[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
CREATING A CLIMATE RESILIENT AMERICA: SMART FINANCE FOR STRONG
COMMUNITIES
=======================================================================
HEARING
BEFORE THE
SELECT COMMITTEE ON THE
CLIMATE CRISIS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
DECEMBER 11, 2019
__________
Serial No. 116-16
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
www.govinfo
Printed for the use of the Select Committee on the Climate Crisis
______
U.S. GOVERNMENT PUBLISHING OFFICE
41-272 WASHINGTON : 2020
SELECT COMMITTEE ON THE CLIMATE CRISIS
One Hundred Sixteenth Congress
KATHY CASTOR, Florida, Chair
BEN RAY LUJAN, New Mexico GARRET GRAVES, Louisiana,
SUZANNE BONAMICI, Oregon Ranking Member
JULIA BROWNLEY, Calfornia MORGAN GRIFFITH, Virginia
JARED HUFFMAN, California GARY PALMER, Alabama
A. DONALD MCEACHIN, Virginia BUDDY CARTER, Georgia
MIKE LEVIN, California CAROL MILLER, West Virginia
SEAN CASTEN, Illinois KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado
------
Ana Unruh Cohen, Majority Staff Director
Marty Hall, Minority Staff Director
climatecrisis.house.gov
C O N T E N T S
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STATEMENTS OF MEMBERS OF CONGRESS
Page
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, and Chair, Select Committee on the Climate Crisis:
Opening Statement............................................ 1
Prepared Statement........................................... 3
Hon. Garrett Graves, a Representative in Congress from the State
of Louisiana, and Ranking Member, Select Committee on the
Climate Crisis:
Opening Statement............................................ 3
WITNESSES
Mark Gaffigan, Managing Director, Natural Resources and
Environment, US Government Accountability Office
Oral Statement............................................... 5
Prepared Statement........................................... 7
Damon Burns, President and CEO, Finance Authority of New Orleans
Oral Statement............................................... 13
Prepared Statement........................................... 15
Charles ``Chuck'' Wemple, Executive Director, Houston-Galveston
Area Council
Oral Statement............................................... 17
Prepared Statement........................................... 19
Marion Mollegen McFadden, Senior Vice President, Public Policy
and Senior Advisor, Resilience, Enterprise Community Partners
Oral Statement............................................... 21
Prepared Statement........................................... 23
APPENDIX
Questions for the Record from Hon. Kathy Castor to Mark Gaffigan. 54
Questions for the Record from Hon. Kathy Castor to Damon Burns... 59
Questions for the Record from Hon. Garret Graves to Damon Burns.. 60
Questions for the Record from Hon. Garret Graves to Charles
``Chuck'' Wemple............................................... 61
Questions for the Record from Hon. Kathy Castor to Marion
Mollegen McFadden.............................................. 64
CREATING A CLIMATE RESILIENT AMERICA: SMART FINANCE FOR STRONG
COMMUNITIES
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THURSDAY, DECEMBER 11, 2019
House of Representatives,
Select Committee on the Climate Crisis,
Washington, DC.
The committee met, pursuant to call, at 2:49 p.m., in Room
210, Cannon House Office Building, Hon. Kathy Castor
[chairwoman of the committee] presiding.
Present: Representatives Castor, Bonamici, Huffman, Neguse,
Graves, Griffith, Palmer, Carter, and Miller.
Ms. Castor. All right. The committee will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
Communities are on the front lines of the climate crisis,
and when it comes to the physical, humanitarian, and financial
impacts of this crisis, low-income families and people of color
face disproportionately higher risks.
That is why today's discussion will center around making
every one of our communities stronger by leveraging Federal
funds, private capital, and insurance to increase resilience
and accelerate disaster recovery.
I now recognize myself for 5 minutes to give an opening
statement.
Local leaders are already taking bold action to protect
their communities from the costly impacts of the climate
crisis. Action at the local level is one big piece of the
climate puzzle, helping to protect our families when climate-
fueled disasters hit. The unwavering commitment of cities,
states, and businesses to climate action can help the United
States significantly reduce emissions, according to a report
released this week by America's Pledge.
But in order to solve the climate crisis, we will need a
thoughtful, comprehensive approach. We need to make sure that
the Federal Government is fully engaged, acting as a robust
partner for communities across America, which leaves us with an
important question: How do we maximize every Federal dollar
spent on protecting American families?
That is what we are discussing today. We will examine how
Congress can make sure no community gets left behind by
emphasizing innovative finance, prioritizing resilience, and
accelerating recovery in the places that need it most.
Since 2005, the Federal Government has spent almost a half-
trillion dollars in disaster assistance after extreme weather
events. Whether it is catastrophic hurricanes that we know all
too well, flooding in the Midwest, or wildfires in the West,
the Federal Government is increasingly stepping in to respond
to natural disasters.
While it is vital that we continue to help communities
after disasters hit, it is critical that we also focus on
increasing resilience and hazard mitigation, which can protect
families before disasters happen and help us protect the bottom
line as well.
We also need to help local governments become more risk-
aware and finance-savvy so they can attract private investment
that benefits everyone in their communities, with an
understanding that some local communities do not have the
resources to do all they should be doing.
The cost of climate inaction is increasing. For example,
the National Flood Insurance Program currently owes over $20
billion to the U.S. Treasury. This program is vital for
communities to recover from devastating floods, which are
unfortunately happening in more places and in some cases
lasting longer.
The Federal Government's fiscal exposure from NFIP is one
of the reasons that the Government Accountability Office has
included climate change risks on its high-risk list. The need
for strategic, cost-saving approaches that prioritize
resilience and hazard mitigation is clear.
I have had the opportunity in this position to travel to
coastal South Carolina, California, Virginia in Hampton Roads.
We look forward to getting to Louisiana and Texas. And on a
recent committee trip, I spoke with the mayors of two flood-
prone cities in south Florida.
One of these cities, Miami Beach, has been able to invest
in innovative solutions to reduce flooding, thanks in part to a
strong tax base. However, nearby North Bay Village doesn't have
the same resources, so when the king tide rolls in, these
communities may experience different levels of flooding because
of their very different fiscal situations.
So we have to level the playing field for vulnerable
communities. We can't let wealth determine how resilient
communities are.
One of the problems is that we don't have an objective way
to assess a community's ability to bounce back after a
disaster, so, in the absence of a uniformly applied metric, the
Federal Government may continue to use wealth as a proxy. That
means the government may overvalue the benefit of protecting
property in wealthy areas while lower-income neighborhoods
don't see the same kind of investment.
So I hope today's discussion will identify ways we can help
ensure a level playing field and environmental justice across
America, especially for low-income communities and communities
of color, who are disproportionately affected by the climate
crisis.
So we all look forward to hearing your ideas.
At this time, I will recognize the ranking member for 5
minutes for an opening statement.
[The statement of Ms. Castor follows:]
Opening Statement of Chair Kathy Castor
Hearing on ``Creating a Climate Resilient America:
Smart Finance for Strong Communities''
Select Committee on the Climate Crisis
December 11, 2019
As Prepared for Delivery
Local leaders are already taking bold action to protect their
communities from the effects of the climate crisis. Action at the local
level is one big piece of the climate puzzle, helping protect our
families when climate-fueled disasters hit. The unwavering commitment
of cities, states and businesses to climate action can help the United
States significantly reduce its emissions, according to a report
released this week by America's Pledge.
In order to solve the climate crisis, we will need a thoughtful and
comprehensive approach. We need to make sure the federal government is
fully engaged, acting as a robust partner for communities across the
America, which leaves us with an important question--how do we maximize
every federal dollar spent on protecting American families?
That's what we're discussing today. We'll examine how Congress can
make sure no community gets left behind by emphasizing innovative
finance, prioritizing resilience, and accelerating recovery in the
places that need it most.
Since 2005, the federal government has spent almost half a trillion
dollars in disaster assistance after extreme weather events. Whether
it's catastrophic hurricanes, flooding in the Midwest, or wildfires in
the West, the federal government is increasingly stepping in to respond
to natural disasters.
While it's vital that we continue to help communities after
disasters hit, it's critical that we also focus on increasing
resilience and hazard mitigation, which can protect families before
disasters happen and protect the bottom line as well.
We also need to help local governments become more risk aware and
finance-savvy, so they can attract private investment that benefits
everyone in their communities--with an understanding that some local
communities do not have the resources to do all they should be doing.
The cost of climate inaction is increasing. For example, the
National Flood Insurance Program currently owes over 20 billion dollars
to the U.S. Treasury. This program is vital for communities to recover
from devastating floods, which are unfortunately happening in more
places and--in some cases--lasting for months. The federal government's
fiscal exposure from the NFIP is one of the reasons that the Government
Accountability Office has included climate change risks on its High
Risk List.
The need for a strategic, cost-saving approach that prioritizes
resilience and hazard mitigation is clear. On a recent committee trip,
I spoke with the mayors of two flood-prone cities in South Florida. One
of these cities, Miami Beach, has been able to invest in innovative
solutions to reduce flooding, thanks in part to a strong tax base.
However, nearby North Bay Village doesn't have the same resources. So
when the King Tide rolls around, these communities may experience
different levels of flooding because of their different fiscal
situations.
We must level the playing field for vulnerable communities. We
can't let wealth determine how resilient our communities are.
One of the problems is we don't have an objective way to assess a
community's ability to bounce back after a disaster. So, in the absence
of a uniformly-applied metric, the federal government may continue to
use wealth as a proxy. That means the government may overvalue the
benefit of protecting property-wealthy areas, while lower-income
neighborhoods don't see the same kinds of investments.
I hope today's discussion will identify ways we can help ensure a
level playing field and environmental justice across the country,
especially for low-income communities and people of color, who are
disproportionately affected by the climate crisis. I look forward to
hearing your ideas.
Mr. Graves. Thank you, Madam Chair.
And, Madam Chair, I want to thank you once again for
holding this hearing. And after many hearings, we have gotten
to the point now to where we have a bipartisan witness that has
written prolifically on Louisiana and our coastal master plan,
which is what I used to do.
You have brought in our committee staffer's first cousin
and a guru from New Orleans on finance.
While Mr. Wemple did not mention Louisiana in your
testimony, I will say your testimony is music to my ears. I
love your thought process on how you are moving forward.
And, of course, Ms. McFadden also often mentions Louisiana
in her testimony.
But, Madam Chair, as you and I have discussed in the past,
this is an area where I do believe that this committee should
be spending a lot of time focusing, because it is an area where
we absolutely should be on the same page. There is no one in
this country, hopefully, that would ever wish disasters and
vulnerability upon anyone.
And just like you noted in your opening statement, you and
I both have been through traumatic disasters in the communities
that we represent, the communities where we live. And they are
absolutely awful, including, which none of us can forget,
Hurricane Katrina, where we lost 1,500 of our brothers, our
sisters, our community members. And it is absolutely
unacceptable to allow anything like that to ever happen again.
And so I will say it again: Thank you for focusing so much
on this topic. Whether you are a fiscal conservative and you
believe the statistics that show anywhere from $3 in cost
savings for every $1 you invest or the studies on the high end
from the National Institute of Building Sciences which
indicates that you get $11 in cost savings for every $1 you
invest in pre-disaster mitigation or proactive hazard-
mitigation-type investments, or perhaps you are completely on
the other side of the spectrum and you care about the impact to
our ecological production and our coastal areas and the
benefits that that provides to our nation, whether it be
seafood, the wetlands, the submerged aquatic vegetation and all
the wildlife that that supports, again, we should all be
working on this together.
And even if we are there for different reasons, this is an
area where it benefits our nation from a fiscal policy
perspective, it improves our environment and ecological
production, and, mostly importantly, it sustains our important
coastal communities, where we have nearly 42 percent of our
nation's population currently living.
So I am not going to go on much longer, but I do want to
say, I want to thank each of you. I think you all bring an
interesting perspective and expertise to the table. I am
looking forward to your testimony and, more importantly,
looking forward to having dialogue with you and figure out a
new path forward for the United States.
So, with that, I yield back.
Ms. Castor. Well, thank you very much.
Without objection, members who wish to enter opening
statements into the record may have 5 business days to do so.
Now I want to welcome our witnesses. I think the ranking
member is correct; we have an outstanding panel today.
Mark Gaffigan works at the Government Accountability
Office, where he is the Managing Director for Natural Resources
and the Environment. Mr. Gaffigan and his team have an
important task: keeping Congress informed on the use of
taxpayer dollars to protect our environment and manage our land
and water resources.
Damon Burns is the President and CEO of the Finance
Authority of New Orleans, whose aim is to boost economic
development and increase climate-resilience projects in
Louisiana's most populous city. Mr. Burns has 15 years of
experience in public finance, entrepreneurship, economic
development, and financial technology.
Chuck Wemple is the Executive Director of the Houston-
Galveston Area Council, a regional association of local
officials from the Texas Gulf Coast Planning Region. The
council works to promote efficient and accountable use of
local, state, and Federal tax dollars. Mr. Wemple also served
on several state-level disaster recovery policy committees.
