, Alabama MARCY KAPTUR, Ohio
KAY GRANGER, Texas PETER J. VISCLOSKY, Indiana
MICHAEL K. SIMPSON, Idaho JOSE E. SERRANO, New York
JOHN ABNEY CULBERSON, Texas ROSA L. DeLAURO, Connecticut
JOHN R. CARTER, Texas DAVID E. PRICE, North Carolina
KEN CALVERT, California LUCILLE ROYBAL-ALLARD, California
TOM COLE, Oklahoma SANFORD D. BISHOP, Jr., Georgia
MARIO DIAZ-BALART, Florida BARBARA LEE, California
CHARLES W. DENT, Pennsylvania BETTY McCOLLUM, Minnesota
TOM GRAVES, Georgia TIM RYAN, Ohio
KEVIN YODER, Kansas C. A. DUTCH RUPPERSBERGER, Maryland
STEVE WOMACK, Arkansas DEBBIE WASSERMAN SCHULTZ, Florida
JEFF FORTENBERRY, Nebraska HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida CHELLIE PINGREE, Maine
CHARLES J. FLEISCHMANN, Tennessee MIKE QUIGLEY, Illinois
JAIME HERRERA BEUTLER, Washington DEREK KILMER, Washington
DAVID P. JOYCE, Ohio MATT CARTWRIGHT, Pennsylvania
DAVID G. VALADAO, California GRACE MENG, New York
ANDY HARRIS, Maryland MARK POCAN, Wisconsin
MARTHA ROBY, Alabama KATHERINE M. CLARK, Massachusetts
MARK E. AMODEI, Nevada PETE AGUILAR, California
CHRIS STEWART, Utah
DAVID YOUNG, Iowa
EVAN H. JENKINS, West Virginia
STEVEN M. PALAZZO, Mississippi
DAN NEWHOUSE, Washington
JOHN R. MOOLENAAR, Michigan
SCOTT TAYLOR, Virginia
----------
\1\}Chairman Emeritus
Nancy Fox, Clerk and Staff Director
(ii)
C O N T E N T S
__________
November 30, 2017
Page
Diaz-Balart, Hon. Mario, a Representative in Congress from the
State of Florida, opening statementt........................... 1
Price, Hon. David E., a Representative in Congress from the State
of North Carolina, opening statement........................... 2
Witness
Hendrickson, Brandye, Acting Administrator, Federal Highway
Administration................................................. 2
Prepared statement........................................... 4
______
December 1, 2017
Diaz-Balart, Hon. Mario, a Representative in Congress from the
State of Florida, opening statementt........................... 27
Price, Hon. David E., a Representative in Congress from the State
of North Carolina, opening statement........................... 28
Rackleff, Neal J., Assistant Secretary, Office of Community
Planning and Development, Department of Houseing and Urban
Development.................................................... 29
Prepared statement........................................... 32
Answers to submitted questions............................... 57
Submitted Material
Bishop, Hon. Sanford D. Jr., a Representative in Congress from
the State of Georgia, submitted statement...................... 56
Serrano, Hon. Jose E., a Representative in Congress from the
State of New York, submitted statement......................... 56
(iii)
DEPARTMENTS OF TRANSPORTATION, HUD, AND RELATED AGENCIES APPROPRIATIONS
FOR 2018
----------
Thursday, November 30, 2017
FEDERAL HIGHWAY ADMINISTRATION--EMERGENCY RELIEF
WITNESSES
BRANDYE HENDRICKSON, ACTING ADMINISTRATOR, FEDERAL HIGHWAY
ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION; WALTER C.
``BUTCH'' WAIDELICH, JR., EXECUTIVE DIRECTOR,
FEDERAL HIGHWAY ADMINISTRATION
OPENING STATEMENT OF CHAIRMAN DIAZ-BALART
Mr. Diaz-Balart. We will call the subcommittee to order.
Let me first welcome our witnesses, Brandye Hendrickson,
acting administrator for the Federal Highway Administration,
and Mr. Butch Waidelich, the executive director of the Federal
Highway Administration. They are here to testify on the
administration's request for additional funding for the
hurricane recovery efforts of 2018.
Obviously, the 2017 hurricane season inflicted billions of
dollars worth of damage and economic loss in a number of States
and territories, obviously, including my home State of Florida.
And so we look forward to working with you and the entire
administration to help rebuild those communities that have been
devastated by Hurricanes Harvey, Irma, and Maria.
So, today, we are going to focus this hearing on the $415
million request for the Federal Highway Administration's
Emergency Relief Program. This program supports both urgent
repairs, which are needed in response to the disaster, as well
as rebuilding projects needed for long-term recovery.
And the beauty of this program is that it leverages the
regular highway program to get projects moving quickly and
responsibly. And so we look forward to learning more about what
is funded in the request and understanding how the program will
serve the needs of those communities that have been impacted by
these horrible storms in this last year.
So as I said before, I thank both of you for your service
and for appearing before us today.
Let me now recognize my friend and partner and colleague
here, the ranking member, Mr. Price.
OPENING STATEMENT OF RANKING MEMBER PRICE
Mr. Price. Thank you, Mr. Chairman.
I want to add my welcome to our witnesses, Administrator
Hendrickson, Director Waidelich. We appreciate you joining us
today. We look forward to what you will have to say.
We, of course, are examining the administration's
supplemental funding request for disaster relief and your
programs, the programs you oversee. The Highway
Administration's Emergency Relief Program is critical to any
major recovery effort. We have got to restore highways, roads,
quickly to facilitate the flow of aid and emergency resources
and to set the foundation for long-term recovery.
I appreciate that your agency has routinely authorized
quick release to jump start the recovery process and that you
have requested an additional $415 million to help the States
and territories affected by Hurricanes Harvey, Irma, and Maria.
I am concerned; will want to explore this later. I remain
concerned that the supplemental request fails to address the
existing backlog of ER projects in dozens of States that have
suffered from other recent disasters. And in addition, the
request doesn't include funding to respond to the wildfires in
California.
Finally, there are ongoing challenges associated with the
cost estimation in hard-hit areas like Puerto Rico. And the
committee will need to continue to receive updated information
as those estimates are received.
So we have a lot of work to do, and we look forward to this
as a useful opportunity to exchange information as we look to
the task ahead. We thank you for being here.
Thank you, Mr. Chairman.
Mr. Diaz-Balart. Thank you, sir.
Administrator Hendrickson, again, your full testimony will
be included in the record, obviously. And so now we thank you
again for being here and we will recognize you for 3 minutes.
STATEMENT OF BRANDYE HENDRICKSON, ACTING ADMINISTRATOR, FEDERAL
HIGHWAY ADMINISTRATION
Ms. Hendrickson. Chairman Diaz-Balart, Ranking Member
Price, and members of the subcommittee, thank you for inviting
me here today to discuss how Federal Highway responds to
disasters, and the administration's request for additional
funding for Emergency Relief Program. Joining me today is Butch
Waidelich, Federal Highway's executive director.
Having served as the CEO of a State DOT, I know firsthand
how important the Emergency Relief Program is to restoring
essential transportation infrastructure following a disaster
and how critical that is to other recovery efforts, commerce,
and the return to a higher quality of life for those impacted.
As you know, over the course of 4 weeks, three major
hurricanes caused widespread devastation across Texas, Florida,
Puerto Rico, and the U.S. Virgin Islands. The administration
took quick action to respond to these events, and under the
leadership of Secretary Chao, U.S. DOT was no exception.
Most of Federal Highway's disaster response efforts are
provided by Federal Highway's Emergency Relief Program. This
program provides funding to States, territories, Federal land
management agencies, and Tribal nations for the repair and
reconstruction of Federal transportation assets that suffer
serious damage as a result of natural disasters or catastrophic
failures.
Through the ER program, Federal Highway has already
provided over $130 million to respond to recent hurricanes.
This funding allowed the recovery process to start almost
immediately after the events ended. However, due to the
magnitude of these storms, more is needed and, therefore, the
administration is requesting an additional $415 million
programs for the ER program to aid in the recovery.
Federal Highway's response has not been limited to funding.
The recovery from these storms would not be possible without
the dedicated work of our division offices in Texas, Florida,
and Puerto Rico. I would like to recognize staff from these
offices, some of whom were personally impacted by these storms,
for their nonstop and continued efforts in providing assistance
to the states and territories.
In addition, Federal Highway deployed its Federal Lands
Highway staff to complete damage assessments, offer technical
assistance, and provide turnkey engineering and contract
administration support in these impacted areas. Our
headquarter's Crisis Management team and other Federal Highway
employees from across the country, who have volunteered to
assist in recovery efforts, also deserve recognition for their
efforts.
I spent a lot of time in the Crisis Management Center, on
many phone conferences, and also had the opportunity to visit
our folks on the ground in Texas. While it is difficult for me
here to convey their passion and their heart for service in the
setting here today, I assure you that Federal Highway will be
there every step of the way and is committed to supporting
these communities in rebuilding their roads and bridges.
Mr. Chairman, thank you again for the opportunity to appear
before you today, and I look forward to answering your
questions.
[The prepared statement of Ms. Hendrickson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Diaz-Balart. Thank you, Administrator. By the way, I
would be remiss if I didn't mention that, during those storms--
and I didn't call the Secretary, she called me. Basically, the
storm was barely over and she was already calling me. And so I
think it is important to note that. And that is greatly
appreciated. I greatly appreciate it.
Members, we will proceed in the standard 5-minute rounds,
alternating sides, recognizing members in order of seniority as
they were seated at the beginning of the hearing. And
obviously, as you know, those 5 minutes include not only the
question, but also the answer.
Ms. Clark. Are you looking at me?
Mr. Diaz-Balart. I am not looking at you, because you are
actually very concise.
Let me just start. It is my understanding that the
Emergency Relief Program--and Mr. Price spoke about this in his
opening remarks--has an obligation backlog. And it is my
understanding it is over $1 billion in expected funding
shortfall of over $800 million. And as Mr. Price said, the
request falls short of this amount, not to mention the
additional funding needed to address the 2017 hurricane damage.
So it would be great if you could explain how the ER
backlog works and what happens when there is a shortfall.
Ms. Hendrickson. The total backlog to date is about $1.4
billion, and that includes the total need estimated for Harvey,
Irma, and Maria. While we are certainly cognizant of all the
other needs across the country, we update that information
twice a year with revised estimates on what States feel that
they can obligate. We certainly continue to support them in
those efforts, but the destruction relative to these hurricanes
is widespread and the need is immediate. And thus, the request
to address those needs with this supplemental request.
Mr. Diaz-Balart. So let me ask you, so if the request were
not to be adequate to cover the current shortfall, and then so
how will any new costs associated with the 2017 storm damage be
addressed?
Ms. Hendrickson. We have a semiannual allocation of funds
that goes out to the States. And we send those out on a
prorated basis based on need and what States feel that they can
obligate. And so, you know, just depending on the available
funds would determine how those funds would be allocated.
Mr. Diaz-Balart. And I don't know if this is something you
can answer, but any idea why the administration didn't request
enough funding to clear the backlog and also support the 2017
damage?
Ms. Hendrickson. I know that the urgency was to get funding
to the hurricane-impacted areas because of the devastation and
because of the immediate need.
Mr. Diaz-Balart. Is there a scenario where projects could
potentially be delayed because of--you know, of a shortfall in
funding?
Ms. Hendrickson. States are free to use their normal
funding, their normal Federal aid funding, to complete
projects, and so I don't anticipate that there could be a
delay. In some cases where absolutely there were no funds
available, it is possible. But we don't expect that.
Mr. Diaz-Balart. And obviously when you think of Puerto
Rico and the Virgin Islands, where the damage is obviously
large, particularly large relative to the size of their regular
highway programs, and potentially waiting years to get
reimbursed might be more challenging for those. Not that it
wouldn't be challenging for others, but I would just imagine
that for particularly those two territories it might be a lot
more challenging.
Ms. Hendrickson. So we allocate funds to States on a
semiannual basis. As funding becomes available, the amount of
funding is determined based on what is available and what is
requested. And so we look every 6 months at the need associated
with what projects can actually get accomplished based on what
the States tell us.
Mr. Diaz-Balart. Right. So any idea how much progress has
been made in the actual damage assessments in each of the areas
affected by the hurricanes? Obviously, you know, I am keenly
interested in Florida, but not only in how it is going in
Florida. Any idea how that assessment is taking place?
Ms. Hendrickson. Sure. In Texas, relative to Hurricane
Harvey damage, about 90 percent of the inspections have been
completed. In Florida, with Hurricane Irma, about 70 percent of
the inspections have been completed. In Puerto Rico, with Irma
and Maria, about 91 percent of the inspections have been
completed. And with the Virgin Islands, about 80 percent of the
inspections have been completed.
Mr. Diaz-Balart. Great. Mr. Price.
Mr. Price. Thank you, Mr. Chairman. I want to just pick up
on the same line of questioning.
I am not sure, Madam Administrator, exactly what you are
saying, so let's try to make sure. The request is for $415
million, and that request is specifically pegged to the known
damage in Texas, Florida, Puerto Rico, and the Virgin Islands.
Is that correct?
Ms. Hendrickson. That is correct.
Mr. Price. So the request has no reference, makes no
reference to the $751 million in unmet need, in backlog?
Ms. Hendrickson. That is correct.
Mr. Price. All right. And I thought I heard you say that
the money went out in--the sequence of payment had to do with
the request being complete, the assessments being complete. But
this backlog, that is not the problem, is it? These assessments
have been there quite a while.