Mary McFadden is the Senior Advisor for Resilience at
Enterprise Community Partners. Ms. McFadden previously worked
at the Department of Housing and Urban Development, where she
served as Deputy Assistant Secretary for Grant Programs. She
oversaw multiple Federal programs at HUD, including the
Community Development Block Grant Program.
Without objection, the witnesses' written statements will
be made part of the record.
With that, Mr. Gaffigan, you are now recognized to give a
5-minute presentation of your testimony. Welcome.
STATEMENTS OF MARK GAFFIGAN, MANAGING DIRECTOR, GOVERNMENT
ACCOUNTABILITY OFFICE; DAMON BURNS, EXECUTIVE DIRECTOR, FINANCE
AUTHORITY OF NEW ORLEANS; CHARLES WEMPLE, EXECUTIVE DIRECTOR,
HOUSTON-GALVESTON AREA COUNCIL; AND MARION MCFADDEN, SENIOR
VICE PRESIDENT FOR POLICY AND SENIOR ADVISOR FOR RESILIENCE,
ENTERPRISE COMMUNITY PARTNERS
STATEMENT OF MARK GAFFIGAN
Mr. Gaffigan. Thank you.
Chairwoman Castor, Ranking Member Graves, and members of
the Select Committee, good afternoon. Thank you for the
opportunity to discuss GAO's recent work on climate resilience
and the Federal role.
I have submitted a statement for the record which
summarizes our October 2019 report on climate resilience, but I
would like to address two points in my opening statement: one,
the importance of climate resilience; and the potential Federal
Government role.
To the first point, I would like to start out by broadly
noting that the Federal Government is on an unsustainable long-
term fiscal path. With current debt of $22 trillion and annual
deficits approaching $1 trillion a year, the nation's fiscal
situation is not healthy.
And speaking of health, while healthcare is a key driver of
Federal spending, net interest, already at 8 percent of the
budget, $350 billion a year, is expected to eventually become
the largest category of Federal spending, including surpassing
all non-defense discretionary spending in 4 years.
However, as dire as these projections are for the Federal
budget, there are additional unknown fiscal exposures, or
risks, outside the budget process that may commit the Federal
Government to future spending that is not projected. One such
example is disaster assistance.
As Chairwoman Castor pointed out, the Federal Government
since 2005 has spent at least $450 billion on disaster
assistance. And these reactive, unbudgeted costs are likely to
increase as extreme weather events become more frequent and
intense due to climate change, as your communities have
experienced--thus, the importance of considering these risks
and attempting to be proactive in building climate resilience
into our communities to protect those communities and to also
avoid these future costs.
And as Ranking Member Graves points out, depending on the
type of resilience project, the estimates range from $3 to $11
in societal benefits for every $1 invested in resilience. An
ounce of prevention truly is worth a pound of cure.
But to my second point, what is the Federal Government's
role in all this? First, it is important to note that the
Federal Government is one key stakeholder among many that are
needed to address this issue. The Federal Government does have
expertise and funding to offer, but it doesn't have all the
answers, nor does it have excess funding to spare in our
unsustainable fiscal situation.
Thus, the importance of the Federal Government engaging
with communities who best know their own needs and can help
ensure that every Federal dollar counts. State, local, Tribal
governments, academia, nonprofits, and the private sector,
including businesses and individual citizens, all have
important roles to play.
But regarding the particular Federal role in resilience,
the Federal Government can contribute in three key areas: as a
provider of information, integration, and incentives. But it
must start with an overall strategic vision and goals, and that
is the part that is missing now.
Consistent with enterprise risk management principles, our
report highlights six key steps for identifying high-priority
climate resilience projects for the Federal investment. But it
starts with step one: the establishment of strategic goals and
a Federal structure with the authority to lead, identify and
integrate all stakeholders, define responsibilities, and
address how the effort will be funded.
This is the key first step that is missing right now. No
one is in charge when it comes to identifying and prioritizing
climate resilience projects across the Federal Government.
With the establishment of a leading Federal organizational
arrangement, the other steps of assessing high-risk areas,
identifying and prioritizing projects, efficient
implementation, and the monitoring of projects and the evolving
climate risk, can follow. Without it, there will be nothing to
follow.
That is why we concluded in our report that Congress
consider establishing a Federal organizational arrangement
charged with the authority to identify and prioritize climate
resilience projects for Federal investment, consistent with
clear goals.
I look forward to hearing from the other witnesses. I look
forward to our discussion and your questions. And I look
forward to GAO's continued work to support the work of this
committee and the Congress.
Thank you.
[The statement of Mr. Gaffigan follows:]
United States Government Accountability Office
Testimony Before the Select Committee on the Climate Crisis,
House of Representatives
Climate Resilience: A Strategic Investment Approach for High-Priority
Projects Could Help Target Federal Resources
Accessible Version
Statement of Mark Gaffigan, Managing Director,
Natural Resources and Environment
For Release on Delivery, Expected at 2:00 p.m. ET,
Wednesday, December, 11, 2019
December 11, 2019
Chairwoman Castor, Ranking Member Graves, and Members of the Select
Committee:
Thank you for the opportunity to discuss our recent work on climate
resilience and federal investment strategies. Since 2005, federal
funding for disaster assistance has totaled at least $450 billion,
including a 2019 supplemental appropriation of $19.1 billion for recent
disasters. In 2018 alone, 14 separate billion-dollar weather and
climate disaster events occurred across the United States, with total
costs of at least $91 billion, including the loss of public and private
property, according to the National Oceanic and Atmospheric
Administration. Disaster costs likely will increase as certain extreme
weather events become more frequent and intense due to climate change,
according to the U.S. Global Change Research Program, a global change
research coordinating body that spans 13 federal agencies.\1\
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\1\ U.S. Global Change Research Program, Impacts, Risks, and
Adaptation in the United States: Fourth National Climate Assessment,
vol. 2 (Washington, D.C.: 2018).
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The cost of recent weather disasters has illustrated the need to
plan for climate change risks and invest in climate resilience. In
2013, we included ``Limiting the Federal Government's Fiscal Exposure
by Better Managing Climate Change Risks'' on our list of federal
program areas at high risk of fraud, waste, abuse, and mismanagement or
most in need of transformation.\2\ Enhancing climate resilience means
taking actions to reduce potential future losses by planning and
preparing for potential climate hazards such as extreme rainfall, sea
level rise, and drought. Investing in climate resilience can reduce the
need for far more costly steps in the decades to come; therefore, we
and others have recommended enhancing climate resilience to help limit
the federal government's fiscal exposure to climate change.\3\
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\2\ Every 2 years, at the start of a new Congress, GAO reevaluates
agency progress in addressing issues on the high-risk list against five
criteria to determine if progress has been made. The criteria are: (1)
leadership commitment to address the risk, (2) agency capacity to
resolve the risk, (3) a corrective action plan to addressing the risk,
(4) a program to monitor the effectiveness of corrective measures, and
(5) ability to demonstrate progress in resolving the high-risk area.
GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.:
February 2013).
\3\ See GAO, Climate Change: Opportunities to Reduce Federal Fiscal
Exposure, GAO-19-625T (Washington, D.C.: June 11, 2019), Climate
Change: Selected Governments Have Approached Adaptation through Laws
and Long-Term Plans, GAO-16-454 (Washington, D.C.: May 12, 2016), and
National Research Council of the National Academies, America's Climate
Choices: Panel on Adapting to the Impacts of Climate Change, Adapting
to the Impacts of Climate Change (Washington, D.C.: 2010).
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Planning for federal investments in climate resilience projects to
limit fiscal exposure is no longer a hypothetical issue. The Disaster
Recovery Reform Act of 2018 provides one potential source of funding
for climate resilience projects.\4\ In particular, it allows the
President to set aside up to 6 percent of the estimated aggregate
amount of grants from certain emergency programs under a major disaster
declaration to implement pre-disaster hazard mitigation activities. The
Federal Emergency Management Agency (FEMA) will administer the
associated program--the Building Resilient Infrastructure and
Communities program. As of the date of this testimony, FEMA had not yet
developed program guidance, although the agency has sought input from
the public on program design.\5\ FEMA officials estimate annual funds
for the program will average $300 million to $500 million.
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\4\ FAA Reauthorization Act of 2018, Pub. L. No. 115-254, div. D,
Sec. Sec. 1206(a)(3), 1234(a)(5) 132 Stat. 3186, 3440, 3462 (2018). The
FAA Reauthorization Act of 2018, which included the Disaster Recovery
Reform Act of 2018, became law on October 5, 2018.
\5\ According to an October 2019 FEMA Disaster Recovery Reform Act
Annual Report, FEMA plans to publish a draft policy for the Building
Resilient Infrastructure and Communities program in 2020 for public
comment. Furthermore, FEMA anticipates releasing the first Notice of
Funding Opportunity in summer 2020 and plans to open the application
period in September 2020. See Department of Homeland Security, Federal
Emergency Management Agency, Disaster Recovery Reform Act (DRRA) Annual
Report (Washington, D.C.: October 2019).
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My statement today focuses on (1) the extent to which the federal
government has a strategic approach for investing in climate resilience
projects; (2) key steps that provide an opportunity to strategically
prioritize projects for investment; and (3) the strengths and
limitations of options for focusing federal funding on these projects.
My statement is based on the findings of our October 2019 report on
climate resilience.\6\ To perform the work for our report, we reviewed
about 50 relevant reports and interviewed 35 stakeholders with
expertise in climate resilience and related fields, including federal
officials, researchers, and consultants. In addition, during the course
of this work, we identified domestic and international examples of
governments that invested in climate resilience and related projects.
We selected two of these examples for in-depth review and presentation
in our report: the state of Louisiana's coastal master planning effort
and Canada's Disaster Mitigation and Adaptation Fund. Additional
information on our scope and methodology is available in our October
2019 report.\7\
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\6\ GAO, Climate Resilience: A Strategic Investment Approach for
High-Priority Projects Could Help Target Federal Resources, GAO-20-127
(Washington, D.C.: Oct. 23, 2019).
\7\ GAO-20-127.
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We conducted the work on which this statement is based in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
The Federal Government Has Invested in Projects That May Convey Some
Climate Resilience Benefits but Does Not Have a Strategic Investment
Approach
As we reported in October 2019, the federal government has invested
in projects that may enhance climate resilience but does not have a
strategic approach for investing in high-priority climate resilience
projects. Some federal agencies have made individual efforts to manage
climate change risk within existing programs and operations, and these
efforts may convey climate resilience benefits. For example, the U.S.
Army Corps of Engineers' civil works program constructs flood control
projects, such as sea walls, that could convey climate resilience
benefits by protecting communities from storms that may be exacerbated
by climate change.
However, even with individual agency efforts, federal investment in
projects specifically designed to enhance climate resilience to date
has been limited. As we stated in our Disaster Resilience Framework,
most of the federal government's efforts to reduce disaster risk are
reactive, and many revolve around disaster recovery.\8\ As a result, we
reported in October 2019 that additional strategic federal investments
may be needed to manage some of the nation's most significant climate
risks because climate change cuts across agency missions and presents
fiscal exposures larger than any one agency can manage. Our analysis
shows the federal government does not strategically identify and
prioritize projects to ensure they address the nation's most
significant climate risks.
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\8\ GAO, Disaster Resilience Framework: Principles for Analyzing
Federal Efforts to Facilitate and Promote Resilience to Natural
Disasters, GAO-20-100SP (Washington, D.C.: October 2019). The
principles in this framework can help identify opportunities to enhance
federal efforts to promote disaster resilience, including building
resilience to climate change.
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In addition, our October 2019 report discusses our past work that
shows an absence of government-wide strategic planning for climate
change. For example, in our March 2019 update to our high-risk list, we
reported that one area of government-wide action needed to reduce
federal fiscal exposure is in the federal government's role as the
leader of a strategic plan that coordinates federal efforts and informs
state, local, and private-sector action.\9\ For this 2019 update, we
assessed the federal government's progress since 2017 related to
climate change strategic planning against five criteria and found that
the federal government had not met any of the criteria for removal from
the high-risk list. Specifically, since our 2017 high-risk update, four
ratings regressed to ``not met'' and one remained unchanged as ``not
met.''
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\9\ GAO, High-Risk Series: Substantial Efforts Needed to Achieve
Greater Progress on High-Risk Areas, GAO-19-157SP (Washington, D.C.:
Mar. 6, 2019).
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Also, although we have made 17 recommendations that address
improving federal climate change strategic planning, as of August 2019,
no action had been taken toward implementing 14 of those
recommendations--including one dating from 2003. Our enterprise risk
management framework calls for reviewing risks and selecting the most
appropriate strategy to manage them.\10\ However, no federal agency,
interagency collaborative effort, or other organizational arrangement
has been established to implement a strategic approach to climate
resilience investment that includes periodically identifying and
prioritizing projects. Such an approach could supplement individual
agency climate resilience efforts and help target federal resources
toward high-priority projects.