Ms. Hendrickson. We allocate funding based on what the
States tell us their needs are and what they can obligate
within the next 6 months. And so while--so as of the last
distribution of funds, we are up to date based on what the
States tell us that they can obligate. We have done another
call to ask what the future looks like in fiscal year 2018, and
that is the need that is represented in the $1.4 billion that
also includes the hurricane, the total hurricane request.
Mr. Price. All right. Well, the money that went out the
door previously, of course, was appropriated in the 2017
Omnibus, signed into law pretty late, admittedly, in May of
this year. That included $528 million. And there was a major
delay in obligating that. The bulk of that funding wasn't
released until this month.
Ms. Hendrickson. That is right.
Mr. Price. And as you know, Ranking Member DeFazio, others,
have expressed concerns about this delay. I share those
concerns. Did that delay have to do with waiting on the States
to make their needs clear and to meet their obligations?
Question A.
And question B, are you saying that now that that $528
million has gone out the door, that is all you can do now, that
the rest of that $751 million can't be committed until you get
more information from the States?
Ms. Hendrickson. So Federal Highway carefully considered
the impacts of the hurricanes before we released the funds to
make sure that the immediate needs from the hurricanes could be
addressed.
Mr. Price. Which hurricanes now are we talking about?
Ms. Hendrickson. Harvey, Irma, and Maria.
Mr. Price. This year's.
Ms. Hendrickson. Yes.
Mr. Price. All right.
Ms. Hendrickson. So we wanted to make sure, before we sent
out the semiannual allocation, that we were going to have
enough funds to cover the immediate quick-release needs of the
impacted areas from the hurricanes.
Mr. Price. That is the source of the $415 million request.
Ms. Hendrickson. The $415 million request is for the total
damage associated, estimated with the hurricane.
Mr. Price. That is what is left after the quick release.
Ms. Hendrickson. Yes.
Mr. Price. I see. OK. I still don't understand what is
hanging up the unmet needs from previous hurricanes, though.
$751 million, it is not included in this request. It is not
clear how we are going to meet those obligations, is it?
Ms. Hendrickson. States tell us what they can obligate in
the next 6 months. So the backlog includes the most up-to-date
numbers that States have told us they can obligate in the next
year. So that is what that number represents.
Mr. Price. Well, the fact that last year's money, the 2017
money wasn't released until November 2016, is that par for the
course or do you consider that to be a delay that you really
wouldn't want to repeat in the future?
Ms. Hendrickson. I would not expect that in the future. The
reason for the delay, again, was, as we considered all of the
needs due to the unprecedented hurricanes, we wanted to make
sure that we had enough funds on hand to get immediately
through quick release to the impacted areas to restore
essential traffic.
Mr. Price. All right. So there was a tradeoff between the
quick-release needs, which none of us would dispute, the need
to respond immediately to the horrible storms of this year, and
that longer term need.
It is still--unless I am missing something, it still
appears to me that we are missing the--that there is going to
be an appropriations--there should be an appropriations request
that we are going to need to consider that will address these
unmet needs from previous years. Or is the money in hand to do
that whenever the paperwork is in order or whatever needs to
happen?
Ms. Hendrickson. The money is not in hand.
Mr. Price. OK.
Ms. Hendrickson. As you know, we have a permanent annual
authorization of $100 million for the Emergency Relief Program.
And historically, we have had supplemental appropriations each
year, over $10 billion, actually, since 2005. And generally,
over the course of the year, the average supplemental is about
$1.5 billion each year, on average, over those years. So that
would be expected.
Mr. Price. All right. Thank you, Mr. Chairman.
Mr. Diaz-Balart. Thank you, sir.
Mr. Dent.
Mr. Dent. Thank you, Mr. Chairman.
Hurricanes Harvey, Irma, and Maria left a trail, I think,
of unprecedented devastation, and consequently, there are a
wide range of recovery needs.
Ms. Hendrickson, I wanted to ask you, when examining all
these needs, how does a State or a territorial government
prioritize repairs under this particular program? And is there
the opportunity for citizens, businesses, and nonprofits to
provide their input or flag needed repairs?
Ms. Hendrickson. Sure. So this is a federally assisted and
State-administered program. So States, you know, they do the
assessments. We determine the eligibility for quick--I am
sorry, for emergency relief funding. But the States really
identify the priorities based on a lot of different factors,
including economic development, safety, and mobility in their
areas. So it would be up to them to prioritize those projects.
We do, you know, certainly encourage and require public
engagement as a part of the Federal aid program. So
stakeholders, including residents and businesses, should
certainly have the opportunity to weigh in on those priorities
at the State level.
Mr. Dent. OK. Now, if you take it a step further, Hurricane
Maria, it hit Puerto Rico, which affected all aspects of day-
to-day life and industry in that territory. And as you know,
people are still recovering. What capacities do they have to
recover? So many of them are devastated right now in that so
many workers and contractors themselves are probably recovering
from the disaster. What is your assessment of the territory's
ability to make use of emergency funding made available through
the program? Are they able to utilize it at this moment?
Ms. Hendrickson. We are aware that several contracts have
already been--several emergency contracts have already been
executed in Puerto Rico. And, in fact, our Federal Lands staff
across the impacted areas are also performing contract
administration work in the impacted areas. So we know that
contracts are underway.
It would be something--contractor capacity would be
something to keep an eye on as more funding and needs
assessments are determined. Moving forward, we would want to
just keep a close eye on that.
Mr. Dent. Do you have any information about the ability to
secure qualified workers for these contractors? Are there
qualified workers available down there right now?
Ms. Hendrickson. We have not heard that that is an issue at
this point but, again, that would be something to keep an eye
on.
Mr. Dent. OK. And you also indicated in your statement that
good progress has been made in Puerto Rico in assessing the
damage to Federal-aid highways, roads, and bridges. What do you
believe is the timetable for completing all damage assessment
in the territory? And are there specific characteristics or
impediments in the remaining areas that are going to make them
more difficult to reach?
Ms. Hendrickson. Given the fact that now 91 percent of the
assessments have been completed, we anticipate that it would be
a fairly short turnaround time for the remaining facilities.
For emergency repairs, there is a 180-day requirement, that the
emergency repairs are completed within 180 days. So, certainly,
before the 180 days has expired, we would expect all of the
assessments to be complete.
We also really, in most cases, require that the detailed
inspections are completed within 3 months.
Mr. Dent. I yield back, Mr. Chairman. Thank you.
Mr. Diaz-Balart. Thank you very much, Mr. Dent.
The always concise and quick, Congresswoman Clark.
Ms. Clark. Thank you, Mr. Chairman. And thank you for being
here today.
I am not quite understanding how you got to your allocation
yet. So let me give you an example; maybe you can help me
understand it. In Florida, in the chairman's home State, my
understanding is they have about $105 million in net-remaining
need. So out of this allocation, which is the $415 million, is
approximately 30 percent of the total no need. Would Florida
get $105 million or did they get 30 percent of that?
Ms. Hendrickson. The total need that is being described
includes $105 million for Florida. So if the $415 million was
approved, Florida would get a substantial portion of that $105
million total need.
Ms. Clark. OK. So you are not going to do 30 percent across
the board, even though you are only asking for 30 percent of
the total need. You are going to prioritize those needs in
Texas, Florida, Puerto Rico, and the Virgin Islands?
Ms. Hendrickson. The request is specifically for these
hurricane-impacted areas. And so it would depend on if that is
what Congress tells us to do, then that is how the funds would
be allocated. But that is how the request has currently been
made.
Ms. Clark. OK. And did you say that there is an average
supplement on an annual basis of $1.5 billion to this, to the
emergency relief funding?
Ms. Hendrickson. Historically, yes.
Ms. Clark. Historically. But you have not received that
this year, and you are not asking for supplemental in addition
to this $415?
Ms. Hendrickson. Correct. That is not a part of this
request.
Ms. Clark. And why did you decide not to do a request that
would meet anywhere near historical standards, especially in
this time of huge need?
Ms. Hendrickson. This request was specifically to address
the immediate need of the hurricane-impacted areas and, you
know, given the unprecedented damage and widespread need, it
was specifically focused on these areas.
Ms. Clark. Yeah. I am just sort of, you know, curious about
why, you know--I certainly understand prioritizing these high-
need areas, and I appreciate the efforts that have been made,
but it seems like the ideal time to at least get to a
historical supplement request. If you could tell me a little
bit more about why you decided not to do that.
Ms. Hendrickson. Again, the specific request was really to
address the hurricane, the hurricane-impacted areas, and given
the magnitude and the historic nature of the hurricanes, the
$415 million was identified as the need for those specific
events.
Ms. Clark. OK. Going back to follow up on my colleague's
question. There's about 91 percent of the damage inspections
are done in Puerto Rico. And did you say it is about 81 percent
in the Virgin Islands?
Ms. Hendrickson. Eighty percent.
Ms. Clark. Eighty percent? And I appreciate that you have
given access to about $41 million to address emergency repair
needs while waiting. Is there any estimate that you have at
this time--and I know you have 180 days usually, you said, to
get this--of the additional amount needed? And if we do not
provide emergency relief funding sufficient to cover all that
existing need, what impact is this going to have on funding the
loan on transportation projects in Puerto Rico and Virgin
Islands?
Ms. Hendrickson. I did want to clarify that, for Puerto
Rico, we have released $72.5 million in quick-release funds.
And for the U.S. Virgin Islands, we have released $8 million
already. And the total quick release for Hurricanes Harvey,
Irma, and Maria is over $130 million. I just wanted to clarify
that.
Ms. Clark. OK. So I guess my question is, with the $415
million that you have decided to ask for, with these
outstanding inspections still needing to go forward, do you
have any estimate how short you might be based on what you are
seeing as the need at this point?
Ms. Hendrickson. The initial damage inspections have been
done. So as contracts are put together and as estimates are
refined, the numbers could change, could change positively or
negatively, depending on if the damage isn't as extensive as we
originally thought. So this is typical in our Emergency Relief
Program, is that as it gets closer to actual time for
construction, estimates get refined. And so the final numbers
come at the time of construction.
Ms. Clark. OK. Thank you.
Mr. Diaz-Balart. Mr. Young.
Mr. Young. Thank you, Mr. Chairman. And hello, colleagues,
good to be with you. And thank you for coming today. This is
very important.
These hurricanes, these disasters, they just wreak havoc on
people and their lives and communities. And we want to make
sure that the funds that we are disbursing here are getting to
the right place in a timely manner. And we also want to be
accountable with these taxpayer funds as well.
When we talk about the assessments, my understanding is you
say the States do the assessments and the inspections. And so
is that the State highway engineers and inspectors that do all
this?
Ms. Hendrickson. That is right. The State DOT's, through,
you know, their employees, their inspectors, do the damage
assessments, with our assistance.
Mr. Young. I mean, your assistance would be sending some
Federal Highway Administration folks down?
Ms. Hendrickson. We have Federal Highway staff in all 50
States.
Mr. Young. OK. So they come from other States? They will
come down from other States and leave a void in some other
States?
Ms. Hendrickson. No. We have Federal Highway employees in
every State.
Mr. Young. In every State, OK.
Ms. Hendrickson. So it would be those division offices that
would provide that technical assistance.
You know, in cases where there is some kind of special
expertise necessary or some kind of, you know, substantial
need, as in the cases of these hurricanes, we have sent
supplemental staff from other parts of the country to assist in
the effort.
Mr. Young. You want to make sure you have the smartest
people there inspecting in the right way, knowing what to look
for, because there are a lot of nuances, and it is case by case
sometimes.
Ms. Hendrickson. It can be, yes.
Mr. Young. And then the States, they do the prioritizing of
what needs fixed first?
Ms. Hendrickson. Yes.
Mr. Young. OK. How do you know that, within the
prioritization, that those--that it is legitimate, that there
is real accountability there, and that it is a real need? You
work with them?
Ms. Hendrickson. Absolutely. We work hand-in-hand with the
States. As they complete the damage assessments and as they
program their projects into their program, we review those
damage assessments to ensure they are eligible for the
emergency relief funds based on the conditions and the scope of
the project.
Mr. Young. OK. Because, you know, I have some--you know,
maybe other people worry about it, but sometimes I think maybe
folks try to slip in some projects in there that may have just
been a wanting to be fixed for a while, and they see an
opportunity, that the Federal tax dollars are coming in, a lot
of it, to take care of some projects. And I just want to make
sure that there is some accountability there to make sure what
has been damaged because of the storm is what is the priority.
And then you assess what the localities, the prioritization,
what needs to be done. OK.
Is it just the Federal Government that is sending the
taxpayer dollars or is there--do the States have any financial
skin in the game as well when it comes to this?
Ms. Hendrickson. Sure. So the emergency repairs in the
Emergency Relief Program are funded at 100 percent Federal with
no local match.
Mr. Young. OK.
Ms. Hendrickson. The permanent repairs, they are funded at
80/20 or 90/10, depending on the project. For territories,
those are funded at 100 percent Federal match.
Mr. Young. OK. That is all I have for right now.
I yield back. Thank you.
Mr. Diaz-Balart. Thank you very much, sir.
Mr. Valadao?
Mr. Valadao. Thank you, Chairman. Thank you very much for
attending today.
I am sure you are aware of the fires that devastated
California in October. Unfortunately, much of the State had
experienced similar wildfire situations for most of the summer.
Last month, the President declared a disaster for these
most recent fires, which burned through about 240,000-245,000
acres. Can you please give me an update of what funding the
Federal Highway Administration has provided so far in relation
to the California wildfires?
Ms. Hendrickson. I do not have a total of what has been
allocated specifically for the wildfires. I know that
California's request that was--it was met in the $519 million
allocation--I am sorry, supplemental appropriation that went
out in November.
Mr. Valadao. OK. And this past Friday, the Office of
Management and Budget submitted a request for $44 billion for
additional supplemental disaster. Unfortunately, the State of
California was not included in that package. I understand that
the California damage assessments are ongoing and the
administration will continue to work with the State in support
of the recovery process.
Does the Federal Highway Administration plan on requesting
additional relief dollars funding in any forthcoming disaster
relief supplement? I mean, are there any questions that need to
be addressed? Are you guys getting all the information that you
need as we move forward?
Ms. Hendrickson. I feel like we are--we do have the
information that we need. We have done a request to all States
about their ongoing need. And California has identified $889
million that they say can be obligated in 2018. And that is
part of the $1.4 billion backlog that I identified earlier.
Mr. Valadao. All right. Well, thank you.
I yield back.
Mr. Diaz-Balart. Thank you, sir.
By the way, I was actually, in a positive way, taken aback
about the numbers that you gave from Puerto Rico and the Virgin
Islands as far as the assessment. And I would imagine that
assessments in place, you know, doing that in Puerto Rico and
the Virgin Islands, must pose some special challenges.
So does the DOT have the resources it needs to evaluate the
damage and to approve projects within a reasonable timeframe
in? My question is really about the Virgin Islands and Puerto
Rico. But why don't we just kind of through that open in
general.
Ms. Hendrickson. It has been a commitment of resources on
behalf of Federal Highways, but I feel like this is when we are
at our finest when we all can rally around the most important
cause. And so we have pulled resources and prioritized this as,
you know, a very important aspect of our business, and feel
that this is the time we shine.
Mr. Diaz-Balart. Do you know if that 9 percent remaining,
right, in Puerto Rico, is that just because--I mean, by the
way, that number is, particularly the challenge, is exceedingly
high. I mean, it is an incredible achievement that you all have
been able to do.
Is that remaining 9 percent going to be a lot more
difficult because it is in the boonies, it is harder to get to?
Any idea what you foresee?
Ms. Hendrickson. I wouldn't want to speculate.
Mr. Diaz-Balart. Speculate on that, right.
Mr. Waidelich. You know, it has been, quite frankly,
remarkable, the speed that we have been able to give these
assessments.
Mr. Diaz-Balart. Yes, absolutely.
Mr. Waidelich. And something I just wanted to mention. We
have got this tool that it is an application that one of our
engineers in our Federal Lands organization developed called a
mobile solution for assessing and reporting. And essentially it
is an app on an iPad.
Now, when the event occurred in Texas, Harvey occurred in
Texas, we actually had trained engineers in Texas. We trained
engineers in our office to actually use it. And it saves quite
a bit of time as far as getting those assessments done. In
Puerto Rico and in the Virgin Islands, we ran into issues with
the, you might want to say, WiFi necessary and the cell
coverage necessary. But as that, you know, was overcome, it
became easier and easier.
So maybe what I am getting at is, is that 91 percent is
remarkable, and we wouldn't be there if it wasn't for that tool
that we have.
Mr. Diaz-Balart. No, that is a remarkable number and, you
know, again, I congratulate you all for doing that.
The committee has received some requests to waive or to at
least adjust, certain statutory requirements for this program
on items such as expenditure caps and the cost share. And so
has the DOT identified any requirements that potentially could
prove problematic for one or more of the areas impacted by the
2017 hurricanes? Are there issues that we need to be looking
at?
Ms. Hendrickson. Well, Federal Highway doesn't have the
discretion to waive the territorial cap. That would be--you
know, congressional action would be required to do that.
Mr. Diaz-Balart. Right. But are there any areas you have
seen that would be helpful for Congress to help you do that if,
in fact, there are some specific areas you have seen that
particularly problematic that maybe a waiver of a cap could
help in one way or another, or something like that?
Ms. Hendrickson. As more damage inspections come in and we
understand the total need in the U.S. Virgin Islands----
Mr. Diaz-Balart. It would be great if you could just stay
in touch with us if, in fact, you see something like that that
might be helpful to you all.
Ms. Hendrickson. OK.
Mr. Diaz-Balart. Again, just know that we are here to try
to help in things like that, if at all possible.
Let me just throw out one kind of a general open-ended
question, which is what are some of the lessons that DOT has
learned with respect to oversight? You know, there were a lot
of stories and I don't want to say horror stories, but some
issues particularly after Katrina and Sandy. And I have had
conversations about lessons learned.
But if you just want to kind of take a stab at that. Any
specific lessons learned after particularly those two storms,
and other major storms that have made it, again, have made the
process, better, more efficient? You mentioned, obviously, this
new process that you are using. But what other kind of lessons
are out there that you think we should hear about that we may
not have heard?
Mr. Waidelich. I don't know if this is considered a lesson,
but it is preparedness. You know, what you do prior to an event
makes a huge difference as to what happens during an event.
We work with the States, both Puerto Rico and Florida and
Texas, prior to an event, training them on what to do in these
areas. We work with them in their operation centers. We, you
might want to say, game and have exercises to see how
evacuations would take place.
So when you actually practice, and I think, you know, for a
good part of this, in Texas, for example, it was incredible,
the speed of that recovery because of what they were doing
prior to that event even happening, and the same thing in
Florida.
Another lesson learned is, you know, we have learned from
Andrew with standards. You have the State of Florida that was
hit by one of these hurricanes that was, you know, one of the
largest that has ever hit the United States with some of the
greatest winds. And the light standards remained. They learned
from Andrew to, you might want to say, develop resiliency into
their standards, so when an event like that occurred again, we
didn't have the issues with those standards coming down.
So, again, I think those are best practices that I think we
need to continue and to follow into the future.
Mr. Diaz-Balart. Thank you.
Mr. Price.
Mr. Price. Again, let me pick up on the chairman's
brilliant line of questioning, because the lessons learned
theme, it is resonant. We had an earlier informal discussion
with this subcommittee, and we were talking along the same
lines about the standards to which we build back. And the
mitigation, the possibilities to encourage mitigation and the
limits on future damage.
You suggested at that time, and you seem to be suggesting
now, that you try to build back to better standards. You
encourage that, you review proposals with that in mind. We know
how especially important that is in Puerto Rico and the Virgin
Islands. But are you saying that this is standard operating
procedure in a way that you take satisfaction with now or is
this more aspirational?
Mr. Waidelich. I wouldn't say it is aspirational. Now, the
ER program itself allows you to rebuild to current standard.
Many times when an event occurs----
Mr. Price. That is why the question came up in the first
place. How do you interpret that and how do you go beyond it?
Mr. Waidelich. You know, first, many times the current
standard is a greater standard than was there before. And
resiliency is built in that standard because as highway
agencies around the country move forward, those standards, you
know, are raised to include resiliency.
The program also allows to look at cost benefit for a
betterment. That includes life-cycle costs, the additional cost
of ER down the road that could occur if it isn't raised to a
higher standard than the actual standard. But we all have to
remember also in the FAST Act, what was included in that is
something called a risk-based asset management system, which
includes resiliency. And States are going through that right
now as far as identifying and looking at their system. And when
you incorporate risk in there, you have to include resiliency.
And an example of that would be maybe an evacuation road,
we would build to a little higher standard to ensure that that
would be always available, versus another road that had very
low ADT and wasn't needed in that. Or a road that goes to the
power plant that would need to be accessed, or the hospital.
Those are the types of things in the normal program that are
being identified by States now.
Mr. Price. Right. And by way of wrapping up, pulling
together earlier themes, let me go back to Puerto Rico here and
ask you about the process of collecting data and getting the
information you need there. This has been touched on, but at--I
know our staff at a briefing about a month ago was talking with
you about the particular difficulties in getting the data you
need in the interior of Puerto Rico because of the lack of
electricity, the lack of wireless connectivity, in many cases.
So that has been a problem. It could, of course, hobble our
entire effort.
What can you report on your progress in getting that data
and getting it more expeditiously?
Ms. Hendrickson. I will say that, again, in Puerto Rico,
you know, 91 percent of the inspections have been complete, and
so we feel like a lot of progress has been made since our last
encounter here in presenting the information to you. Again, we
feel like the estimate of the additional need of $212 million
is a good estimate, but, again, those estimates will be refined
over time.
Mr. Price. Well, you know, the picture that came out
earlier, and it wasn't that long ago, the picture that came out
was we wouldn't have anticipated a 91 percent completion of the
data. How have you pulled this off or what has happened to
overcome these problems? Because they really aren't problems
that are prevalent in the 50 States.
Ms. Hendrickson. We have deployed about 100 employees for
hurricane response relative to Maria. Our Federal Lands Highway
staff is there onsite, along with the Puerto Rico division
employees, to assist the Puerto Rico Department of
Transportation in completing these assessments. And so we feel
like with the additional support of Puerto Rico and the
priority that they have put on this as well, that we are
getting close to having the damage assessments complete.
Mr. Price. All right. Thank you.
Thank you, Mr. Chairman.
Mr. Diaz-Balart. Thank you, sir.
Mr. Young?
Mr. Young. Thank you, Mr. Chairman.
I just want to clarify the issue regarding waiver
authority. And you say that you have--in certain instances, you
can issue that authority when it is dealing with States, but
not territories? Is that what I understand?
Ms. Hendrickson. Ask that again.
Mr. Young. Like, you know, caps or cost share, something
like that.
Ms. Hendrickson. You know, we do not have the discretion at
Federal Highway to waive those caps.
Mr. Young. OK.
Ms. Hendrickson. Now, you know, the emergency repairs are
funded at 100 percent and the permanent repairs are funded at
80 percent Federal share with a 20 percent match, but those
match requirements are not within the discretion of the Federal
Highway Administration. Congressional action would be required
to waive that.
Mr. Young. OK. That's very, very helpful. Thank you.
That is maybe something we may want to look at sometime,
Mr. Chairman.
And also, just to dovetail on what the ranking member and
chairman have already talked about, just lessons learned and
recommendations. You mentioned to be prepared, but on the back
end of that, you know, what do we learn when it comes to
responsiveness. And I think it could be very helpful to both
folks who unfortunately may come under some disasters in the
future, and with Congress and for the taxpayer to really
understand what these lessons learned are and try to make sure
that we make things better in the future. So thank you, Mr.
Chairman.
Mr. Diaz-Balart. Thank you, sir.
Mr. Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman.
I know that my colleague, Mr. Valadao, asked some questions
related to California, so I just had one. And that was specific
to the quick-release funds. Can you walk me through whether the
California disaster qualifies for quick release, and what has
been the discussion with California on that funding? I know the
priorities were kind of debris clearing initially. Of course,
as my colleague knows, 5,000 structures, 200,000 acres burned,
40 deaths as a consequence. So can you talk with me a little
bit about that specific category?
Ms. Hendrickson. We have not currently received a quick-
release request from California, but what would go into that
decisionmaking would be, you know, looking at the intent of the
funds, the urgency of the request, how the funds would be
intended to be used, on what types of projects. But we would
certainly consider a request, if received.
Mr. Aguilar. Thank you. That is it, Mr. Chairman.
Mr. Diaz-Balart. Mr. Price, I want to make sure that unless
you have--oh, no, wait, Mr. Valadao. I apologize. I almost,
because you are such a small guy out there quiet in the corner
that I almost forgot you.
Mr. Valadao. So far down the road here.
Mr. Diaz-Balart. You are recognized. My apologies.
Mr. Valadao. Oh, no problem. Just a real quick question I
should have touched on earlier.
Moving forward, how do you plan on balancing the needs of
those in the southeast dealing with the hurricane-related
damages and those in the West dealing with very different kinds
of damage caused by wildfires? Will the funding be disbursed
competitively or will it be disbursed specifically to the
hurricane-stricken States, and is there a timeline?
Ms. Hendrickson. So the way that the emergency relief funds
are distributed are through, again, through the semiannual
allocation, which basically is distributed through a
proportional share of the funding, based on the needs
identified by the States. So the States tell us what they can
obligate over the next 6 months or the next year. And when
funding is not enough to meet 100 percent of those needs, they
are distributed on a prorated share.
They are also distributed through quick release. So if
there are requests for quick release, that would be another way
that funds get distributed. And then also, as directed by
Congress. So if Congress tells us specifically to allocate
funds for these events, then those funds would be distributed
similar to how quick-release funds go out.
Mr. Valadao. Thank you, Chairman. I yield back.
Mr. Diaz-Balart. Thank you, sir.
Well, let me first, Madam Administrator and Mr. Executive
Director, thank you for your time. As this subcommittee has
had, we had an informal Members' briefing or a roundtable,
which I think was very helpful in getting all our members to
understand, frankly, the intricacies of the program itself. And
now we want to thank you today for your testimony. It has
really broadened our understanding of the supplemental request,
and it will help inform the subcommittee in our funding and
policy decisions dealing with disaster recovery. So, again, I
want to thank you for what you do, for your service, and also
for being exceedingly accessible to this subcommittee.
And so, with that, we will adjourn the subcommittee.
Thank you very much.
Friday, December 1, 2017
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT--DISASTER RECOVERY
WITNESS
NEAL J. RACKLEFF, ASSISTANT SECRETARY, OFFICE OF COMMUNITY PLANNING AND
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
OPENING STATEMENT OF CHAIRMAN DIAZ-BALART
Mr. Diaz-Balart. Good morning. Let's call the subcommittee
to order.
This morning we want to welcome Mr. Neal Rackleff, Housing
and Urban Development's assistant secretary for Community
Planning and Development.