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\10\ GAO, Enterprise Risk Management: Selected Agencies'
Experiences Illustrate Good Practices in Managing Risk, GAO-17-63
(Washington, D.C.: Dec. 1, 2016).
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Six Key Steps Provide an Opportunity for the Federal Government to
Strategically Identify and Prioritize Climate Resilience Projects
Six key steps provide an opportunity for the federal government to
strategically identify and prioritize climate resilience projects for
investment, based on our review of reports (including a National
Academies report and the U.S. Global Change Research Program's Fourth
National Climate Assessment) that discuss adaptation as a risk
management process, as well as on international standards, our past
work (including our enterprise risk management criteria), and
interviews with stakeholders.\11\ The six key steps are (1) defining
the strategic goals of the climate resilience investment effort and how
the effort will be carried out, (2) identifying and assessing high-risk
areas for targeted resilience investment, (3) identifying potential
project ideas, (4) prioritizing projects, (5) implementing high-
priority projects, and (6) monitoring projects and climate risks. (See
fig. 1.)
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\11\ See National Research Council of the National Academies,
America's Climate Choices: Panel on Adapting to the Impacts of Climate
Change, Adapting to the Impacts of Climate Change (Washington, D.C.:
2010); U.S. Global Change Research Program, Impacts, Risks, and
Adaptation in the United States: Fourth National Climate Assessment,
vol. 2 (Washington, D.C.: 2018); International Organization for
Standardization, ISO 14090:2019, Adaptation to Climate Change--
Principles, Requirements and Guidelines (June 2019); and ASTM
International, Standard ASTM E3032-15e1: Guide for Climate Resiliency
Planning and Strategy (2015). The International Organization for
Standardization is a worldwide federation of national standards bodies.
ASTM International develops voluntary consensus industry standards.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In our October 2019 report, we used one domestic and one
international example to illustrate these key steps: Louisiana's
Coastal Protection and Restoration Authority (CPRA) coastal master
planning effort and Canada's Disaster Mitigation and Adaptation Fund
(DMAF).
In the domestic example, to address the lack of strategic
coordination, in 2005 the state of Louisiana consolidated coastal
planning efforts previously carried out by multiple state entities into
a single effort, led by CPRA. CPRA periodically identifies high-
priority coastal resilience projects designed to address two primary
risks: flooding and coastal land loss. To identify potential projects,
CPRA sought project proposals from citizens, nongovernmental
organizations, and others. To prioritize projects, CPRA used
quantitative modeling to estimate project outcomes under multiple
future scenarios of varied climate and other conditions and coordinated
with stakeholders to understand potential project impacts. CPRA has
published three coastal master plans in which it identified and
evaluated potential projects. For example, in its 2017 Comprehensive
Master Plan for a Sustainable Coast, CPRA identified $50 billion in
high-priority projects to be implemented as funding becomes available.
In the international example, in 2018 the Canadian government
launched the DMAF, a financial assistance program, to provide $1.5
billion (in U.S. dollars) over 10 years for large-scale, nationally
significant projects to manage natural hazard risks, including those
triggered by climate change. Infrastructure Canada, the entity
responsible for administering the DMAF, seeks project ideas from
provinces and territories, municipal and regional governments,
indigenous groups, and others. These entities apply directly to
Infrastructure Canada for funding. According to Canadian officials, two
committees of experts--one composed of experts from other federal
departments and the other composed of nonfederal experts (e.g., urban
planners and individuals with regional expertise)--provide feedback on
potential projects. These projects are prioritized based on multiple
criteria such as the extent to which they reduce the impacts of natural
disasters.
Options for Focusing Federal Funding on High-Priority Climate
Resilience Projects Have Strengths and Limitations, and Opportunities
Exist to Increase Funding Impact
As we reported in October 2019, on the basis of our review of
relevant reports and our past work, interviews with stakeholders, and
illustrative examples, we identified two options--each with strengths
and limitations--for focusing federal funding on high-priority climate
resilience projects. The options are (1) coordinating funding provided
through multiple existing programs with varied purposes and (2)
creating a new federal funding source specifically for investment in
climate resilience. In addition, our analysis of these sources
identified opportunities to increase the climate resilience impact of
these two funding options.
A strength of coordinating funding from existing sources is access
to multiple funding sources for a project. For example, one stakeholder
we interviewed whose community used federal funding to implement large-
scale resilience projects said that having multiple programs is
advantageous because when funding from one program is not available--
such as when the project does not match that program's purpose or when
there are insufficient funds--funds could be sought from another
program. The state of Louisiana's coastal master planning effort also
uses multi-program coordination to fund projects. Specifically, funding
for high-priority resilience projects identified in the master plan is
provided via several federal and nonfederal programs designed for
wetlands restoration, hurricane risk reduction, oil spill recovery, and
community development, among other purposes. A limitation of that
option, according to CPRA officials, is that coordinating funding from
multiple sources could be administratively challenging and could
require dedicated staff to identify programs, assess whether projects
meet program funding criteria, apply for funds, and ensure program
requirements are met.
Alternatively, one strength of creating a new federal funding
source, such as a federal financial assistance program that could
provide loans or grants or a climate infrastructure bank, is that it
could encourage cross-sector projects designed to achieve benefits in
multiple sectors. For example, according to one stakeholder, such a
funding source could allow experts from multiple sectors--such as
infrastructure, housing, transportation, and health--to collaborate on
projects, leading to more creative, comprehensive approaches to enhance
community resilience. However, such a new funding source would have to
be created, which would require congressional authorization.
In addition, we identified opportunities to increase the climate
resilience impact of federal funding options based on our review of our
past work, related reports, an international standard, and the
Louisiana and Canadian examples, as well as interviews with
stakeholders:
Using both existing and new funding options. Several
stakeholders told us that using both funding options--multiple,
existing federal programs with varied purposes and a new funding source
for high-priority climate resilience projects--in a strategic,
coordinated way could help increase the impact of federal investment.
Two stakeholders told us that in practice, multiple, existing federal
funding sources that are not specific to climate resilience could be
coordinated to fund projects when their purposes and rules align and
adequate funding is available. A funding source specifically for
climate resilience could be used to fund proposed projects when no
related program exists or when existing programs do not have sufficient
funding available, according to these and other stakeholders.
Helping ensure adequate and consistent funding. Several
stakeholders we interviewed identified the need for adequate and
consistent funding to implement high-priority climate resilience
projects. For example, according to one stakeholder we interviewed,
inconsistent, inadequate funding makes it difficult to complete large-
scale projects and can lead to additional costs if significant delays
occur during which existing work deteriorates. In addition to adequate
and consistent funding, funding options should be designed to
accommodate long-term projects since high-priority climate resilience
projects can take multiple years to design and implement, according to
two stakeholders we interviewed.
Encouraging nonfederal investment. Several stakeholders
we interviewed told us that the federal government could use a federal
climate resilience investment effort to encourage nonfederal investment
in high-priority climate resilience projects, thereby increasing the
impact of federal investment. For example, several stakeholders
identified the importance of a cost-share component so that funding
recipients are invested in a project's success. Canada's DMAF
encourages nonfederal investment by partially funding projects of
national significance and requiring different levels of cost-share from
funding recipients, ranging from 25 percent for indigenous recipients
to 75 percent for private-sector and other for-profit recipients.
Several stakeholders also identified potential funding mechanisms--for
example, public-private partnerships and loan guarantees--that could
leverage federal dollars to encourage additional investment in climate
resilience projects by nonfederal entities, including the private
sector.
Encouraging complementary resilience activities. To
increase the impact of federal investment in climate resilience, a
federal investment effort presents an opportunity to encourage
complementary resilience activities by nonfederal actors such as
states, localities, and private-sector partners, based on interviews
with several stakeholders, the Canadian example, and reports we
reviewed. For example, this could include establishing conditions that
funding recipients must meet in exchange for receiving federal funding.
Alternatively, the federal government could use incentives (e.g.,
providing greater federal cost-share or giving additional preference in
the project prioritization process) to encourage complementary
resilience activities by nonfederal actors. Our Disaster Resilience
Framework states that incentives can make long-term, forward-looking
risk reduction investments more viable and attractive among competing
priorities.\12\ The federal government could use these conditions and
incentives to encourage several types of complementary resilience
activities by nonfederal actors. For example, the federal government
could encourage the use and enforcement of building codes that require
stronger risk-reduction measures. In addition, a federal investment
effort could provide an opportunity to encourage communities to limit
or prohibit development in high-risk areas to minimize risks to people
and assets exposed to future climate hazards. One example of this would
be through zoning regulations. Another stakeholder suggested that
communities receiving federal funding for resilience projects should be
adequately insured against future climate risks so they have a
potential source of funding for rebuilding in the event of a disaster.
---------------------------------------------------------------------------
\12\ GAO-20-100SP.
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Allowing funds to be used at various stages of project
development. Several stakeholders suggested that federal funds be used
for multiple stages of project development--such as project design,
implementation, or monitoring--to increase the impact of federal funds.
For example, two stakeholders we interviewed told us that resilience
projects can require significant amounts of design work to develop an
implementable and effective project concept and that making funds
available for project design could improve the quality of project
proposals, thereby maximizing the impact of federal funds. In addition
to providing federal funds for project design, one stakeholder
suggested making federal funding available to measure project outcomes
(e.g., how effectively projects increased resilience) to improve future
decisions by both the federal government and others making resilience
investments.
Based on the findings of our October 2019 report, we recommended
that Congress consider establishing a federal organizational
arrangement to periodically identify and prioritize climate resilience
projects for federal investment. Such an arrangement could be designed
using the six key steps for prioritizing climate resilience investments
and the opportunities to increase the climate resilience impact of
federal funding options that we identified in our report.
Chairwoman Castor, Ranking Member Graves, and Members of the Select
Committee, this completes my prepared statement. I would be pleased to
respond to any questions that you may have at this time.
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Colleen M. Candrl, Kendall Childers, Steven Cohen, Christopher Curry,
Cindy Gilbert, Kathryn Godfrey, Holly Halifax, Carol Henn, Susan
Irving, Richard Johnson, Gwendolyn Kirby, Joe Maher, Gregory Marchand,
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Ms. Castor. Thank you very much.
Mr. Burns, you are recognized for 5 minutes.
STATEMENT OF DAMON BURNS
Mr. Burns. Thank you, Chair Castor, and thank you, Ranking
Member Graves and the rest of the members of the committee.
Thank you for having me here today.
My name is Damon Burns. I represent the Finance Authority
of New Orleans. I am also here speaking on behalf of the City
of New Orleans to just talk a little bit about climate
resilience and how a disaster can really affect the community.
So, in New Orleans, we have a history of being innovative.
Usually, people don't think of New Orleans and innovation, but
we have been innovative over time. And we find ourselves in a
position again in the need to be innovative. This time, it is
about climate, it is about protecting our environment.
And I think everyone here knows the story of Katrina and
all of the subsequent disasters that have happened since. Well,
I want to talk a little bit about what has happened to our
agency, in particular, and some of the things that we need to
do to protect other cities so that they don't find themselves
in the same situation that we are dealing with in New Orleans.
So, in 2015, the city of New Orleans decided to adopt a
climate resilience plan. And that climate resilience plan has
three basic goals: one, educate the community and embrace
climate resilience; two, physically transform New Orleans; and,
three, create opportunity for underinvested communities. That
is a very simple plan, and we think that plan can apply across
state lines, across city lines.
It is really important that we make those investments
today. And the Finance Authority of New Orleans is a prime
example, living example, of what can happen. So, after
Hurricane Katrina, the Finance Authority found itself in a
situation where we needed to reinvent ourselves. And we are 14
years removed, and we are still coming up with that reinvention
process.
So what happened to us? We invested over $650 million in
New Orleans over three decades. We served over 7,000 families,
particularly first-time homebuyers. We helped them get into
their first homes. And that is important because, in many
cases, we are the only opportunity people have to have a chance
to access capital. The traditional banking network or system is
not so favorable to certain communities, underinvested
communities. So the Finance Authority of New Orleans plays that
role, where we create access.
Well, after Katrina, our access was cut off. We lost $350
million off our balance sheet overnight. That is 95 percent of
our balance sheet, almost overnight. And that is a direct
result of us not having resilient infrastructure in our
neighborhood so that people can stay when disaster strikes. So
if the infrastructure isn't resilient, people have to move out
almost immediately. And that happened to us.
So we still find ourselves in a position of recovery. So,
moving forward, we have decided to make all of our investments
climate resilient. It is not just about providing access to
capital anymore; it is also providing access to capital that
allows us to protect our communities and protect our
neighborhoods.
So there are some things that we are doing on the ground,
such as providing green mortgages to homeowners and developers.
And a green mortgage is nothing more than a regular mortgage,
but it has funding built in so that a family can put in
permeable pavement, they can put in solar panels into their
home, they can make that home more energy-efficient.