Mr. Secretary, we look forward to hearing your testimony on
the administration's supplemental request for Community
Development Block Grants Disaster Recovery. Mr. Rackleff, as I
read your bio--which is rather impressive, I may add.
Mr. Rackleff. Thank you.
Mr. Diaz-Balart. I was struck by the fact that you are
coming to HUD with, frankly, a great deal of experience. And it
is particularly relevant, Mr. Secretary, to our current
challenges, as you spent years running Houston's Department of
Housing and Community Development. And so, again, I think that,
nobody better than you to be in this position particularly at
this time. So, again, we are grateful for that.
I am confident that your experience in Houston will serve
you very well, sir. In fact, will serve all of us this
subcommittee, the committee, and the entire country well. As
you know, you face some great challenges in deploying CDBG
resources to help our communities rebuild and recover from this
year's disaster.
Now, the administration has requested $12 billion in
additional funding for HUD to establish a new, a brand-new
competitor program for flood mitigation projects. This request
assumes that we have done all that we need to do, I assume--
that is the assumption--all that we need to do for the regular
CDBG-DR program when we provided the $7.4 billion in the first
supplemental for the 2017 disasters.
Now, let me say upfront, I don't believe that we have done
enough in the regular CDBG-DR Program. I have personally
witnessed the devastation in Florida, throughout different
parts of the State, and particularly in the district that I am
privileged to represent, where significant portions of Collier
County were hit hard by Hurricane Irma. There are a couple of
communities in the district that I represent that are still
working awfully hard to get back on their feet. When you look
at the Everglades City, Chokoloskee Island area, or Immokalee,
those areas are still struggling. And, obviously, the Keys are
still struggling as well. Folks in those communities know that
the road to recovery will be long and a very difficult one. And
so they are more than ready for the task of rebuilding. Their
attitude is great.
But we need to make sure that the full, appropriate Federal
commitment is there for the long-term recovery. And I think all
of us are committed to that, just as the Federal Government has
stepped up in previous storms.
So I would like to first take this opportunity, not just to
discuss the administration's proposal for a new CDBG program,
or a new CDBG type program, but also to look at the existing
CDBG program and the remaining funding needs. I have heard from
several members that we need to make sure that we are meeting
pressing immediate needs of communities that have been affected
by Hurricanes Harvey, Irma, and Maria, and those that have been
affected by also the California wildfires.
In addition to looking at the policy issues and funding
requirements for CDBG Disaster Recovery, we will maintain a
high priority on oversight, obviously, of these funds. And so
we must make sure that this program is executed in a way that
ensures, frankly, that there is as little room as possible for
waste, fraud, and abuse.
The traditional CDBG-DR program, as you know, Mr.
Secretary, is run as a block grant program with funding
provided directly to the States. That is how the program, I
think, should be run, with flexibility in decision-making
powers at the local level. That, by the way, has always been a
big Republican priority. So, however, the block grant approach
presents challenges for financial oversight as we balance
flexibility with accountability.
So we want to make sure, Mr. Secretary, that you have the
tools that you need to make sure that every last dollar in the
program goes to the intended purpose, which is obviously
helping communities recover and prosper.
Again, I am grateful that we have somebody of your
experience in this position, and we look forward to engaging
with you on that issue today, and obviously, continuing that
oversight in months and years to come. Again, so I want to
welcome you to this committee.
And before we go and listen to your statement, let me turn
it over to my colleague and my dear friend and ranking member,
Mr. Price.
Mr. Price, you are recognized, sir.
OPENING STATEMENT OF RANKING MEMBER PRICE
Mr. Price. Thank you, Mr. Chairman. I am also pleased to be
here this morning and to work on this supplemental funding
request from the administration for disaster relief.
Secretary Rackleff, thank you for joining us today. We
congratulate you on your appointment. Look forward to working
with you.
Mr. Rackleff. Thank you.
Mr. Price. The HUD CDBG Disaster Relief Program is critical
to disaster recovery. We have learned that through many
disasters in many States. These flexible dollars from HUD have
become, in many instances, the primary Federal funding source
for long-term recovery and for rebuilding activities.
North Carolina knows all too well what it is like to
recover after being hit by major storms. After Hurricane Floyd
made landfall in 1999, our State was one of the early pioneers
when it came to innovative ways to leverage CDBG dollars for
disaster recovery.
Just last year, Hurricane Matthew inflicted more than $3
billion in damage to North Carolina communities. And we have
subsequently received more than $220 million in CDBG-DR funding
to facilitate long-term Matthew recovery efforts. So I am
grateful for this funding stream and for the cooperation of HUD
in working with us.
There have been some disagreements about how HUD measures
unmet need in getting this aid to our State. But there is
certainly no disagreement that CDBG-DR funding helps our
constituents and remains a vital tool in the government's
disaster recovery toolkit. So we have got to ensure that States
and territories suffering from disasters receive adequate
funding.
To that end, I am interested in when we can expect full
disaster estimates for unmet needs in Texas, Florida, Puerto
Rico, the Virgin Islands. I also want more information about
how HUD and its grantees will address rental housing needs
during the recovery. In addition, I have several questions
about the administration's request for national mitigation
competition using $12 billion in additional CDBG dollars.
I applaud the administration for emphasizing resiliency in
mitigation. But we do need more information about how this
competition is actually going to work and how it intersects
with remaining unmet needs. It may be premature to fund such a
program, or at least to totally rely on it, when we have yet to
completely fund base unmet needs in States that were affected
by Harvey, Irma, and Maria.
So there is a lot to talk about, a lot to work on. And I
look forward to hearing more about your request and how HUD
plans to address ongoing disaster recovery needs.
Thank you.
Mr. Diaz-Balart. Thank you.
Again, Mr. Secretary, thank you for being here. Your full
written testimony will be included in the record. Thank you for
being here. You are recognized for the 5 minutes.
STATEMENT OF NEAL J. RACKLEFF, ASSISTANT SECRETARY, OFFICE OF
COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Mr. Rackleff. Thank you, first, for being so generous in
your comments regarding my past experience.
I want to start by complimenting this body with the speed
with which you all reacted after these hurricanes. The $7.4
billion appropriation came in record speed, and it is a
testament to the commitment that you have to the people who are
suffering and who have undergone so many difficult challenges.
We stand with you in working to the very best of our ability to
find the best ways to help folks as quickly as possible.
More than $50 billion since 2001 for CDBG-DR purposes has
been allocated to States and communities to help with really a
very broad array of needs, everything from the 9/11 attacks,
from hurricanes, floods, to wildfires. And I am pleased to tell
you that for the past 25 years, I have been deeply involved in
working out public-private partnerships to rebuild from
disasters, to revitalize cities, and to provide quality,
affordable housing.
My most recent public service was in Houston as the
director of Housing and Community Development. In that
situation, I was plugged into an ongoing disaster recovery
project relating from Hurricane Ike. And our group turned
around a program that was plagued with inefficiencies and
problems, got it back on track, and then moved through a
subsequent allocation of funding in a manner that I think was
really respectful to the families that we served. We found ways
to do things much more quickly than they have done in the past,
and we were more efficient with the resources that we were
entrusted with.
I want you to know that these resources, I have always
felt, are a sacred stewardship. We have folks who sweat and
bleed to earn a living, and those tax resources that are
generated from that toil need to be used in the most prudent
way possible.
The $7.4 billion that was appropriated earlier is money
that we try to use in a very rational and consistent and
equitable way. Mr. Price mentioned concerns about the way that
we measure unmet need. I am very happy to visit with you and
your staff and look at those issues in depth, because I want to
do the right thing to meet those needs. And, you know, if it
means changing and doing things differently than we have done,
I really don't care. The overriding goal that I have as the
assistant secretary over CPD is to help families as quickly and
as effectively as possible.
This supplemental request, I think, actually is a really
wonderful opportunity to look at these situations in a more
proactive and preventive way. You know, the question regarding
how much unmet need remains is one that we have analyzed. And,
according to our analysis, we have made huge strides in terms
of the amount of unmet need we are able to meet with the $7.4
billion. We also think it is critically important that we don't
only look at disaster relief when we are looking down the
barrel of a hurricane or major flooding. You know, we have got
to get into a more proactive mode. Often, the old maxim that a
pound or a--what is it, a pound of--no, a penny worth of
prevention is worth a pound of relief. Thanks. I am going off
script. So folks back there are probably going, oh, please,
don't.
But, anyhow, you know, we want to make sure that we are
smart with the resources that we have. And, you know, I can
tell you from being in the trenches at the local level, there
are a lot of jurisdictions that know of projects that would be
extremely helpful for them to mitigate future flooding, but
they just don't have the money to be able to afford them. So
through a competitive process, which is fundamentally
different, certainly, than what we typically do with CDBG-DR,
we think that we can hone the analysis more finely and we can
help communities leverage the resources that they have and find
the best ways to avoid families experiencing flooding in the
future.
The eligible applicants for this program would be those
States in insular areas with more than one flood-related major
disaster between January 1, 2014, and December 31, 2017. So
that would include 33 States, Puerto Rico, the U.S. Virgin
Islands, and Guam.
I can tell you that, you know, I got here, I was sworn in
on August 16. And just about 2 weeks later, the hurricanes
started hitting. And so I have been working around the clock
with really a remarkable staff of professionals at the senior
levels that I have been privileged to work with at HUD. And we
are doing everything we can to get as much help to folks as
quickly as possible.
Thank you, very much, and I look forward to your questions.
[The prepared statement of Mr. Rackleff follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Diaz-Balart. Again, thank you very much, Mr. Secretary.
We are going to go through the regular process as we always
do as far as questioning in order, which I will not repeat
here.
Secretary, I agree with you that these are issues that we
should not only deal with when we are looking down the barrel,
as you said. But right now, we are looking down the barrel.
Mr. Rackleff. Yes, sir.
Mr. Diaz-Balart. And I agree with you that these are issues
that should be looked at, but I would argue that through the
regular process with hearings, through potential legislation.
Right now, obviously, we have this emergency that we are
dealing with.
So let me talk a little bit about the administration's
proposal for CDBG, you know, setting up this entire new program
at HUD for flood mitigation projects, which is run as an
interagency competition, as you mentioned. But part of the
challenge we face, Mr. Secretary, is twofold. One is because we
don't have a lot of time. We have folks that are suffering. We
have got to deal with that right now through a supplemental.
Mr. Rackleff. Yes, sir.
Mr. Diaz-Balart. And the fact that we face a challenge in
evaluating this new program, one of the challenges is that we,
frankly, have very little details right now. It is very thin.
The supplemental request describes the program in a single
brief paragraph. Obviously, you have provided some limited bill
language for this program, but there is no authorizing language
proposed. For example, the program would largely be defined by
a notice in the Federal Register.
So, again, not telling you that it may not be the best
thing since sliced bread, but this is a process that is going
to have to be looked at, I think, through the authorizing
process as well.
So the first question most of us have is when a new program
is proposed, really the first program, is what other Federal
efforts currently have the same or similar mission? Avoiding,
obviously, program duplication is a no-brainer for all of us.
And I think our colleagues on both sides of the aisle would
agree.
Let me throw some issues. The Army Corps of Engineers, for
example, does major construction projects, many of which
address flood mitigation. Why should we consider duplicating
that activity at HUD that doesn't have the expertise or the
experience? The Federal Emergency Management Agency has a
hazard mitigation grant program, which also supports flood
mitigation projects. You know, how would this new program
differ from FEMA's program?
There are a lot of questions. I have got others, but let me
just not overburden you with--I would like to kind of hear from
you on some of your thoughts on some of these pretty basic
issues that we have to deal with when you are creating a new
program.
Mr. Rackleff. Thank you very much. I think those are great
questions.
The Army Corps of Engineers certainly owns and operates
many of the flood-related infrastructure projects and
facilities throughout the country. But I can tell you that,
from working in the local level, that there are numerous
floodway, storm drainage, retention pond, spillways, levies, et
cetera, that are operated by State and local governmental
entities. I will also tell you too that what we plan to do with
this new program is to really embark on an interagency effort.
So, as you mentioned, there are other agencies that have
greater expertise with regards to infrastructure. We are fully
aware of that. We will work very closely with the Army Corps
and with FEMA in developing the criteria for the competition
that we are proposing.
I will also tell you that one of the reasons that we are
looking to use CDBG-DR funding is because of the legal
capabilities of this funding. We are able to go in and not just
get communities back to the level they were at before a
disaster, but, as you know, we can exceed that level and build
in resiliency and mitigation that wasn't there prior. So this
is the best funding source to use, and we will work with our
agency partners, as we have been already, to make sure that we
develop criteria that makes sense.
Mr. Diaz-Balart. And I get that. HUD's mission, as you
know, is focused on housing and community development. And I
think, as such, personnel at HUD, including yourself and
others, have great expertise in that area. I believe it would
be, respectfully, fair to say that HUD's personnel do not
typically have a high level of expertise in large-scale
flooding mitigation construction projects. And I am not being
critical of HUD's staff, obviously. And, as you mentioned,
there are some incredible people there. But it is just not the
mission.
So why is it appropriate for HUD to be, all of a sudden,
the lead on such a new mission rather than another agency that
has the expertise and practical experience and, you know,
experience in managing those types of projects?
Mr. Rackleff. Well, I can tell you that I appreciate your
compliment to our staff. They are really incredible folks. I,
personally, do have quite a bit of experience with
infrastructure finance and construction in the last 25 years.