So we have to stretch ourselves in order to do these
things. And, frankly, the system is not set up for us to do
this on a continuous basis, on a sustainable basis. We are
doing what we can with what we have, but we honestly need more.
So I want to give you a few points that I think are
important for other cities and things that we can adopt to make
sure that other cities are protected and prepared.
Number one, everyone has to be educated. There needs to be
common education across state lines so everyone understands the
importance and the risk of climate change. Also, it would help
to create a common market or create a marketplace for cities
that are investing in climate resilience. Because that doesn't
exist today, or it exists with little capacity. So we need to
grow the capacity of that industry.
Secondly, there is no big difference between a green bond
and a regular municipal bond today. So we need to encourage and
incentivize cities to invest in more climate resilience-based
bonds, and we need to incentivize investors to buy more climate
resilience bonds.
Also, tax credits. Ninety percent of the capital projects
in this country are already funded in the municipal bond
market. Cities can only take on so much more debt. So it is
important that we create other types of creative financial
solutions that cities can leverage and bring in private capital
so that we can actually make these investments.
Also, leveraging the Federal Government's resources as an
insurer. We need insurance products to make these programs run,
not just debt and equity, but insurance is a third leg of the
financing solution that we need to have in the cities.
And last is create an opportunity where it doesn't exist.
Many communities have been destroyed through underinvestment,
through racial injustice, et cetera. Climate resilience is an
opportunity to reinvest in those communities. So someone has to
put on those solar panels, someone has to put in that permeable
pavement, someone has to make all those improvements. It is an
opportunity for us to put those communities back to work and to
use climate resilience as a chance to reinvest in communities
where they haven't received any investments.
And in closing, I would like to say that, you know, for us
on the ground in New Orleans, climate change is not an opinion;
it is actually the law of the universe. And we think that the
climate will always evolve, and we have to evolve with it. And
our basic stance at this point is, if we don't care of the
Earth, the Earth won't take care of us.
So we are doing everything that we can with the investments
that we have, but I urge you to do more and recreate the system
so that we can have a more climate resilient America.
Thank you.
[The statement of Mr. Burns follows:]
Statement of Mr. Damon Burns, Chief Executive Officer,
Finance Authority of New Orleans, New Orleans, Louisiana on
``Creating a Climate Resilient America:
Smart Finance for Strong Communities''
U.S. House of Representatives Select Committee on the Climate Crisis
December 11th, 2019
Chairwoman Castor, Ranking Member Graves and Committee Members, my
name is Damon Burns and I am from New Orleans, Louisiana. I am the
Chief Executive Officer of The Finance Authority of New Orleans; a
green housing and development finance agency that has invested over
$650 million into New Orleans since 1978. My organization serves all
New Orleanians under the leadership of our Honorable Mayor LaToya
Cantrell. Our long-term vision is to create a climate resilient New
Orleans that provides all communities with a decent quality of life. It
is an honor and privilege to be here with you today and discuss
``Creating a Climate Resilient America: Smart Finance for Strong
Communities''.
Now the youthful age of 301, New Orleans, Louisiana is older than
United States itself. New Orleans has always played an important role
in the development of America. Be it international trade, mortgage
backed securities, jazz, gumbo, infrastructure or bounce music: New
Orleans has given this world some of its best innovations. Prior to
being known as New Orleans, the land on which it sits was occupied by
an advanced civilization of mound builders that mastered the art of
living along the Mississippi River. The spirit of these ancient ``New
Orleanians'' lives on because we must now re-master the art of living
with water and other climate risks.
In New Orleans, our first-hand experience suggests that climate
change is not an opinion: it is the Law of the Universe and we must
heed Mother Nature's warnings. New Orleans and surrounding communities
face climate challenges unlike any city in the United States. In our
view, climate resiliency is a necessity as opposed to a political
stance or market ideology. It is the price to pay for being a water
dependent civilization. With sea levels potentially rising over 10 feet
within the next 100 years and aging infrastructure, New Orleans must be
proactive about ensuring a sustainable future for generations.
The Finance Authority of New Orleans is a living example of the
potential social and economic damage that climate events can inflict
upon communities. Prior to Hurricane Katrina in 2005, FANO invested
more than $650 million into New Orleans over the course of 25 years
benefiting more than 7,000 families. However, FANO's balance sheet
assets declined by over $350 million or 95% In the aftermath of
Hurricane Katrina due to inadequate levees and infrastructure leading
to families being displaced. The Great Recession immediately followed
Hurricane Katrina and placed more stress on our financial condition and
ability to invest in New Orleans. Such a significant loss of community
wealth is damaging in an impoverished city like New Orleans. For many
members of our community, FANO is their only access to capital for
homeownership.
In 2015, the City of New Orleans established a Climate Resilience
Plan, which includes (1) embracing environmental change, (2) physically
transforming New Orleans to increase resiliency against climate events,
and (3) creating new job opportunities for distressed communities. In
response, The Finance Authority of New Orleans has updated its business
model to execute the ``green'' financing component of the City's
Climate Resilience Plan. Beginning in 2020, FANO will provide capital
to homeowners, businesses, and government agencies to stimulate the
development of green homes, green infrastructure, stormwater systems,
renewable energy, and other investments that advance the City's Climate
Resilience Plan. These projects must utilize commercially viable
techniques and technologies, such as permeable pavement, rain barrels,
solar panels, and clean energy transportation. FANO is also
prioritizing support for minority owned businesses and early stage
technology companies developing solutions to help cities mitigate the
effects of climate change. Our goal is to invest $500 million into the
New Orleans economy over the next 5 years. Large corporations are being
engaged to play a role as well. We need all hands-on deck if we are
going to protect New Orleans from the next Hurricane Katrina.
New Orleans' story represents Earth's constantly evolving climate
reality and underscores the lack of investment America has made into
critical infrastructure to protect our cities. Members of the United
States Congress must take decisive action to ensure a climate protected
future. As of today, America is not prepared for this new climate
reality. Provided below are suggested actions from the perspective of
local governments for making America more climate resilient:
educate america about the realities of climate change
Encourage cities to adopt common Climate Resiliency
plans. Solutions for climate resiliency will vary per community.
Nonetheless, cities should be encouraged to develop plans that can
translate to other communities. Doing so will aid communication between
cities and help markets develop around the economic activity that will
stem from cities investing in climate resilience.
Inform the public that climate change is a reality and
must be taken seriously. The Federal Government has the responsibility
to ensure public safety. Climate change is a public safety issue above
all. Education campaigns targeting households and businesses should be
launched in collaboration with cities and state governments.
physically transform america by investing in climate resilience
Incentive municipal bond investors to buy ``green
bonds''. There has been interest in municipal green bonds, but issuance
in 2018 was only $4.9 billion or about 1.5% of total municipal bond
issuance for 2018. There is currently minimal financial incentive for
investors to buy green bonds. Green bonds must be placed into a special
category to encourage investors to make the transition so that we can
physically transform America. Some are investing in green bonds because
of internal investment policy mandates but greater stimulation is
needed to make the municipal bond market fully adopt green bonds.
Reestablish the renewable energy tax investment credit
program and create tax credits for green infrastructure. Cities are
maxed out on municipal debt. The municipal bond market currently funds
approximately 90% of all capital projects. Cities do not have the
ability to sell equity to investors as corporations do, which limits
their market-based sources of funds to invest in climate resiliency.
There is simply not enough capital to fund the trillions of dollars of
infrastructure investment America needs to upgrade itself. Robust tax
credit programs for renewable energy and green infrastructure projects
would stimulate more public private partnerships and job creation.
Create a market for affordable climate resiliency
insurance. Government insurance is a critical component of capital
markets. Many households and businesses are unable to access capital
markets without government insurance products. Insurance for climate
resiliency is no different. Insurance products tailored for climate
resiliency need to be created to bring efficiency and access to the
marketplace.
create opportunity for underinvested communities
Use climate resiliency as an opportunity to rebuild
damaged communities. Many American communities are broken from a
history of disinvestment and racial injustice. America has the
opportunity to recreate its cities in a fair and equitable manner. The
Federal Government should create incentives for minority and women
owned businesses to play a key role in the physical transformation of
America. So called ``Black'' communities around the country are at an
even higher risk of failure due to the digital technology transition we
are currently experiencing. Many of the jobs these families depend on
for an additional paycheck will be obsolete in the coming years
resulting in more poverty. Investing in minority businesses and
communities is critical to the long-term success of America. Failing to
do so will prevent America from reaching its full potential.
Climate change is an issue this entire country should rally around
regardless of race or political affiliation. America has the capacity
to lead Earth in a new direction. Ignoring the power of Mother Nature
does nothing but put us all at risk of displacement. The climate of
Earth will constantly evolve, and we must evolve with it. America has a
chance to recreate itself by investing in climate resilience. America
also has the opportunity to rebuild communities that it damaged through
enslavement, racial segregation and private prisons. If America is to
stand the test of time, it must rebuild in a fair and equitable way. No
community should be left behind, and no community should be given an
unfair advantage over the other if we are to reach the apex of our
potential.
Thank you for the opportunity to communicate the climate resiliency
needs of New Orleans and other cities facing similar issues. I urge you
to take actions that place all of America's people in a position to
live a decent quality of life. If we do not take care of the Earth, the
Earth will not take care of us.
Ms. Castor. Very good.
Mr. Wemple, you are recognized for 5 minutes.
STATEMENT OF CHARLES WEMPLE
Mr. Wemple. Chair Castor, Ranking Member Graves, and
members of the committee, thank you for the opportunity to
speak to you today about the important role smart finance and
economic resiliency play in creating strong communities.
I am actually thrilled to be here today to talk about the
importance of economic resiliency and financial strength. This
topic is very important, and it rarely gets the attention and
consideration that it merits. It is often overshadowed by
infrastructure discussions and housing needs after natural
disasters. And it is something that ties all of our resiliency
together, is by looking at our economies and how to make things
stronger.
My name is Chuck Wemple. I am the Executive Director of the
Houston-Galveston Area Council. We are a Regional Planning
Commission comprised of 13 counties and 110 cities along the
upper Texas coast. We are home to about 7 million people,
covering about 12,000 square miles, and we are prone to natural
disasters, primarily flooding and hurricanes. And understanding
our economic resilience is very important as we look to a
future of more intense weather, rapid growth, and changing
economies.
The Houston-Galveston Area Council conducted some of the
earliest work in our region on the effects of environmental
trends on our quality of life and economy; the intersection of
transportation, economy, housing, and the environment in
creating healthy communities; and also a comprehensive economic
development strategy, which includes resiliency as a primary
goal. I have included links to these reports in my written
testimony, and I hope you find them helpful as you move
forward.
We have also played a key role in the recovery of our
communities after natural disasters, most notably starting with
Hurricane Rita, followed by Ike, and most recently Harvey. And
I come to you today with the perspective of about 14 years'
experience working for large cities, small towns, suburban
neighborhoods, and rural counties to help them understand their
vulnerabilities in natural disasters and economic shocks, which
is often overlooked at great expense, in my opinion--we focus a
lot on natural disasters, but the economic shocks are equally
as important--and how to better be prepared to bounce back when
they are knocked off their feet.
Each time we encounter a disaster, we learn a bit more. We
learn how we might be able to make processes more streamlined
and more nimble. Harvey changed the conversation for us,
though. For the first time, we are hearing in our region a
discussion of true regional, multijurisdictional projects, that
one entity, no matter how large, cannot fix the root cause of
the problem that is in front of us in our region.
So we are starting to lead efforts, mostly brought together
by our chief elected officials in urban counties and rural
counties, to come together and better understand what those
vulnerabilities are, face those risks head-on, and then come up
with ways to develop kind of an investment portfolio approach
to how they might be able to meet those needs.
I would like to give you one quick example, if I could. We
have a large water body called Cedar Bayou which drains from
north to south in our region. It forms the boundary between a
large urban county and two rural counties. And, in the past,
those counties and cities had been competing against each other
for different types of mitigation and disaster recovery
funding. And they came together, and we helped lead the
conversation to better understand what is truly happening, what
is causing the flooding, and what are the most important
projects to be funded. And so now there is a discussion of
maybe the best project is not in an individual's jurisdiction
but it might make a difference if it is somewhere else, could
make their community better and take away some of that
competition of funding.
We have also seen programs in our area that are Federal
that tend to be small and nimble programs, such as the Economic
Development Administration and the U.S. Department of
Agriculture. They tend to be able to get money out very quickly
after a disaster and also in advance.
The common characteristic between both those programs for
us is they have a strong regional presence, they are closely
connected to the communities, and they have some autonomy in
being able to make quick funding decisions. And, as a result,
they are able to bring help and relief very quickly to our
communities.
Lastly, back in the area that I represent in the State of
Texas, we are not going to wait on seeing how the Federal
funding comes down to us. Our State legislature took action in
our most recent legislative session to allocate $3 billion out
of our $10 billion rainy-day fund to put towards recovery and
mitigation as well; also, made loans and grants available; and,
also, training requirements for elected officials and others as
well.