About half that time has been in the private sector. I have
represented municipal utility districts on water and sewer
projects, flooding projects. And, also, when I was the director
of housing, we found innovative ways to accelerate the
development of storm drainage infrastructure using CDBG-DR
funding that our public works department wasn't able to figure
out how to expedite, because I had had experience doing tax
increment financing and local development of infrastructure.
So I would argue that I have a lot of that expertise. I am
certainly no civil engineer. But, again, we are not going to
rely just on our reservoir of expertise. We are going to work
with FEMA and with HUD. The funding that they--with the Army
Corps, rather. The funding that FEMA has, as I mentioned
earlier, allows you to just get back to the place that you were
previously and doesn't allow you to do the kind of flexible,
proactive extra work that we hope to achieve here.
Mr. Diaz-Balart. Thank you, Mr. Secretary.
Mr. Price, you are recognized, sir.
Mr. Price. I want to ask you about the environmental waiver
provisions, but I also want to register my concern about this
new departure.
On the one hand, the mitigation emphasis is important and I
think should be built in, to the extent we can, to all disaster
relief efforts. There are concerns, though, about the unmet
needs that remain in terms of the base CDBG-DR program and the
kind of reliance we have had on that program in past disasters.
And we want to make sure that, as we move toward this kind of
competitive program focused on mitigation, that we don't
shortchange the unmet needs. And we still feel that those two
objectives need not be incompatible.
Let me, though, ask you about the environmental waiver
request, because I really want to lead with that. I think it is
important, and we are not certain of our time here. So I want
to take my time with this.
You included a proposal related to environmental reviews.
The request would allow the Secretary of HUD to waive
environmental reviews for single-family homes outside FEMA's
flood plain. Now, that is a change. Previous appropriations
have allowed the Secretary to have broad waiver authority to
administer the program, but has required continued compliance
with fair housing, with nondiscrimination, and with labor and
environmental laws.
The flooding in Houston reached many homes outside the
flood zones indicated on the flood maps. We have read reports
of floodwaters that contained elevated levels of E. Coli, lead,
arsenic, other toxins. Yet the proposal as requested by the
administration would exempt these types of properties from
environmental review. I know at the staff level we have worked
to narrow the application of this waiver. But I am still
concerned that this request doesn't adequately balance public
health concerns with efforts to speed the process along.
So my questions have to do with why HUD feels they need a
statutory change to expedite environmental review. And what
regulatory or administrative actions have you taken up to this
point to address the issue?
Mr. Rackleff. Thank you. I want to assure you, Mr. Price,
that we are not intending to do anything that would put
families or occupants of the homes that we are looking to
improve in harm's way. We just absolutely wouldn't do that.
However, I will tell you that, as you rightly pointed out,
there is a very difficult balance between speed of assistance
and desires to achieve other objectives. Right? And I have
spoken extensively with folks who have run disaster recovery
programs in Texas, in Louisiana, in New York--we visited New
York recently--and in Mississippi. And while we need to be
careful in making sure that we protect families, I can tell you
that in many cases, we have single-family home subdivisions
that, for example, were built 15 years ago, had extensive
environmental reviews done before the development of those
subdivisions. And we are spending a crazy amount of money, in
my opinion, in doing environmental reviews at single-family
homes. We really don't need to be doing endangered species
analysis. We don't need a historic review analysis for a 15-
year-old tract home. Right?
So we looked at the data. And let's--taking the $5 billion
that has been allocated to Houston, if you assume 75 percent of
that is used for housing, and you assume $150,000 per housing
improvement project and $1,000 per environmental review, that
is $25 million that we are spending to do pretty exhaustive
environmental reviews on single-family homes, that, you know,
if a family lives there and for some reason we find that there
is a failure and they can't participate in the program, they
are not moving. They are going to stay there. So this is
fundamentally different.
I have done real estate development for many years. This is
not an urban situation where you wonder if there is a dry
cleaner that was there before or underground storage tanks. So
every leader of these programs has said if you can do one thing
to speed the delivery of repairs to families and dramatically
reduce costs, it is use a prudent single-family waiver for
properties on the same footprint, because, in most cases, we
don't need it.
Mr. Price. My time has expired. We can return to this. We
are ready to work with you on this. But we are also talking
here about contaminants, environmental hazards that may have
been introduced as a result of the disaster.
Mr. Rackleff. Yes, sir.
Mr. Price. And that is something that it would seem would
need to be--we would need to address. And we would hope a
waiver would be very selectively and responsibly exercised.
I also want to get into, in the next round of questioning,
the very broad application of this waiver to other agencies and
what those implications are.
But, at this point, thank you, Mr. Chairman.
Mr. Diaz-Balart. Thank you, Mr. Price.
Mr. Valadao, you would be next, but I know that you would
not mind yielding to the ranking member of the full committee
here, Mrs. Lowey. So if that is all right with you----
Mrs. Lowey, great to you have here, ma'am.
Mrs. Lowey. Thank you, Mr. Chairman. I am honored to be
here to discuss these important issues.
Assistant Secretary Rackleff, I am sorry I was detained at
another meeting.
Mr. Rackleff. Quite all right.
Mrs. Lowey. This request includes a proposal for a national
mitigation competition, but includes no new money to address
the unmet needs in Puerto Rico or the U.S. Virgin Islands. If
you could explain to me how this competition process is
different from what we saw during Superstorm Sandy, and why are
there differences? It seems to me the two disasters are quite
similar, Maria being potentially more devastating in scope.
And, as I understand it, HUD relies on data obtained
through FEMA field estimates. HUD then takes that data and
determines the unmet need. Puerto Rico has requested $46
billion in CDBG, with an additional $10 billion for community
development projects like hospital reconstruction, school
investment, small business grants. And these estimates, having
been there with the Speaker not too long ago, these estimates
do seem reasonable to me.
Can you tell me why this request doesn't include Puerto
Rico, or does this administration contemplate a fourth
supplemental to deal with Puerto Rico's clear need?
Mr. Rackleff. Thank you very much. If I could correct one
misstatement earlier. I apparently said $5 billion was
allocated to Houston. It is Texas that that $5 billion was
allocated to.
This particular program is one that the U.S. Virgin Islands
and Puerto Rico would be able to participate in. But regarding
the amount of unmet need relating to the $7.4 billion already
appropriated, and others that could be appropriated, the
challenge that we have is that we have very good data for Texas
and Florida. And so we were able to accurately calculate unmet
need in those areas. The data that we have in Puerto Rico and
the U.S. Virgin Islands is far, far behind what we had there.
So we simply don't have enough information yet to accurately
determine the unmet need.
I will also tell you that Puerto Rico, as you all are
aware, has systemic economic challenges and capacity issues
that are very, very real. The dollars we are talking about, I
can tell you from having worked on one of these programs
before, are going to tax the capacity of the most sophisticated
States and jurisdictions that receive these funds. And we have
recently received a report from the inspector general regarding
the level of capacity in Puerto Rico, and there are grave
concerns about allocating more money in a context where there
are systemic economic problems and capacity issues that may not
allow that funding to be used in an appropriate and effective
way. So it is a totally different ball game there. But when we
get better data, we will perhaps make other recommendations.
Right now, we are focused on the $12 billion.
Mrs. Lowey. May I just follow up with you on that, because
having been there and talking with the people, we know--I
mentioned the hospital reconstruction. The system is
disastrous. Schools, small businesses, need help in getting
going again. I have no doubt that the data is not sufficient.
But these sources of funds are where they can really be of most
help. So my question to you, to what extent do you provide
technical assistance? In other words, if they need your funds
and they are not doing a good--I am not going to get into the
Governor, and staff, and who is capable and who is not.
Mr. Rackleff. Right.
Mrs. Lowey. So my question is, what kind of technical
assistance can you provide, knowing that these are really
important sources of funds for Puerto Rico dealing with the
hospitals, the schools, the small businesses?
Mr. Rackleff. Thank you. We actually have great technical
assistance. And over the last few years, HUD has done a lot to
streamline the application of those resources to areas that
need it. So we have great resources. I am actually traveling to
Puerto Rico on Monday with our deputy secretary and a
contingency from HUD there. We have had staff on the ground
there that are from Puerto Rico since the disaster hit. One of
our very senior officials, Nelson Bregon, who is from Puerto
Rico, has been down there, and we receive daily updates on what
is happening.
But with regard to specifically to technical assistance, we
are doing a lot there. We have in the past. We even, in the
past, funded a long-term affordable housing recovery plan for
Puerto Rico, with Puerto Rican officials, which was really
quite well done.
So as we get more data, and as we are able to better
understand the situation, we will be able to do a lot more to
help.
Mrs. Lowey. You mentioned this gentleman, Nelson?
Mr. Rackleff. Bregon.
Mrs. Lowey. Bregon. Is he there permanently or temporarily
on assignment?
Mr. Rackleff. He has been assigned there. He is from
headquarters, but he has been there for several weeks now and
will be there for the foreseeable future.
Mrs. Lowey. And how many people does he have to work with
him? Because I think what you said is they don't have the
statistics, they don't have the documentation that is adequate
or good enough to compete for these funds. But the needs are
extraordinary.
Mr. Rackleff. Yes, ma'am. The needs certainly are
extraordinary. The data that we utilize to measure unmet need
comes from FEMA inspections and from the SBA. So that data
doesn't come from our group, which relatively is very small in
Puerto Rico. Right now, there are 4,609 FEMA inspectors at work
in Puerto Rico, and 125 in the U.S. Virgin Islands. Those 4,600
inspectors in Puerto Rico have issued 685,000 inspections and
completed 248,000 inspections. So that is about 36 percent of
the inspections that need to be done.
I will also tell you that we actually have 250,000
individuals who receive HUD assistance in terms of rent through
public housing, project-based Section 8, and the housing choice
voucher program. We have 101,000 units of housing that we are
responsible for in those different areas in Puerto Rico. So we
are absolutely focused on doing whatever we can to help the
families that are in those situations. Thank you.
Mrs. Lowey. Thank you very much, Mr. Chairman.
Mr. Diaz-Balart. Thank you, Mrs. Lowey.
Again, Mr. Valadao, thank you for your patience and your
consideration. You are always a gentleman and, of course, you
are recognized.
Mr. Valadao. Thank you, Chairman.
Assistant Secretary, thank you for being here today. I am
sure you are aware of the fires that devastated California in
October. Unfortunately, much of the State had experienced
similar wildfire situations most of the summer. The President
declared a disaster for these most recent fires, which burned
through about 245,000 acres.
Can you please give us an update on CDBG Disaster Recovery
funding in reaction to the California wildfires so far this
year? And, moving forward, how do you plan to balance the needs
of those in the southeast dealing with hurricane-related
damages and those in the West dealing with very different kinds
of damages caused by wildfires?
Mr. Rackleff. Thank you. I actually grew up in California,
and went to law school in L.A., and lived in central California
for a while. So that disaster is, again, another heartbreaking
situation. And our thoughts and prayers are with the good
people who have suffered so much there.
We are looking at the--measuring unmet need through the
same kind of FEMA data that we look at in the areas where the
hurricanes are. We don't have enough data yet to be able to
make a determination as to how much of the $7.4 billion should
be appropriately allocated to the wildfires. But we would be
very happy to visit with you and go through the methodology
that we are looking at. We can show you--my team may say I am
not supposed to say this, but I would be happy to show you the
preliminary data that we have got that we are not going public
with yet until it is appropriate.
But one of the things to bear in mind is that when we look
at unmet need, if folks have insurance that covers their need,
then we don't provide funding for that. And so one of the
unusual situations--or distinguishing characteristics of fire
damage versus flood damage is that in a fire, you know, most
everybody has got homeowners insurance that covers fire. And in
a flood, you frequently have situations where your regular
property homeowners insurance covers wind-driven rain and wind
damage, but doesn't cover rising waters, unless you
specifically have flood insurance. So that is one of the things
that we are looking at when we are measuring the unmet need
there.
Mr. Valadao. Last Friday, the Office of Management and
Budget submitted a request for $44 billion for additional
supplemental disaster funding, with $12 billion specifically
designated for CDBG Disaster Recovery funds. Will the disaster
recovery fund be disbursed competitively or will it be
disbursed specifically to the hurricane-stricken States?
Mr. Rackleff. Regarding the $12 billion?
Mr. Valadao. Yes.
Mr. Rackleff. Yes. It is our intent that this be a
competitive program. And I know that is controversial. It is--
we think what some call controversial, we would say is cutting
edge, and is a better way to allocate resources. As I mentioned
earlier, an ounce of prevention is worth a pound of cure.
Avoiding mixing metaphors again.
So, no, sir, we look forward to this being a competitive
process.
Mr. Valadao. I understand the Community Development Block
Grant Disaster Recovery Program funding cannot duplicate
funding available from FEMA, the Small Business Administration,
U.S. Army Corps of Engineers. If funding is granted, how does
HUD plan to monitor spending to avoid misuse and waste of these
funds? And is there something this committee can do to help HUD
ensure that those funds won't be misused and get funds to
communities that are in need of them most?
Mr. Rackleff. We work very, very carefully with all of the
grantees to ensure that these funds are used properly. And so,
here again, this is one of the big balancing efforts that we
undertake. We all want recovery to go as quickly as possible.
At the same time, we are talking about billions of dollars that
need to be protected. And so one of the things we do when an
allocation is made is that we go through a certification
process to ensure that the grantee has appropriate financial
controls in place, procurement controls in place, and also,
that they have the capacity, meaning the humans on their staff
who know how to utilize these funds and implement these
programs.
Mr. Valadao. Can you describe Federal resources that are
available to local government, small businesses, and residents
to rebuild private infrastructure? Are there opportunities
under CDBG public-private partnerships? And, if so, what are
some examples? And what has worked well and what not so well?
Mr. Rackleff. Yes, there are opportunities for public-
private partnerships. And I can tell you one that I
participated in that I alluded to earlier. We were developing a
beautiful, affordable housing complex. Mr. Culberson, it is in
the Hardy Yards area of Houston just north of downtown. It was
going to be mixed-use on the new light-rail line, a very cool
project.
And we were trying to figure out how to fund infrastructure
attendant to that. Went to our public works department, they
said this will take us 4 to 7 years to do a major
infrastructure project. We worked with the developer of the
facility who had already designed and permitted about $12
million of street reconstruction, drainage capacity increase,
new signalized intersection. And then we looked at, with a
civil engineer, to see how much benefit would accrue in terms
of mitigating flooding to the surrounding area, not just on
that developer's project. And then we structured an upfront
program where the developer fronted the cost and we contracted
with a tax increment finance district to be able to use CDBG-DR
funds to reimburse the developer on a progress payment basis.
It was win-win because we got a project done in about 6 months
rather than the normal several year process. The community
benefited and the developer benefited as well.
So there are ways to flip these infrastructure models and
do public-private partnerships that put the development risk on
the developers and then utilize some type of revenue stream to
be able to repay them.
Mr. Valadao. Thank you. And I look forward to continuing
the conversation.
Chairman, I yield back. Thank you very much.
Mr. Diaz-Balart. Thank you. By the way, usually I am very
strict about keeping folks to the time. But since they are
going to be probably calling votes anywhere between 10:30 to
10:45, we may not get a second round, which is why I am kind of
allowing folks to go a little bit over.
But the gentlewoman from the Commonwealth of Massachusetts
rarely does. So, you are recognized.
Ms. Clark. Thank you, Mr. Chairman.
Thank you for being with us, Secretary Rackleff. I had a
question for you about some of the assumptions that seem to be
altered in how HUD allocates its CDBG-DR funding. Specifically,
you said in your testimony that managing flood risk is a shared
responsibility, and that households within the 100-year flood
plain that had financial ability to insure against flood loss
should have done so. And I believe that you had pegged this at
120 percent of area median income, and that they will not
qualify for these funds any longer.
Is my understanding correct?
Mr. Rackleff. Yes.
Ms. Clark. And what criteria did you use when determining
that 120 percent of area median income was sufficient to
purchase flood insurance?
Mr. Rackleff. Well, actually, let me correct my earlier
statement. It is more nuanced than that, right. So we used the
120 percent area median income measure to determine unmet need.
Right? But 70 percent of the total amount, say of the $7.4
billion already appropriated, would typically need to go to LMI
households, which are 80 percent and below area median income.
Thirty percent of that money can be used for families that are
actually at higher income levels through the urgent need
national objective under the Community Development Block Grant
fund.
So it is not the case that families that are over 120
percent AMI are completely shut out of the $7.4 billion. But
what we are saying is that there needs to be a level of
responsibility. So if you are a family that has the wherewithal
to repair, and you have chosen not to get flood insurance, even
though you are in a flood zone, we think that that family
should be looked at differently than a lower income family who
may not have the economic capability to meet that need. But we
are happy to visit with you in greater depth and look at the
assumptions that we are using.
And, you know, we want to find the right measure. It is
hard. We draw lines at places that we think are equitable, but
we are very open to your----
Ms. Clark. Can you tell me how many families or households
you think will be affected by this sort of new means testing
you are putting in place? And what was the notification process
before these storms to let people know that this was going to
be a change in the flood insurance and give them a chance to
buy it?
Mr. Rackleff. Well, it is certainly not a change in the
Flood Insurance Program. The Flood Insurance Program, you know,
is not affected by this.
Ms. Clark. Sorry. I misspoke there. But what was the
notification before these latest hurricanes that future
assistance might be tied to your income levels?
Mr. Rackleff. Well, we have to issue a Federal Register
notice, which would have that kind of criteria embedded within
it, unless any of my smarter team members behind me correct me.
Ms. Clark. So when was that done?
Mr. Rackleff. We have yet to issue the Federal Register
notice for the $7.4 billion.
Ms. Clark. So will this apply retroactively or you are only
going to apply this prospectively after you issue that?
Mr. Rackleff. Are you talking about the $7.4 billion or the
$12 billion?
Ms. Clark. The $12 billion.
Mr. Rackleff. OK. I am sorry. Going forward, on the $12
billion, we would issue notices, a Federal Register notice as
well, that would provide that notification to everybody
involved.
Ms. Clark. So this won't--so will anyone's flood insurance
that they might have thought they would get Federal assistance
for be affected by this change in this income that they weren't
anticipating?
Mr. Rackleff. No. Their flood insurance won't be affected
by this at all.
Ms. Clark. Not the flood insurance, the disaster relief
under the CDBG?
Mr. Rackleff. I may be mixing a little bit of apples and
oranges, and I apologize if I am. But with regard to the $7.4
billion, families that are above the 120 percent median income
can be served. We don't want to serve families, though, that
are in the flood plain and didn't have that insurance. So that
is the line that we have drawn with regards to basic
eligibility. I think I was not clear in that earlier.
Ms. Clark. I think I am not being particularly clear
either. Was there any notice about that to those families
before this disaster?
Mr. Rackleff. No. No, there was not notice about that prior
to this disaster. That is a new policy that we have introduced.
And it would be rolled out with the notices that we are
required by law to give.
Ms. Clark. I see that I am out of time. I will let my
colleague, Mr. Culberson, pursue my----
Mr. Diaz-Balart. Thank you, ma'am.
Mr. Joyce, you are recognized, sir.
Mr. Joyce. Good morning.
Mr. Rackleff. Good morning.
Mr. Joyce. Mr. Rackleff, when allocating CDBG funds based
on unmet recovery needs, how does the program balance grants
for short-term disaster relief, mitigation activities, and
long-term recovery activities?
Mr. Rackleff. We do the best that we can to balance those
issues, and we provide flexibility to local jurisdictions to be
able to come up with an action plan that they think
appropriately balances those different needs. The CDBG-DR
funding is typically long-term recovery. There, as I mentioned
earlier, because we are talking about an allocation of billions
of dollars, we have to make sure that appropriate financial
controls are in place. And we also have to go through a process
where the jurisdictions develop an action plan and let us know
how they are going to use that money responsibly.
Mr. Joyce. In your written testimony, you are discussing
incorporating the administration's infrastructure initiative
policy principles such as leveraging State, local, and private
resources and using public-private partnerships to expedite
project delivery and support ongoing maintenance. Can you
elaborate on the types of public-private partnerships we should
expect to see as the funding is used in disaster areas?
Mr. Rackleff. Sure. Now, I will say that that is pertaining
to the $12 billion, and we would be looking at competitive
proposals to come in. So, you know, I hope that we are
surprised with some great ideas that are out there.
I have worked on projects, as I mentioned, in the past
where we have worked with the private sector to structure
projects where they put the money upfront, they do the design
and construction of infrastructure projects, which they can do
much more quickly than governmental entities, and then we have
a reimbursement structure that is set up. So that is one broad
framework that can be used.
But we do think it is critically important to help local
areas to leverage the funding that they have got. Many local
jurisdictions have, say, buyout programs that are already up
and running and in place that have some funding there to buy
out homes that have repetitively flooded. But they don't have
enough. So there could be a proposal from a group to say, look,
we have identified thousands of homes that we need to buy out
to help families there, but we don't have the resources yet.
You know, and we would like to combine our resources with
theirs. Does that help?
Mr. Joyce. It does to a degree. But how do you provide
oversight for the funds that you are going to expend?
Mr. Rackleff. Well, it is actually--the oversight is the
same in many regards. And, as I mentioned, with some of the
public-private partnerships, the fact that we shift the
development risk of infrastructure to the private sector and
have them take on the upfront costs actually protects our
resources and those of our local government partners working
with those developers because you are shifting the construction
development risk to the private sector.
Mr. Joyce. Thank you. And I would yield the rest of my
time, Mr. Chairman.
Mr. Diaz-Balart. Thank you, sir.
The gentleman from southern California, Senor Aguilar.
Mr. Aguilar. Thank you, Mr. Chairman. And I will try to
keep this short to ensure that our colleague, Mr. Culberson,
has some time to expand on Ms. Clark's questions.
I will pick up a little bit on what Mr. Valadao said. And
also offer, Mr. Secretary, that I would love to see some of
that data. You offered to share some of that data, that
nonpublic data, at the appropriate time. And I would love to
also see that with the type of collection of data that FEMA and
SBA are mostly responsible for but have shared with HUD, damage
caused by the northern California fires.
I understand HUD has also made some changes to calculating
the average cost of repair for housing damage caused by
disasters. Can you spend some time talking about what changes
were made?
Mr. Rackleff. You know, that gets to a level of detail that
our sort of genius folks in our analytical group go through.
But I can tell you that what we do is we endeavor to make sure
that the assumptions that we are making are based on recent
economic trends and on the best available data that we have
got. So it is appropriate for us to make sure that we adjust
those baseline assumptions as we move through different
disasters, because average amounts of damage, for example, can
be dramatically different from one disaster to another. So we
have worked carefully to make sure that we are using the right
measures.
And I would be happy to visit with you about other data we
have got, to the extent I am legally able to do, so----
Mr. Aguilar. Sure. If that was in response to my first
question, I was just expanding on what you had offered Mr.
Valadao with respect to data. If that is related to this, I
think we would like to see a little--I would like to see a
little bit more detail. I understand, you know, that there may
be changes that need to be made. I think that what we would
want to ensure is when we are talking apples to apples, you
know, prior hurricane damage, versus this hurricane damage,
those types of things, I think would be important for the
committee to at least have a better gauge on if we could submit
that, you know, maybe for the record, and have that expanded
on.
You know, I will ask a follow-up to what my colleague, Ms.
Clark, mentioned and say, with respect to disaster funding, are
there any examples at HUD where relief was means tested after
the disaster? In essence, where residents were denied funding
because they didn't make a decision, as you mentioned, with
respect to flood insurance, yet weren't told about this prior
to this disaster.
Mr. Rackleff. Not that I am aware of.
Mr. Aguilar. OK. Thank you, sir.
I will yield back, Mr. Chairman.
Mr. Diaz-Balart. Thank you very much, Mr. Aguilar.
Mr. Culberson, obviously, very few States were hit as hard
as yours. And we want to thank you for your leadership. So you
are recognized, sir.
Mr. Culberson. Thank you, Mr. Chairman. And I sincerely
appreciate my colleagues' attention on this, appreciate your
leadership and support, Mr. Chairman, to help the people of
Florida and Texas recover.
And if I could, Mr. Rackleff, in following up on Mr.
Aguilar and Ms. Clark's questions, there is two aspects, I
think, are deeply troubling about HUD's change of policy. Not
only did you do so after the hurricane took place so people had
no prior notice of this, but remember also that there were tens
of thousands of people in the eastern area, for example, on
the--along the Trinity River, along the San Jacinto River as
well. This is the largest housing disaster in the history of
the country, and people in those watersheds were flooded as a
direct result of the deliberate action of the Army Corps of
Engineers to open the floodgates.
Now, we understand intellectually that they had to do it.
It was as though in the San Francisco earthquake, most people
suffered as a result of the fires after the earthquake, not the
earthquake itself. So San Francisco had to make the decision to
go in and blow up houses to create a fire break. If the
government deliberately destroys your property to save others,
that is something the government obviously has a responsibility
to help compensate that property owner for.
So by changing these requirements to 120 percent of--
changing that requirement after the storm, not only is it--it
is unprecedented, it is unfair, it is damaging and destructive
to these homeowners. But you are also shutting people out of
access to funding that they will desperately need, and they
were deliberately flooded by the government.
So, Mr. Chairman, I join my colleagues in strongly
objecting to this change, and hope that we will address it in
our legislation that we are putting together to help the people
of southeast Texas, Florida, and Puerto Rico, and the Virgin
Islands recover. And I know we are working on that, Mr.
Chairman, and appreciate very much your support for this.
I am also deeply troubled that the administration's request
in response to the largest housing disaster in the history of
the country contains no funds for housing. It is unbelievable
that OMB would propose something like this. And it is important
to remember that the Constitution vests the Congress with
responsibility for making these decisions. OMB's request is
simply that. It is a recommendation. It is a request.
I am very grateful to you, Mr. Chairman, to our leadership
on both sides of the aisle, and to the Speaker and to our full
committee chairman and to Mrs. Lowey for ensuring that the
Appropriations Committee is going to be the one that resolves
this, that we deal with it.
Because, for example, not only are there no funds in there
for housing, but this new program, which makes no sense--I
would just as soon the administration experiment with creating
a new program on somebody else's disaster. You know, let's wait
till--you know, do this before the next disaster. Don't
experiment on the people of Texas, Florida, Puerto Rico, and
the Virgin Islands. Because this request will leave nothing for
home repairs, rental assistance, small business recovery, and
would exclude local governments from applying.
So I strenuously object to this proposed new program, Mr.
Chairman. Glad we are going to move in a different direction.
And I also want to register my very strong objection, in
the brief time we have got, if I could, Mr. Rackleff, with the
attempts that your office is making to build a housing--build
the Fountainview Project in Houston, which nobody wants. The
mayor of Houston doesn't want it. City council doesn't want it.
None of the elected officials want it. The neighbors don't want
it. Nobody in Houston wants this project.
And it is using Hurricane Ike money, Mr. Chairman. This is
another thing we need to do, is make sure that these CDBG money
disaster relief funds are actually going to people that have
been displaced or damaged as a result of a storm. HUD is
proposing to use very precious, hard-earned, and scarce
American tax dollars for a project that nobody in the local
community wants.