I would just wrap up my testimony by saying that, if we
focus on three primary things, we can create stronger, more
resilient communities: first, working before the next disaster
strikes to understand our vulnerabilities; facing our risks
head-on; and then also developing a smart finance framework.
What is missing is an overarching coordination event to
help bring all of these different types of funding together to
fund projects. So, instead of chasing individual funding
streams, if we can have great projects that make our
communities more resilient and understand our economy, then we
can find ways to fund them.
And, with that, I will conclude my testimony. Thank you.
[The statement of Mr. Wemple follows:]
Testimony--Chuck Wemple, Houston-Galveston Area Council
Hearing of the House Select Committee on the Climate Crisis
``Creating a Climate Resilient America:
Smart Finance for Strong Communities''
Wednesday, December 11, 2019
Chair Castor, Ranking Member Graves, and members of the Committee,
thank you for the opportunity to speak with you today about the
important roles smart finance and economic resiliency play in creating
strong communities. I'm thrilled to be here today to talk about the
importance of economic resiliency and financial strength. This
important topic rarely gets the attention and consideration it merits
and is often overshadowed by infrastructure and housing needs after
natural disasters.
My name is Chuck Wemple and I am the Executive Director of the
Houston-Galveston Area Council, a regional planning commission
comprised of 13 counties and 110 cities along the upper Texas Coast.
Our region is home to nearly 7 million people, covers over 12,000
square miles, and prone to natural disasters--primarily flooding and
hurricanes. Understanding our economic resilience is very important as
we look to a future of intense weather, rapid growth, and changing
economies.
Our agency works with local communities to solve regional problems
and improve quality of life for our residents--from workforce
development to public safety, homeland security, transportation,
economic development, services for the elderly, hazard mitigation and
more. The Houston-Galveston Area Council has conducted some of the
earliest work in our region on the effects of environment trends on our
quality of life and economy, the intersection of transportation,
economy, housing, and the environment in creating healthy communities,
and a comprehensive economic development strategy which includes
resiliency as a primary goal. I've included links to the reports of
these efforts at the end of this document. We've also played a key role
in the recovery of our communities after natural disasters; most
notably Hurricanes Rita, Ike, and Harvey.
I come to you today with the perspective of over 14-years of
experience working with large cities, small towns, suburban
neighborhoods, and rural counties, to help them understand their
vulnerabilities to natural disasters and economic shocks and how to be
better prepared and bounce back when knocked off their feet.
After assisting over 500 households repair and rebuild their homes,
working with scores of small businesses to re-establish their
enterprises, allocating over $2 billion in federal disaster recovery
funds, and crafting locally-driven hazard mitigation plans which list
the needs of our communities in the hundreds of projects, I can tell
you without reservation that understanding our vulnerabilities, facing
our risks head on, and investing in resilient communities is critical
to our future.
So how can we all work together to make our communities stronger
and more resilient? One--Be strategic with future funding for resilient
and strong communities. Two--Lean in to hard conversations and face our
risks head on. Three--Consider all sources of funding--federal, state,
local, and private--as an investment portfolio to strengthen our
communities.
I want to be clear that the solution is not as simple as increasing
funding. By planning in advance of the next disaster and better
understanding the variety of funding available from federal, state, and
local sources, we can spend the money already available better and more
efficiently. Any future increases should be linked to up-front
planning, focused on planning and projects that strengthen communities
in advance of major setbacks, and in the case of federal funding,
programmed through streamlined processes that quickly move money from
the federal government into the communities in need of help.
A critical part of strengthening our communities is to lean in to
hard conversations about what could make our communities more resilient
and turn challenges into opportunities. These hard conversations tend
to be centered on impacts to local economies. I'll give three examples
of where the Houston-Galveston Area Council is working with our local
governments to start some of these conversations.
We are coordinating a multijurisdictional project along Cedar Bayou
a major waterbody in our region which affects three counties, multiple
cities, rural areas, maritime shipping and the petrochemical industry.
Cedar Bayou received some of the highest amounts of rainfall during
Hurricane Harvey and produced massive flooding that impacted
transportation networks, freight and goods movement, homes, and
businesses. The first phase of our work used local knowledge to
prioritize projects and guide future investment of federal, state, and
local funding. The second phase includes forming a multijurisdictional
alliance to pursue federal and state funding and a special district to
produce local revenue. The most challenging discussions and most
innovative thinking have centered on potential limits on economic
development and raising local funding. What could have been a roadblock
has become an opportunity by exploring new ideas for fees and
incentives rather than an increased tax on land owners. One example is
the possibility of a flood-mitigation bank which could be used to
compensate a local government that may experience reduced tax revenue
due to converting land to detention rather than pursuing traditional
economic development opportunities. It is important to know that this
example of upfront planning and collaboration is funded by local
dollars and intended to provide a mechanism for strategic investment of
future federal and state funds.
In the coming year, the Houston-Galveston Area Council will use a
similar approach to gauge local interest in a regional voluntary-
conservation plan which could provide a triple bottom line win of
protecting natural resources and communities, reducing reliance on
federal disaster recovery funds, and diversify our regional economy by
increasing recreational opportunities for our residents. This project
is locally funded. Results of this work may also be transferrable to
help local communities offset the cost associated with a reduced tax
base resulting from home buy out programs and other land use
restrictions.
Quality housing is directly linked to a community's economic
resiliency. One of the small cities along our coast moved quickly to
get city services restored after Hurricane Ike. The city also benefited
from a strong group of local businesses who rapidly reopened their
restaurants, shops, and storefronts. While everything seemed set for a
speedy recovery, one important piece was missing. The workers. Many of
the employees had been displaced and the city did not have adequate
workforce housing nearby. The city suffered a worker shortage which
slowed recovery. As a region we work to build off these experiences to
better understand our vulnerabilities and seek solutions.
Based on our experience working on economic development
initiatives, job and population forecasts, and disaster recovery
housing experience, the Houston-Galveston Area Council recently
conducted the region's first housing assessment to identify local
challenges to addressing unmet housing needs. One of the key findings
of the work included identifying opportunities for local governments to
work with the private sector and community nonprofits to increase
access to workforce housing. Housing discussions can be challenging in
many cities and towns but providing economic context and conducting the
work at a regional level result in positive outcomes and strengthen our
communities. As with the two previous studies, this work was locally
funded.
One of the first steps in considering the suite of funds available
to increase community resilience as a portfolio is to develop a
framework that either coordinates or consolidates the various funding
streams.
When communities are hit by a disaster, they are highly focused on
immediate critical needs like clearing roads, restoring water and sewer
service and removing debris and they simply don't have the time to
figure out where to find resources offered by many federal agencies.
Immediately after a disaster strikes, the Houston-Galveston Area
Council launches a webpage providing access to the various agencies
offering funding. This list is dynamic and grows and shrinks as
programs start and end and can easily top a dozen federal and state
agencies offering multiple programs. This effort focuses on recovery
and as a result is reactionary rather than anticipatory.
Our regional resiliency efforts are beginning to bring together
opportunities from federal, state, and local funds and we will begin
providing a funding toolbox to our members. The State of Texas took
action during the most recent legislative session to open opportunities
to use our reserve fund and create other loan and grant opportunities
to help communities become more resilient and prepared. One particular
area of private funding that holds promise for helping create more
resilient residents is our new work with banks and lenders to leverage
community reinvestment act funds in some of our most needy communities.
These efforts will increase the fiscal strength of individuals by
teaching financial literacy, improving creditworthiness, and providing
access to financing. And we are exploring the viability of other
mechanisms which could induce more private sector investment in
mitigation and resiliency, including the possibility of franchise/
concession funding for maintenance and operation of infrastructure and
mitigation banks.
Regional planning commissions and federal agencies both have roles
in coordinating resilience funding. The regional US Department of
Commerce Economic Development Administration (EDA) office which covers
Texas and the four surrounding states has taken the lead and partnered
with us to host integration meetings which bring our communities and a
host of other federal agencies together to make connections and help
our communities see federal opportunities as a portfolio rather than as
single agencies.
Other federal models also exist and could be modified FEMA's ESF-14
and the current National Framework could be good starting points but
could use stronger economic resiliency components.
We have observed that programs with relatively small allocations of
funds that are also closely connected to local communities and have
strong partnerships with local leaders and regional planning
commissions are able to react nimbly and quickly deliver funds which
brings hope to communities and speeds recovery. Two great examples
include the US Department of Commerce Economic Development
Administration (EDA) and the US Department of Agriculture. Both have
strong district/regional presence, know local conditions and needs, and
are empowered by their headquarters outside of Washington. Both
programs exhibit accountability and flexibility to address local needs
and priorities. One program of particular note from USDA is the
Community Facilities Program which offers a mix of direct loans, grants
and loan guarantees to assist rural communities in expanding,
constructing, or improving community assets like fire and rescue
stations, hospitals and clinics, public buildings and transportation
infrastructure. This program increases economic competitiveness and
resiliency.
To summarize, the conventional approach of mitigation and recovery
takes too long and has substantial impediments that limit our ability
to create truly resilient communities. We can create stronger more
resilient communities by focusing in three primary tasks. One--working
before the next disaster strikes to understand our vulnerabilities.
Two--facing our risks head on and identifying projects that mitigate
these risks. Three, developing a smart finance framework that
coordinates all sources of funding--federal, state, local, and
private--as an investment portfolio to strengthen our communities. Look
to regional planning commissions and local governments for exciting
examples that can help illustrate how this is currently working and can
be expanded. Nimble federal programs that rapidly provide funding to
support the implementation of resiliency projects will be critical for
our efforts to be successful.
Together we can take a holistic approach to addressing our current
challenges and making our communities better prepared to adapt to any
changes that might come their way. The Houston-Galveston Area Council
stands ready to serve. This concludes my testimony and I look forward
to answering any questions you may have.
Links to reports referenced on page 1 of this testimony.
Regional Economic Resilience Plan, http: // www.h - gac.com /
gulf - coast - economic -development-district/documents/
Regional%20Economic%20Resilience%20Plan.pdf
Comprehensive Economic Development Strategy, http: // www.h -
gac.com / gulf -
coast-economic-development - district / documents / Draft - 2018 -
2022 - GCEDD - CEDS - to -EDA.pdf
Our Great Region 2040 Sustainable Communities Plan, http://
www.ourregion.org/download.html
Foresight Panel on Environmental Effects, http://www.h-gac.com/
foresight-panel-on-environmental-effects/documents/
foresight_panel_on_environmental_effects&low
bar;
report.pdf
Ms. Castor. Terrific. Thank you.
Ms. McFadden, you are recognized for 5 minutes.
STATEMENT OF MARION MCFADDEN
Ms. McFadden. Chair Castor, Ranking Member Graves, and
other esteemed members of the committee, thank you so much for
the opportunity to appear before you today to present my
recommendations.
I am the Senior Vice President for Public Policy and a
Senior Advisor for Resilience at Enterprise Community Partners.
And, as you heard, I previously spent 15 years working on
disaster recovery and infrastructure programs at HUD.
Enterprise is a nonprofit organization that for more than
35 years has been helping build the capacity in both the public
and private sectors so that capital can be deployed more
effectively. We have invested more than $43 billion in 585,000
homes across all 50 States.
Currently, Enterprise is supporting rebuilding and
resilience initiatives in Puerto Rico, the United States Virgin
Islands, Florida, Georgia, Texas, Louisiana, North Carolina,
D.C., New York, Michigan, Illinois, and California.
At Enterprise, we don't just take it on faith that
incorporating resilience measures will save money. We saw that
firsthand in 2017 when a heavy rainfall flooded New Orleans and
deluged the Faubourg Lafitte homes that Enterprise and
Providence Community Housing rebuilt after Hurricane Katrina.
Residents found their streets waist-deep in water, but our
development escaped harm because the homes had been built an
additional 2 feet above the base flood elevation, taking into
consideration the possibility of future flooding. Our efforts
to do what was within our own control paid off.
Large-scale damage caused by wildfires, floods, tornadoes,
and hurricanes has become the new normal. I commend the House
and particularly this committee for embracing the need to
better prepare communities. You have put your money where your
mouth is by making funds available for resilience. I
particularly thank you for authorizing FEMA to set aside 6
percent of disaster relief funds for hazard mitigation
projects.
Despite growing interest and commitment though, we are not
moving at the necessary pace of change. I would like to offer
six brief recommendations.
The first is that you charge Federal agencies with working
together to provide the best available risk data to communities
in a manner that is easily usable at the address or block
level.
No private company, nonprofit institution, or local
government is better suited than the U.S. Government to make
accurate climate science and risk data available to the public.
In creating risk data, it is important to include the unique
needs of elders, people with disability, people with limited
English proficiency, and people of modest means.
The Federal Government alone has the power to shine a light
on the risk we face, but it will not need to act alone once
adequate information is shared.
My second recommendation is to develop a Federal framework
for rating resilient infrastructure. This would help cities
design, build, and operate infrastructure to ensure its long-
term viability and to deliver other environmental, economic,
and social benefits.