And worse than that, Mr. Chairman, the project that HUD is
proposing to build--and, Mr. Rackleff, I know you came out of
the city of Houston. It is my understanding that you are the
one really aggressively pushing this. So I would ask you to
drop it, leave it alone. We don't want it.
And not only that, Mr. Chairman, the project HUD is
proposing to build with our precious, hard-earned, and very
scarce tax dollars would cost about $250,000 a unit. I mean,
even a high-end apartment in Houston--I mean, you have to work
to make it $150,000 a unit. I mean, this is a gold-plated,
unwanted, unnecessary, utterly wasteful housing project that
HUD is attempting to strong-arm the mayor of Houston into
taking.
So, Mr. Rackleff, we appreciate your public service. But I,
for one, am going to be working closely with my colleagues. We
have got a lot of problems with what you are proposing, what
OMB has proposed. And please leave the Fountainview Project
alone. We have got a lot of better uses for the money. They are
desperately needed elsewhere. And one place it could certainly
be used is to help the people of Florida, Houston, and Puerto
Rico recover by getting rid of this 120 percent requirement on
eligibility. Do it for the next storm, and don't experiment
with a new program on us, please.
And I appreciate your help with this, Mr. Chairman.
Mr. Diaz-Balart. Thank you, Mr. Culberson.
Mr. Rackleff. May I respond?
Mr. Diaz-Balart. Absolutely.
Mr. Culberson. Yes.
Mr. Rackleff. It is great to be with another Houstonian.
And thank you for your very kind words. I know that your
passion is directed towards helping the people of Houston that
you serve ably.
Mr. Culberson. It is.
Mr. Rackleff. And we both love the people there. And I
appreciate your fervor.
Mr. Culberson. And my words are aimed at the Department.
And I just appeal to you as a Houstonian. You know about the
Fountainview Project. And let's just leave it alone. Let's use
the money elsewhere. And leave my mayor alone, please.
Mr. Rackleff. I got to respond to that. Right? In a loving,
kind way----
Mr. Culberson. My good friend, Sylvester Turner, a Democrat
whom I worked with in the Texas House, who is a dear good
friend, and he is now our mayor.
Mr. Rackleff. I am not pushing that project.
Mr. Culberson. Your agency is.
Mr. Rackleff. And, in fact, I have recused myself from it
because I worked previously on it. I will tell you in generic
terms that I don't think that anybody should be doing
development projects that are $230,000 per unit.
Mr. Culberson. 250.
Mr. Rackleff. Depends what measures you are looking at.
But, again, I am speaking hypothetically. Right?
So I share your concern on many of the issues that you have
raised. I will also tell you that, unless I am corrected anew
by my colleagues behind me, I misspoke earlier. And, Madam
Clark, I apologize for not being as clear as I could have been
regarding the 120 percent AMI issue.
Mr. Culberson. And I want to yield any remaining time to
Ms. Clark, if she----
Mr. Rackleff. Sure.
Mr. Diaz-Balart. There is no time to yield.
Mr. Rackleff. May I clarify?
Mr. Diaz-Balart. Yes. We will let the secretary clarify.
Thank you.
Mr. Rackleff. All right. So we are not saying that folks
are ineligible if they are over 120 percent. We simply used 120
percent of AMI instead of 80 percent of AMI for those families
who are in the floodplain to calculate unmet need. But it is
not a new criteria that is going to knock out a bunch of
families that would have previously been eligible.
Mr. Diaz-Balart. And thank you, Secretary, for that
clarification. Obviously, it is something that we are going to
need more information, so we would all be helped by further
information on that.
Mr. Young.
Mr. Young. Thank you, Mr. Chairman. I love these hearings
because I learn so much, and I just learned something from my
colleague here, Mr. Culberson.
If you have recused yourself from oversight of that project
that my colleague was talking about, then who is driving this
or pushing this or monitoring this, or is it on autopilot and
just----
Mr. Rackleff. No, no. The issue involved there----
Mr. Young. My colleague needs to know that. We need to know
that as a committee, where to direct our questions.
Mr. Rackleff. The division at HUD that handles fair housing
is our Fair Housing and Equal Opportunity section. So our
assistant secretary, Anna Maria Farias, is responsible for
dealing with that issue. It is not within the purview of
Community Planning and Development.
Mr. Young. Well, that is helpful to get a name at least, so
thank you for that.
Mr. Rackleff. You are welcome.
Mr. Young. In your testimony, you talked about your goal to
getting families help faster and in a more efficient manner.
You said in your testimony there that you are working to
identify and remove unnecessary delays. We all appreciate that.
You said that there is some challenges at the State and local
and Federal level, and some of these changes to improve
recovery efforts and outcomes, and some of these changes will
be incorporated in the forthcoming Federal Register notice, and
that is coming out when? And can you give us a preview of what
to expect there? Because we would like to monitor those, make
sure we see them, and be helpful.
Mr. Rackleff. Sure. I would estimate that that will be out
by--we are shooting for December 17 right now. We have been
working very diligently on that notice.
Mr. Young. Any statutory changes that Congress, that you
know of, could move on that is blocking you right now that you
would like to make any recommendations on that are hindering
your outcomes?
Mr. Rackleff. The biggest issue that I referenced earlier
is environmental reviews on single-family homes that are not
historic, that are not in areas near super fund sites.
And, Mr. Price, I want to mention to you that one of the
things I failed to mention earlier is that we would not use the
waiver authority for environmental reviews of single-family
homes in areas where there were reported releases or discharges
of chemicals or untreated sewage, which happened in some areas
of Houston. So we would be very circumspect in the way that we
use that.
But I can tell you, we are spending tens of millions of
dollars to do, you know, environmental reviews of the single-
family homes that are completely, in most people's common sense
opinion, unnecessary, and they take a lot of time.
Mr. Young. OK. Thank you for your answers.
And, Mr. Chairman, I have a few minutes left. I know my
colleague here from Texas is very passionate, and would it be
OK to yield to him?
Mr. Diaz-Balart. Since we are not going to have another
round----
Mr. Young. Well, there is 2 minutes I am yielding back for
anyone to use, under your direction. Thank you.
Mr. Diaz-Balart. Mr. Culberson, we are going to give you--
because of how hard your area has been hit, we are going to
give you any time that you might need. There is an additional 2
minutes.
Mr. Culberson. Thank you very much. And I am happy to yield
part of that to my colleagues over here if I can.
But I do want to ask about the requirement that HUD has as
70 percent of these dollars go to low to moderate income, and
people who have flooded in west Houston as a direct result of
the deliberate action of the Army Corps of Engineers in opening
the flood gates and flooding them. These are middle- to upper-
income homes.
I submitted a request, along with my colleagues from
Houston, that that be split 50/50. When are you going to act on
that? And I hope you will make that change. You have got the
authority to split that 50/50 between low to moderate income
and upper income.
Mr. Rackleff. The tact that we prefer to take is to stick
with the 70 percent out of the gate, and then look at the data
as we move forward and see if there, in fact, is a need to
modify that. May I finish?
Mr. Culberson. Yes, sir.
Mr. Rackleff. And the other thing that I will tell you
having worked one of these programs, is one of the biggest
risks that we have of slowing down help to the very families
that you and I care so much about is litigation from fair
housing activists, which slowed down Ike recovery for a number
of years. And they have asked us for 80 percent to go to those
areas.
Mr. Culberson. I have got tens of thousands of constituents
who are living on the second floor of their house with all the
sheetrock torn out on the first level. They have nowhere else
to go. These are $400,000 and $500,000 houses. These people are
not wealthy. These are middle income, hardworking Americans who
are busting their chops. Their entire life savings is sunk into
their house. And they were flooded deliberately by the Corps of
Engineers. And by dragging your feet on this, you are really
hurting these folks. These people need help.
We need to have this change, Mr. Chairman, so it is a 50/50
split. This is an unprecedented, the biggest housing disaster
in the history of the country.
Mr. Diaz-Balart. Mr. Secretary, we are going to give you--
--
Mr. Culberson. Don't worry about litigation; how about
helping folks.
Mr. Diaz-Balart. We are going to give you just a few
seconds to respond, and then we are going to move on.
Mr. Rackleff. Well, I don't worry about litigation in terms
of prioritizing, helping people either, but I will tell you
that the thing that could bring this stuff--this program to a
grinding halt is that very litigation that you are not worried
about. I have had experience in the trenches dealing with this,
and we need to be concerned about it.
Nevertheless, we have looked at the unmet need that we see,
and we think that we have made a very fair and equitable
estimate of the damage that is there. We will work with those
percentages if we think that it is appropriate moving forward.
Mr. Diaz-Balart. Mr. Secretary, let me first thank you
for--I think we are very fortunate, the country, and
particularly those of us that our States have been hit--we are
very fortunate to have you in this key position at this moment.
Mr. Rackleff. Thank you.
Mr. Diaz-Balart. So the committee staff will be in contact
with your budget officer regarding questions for the record.
And I know that we have a number of questions to submit, and I
would imagine other Members--as you have heard, there are a lot
of questions, so other members will also have questions to
submit.
Sir, if you would please work with them to return the
information for the record to the subcommittee as soon as
possible, that would allow us to be able to publish the
transcript of today's hearings, and make, obviously, informed
decisions as we move forward.
We are also inviting other Members to submit additional
testimony for the record no later than Friday the 8th. I don't
know if that requires a unanimous consent agreement, but if so,
without objection. I see no objection
Mr. Price, again, a person who is also very familiar with
these issues and has been for many, many years.
Mr. Price. Thank you, Mr. Chairman. I join you in thanking
our witness and indicating the desire of many of us to follow
up. I appreciate your clarification, in particular, on the way
that you anticipate the waiver authority would be used. On the
other hand, this is a really broad waiver request. And another
respect in which it is broad--and I do want to ask you to
follow up on this, another respect in which it is broad is to
indicate a desire to streamline and expedite this, not just at
HUD, but across the government agencies with which you are
coordinating and collaborating: Army Corps, FEMA, and so forth.
I feel like we need to know what you mean by that, and what
the compatibility is between the proposal you are making and
the procedures in place in these other agencies, how this
coordination would work, and so forth. So we will ask you to
clarify that for the record.
But this is a useful start this morning. And we appreciate
your being here. We wish you well.
Mr. Rackleff. Thank you, sir.
Mr. Diaz-Balart. Thank you, Mr. Price.
Mr. Secretary, as you can see, we are all anxious to work
with you. There are a lot of concerns about this new proposal,
and we will have ample opportunity to talk about them as we
move forward. Obviously, some of us believe that, as Mr.
Culberson said, that we should probably--those are things that
might have to go through regular order, you know, through the
other committees to make sure that we get this right. It has
taken years to work out a lot of the bugs of CDBG-DR, and we
are, I think, in a position where it is working relatively
well. But anyway, we will have ample opportunity to deal with
that.
We want to thank you for your service. And I want to thank,
by the way, the members of the subcommittee. We were a little
bit more flexible this time because I think we could, and we
have a secretary who is intimately knowledgeable, and again, we
are blessed to have you there.
Thank you, sir, for being here. Thank you all. And we are
adjourned.
Mr. Rackleff. Thanks. It was my honor to speak before you.
[Material submitted for inclusion in the records follows:]
Prepared Statement of Hon. Jose E. Serrano, a Representative in
Congress from the State of New York
Chairman Diaz-Balart and Ranking Member Price, I deeply
appreciate the opportunity to testify before the committee to
stress the need for Community Development Block Grant Disaster
Recovery (CDBG-DR) assistance in Puerto Rico. Prioritizing the
livelihood, health, and safety of the 3.4 million American
citizens dealing with the devastating aftermath of Hurricane
Irma and Maria remains one of my top concerns.
As you may know, administering Federal relief efforts in
Puerto Rico has been challenging due to the environment and the
damaging effects of Hurricane Maria on the island's ports,
roads, bridges, communication systems, and electrical power
grids. As a result, Puerto Rico is still unfortunately
operating on temporary emergency power. It is for these reasons
that I call upon the committee to include robust CDBG-DR
funding for Puerto Rico and other hurricane affected areas so
that the island can expedite restoration of its most essential
services including power and water treatment.
I would note that I believe the administration's request to
be inadequate in this regard. First, the amount requested by
the administration, $12 billion, falls far short of what is
needed in Texas, Florida, Puerto Rico and the U.S. Virgin
Islands. I hope the committee will consider adding additional
funds to this account beyond what was request. In addition, the
request attempts to create a competitive process solely for
flood mitigation projects. My understanding is that the
administration also intends to prioritize projects with a
significant local funding component already in place. I am
deeply concerned that these restrictions will effectively
eliminate Puerto Rico from receipt of any of these funds. In
particular, because Puerto Rico's government is in the midst of
a fiscal crisis, the local funding component will be almost
impossible for Puerto Rico to meet. It is also troubling that
the administration expects projects that would more
appropriately fall under the U.S. Army Corps of Engineers to be
shifted to this competitive process instead.
While I disagree with the restrictions proposed by the
administration, I do believe that the Committee should ensure
that CDBG-DR funding be made available to build more resilient
infrastructure that withstands future hurricanes and saves
taxpayers' money in the long term. In short, this committee
should provide Puerto Rico with the funding and flexibility is
needs to adequately rebuild the island while making sure that
funds are administered in a responsible and transparent manner.
I have no doubt that we will continue to work hard and do
everything possible to support Puerto Rico and the people on
the Island as they recover from Hurricane Maria. I appreciate
the committee's response to date, and look forward to working
with you further on these issues.