Thirdly, I recommend that Congress improve and harmonize
Federal infrastructure requirements. Private investment in
Federal infrastructure projects is hampered by inefficiencies
and lack of certainty on the front end. In particular, Congress
should require the executive branch to improve, simplify, and
standardize its benefit-cost analysis methods and prioritize
mitigation investments in communities with the highest
vulnerability to hazards.
My fourth recommendation is to ensure that all federally
funded infrastructure projects, and not just disaster recovery
projects, are built to resilience standards. Given our
knowledge of what is to come, we must stop investing taxpayer
dollars in projects that don't plan for reasonably foreseeable
risks.
Last year, Congress wisely approved a one-time infusion of
nearly $16 billion to the Community Development Block Grant
Program for resilience activities, such as risk assessments and
planning, infrastructure upgrades, building retrofits, and buy-
outs. Funds were allocated only to those places that have had
the worst disasters in recent years. My fifth recommendation is
that Congress permanently expand the annual CDBG program to
allow communities nationwide to embrace a proactive approach to
mitigation and resilience.
My final recommendation is to further explore partnering
with the private sector to ensure robust investment in
resilient infrastructure through the creation of a national
infrastructure bank. The use of private financing for
infrastructure projects in the United States is not as
substantial as it should be. The infrastructure bank should
provide funds to complement, not replace, existing Federal
programs.
In conclusion, in order to spur the level of investment and
focus that is required to combat the looming threats of climate
change, we must act boldly. I commend the committee for your
commitment to examining how to best create a climate resilient
America. Working collaboratively across all levels of
government, the public sector, and nonprofit institutions, we
can build resilient futures.
Thank you, and I look forward to answering any questions
you may have.
[The statement of Ms. McFadden follows:]
Written Testimony of Marion Mollegen McFadden, Senior Vice President,
Public Policy & Senior Advisor, Resilience Enterprise Community
Partners
Before the Select Committee on the Climate Crisis,
United States House of Representatives
December 11, 2019
Hearing on Creating a Climate Resilient America:
Smart Finance for Strong Communities
Introduction
Chair Castor, Ranking Member Graves, and members of the House
Select Committee on the Climate Crisis, thank you for the opportunity
to submit this testimony. I am the Senior Vice President for Public
Policy and Senior Advisor for Resilience at Enterprise Community
Partners. Enterprise is a nonprofit organization committed to making
well-designed homes affordable so that communities can thrive. We have
eleven regional offices and in the past several years have worked in
more than 425 communities nationwide. For more than 35 years,
Enterprise has been committed to helping communities break down silos
and build organizational capacity in both the public and private
sectors so that funding is deployed more effectively. We have invested
more than $43 billion in capital to help create or preserve 585,000
homes in all 50 states plus the District of Columbia and Puerto Rico.
We have been working with disaster-impacted communities for well over a
decade. This testimony is informed by work we did from 2017-2018 with
more than two dozen American cities participating in the 100 Resilient
Cities network, which was pioneered by The Rockefeller Foundation.
Before working at Enterprise, I spent more than 15 years working on
disaster recovery and infrastructure grants and loan guarantees at the
U.S. Department of Housing and Urban Development (HUD). During that
time, I served as Deputy Assistant Secretary for Grant Programs,
overseeing billions of dollars in infrastructure programs, and served
as Chief Operating Officer and Acting Executive Director of the
Hurricane Sandy Rebuilding Task Force, overseeing development of an
innovative $1 billion flood control design competition. I have learned
that while no two disasters are alike, the people whose lives, homes,
and jobs are affected by the worst disasters all need the same thing--a
safe and secure future, starting with safe places to live, work, get an
education, and receive medical care. And they need reliable routes to
get to where to where they need to be.
Currently Enterprise is supporting rebuilding and resilience
initiatives in Puerto Rico, the United States Virgin Islands, Florida,
Georgia, Texas, Louisiana, North Carolina, D.C., New York, Michigan,
Illinois, and California. Enterprise provides a spectrum of resources
in the form of capital, programs, and policy both before and after
disasters occur. We are not first responders, but rather act as an
intermediary supporting emergency preparedness, mitigation planning,
and long-term disaster recovery. Through our nationwide work as a
Community Development Financial Institution (CDFI), a syndicator of
Low-Income Housing Tax Credits, and investor of other public and
private funds, we have built a track record of successfully investing
capital to build more resilient futures.
At Enterprise, we don't just take it on faith that incorporating
resilience measures saves money. We saw that firsthand in 2017 when a
very heavy rainfall flooded New Orleans and tested the new Faubourg-
Lafitte development which Enterprise and Providence Community Housing
rebuilt after Hurricane Katrina. The deluge overwhelmed the city's
drainage systems. Residents found their streets waist-deep in water,
but our development escaped harm. Water did not breach the first floor
of our property because the homes had been built two feet above the
base flood elevation, taking into consideration the possibility of
future flooding. These homes were unharmed, so residents could quickly
get back to their daily lives once the water receded, and there was no
need to make a claim on the development's National Flood Insurance
Program policy. Better underground infrastructure is needed throughout
the city to allow water to drain more quickly, but our efforts to do
what was within our own control to minimize risk paid off.
I have learned that resilience isn't just about a building or road
or sewer system, but also about drawing from the inherent strength in
communities to help everyone prepare for and move forward in the face
of our new climate future. As Members of this Committee well know, the
challenges of our new climate are many, so Enterprise has identified
the risk of our changing climate and its disproportionate effect on
lower income communities and communities of color as an existential
threat that we must address. We stand committed to deploying existing
and new solutions that are cohesive and equitable, ideally harnessing
both public and private will and capital to keep people and property
safe from harm.
The Challenges of our New Climate
The increasing intensity of natural disasters all over the United
States has placed a significant strain on communities and local
economies. Since 1980, the U.S. has endured 254 weather and climate
disasters where the overall cost reached or exceed $1 billion--totaling
more than $1.7 trillion in damage. The frequency of these devasting
storms is only increasing, and already this year there have been ten
weather and climate disaster events with losses above $1 billion each.
2019 marks the fifth consecutive year in which 10 or more billion-
dollar disaster have impacted the U.S.\1\ Large-scale damage caused by
wildfires, floods, tornadoes, and hurricanes has become the new normal.
A recent report by the Trump Administration forecasted that this trend
will continue in the coming years and decades. The Fourth National
Climate Assessment stated that not only will our changing climate
exacerbate existing vulnerabilities across the United States but that
it will also present growing challenges to human health and safety,
quality of life, and the rate of economic growth.\2\
---------------------------------------------------------------------------
\1\ NOAA National Centers for Environmental Information (NCEI) U.S.
Billion-Dollar Weather and Climate Disasters (2019). https://
www.ncdc.noaa.gov/billions/
\2\ Jay, A., D.R. Reidmiller, C.W. Avery, D. Barrie, B.J. DeAngelo,
A. Dave, M. Dzaugis, M. Kolian, K.L.M. Lewis, K. Reeves, and D. Winner,
2018: Overview. In Impacts, Risks, and Adaptation in the United States:
Fourth National Climate Assessment, Volume II [Reidmiller, D.R., C.W.
Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. Maycock, and
B.C. Stewart (eds.)]. U.S. Global Change Research Program, Washington,
DC, USA.
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While disasters are agnostic to whether a neighborhood is high or
low income, low-income households and vulnerable communities generally
pay the highest price when a major disaster strikes.\3\ Low-income
populations and people of color are less likely to have the resources
necessary to prepare for a storm and they are more likely to lack
savings before disasters strike. Evacuating alone can be too costly for
many, given that fewer than 40 percent of Americans have enough savings
to cover a $1,000 emergency.\4\ Socially vulnerable populations are
more likely to live in physically vulnerable areas that have greater
natural hazard risks due to historical, economic, and political factors
and thus cost less than homes in safer locations. Lower-quality homes
are less stable in the high winds of hurricanes and tornados, posing
additional risk to individuals and families who cannot afford to pay
for something safer. Experience shows that natural disasters exacerbate
wealth inequality.
---------------------------------------------------------------------------
\3\ Krause, Eleanor, Reeves, Richard V. ``Hurricanes hit the poor
the hardest.'' September 18, 2017. https://www.brookings.edu/blog/
social - mobility- memos /2017/09/18/hurricanes - hit - the - poor-
the-hardest/
\4\ Blatchford, Laurel. ``Climate Change Disproportionately Affects
Low-Income Communi-
ties.'' December 7, 2018. https: // www.enterprisecommunity.org /
blog / 2018 / 12 / climate - change - disproportionately-affectslow-
income-communities
---------------------------------------------------------------------------
I commend the Congress and particularly this Committee for
embracing the need to better prepare communities and making funds
available for resilience, adaptation and mitigation. In February 2018,
Congress approved a one-time of infusion of nearly $16 billion for HUD
to prepare communities for future disasters. The HUD Community
Development Block Grant (CDBG)-Mitigation program will fund disaster
mitigation activities such as mitigation planning, infrastructure
upgrades, building retrofits, and strategic relocation (also known as
buyouts). Funds were allocated to places that have had the worst
disasters recently, including California, Florida, Georgia, Missouri,
Texas, West Virginia, Puerto Rico and the U.S. Virgin Islands. As with
the annual CDBG program, the CDBG-Mitigation program appropriately
gives flexibility to state and local governments to choose from a menu
of eligible activities to suit their local needs. Mitigation measures
have been proven to more than pay for themselves. A FEMA-endorsed study
by the National Institute of Building Science found that taxpayers save
an average of $6 in future disaster recovery costs for every dollar
spent on hazard mitigation.\5\ I further commend the Congress for
authorizing FEMA, through the Disaster Recovery Reform Act, to set
aside six percent of Disaster Relief Fund dollars for hazard mitigation
projects.
---------------------------------------------------------------------------
\5\ National Institute of Building Science, https://www.nibs.org/
page/mitigationsaves
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As a nation we are becoming more aware of our physical and
financial exposure to impacts of the changing climate, with about six
in ten Americans at least ``somewhat worried'' and more than one in
five Americans (23%) ``very worried'' about global warming.\6\ However
our worry has not been matched with proactive lifestyle, zoning, and
building code changes. All over the country, people are confused about
what they can do to protect themselves and their communities from
what's to come. Forward-thinking cities, including more than two dozen
American cities that participated in The Rockefeller Foundation's 100
Resilient Cities initiatives, have been working hard to design
community-scale plans for protection, setting an excellent model for
similarly-situated cities. But still as a nation we are underinvesting
in preparing for the impacts of extreme weather events. Despite growing
interest and commitment, our housing, infrastructure, and regions are
not mitigating or adapting at the necessary pace of change. And
inefficiencies in programs which are tolerable in normal times
exacerbate post-disaster challenges.
---------------------------------------------------------------------------
\6\ https: // climatecommunication.yale.edu / publications/climate-
change-in-the-american-mind-april-2019/4/
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In the extreme, the lack of physical infrastructure and natural
systems necessary to withstand extreme weather conditions has led to
displacement of entire communities of people, from Alaska to Louisiana
to Puerto Rico. And we have a lack of user-friendly available data that
can educate our communities on hazard risk, so we continue to build
infrastructure that is not designed to withstand what's to come.
This lack of investment and forethought leaves our communities
vulnerable. As a result, the Federal Government is often called upon to
authorize large supplemental appropriations to help communities rebuild
homes and apartment buildings, reopen hospitals and schools, and cover
uninsured losses for small businesses. According to the Government
Accountability Office (GAO), since 2005 the federal government has
spent at least $450 billion on disaster assistance. The unprecedented
levels of funding for disaster recovery must be spent with an eye to
the future. And to improve efficiency, communities should be encouraged
to align their federally-mandated planning processes, so that, for
example, a community's hazard mitigation plan aligns with its
consolidated plan and disaster recovery plan.
Local governments rely on partnerships, in many cases with the
Federal Government, to make their communities safer and more resilient.
Federal grants, loans, loan guarantees, and other federally-backed
sources such as mortgage insurance and flood insurance help cities
finance and protect critical investments. Federal regulations and
guidance set minimum requirements and provide information to guide
cities' decision-making and use of federal dollars. And federally
generated data inform project planning and implementation. The Federal
Government has done an admirable job of investing in states' and
cities' projects and programs, providing some data and technical
expertise and regulating private and utility actors. Communities deeply
benefit from and value these investments, but they often come with
challenges. For instance, while cities rely on federal funds for
affordable housing, infrastructure, and small businesses growth, all
are authorized by different laws. Each funding source and corresponding
law comes with a unique set of regulations, and this complexity can
create barriers for cities and counties trying to use federal funding
efficiently for integrated and effective solutions. In addition, while
the federal data on flood plains is invaluable to cities, in many
places, these data are out of date, lacking a reflection of changes to
the built environment and climate conditions. And all communities
suffer from the lack of a single source of data identifying all climate
risks.