----------
Prepared Statement of Hon. Sanford D. Bishop, Jr., a Representative in
Congress from the State of Georgia
Chairman Diaz-Balart, Ranking Member Price, and
distinguished members of the House Appropriations Subcommittee
on Transportation, Housing and Urban Development, and Related
Agencies. Thank you for the opportunity to submit written
testimony for the record.
In January 2017, two destructive storms ravaged the State
of Georgia, with the Albany / Dougherty County region in my
district being particularly impacted. Each of the storms were
declared major disasters by the President, and together they
caused hundreds of millions of dollars in damage and affected
the lives of tens of thousands of Georgians. In the aftermath
of those storms, Georgia's Governor Nathan Deal and the Georgia
Congressional Delegation worked tirelessly to secure $200
million in much needed Federal funding from the Department of
Housing and Urban Development (HUD)'s Community Development
Block Grant--Disaster Recovery (CDBG-DR) Program for disaster
recovery in Georgia. I hope that as your subcommittee
formulates its final fiscal year 2018 appropriations decisions,
you will support the necessary funding to meet Georgia's unmet
need.
As you may know, in April 2017, Governor Deal partnered
with the Governors of West Virginia, North Carolina, South
Carolina, and Louisiana to jointly request Federal relief
assistance in the fiscal year 2017 omnibus appropriations
package for communities impacted by many natural disasters over
the past year. In that letter, Governor Deal requested $200
million total, $100 million for the Dougherty County region and
$100 million for other smaller counties in Georgia affected by
the January storms. Ultimately the Governors' request was
successful, and Congress included vital funding for disaster
relief in the fiscal year 2017 spending package.
Unfortunately, the Department of Housing and Urban
Development later communicated to the Georgia Congressional
delegation that specific language Congress included in the
April omnibus appropriations bill tied HUD to a previously-
issued Federal Register notice, and required HUD to look only
at unmet housing need in determining eligibility for CDBG-DR
funding. To expedite the allocation of CDBG-DR funds, Congress,
in the April spending bill, directed HUD to utilize a formula
outlined in a 2016 Federal Register notice governing the
administration of CDBG-DR funds.
Unfortunately, that 2016 Federal Register notice was
written after money was appropriated to assist Louisiana after
their storms and flooding in 2016, where over 40,000 homes were
lost. The specific formula in the 2016 Federal Register notice
did not allow HUD to look more broadly and accurately measure
the actual devastation to communities like Dougherty County and
the resulting financial need. In Georgia, the most significant
portion of property loss was in the Dougherty County region was
not housing--it was infrastructure, debris, public
infrastructure, and redevelopment related.
The congressional delegation attempted to work, in
conjunction, with the Georgia Emergency Management Agency
(GEMA) to urge HUD to reconsider their interpretation of this
criteria or grant a waiver for Dougherty County to ensure the
region was eligible for fiscal year 2017 funds, but thus far
those efforts have been unsuccessful.
In September, following the disastrous effects of Hurricane
Harvey in Texas, and knowing that Hurricane Irma was on the
way, Congress swiftly passed $15 billion in new funding for
disaster relief efforts moving forward. Half of that funding
was allocated to HUD for CDBG-DR efforts, and HUD is now in the
process of considering the criteria for allotting that
assistance. That spending bill provided flexibility for HUD to
issue a new Federal Register notice, which is appropriate given
the vast and various impacts from those storms.
It is now a priority of the Georgia Congressional
Delegation and our governor that any new allocations of CDBG-DR
funding come with a new set of criteria to allow places like
Dougherty County and other communities in Georgia to be
eligible for the relief funding they need. It is imperative
that HUD issue a new Federal Register notice that allows more
broad eligibility criteria so Dougherty County can access the
CDBG-DR funding. My colleagues in the House and Senate and have
been in regular contact with Secretary Carson and Deputy
Secretary Patenaude to make this a reality.
I also urge the subcommittee to support these efforts by
including legislative language in subsequent disaster relief
funding that does not exclude or disadvantage Georgia's needs
and ensures that disaster losses related to the January
tornados are eligible for HUD assistance. Doing so will ensure
that those in the Dougherty County/Albany area will be fully
eligible for critical funding that will help them recover from
these devastating storms and assist them in rebuilding their
lives and returning to a sense of normalcy and safety.
I know that compared to the dramatic effects of Harvey and
Irma, Georgia's needs look small. However, the January 2017
storms were just as devastating to those communities impacted.
Simply put, we seek an opportunity for our communities who were
affected by natural disasters access to funding for unmet
recovery needs. Thank you for your consideration of this
request, and I look forward to working with the members of the
subcommittee on this important issue moving forward.
----------
Department of Housing and Urban Development Answers to Submitted
Questions
Environmental Waivers
Why does HUD feel that they need a statutory change to
expedite environmental review?
Several Community Development Block Grant Disaster Recovery
(CDBG-DR) grantees expressed concern that time and cost
associated with environmental reviews for homeowners trying to
return to their homes after a disaster prolongs the recovery
effort and significantly increases costs. Such cost increases
mean we serve fewer families whose homes have been damaged. To
address these concerns, the Administration requested
legislative action to specify alternative environmental review
requirements for single-family homes that are rehabilitated
outside the floodplain, to expedite recovery. This change would
apply retroactively to CDBG-DR funds appropriated under Public
Law 115-56.
What regulatory or administrative actions has HUD taken,
up to this point, to address this issue?
HUD has worked to educate grantees on a range of options
that can help speed execution of environmental review
responsibilities in the disaster response and recovery process.
These options include:
(1) Expedited comment periods that permit grantees to
publish the combined Finding of No Significant Impact (FONSI)
and Notice of Intent to Request Release of Funds (NOI/RROF)
simultaneously with the submission of the RROF.
(2) Adoption of another agency's environmental review--HUD
grantees are permitted to adopt environmental reviews performed
by other Federal agencies when the HUD grantee is providing
supplemental assistance to actions performed under sections
402, 403, 404, 406, 407, or 502 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act.
(3) Unified Federal Review--The Unified Federal Review
(UFR) establishes an expedited and unified interagency review
process to ensure compliance with environmental and historic
requirements under Federal law relating to disaster recovery
projects, to expedite the recovery process, consistent with
applicable law. The process aims to coordinate environmental
and historic preservation reviews to expedite planning and
decision-making for disaster recovery projects.
(4) Technical Assistance--HUD has worked with Responsible
Entities receiving CDBG-DR programs to help in the development
of Tiered Environmental Reviews, Programmatic Environmental
Reviews, and data sharing from FEMA to streamline and expedite
the environmental review process.
However, even with the implementation of these options, the
cost and time necessary to conduct the reviews is still
significant.
One of the stated purposes for this waiver is to streamline
and expedite the environmental review process across government
agencies. CDBG-DR funds interface with many different programs
of the Federal Government including FEMA and the Army Corps of
Engineers. How does this waiver request compare to the
authority provided in other Federal programs? For instance, do
FEMA's Stafford Act programs have similar environmental waiver
authority?
HUD does not have in place a statutory waiver to streamline
environmental review.
Programmatic agreements allow for a streamlined
collaborative process between Federal agencies and State
Historic Preservation Offices when complying with the Historic
Preservation Act. FEMA prefers to use programmatic agreements
to comply with their post-disaster obligations under the
Historic Preservation Act; other Federal agencies, like HUD,
could join on to an existing programmatic agreement. Does HUD
routinely use or encourage the use of programmatic agreements?
Yes, HUD encourages the use of programmatic agreements
between CDBG-DR grantees and State Historic Preservation
Offices to streamline the process associated with the
evaluation of historic properties. Following Hurricane Sandy,
HUD proposed and negotiated an innovative use of Programmatic
Agreements (PAs) to expedite historic preservation reviews of
CDBG-DR projects, building upon previous work by FEMA. New
Jersey and New York were able to sign the HUD Addendum to the
FEMA PA in one month. FEMA PAs include extensive exemptions,
shortened timeframes, and expedited resolution of adverse
effects (like demolitions). The following states have signed on
to the FEMA PA via the HUD Addendum: Colorado, Louisiana, New
Jersey, New York, Oklahoma, South Carolina, and West Virginia.
Texas has an existing CDBG-DR Programmatic Agreement with the
State Historic Preservation Office. HUD has started working
with Florida to sign a HUD addendum to the FEMA PA, and will
focus on Puerto Rico and the U.S. Virgin Islands in the near
future.
Rental Housing
In many of the disaster-affected areas this year, rental
housing was affected, particularly rental housing owned by
small operators. What is HUD doing to ensure that grantees are
adequately addressing rental housing in their action plans?
In previous CDBG-DR appropriations, the Department has
required CDBG-DR grantees to evaluate all aspects of recovery
including rental housing. CDBG-DR grantees receiving those
funds were required to include a description of how they will
identify and address the rehabilitation, reconstruction,
replacement, and new construction of housing and shelters in
the areas affected by the disaster. This includes any rental
housing that is affordable to low- or moderate-income
households. Additionally, the Department has previously
required CDBG-DR grantees to commit CDBG-DR funds for the
recovery of rental housing. The Department will identify ways
to incorporate these requirements into future allocations.
Small Area Mitigation
While large-scale projects have their place in the
mitigation toolkit, effective pre-disaster mitigation requires
small, property level projects like house elevations and
structure hardening. How will HUD encourage or require grantees
to incorporate best practices for mitigation and resiliency
when using CDBG-DR funds?
In previous CDBG-DR allocations, the Department required
CDBG-DR grantees to comprehensively plan for and incorporate
the costs of mitigation and resilience measures to protect
against the anticipated effects of future extreme weather
events and other natural hazards. Mitigation costs must be
reasonable, and grantee decisions to take certain actions must
be cost reasonable relative to other alternatives strategies,
such as demolition of substantially-damaged structures with
reconstruction of an elevated structure on the same site,
property buyouts, or infrastructure improvements to prevent
loss of life and mitigate future property damage. The
Department will specify applicable mitigation-related
requirements in future CDBG-DR allocation Notices.
Mitigation Competition
What kinds of projects do you envision funding under the
proposed national mitigation competition?
Funding could be used for a wide range of risk mitigation
or resilience activities, including but not limited to large-
scale buyouts in areas of high flood risk or repetitive loss,
elevation and structure hardening, forward-looking land-use
plans, adoption of disaster resistant building codes, green or
grey infrastructure investments (e.g., projects authorized by
the U.S. Army Corps of Engineers and improvements to storm
water management systems). Projects need to make sense under a
cost-benefit analysis of flood mitigation and resilience
objectives (some of which may be harder to measure).
Generally, who would operate and maintain the projects? In
the proposal, it appears that once an Army Corps of Engineers
project receives funding via the competition that project is
barred from future Federal funds.
The Mitigation Fund would incorporate the administration's
Infrastructure Initiative policy principles, such as leveraging
state, local and private resources and using public-private
partnerships to expedite project delivery and support ongoing
maintenance. Winning proposals would specify the non-Federal
source of sufficient funding for operations and maintenance.
Projects without such funding would not be competitive.
If an applicant were unable to contribute a significant
local cost share, how would that affect their ability to
compete for funding?
An objective of the Mitigation Fund is to focus Federal
dollars on significant mitigation projects in high-risk areas
to stretch the use and benefit of taxpayer funds. Every state
and local government uses its local funds for infrastructure
investments every day. This fund would incentivize using state/
local/private funding to significantly increase total risk
mitigation funding and to use public-private partnerships to
improve efficiency in project delivery and ongoing maintenance
and operations.
Please describe the key differences between this
competition and the NDRC and Rebuilding by Design competitions.
The objectives of each competition are related to disaster
resilience, but focused and implemented differently. Rebuild by
Design was a design competition administered by philanthropic
and non-profit organizations under the America Competes Act. It
was searching for innovative design responses to the impacts of
Sandy. Benefit-cost analysis was carried out after the fact and
funding leverage was not a competition factor. State and local
government implementers got involved late in the process.
The National Disaster Resilience Competition (NDRC)
involved state and local government initiated funding
proposals, and was carried out under the strict requirements of
the HUD Reform Act. NDRC distributed just under $1 billion in
grant awards to states and local governments. NDRC was a long,
two-phased competition incorporating a few of the design
aspects of RBD, such as considering co-benefits of each
project, while focusing more on applicant implementation
capacity. NDRC scoring considered stakeholder engagement
(especially with vulnerable populations), leverage, and long-
term commitment by the applicant, along with more standard
capacity and sound approach factors. Only the largest proposed
projects were subject to benefit-cost analysis.
The current Mitigation Fund proposal focuses on reducing
future Federal taxpayer disaster costs by funding significant
mitigation projects in high-risk areas, emphasizing leverage
and benefit-cost analysis. Funding would concentrate
investments for flood mitigation solutions in communities that
experience repetitive damage from flood-related disasters, and
encourage community and neighborhood-wide solutions. This would
lower the potential costs of future disaster recovery efforts
for all Federal taxpayers.
Although the proposal includes $10 million in HUD salaries
and expenses, there is no additional funding for other Federal
agencies, like the Army Corps, to help manage this large-scale
program. This proposal would require HUD to oversee and
coordinate a mitigation effort across government. Do you
believe HUD has the capacity to independently manage such a
large interagency program?
HUD has the capacity to manage the grants with the $10
million dedicated to this fund. For specific mitigation and
environmental expertise related to particular projects, HUD
would rely on coordination and consultation with Federal
partners such as FEMA and the Army Corps of Engineers, as it
does now.