Through this testimony I recommend that Congress:
1. Charge Federal agencies with working together to provide the
best available risk data to communities in a manner that is easily
useable at the address or block level
2. Develop a Federal framework for rating resilient infrastructure
3. Improve and harmonize federal infrastructure requirements
4. Ensure that all federally-funded infrastructure projects--not
just disaster recovery projects--are built to resilience standards
5. Increase HUD Community Development Block Grant (CDBG) program
funding and mandate that a portion of the funds be used to identify and
address local risks
6. Create a National Infrastructure Bank to further private
investments in resilience
Recommendations:
Charge Federal agencies with working together to provide the best
available risk data to communities in a manner that is easily useable
at the address or block level
No private company, nonprofit institution, or local government is
better suited than the U.S. Government to make accurate climate science
and risk data available to the public. Further, in the absence of
publicly available, uniformly applied metrics evaluating communities,
individual jurisdictions and companies could suffer a ``first-mover
disadvantage'' for disclosing risks while their counterparts do not.\7\
The Federal Government alone has the power to shine a light on the risk
we face, but it will not need to act alone once adequate information is
shared. In creating risk data, it is important to include the unique
needs of elders, people with disabilities and dependence on medical
equipment, people with limited English proficiency, and people of
modest means.
---------------------------------------------------------------------------
\7\ See Alice C. Hill & Leonardo Martinez-Diaz, Building a
Resilient Tomorrow, Oxford University Press 2020, p. 61.
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Develop a Federal framework for rating resilient infrastructure
Federal agencies should develop a framework for rating and
evaluating resilient infrastructure design. The framework should serve
as a best practice guide to help cities design, build and operate
infrastructure to ensure its long-term viability and to deliver other
environmental, economic, and social benefits, where feasible. Once a
rating system is designed, federal agencies should then condition the
receipt of federal funds on projects meeting a required resilience
rating.
A rating framework would help agencies ensure that federally funded
projects are evaluated consistently, and that federal investments are
yielding resilient infrastructure systems. This consistency could, over
the long term, create more efficiency and reduce operating and
insurance costs, as well as mitigate risk. And predictability would
remove a current obstacle to private investment.
The rating system should:
Include metrics to help decision makers evaluate the
factors of infrastructure resilience.
Establish risk tolerance guidelines and help project
designers incorporate risk mitigation.
Address both future shocks and stresses, including sea
level rise, extreme heat and changing precipitation patterns.
Help design and develop infrastructure investments that
provide multiple benefits, including projects that deliver improvements
to infrastructure and the environment (including promoting reliable
communication and mobility; ensuring continuity of critical services;
providing and enhancing natural and man-made assets); health and well-
being (including air quality and water quality); economy and society
(including financial systems and job opportunities); leadership and
strategy (including engaging and empowering community stakeholders).
Include guidance on how cities can rehabilitate or
incorporate resilience into existing infrastructure or integrate
resilience into asset management planning.
Complement other sustainability rating systems that
address specific infrastructure types (e.g. roads or ports) or can be
incorporated into them (as the Water Environment Federation has done
with Envision).
Help decision makers prioritize community needs to ensure
that investments made in infrastructure systems are efficient,
equitable and risk-based.
Require compliance with local, state and federal law.
Congress should direct the National Institute of Standards and
Technology to work with federal agencies, the U.S. Global Change
Research Program and other private sector standard-developing
organizations, to develop or identify certifications for resilient
infrastructure that also pinpoint a consistent and authoritative set of
climate information to be used.
Once a framework is identified, Congress should require its use in
appropriation bills, such as the water resources developments acts,
military appropriations and transportation reauthorization bills.
Congress should require agencies to prioritize projects that
achieve higher resilience scores when awarding funds for infrastructure
projects through discretionary competitive grant programs such as the
Transportation Investment Generating Economic Recovery (TIGER) as well
as for United States Army Corps of Engineers and Department of Defense
infrastructure work.
Improve and harmonize federal infrastructure requirements
Private investment in federal infrastructure projects is hampered
by inefficiencies and lack of certainty on the front end. Many federal
funding programs require applicants to demonstrate that their project
is ``cost-effective'' by submitting a complex benefit-cost analysis
(BCA, also known as a benefit-cost ratio or BCR) showing how the
benefits of the project outweigh the costs. It is prudent to ensure
that taxpayer dollars are invested in projects that will deliver
maximum results. However, a traditional BCA imposes unnecessary
transaction costs and decreases government efficiency and innovation at
both the federal and local levels. This problem is typical for both
routine and disaster recovery projects. Current agency practices for
comparing benefits to costs are flawed and the complexity and
uncertainties discourage leveraging federal funds with private
investments.
There is no harmonization between departments and agencies such as
the Departments of Transportation, Homeland Security, Commerce and the
U.S. Army Corps of Engineers. Each federal agency has its own processes
and formulas for developing a BCA. This system creates burdens on both
federal agency staff and the cities applying for federal funds, because
applicants are saddled with additional transaction costs by having to
prepare different BCAs for different agencies, often for the same
project. Typical agency BCA methods do not properly account for
increasing potential for loss in consideration of future risks, such as
impacts of climate change. BCA methods do not adequately allow project
applicants to capture a project's economic, social and environmental
co-benefits, including ecosystem services, or adequately quantify
externalities of either cost or benefit. The discount rate is a rate
set by the Office of Management and Budget (OMB) to determine the
``present value'' of the investment being made, using the concept of
the time value of money to normalize when benefits are realized.
However, it generally does not accurately account for future risk, or
for projects like wetland restoration that appreciate over time.
The complexity of the BCA process for many federal grants
discourages smaller communities with fewer staff and less resources
from applying for competitive grants such as FEMA's Pre-Disaster
Mitigation program grants. Rather than investing in technical
assistance to teach smaller communities to navigate varying and complex
approaches across agencies, Congress should require the Executive
Branch to improve, simplify, and harmonize its BCA methods.
Congress should commission a National Academies study to develop a
process for harmonizing benefit-cost analyses across agencies and
departments that grant funds or regulate infrastructure and other
development projects. This group would be charged with evaluating
current agency BCA processes and identifying options for aligning these
processes in ways that account for the full life-cycle benefits of a
project, future disaster risks to the project, as well as the full
range of social, economic, and environmental co-benefits. An explicit
goal of the endeavor should be facilitating the use of natural
infrastructure projects such as restoration of wetlands which will have
low costs to operate and maintain over time. The National Academies,
Department of Transportation, Economic Development Agency, and Housing
and Urban Development should engage the public, including finance,
insurance, engineering and construction, utility, credit rating, and
institutional investor communities, in an open dialogue about best
practices for conducting BCA for projects with a long design life.
These discussions should address calculations of future risks and
benefits, given projected climate and other changes.
The Congressional Budget Office should ensure that project budget
analysis incorporates risk mitigation's impact on future savings to
infrastructure and communities.
Ensure that all federally-funded infrastructure projects--not just
disaster recovery projects--are built to resilience standards
Agencies such as HUD and FEMA provide assistance for resilient
rebuilding to communities that have survived the worst. Those grant
funds come with standards for resilient rebuilding, such as increased
elevation of homes and critical facilities located in the 100 year
flood plain, in consideration of future and not just current risk.
However, the regular, non-disaster-specific Federal resources available
for building roads, bridges, schools, hospitals, nursing homes,
affordable housing, and other public facilities do not consistently
require a consideration of flood risk over the course of the useful
life of infrastructure. Every year, flooding is the costliest type of
disaster damage.\8\ We should stop investing taxpayer dollars in
projects that don't plan for reasonably foreseeable risks. Congress
should direct funded agencies to reinstitute the Federal Flood Risk
Management Standards and develop other cross-cutting resilience
requirements.
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\8\ Lightbody, Laura. ``Flooding Disasters Cost Billions in 2016.''
February, 2017. https://www. pewtrusts.org/en/research-and-analysis/
articles/2017/02/01/flooding-disasters-cost-billions-in-2016
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Proactively combating the impact of these disasters and building
towards a more resilient future begins with building codes. In January
2019, a study by the National Institute of Building Sciences found that
up-to-date model building codes save $11 for every $1 invested through
earthquake, flood and wind mitigation benefits.\9\ FEMA's current
Strategic Plan highlights the fundamental role that up-to-date building
codes have to play in disaster resilience and the promotion of public
safety and property protection. However, more than two-thirds of
communities facing hazard risk use out-of-date codes. If the Federal
government is going to continue to supply state and local jurisdictions
with aid to rebuild, they should require new repairs and construction
to be done to the latest model building code. Additionally, where
funding is going to new construction or substantial rehabilitation,
they should meet green building certification, such as my
organization's Enterprise Green Criteria.
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\9\ National Institute of Building Science, https://www.nibs.org/
page/mitigationsaves
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The benefits of consistent codes are clear and will ensure that we
have safer and more resilient homes, schools, workplaces, and childcare
and healthcare facilities. Additionally, uniform adoption of modern
model building codes is one of the easiest, most cost-effective ways to
address our nation's affordable housing shortage. While it is vital
that we tackle affordable housing challenges for American families,
building cheap homes that will collapse in the face of any event, from
minor flooding to historic is not the way to do it. All families
deserve well-built homes they can afford, as well as the peace of mind
that comes with knowing that their home can survive a natural disaster
without bankrupting them. To protect families across the country, it's
vital that we take these steps.
Increase Housing and Urban Development Community Development Block
Grant (CDBG) program funding and mandate that a portion of the funds be
used to identify and address local risks
CDBG provides essential annual resources to more than 1,200 cities,
counties, states and rural areas nationwide. This formula allocation
program is a crucial source of funding for a wide range of local
projects, including funding infrastructure improvements, filling
funding gaps in the development of affordable housing, and supporting
code enforcement and other essential municipal services that have a
real impact on the quality of a city's housing stock. For more than 40
years, CDBG has served as the cornerstone of the federal government's
commitment to partnering with states and local governments to
strengthen our nation's communities and improve the quality of life for
low- and moderate-income Americans.
CDBG can be a powerful tool for advancing the resilience and
adaptive capacity necessary to address future climate risks. The
program already has a successful track record of being able to leverage
funds. Based on reported leveraging data from 2018, there were 1,358
public infrastructure and public improvements activities recorded.
These activities were funded with more than $390 million of CDBG funds
and leveraged $563 million additional funds. Congress should expand the
annual CDBG program, making additional capital available every year for
activities now eligible under the one-time CDBG-Mitigation program.
This funding should require that grantees adhere to forward-facing
building codes, to ensure that new projects are up to the latest
standards. This will allow communities nationwide to embrace a
proactive approach to mitigation and resilience regardless of whether
or not they have already been affected by a major disaster.
The program should identify and expedite activities known to
mitigate risk:
Explicitly state that eligible hazard mitigation projects
include all activities permitted in FEMA's Hazard Mitigation Grant
Program and Pre-Disaster Mitigation Program.
Create catalogue of best practice mitigation strategies
states can pre-approve and preauthorize for grantees.
Maintain properties that have flooded multiple times as
open space in perpetuity and deed restricted or used productively for
water management or similar mitigation purposes.
Encourage grantees to use funds for green infrastructure
projects or other nonstructural, nature-based flood protections that
are known to adapt to as well as mitigate flood risk and provide
multiple co-benefits. Also allow funds to be used for operation and
maintenance of green infrastructure projects.
Allow and encourage other activities that reduce risk and
benefit LMI communities.
Maintain a continuous feedback loop on whether programs are
sufficient to meet community needs with ongoing CDBG-DR community
participation requirements:
Direct grantees to conduct a minimum number of public
hearings to maximize community input and buy-in and for all major
projects and programs.
Direct grantees to create advisory bodies of affected
populations (including homeowners participating in buy-out programs,
small business owners receiving loans for their properties, residents
and businesses living near infrastructure projects with $50 million or
more of federal funding, etc.) to consider ongoing decisions and input
as programs and projects progress. Grantees should produce periodic
reports detailing why proposed changes were accepted or not accepted.
Prioritize use of taxpayer dollars for projects that both reduce risk
and deliver other needed benefits for low- and moderate-income
communities.
Require that mitigation projects deliver a benefit greater than
risk reduction alone:
Encourage CDBG-eligible activities that produce risk
reduction along with other co-benefits to low-income communities.
Prioritize mitigation investments in communities with the
highest vulnerability to hazards.
Create a National Infrastructure Bank to further private
investments in resilience
The Federal Government should further explore partnering with the
private sector to ensure robust investment in resilient infrastructure
investment through the creation of a National Infrastructure Bank. The
use of private financing for infrastructure projects in the United
States is not as substantial as it should be, in part because financing
requires a revenue stream to pay back the loan. Infrastructure service
fee structures do not account for the full cost of service, repair and
maintenance and thus often private investors do not deem these projects
to be financially prudent.
By creating a National Infrastructure Bank (NIB), Congress could
enable private sector investment to rehabilitate and enhance the
resilience of infrastructure. Infrastructure banks are often
capitalized by public sector dollars, with public sector money then
lent to state and local governments at below-market rates to attract
private loans or deployed via loan guarantees for infrastructure
projects that provide a clear public benefit. Revenues generated from
the projects are then used to repay the loan and recapitalize the bank
to fund other projects. To ensure that projects receiving NIB financing
are meeting the resilience needs of cities, legislation creating a NIB
should be designed with the following principles in mind. The NIB
should: provide funds to complement, not replace, existing federal
programs such as the Highway Trust Fund and State Revolving Funds and
provide financing options for a variety of infrastructure projects
(e.g., energy, water, transportation, communications).
The NIB could bring a great deal of value to many cities. For
example, New York City's partially funded $3.7 billion coastal
protection plan calls for flood-protection infrastructure and ecosystem
restoration to enhance the city's flood resilience.\10\ Berkeley's 5-
year, $30 million initiative calls for street improvements and green
infrastructure to address storm water management and other resilience
objectives.\11\ These investments would not only help these cities
enhance their resilience, but also create job opportunities and
increased economic investment into local city economies by supporting
goods procurement and support for service.\12\
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\10\ 100 Resilient Cities Resilience Strategy accessed from
Georgetown Climate Center Adaptation Clearinghouse: http://
www.adaptationclearinghouse.org/networks/100rc-resilience-advisory-
council/resilience-strategies.htm
\11\ This initiative was passed by voters in 2012. http://
www.ci.berkeley.ca.us/City_Manager/Press_Releases/2014/2014-08-
28_Measure_M_spurs_the_paving_of_streets _ throughout _ Berkeley. aspx
\12\
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Congress should create and capitalize a NIB to facilitate private
financing for projects aimed at rehabilitating and modernizing
infrastructure. The expertise of leading infrastructure agencies should
be sought in the design of the NIB to ensure that NIB financing can be
blended with other public-sector dollars and financing mechanisms.
Departments with leading roles in infrastructure funding and financing
include the Department of Transportation, US Department of Agriculture
with investments in rural communities, Department of Defense,
Department of Energy and the Environmental Protection Agency.
Conclusion
In order to spur the level of investment and focus that is required
to combat the looming threats of climate change, we must act boldly. I
commend the House Select Committee on the Climate Crisis for your
commitment to examining how to best create a climate resilient America
and thank you for seeking my organization's input. Working
collaboratively across all levels of government, the private sector,
and nonprofit institutions, we can build resilient futures.
Ms. Castor. Well, thanks to all of our witnesses for your
very substantive recommendations to the committee.
At this time, I will recognize Ms. Bonamici for 5 minutes.
Ms. Bonamici. Thank you very much, Chair Castor and Ranking
Member Graves.
And thank you to the witnesses for this important
conversation, for bringing your expertise.
I am from the Pacific Northwest, where we know, of course,
climate change isn't just a distant threat; it is a reality.
And we know the science is clear, and we know the consequences
of inaction are serious. If we don't take steps to help our
communities prepare for the climate crisis, the effects will
continue to disproportionately affect frontline communities.
In the Pacific Northwest, this includes Tribes that have
treaty rights and a deep cultural connection to our natural
resources but also economically disadvantaged communities and
communities of color. So I am glad that some of this hearing
today is focused on making vulnerable communities a priority.
The Portland Harbor Superfund Site in my home State of
Oregon was added to the EPA's National Priorities List in
December of 2000. I will say that again: December of 2000. The
site is extremely complex. It involves hundreds of contaminants
from industrial activities, more than 150 potentially
responsible parties, and thousands of acres along the
Willamette River, which passes through Oregon's most populous
city.
And, last month, the GAO released a new report finding that
60 percent of Superfund sites are threatened by the climate
crisis. And we also know from a 2017 report from the EPA that
the communities near Superfund sites across the country
disproportionately affect people of color, low-income
households, and individuals with less than a high school
education.
So, Mr. Gaffigan--did I say your name right? Was I close?
Mr. Gaffigan. You were right on.
Ms. Bonamici. In your testimony, you mentioned that the
Federal Government does not currently strategically identify
and prioritize projects to address significant climate risks.
And as our committee works on recommendations to direct
agencies like the EPA to consider climate resilience when
making investments in programs like the recovery of Superfund
sites, how can we incentivize Federal agencies to become more
responsive to the needs of frontline communities?
Mr. Gaffigan. Yeah, I think it is an excellent question.
And, as you know, in that report, what we pointed out with EPA
is they lack an alignment of their goals to the risk associated
with climate change. And, you know, again, it starts with that
vision and those goals.
And we think, not only at EPA but in terms of a broader
strategy, whatever goals and vision can be set aside that
identifies the needs of those communities--those communities
that are in position to not have the resources to apply for
grants, those communities need to be helped and can be
targeted, but we don't have goals around that. And I think that
would be something Congress can think about, in terms of
targeting help for these communities.
Ms. Bonamici. Thank you so much.
And, Mr. Gaffigan again but also Ms. McFadden, you each
mentioned the concept of a climate infrastructure bank to help
finance resilient infrastructure projects. And I frequently
hear from elected officials in the Pacific Northwest about the
need for additional opportunities to leverage local and Federal
dollars in transportation and infrastructure projects.
So how could the structure of a climate infrastructure bank
complement existing Federal funding opportunities? And then,
also, how should it be structured to make sure that it is
valuable for both large, urban areas but also smaller, rural
communities?
And I will start with Ms. McFadden and then go to Mr.
Gaffigan.
Ms. McFadden. Thank you so much for the question.
Of course, an infrastructure bank won't work for every type
of infrastructure project. There needs to be some ability to
pay back a loan. But for those projects where there is a
reasonable opportunity to find that payback, it is going to be
important to subsidize capital and make sure that that is
available for communities.
Ms. Bonamici. Thank you.
Mr. Gaffigan. And I would just add that, you know, in terms
of the Federal Government, I talked about the Federal
Government being in a position to provide information,
integration, and incentives. And I think that incentive piece
is the part that really can help here, by incentivizing local
communities with incentives to take complementary types of
action, such as the latest building codes and those sorts of
things. So I think that is the role the Federal Government can
play when it comes to incentives.
Ms. Bonamici. Thank you very much.
I am going to yield back the balance of my time to the
chair. Thank you.
Ms. Castor. Mr. Palmer, you are recognized for 5 minutes.
Mr. Palmer. Thank you, Madam Chairman.
I want to talk about a couple of things here, and
particularly with the GAO. I tell people that GAO is my
favorite organization, but I am a nerd, so that speaks volumes
about my personality, I guess.
Mr. Gaffigan. Well, we are all nerds too, so that is
probably why.
Mr. Palmer. That is why we get along so well.
Mr. Graves. Say all that behind you all's back.
Mr. Gaffigan. No, they usually say it in front of us.
Mr. Palmer. No, I work for a couple engineering companies,
and I tell people engineers are people who are good at math but
don't have enough personality to be an accountant. No offense
to the accountants in the room.
But one of the things--and we actually had a discussion
about this in one of the hearings that I chaired on the
Oversight Committee, is about the failure of various Federal
agencies that are listed as high-risk to follow through and
make the necessary corrections.
And I think in your testimony you point out that the GAO
has highlighted the Federal agencies related to climate change
and the risk and practically nothing has been done. Is that
correct?
Mr. Gaffigan. We have a long way to go. It is a hard task,
I will say that, because they are trying to coordinate
activities across a very crosscutting type of issue, and we are
not set up for that.
And, again, I will go back to--the one theme here is that
there hasn't been a strategic vision established. So a lot of
agencies are interested in helping, but a lot of times we hear,
``That is not my job,'' or, ``I don't have the authority,'' and
that is the thing that needs to be fixed.
Mr. Palmer. But you also identify in your testimony, or
mention in your testimony, about the misuse of funds, the lack
of--for lack of a better word, the lack of transparency and
accountability, which has been a problem throughout the Federal
agencies, particularly in respect to improper payments and that
sort of thing, which brings me to what Mr. Burns mentioned
about Katrina.
There is a long history there of bad decisions and misspent
money that you really don't address in your report but I think
should be addressed, in respect to what happened with Katrina,
that was avoidable. There were literally hundreds of millions
of dollars that were misspent--ill-conceived projects to
protect the city from, at a minimum, a Category 3 hurricane;
money that was spent to put in access to casinos. The Corps of
Engineers wanted to put in locks to protect the city from
flooding from Lake Pontchartrain; instead, contracts were let
to raise the levees, which were in--the foundations were
inadequate. The piling wasn't deep enough. And those pilings
collapsed, and that is what flooded many of the streets.
I think that has to be part of what we address in
resiliency, is we got to make sure that when we do the
studies--and the Corps of Engineers is--Lord knows they are
famous for long, long studies. But once we reach a conclusion
on design, it needs to be implemented.
Mr. Gaffigan. Yeah. And I think it goes back, again, to not
having a clear vision of what these projects are about. And
when you don't have that, it is wide open and you get the kind
of things that you are talking about, where there is not clear
direction on what this money is for.
Mr. Palmer. Well, the point that I have tried to make in
this committee time and time again is that the climate is
changing. We spend most of our time talking about
CO2, but if you look at the geological record, we
know the climate is changing. We are going to have some major
issues to have to deal with, whether it is storms, whether it
is flooding, whether it is drought. And I think we really need
to be preparing for that.
You know, I went back and I looked at some of the data on
the intensity of storms. The deadliest storm in the history of
the United States was in your area, 1900, the Galveston
hurricane. If you adjusted the damages that were reported at
that time--and I am not sure those estimates were accurate--in
today's dollars, that would have been well over a billion
dollars, I think, and somewhere between 6,000 and 12,000 people
killed.
We try to attribute these storms to climate change. I think
the International Panel on Climate Change report has indicated
that there is no connection; at least, they haven't found a
connection to that. The bottom line, though, is that the
climate is changing, and we are going to have to deal with it.
And my perspective, Madam Chairman, is that when we get
these studies, when we know what the design ought to be, we
have got to have some ability to have some oversight to make
sure that what needs to be done actually gets done and the
money is spent where it needs to be spent.
Thank you for giving me an extra 15 seconds. I yield back.
Ms. Castor. Mr. Huffman, you are recognized for 5 minutes.
Mr. Huffman. Well, thank you, Madam Chair.
And thanks to this terrific panel. I appreciate the
opportunity here to examine the ways that existing resiliency
policies are failing to meet the needs especially of the
frontline communities, disadvantaged communities. So thank you
for giving us a chance to focus on that as well.
As this committee develops its recommendations on how to
increase resiliency, I think it is very important that the
policies that we support have to work for all Americans. In
addition to assuring that our policies work for all Americans,
we have got to ensure that they are forward-looking. And I am
really pleased that that was kind of a common theme we heard
from all of our panelists here today.
I know climate change is not only happening, it is going to
get worse in the years ahead. In my home state of California,
we now have a year-round fire season, a fire season that
visited my district pretty brutally just a few months ago.
And with warmer climates, more intense storms, atmospheric
rivers that have made it a very wet December so far in northern
California, more heavy and intense rainfall, all of this is
going to contribute to more extreme and intense flooding as
well as greater frequency of superstorms.
And so, as we rework our policies aiming for resiliency in
rebuilding communities after disasters, I think it is not only
important that we not rebuild to the last disaster, that we
rebuild maybe even better than to the next disaster. Let's look
ahead to the next decade's or the next generation's disasters
while we are at it. And I appreciate that this seemed to be
something that all of our panelists were interested in doing.
Mr. Gaffigan, I want to start with you. I was interested in
your testimony that recommended--your GAO recommendation that
the Federal Government achieve an organizing arrangement to
identify and prioritize climate risk.
But that was pretty vague. And so I guess I want to ask you
to----
Mr. Gaffigan. Yeah.
Mr. Huffman [continuing]. Be a little more specific,
sharpen that. What does it look like? Are you talking about a
new Federal agency, or are you talking about new rules of the
road for all Federal agencies so that we can identify and
prioritize climate risk?
Mr. Gaffigan. Yeah, and it was worded intentionally vague,
because we want to give you guys the wide option to make these
policy decisions. But, in our report, we talk about some
particular options. And I think it can look in different ways.
It could look like a task force. It could look like a new
agency. We could take advantage of some of the current working
groups. I think there is a wide range of options there.
I think the most important thing is to designate who is in
charge. And that can be a working group. That could be a lead
Federal agency. It just needs to be done. We have tried in this
work over climate change over the past 10 years to focus
recommendations towards the Executive Office of the President,
thinking that might be where it is at.
But Executive Orders don't last in the long term. So we
think, in the long term, there needs to be some Congressional
direction, you know, of course, in concert with the Executive
branch, to decide on what is the best path forward. But
identifying that authority and making sure it has the authority
to lead, that is what is missing.
Mr. Huffman. Do you have any thoughts on whether this would
be a coordinating, like at the CEQ-like authority?
Mr. Gaffigan. It would totally have to be an integrating
body, because there are so many ongoing programs, and you want
to take advantage of the ongoing programs. And you can
mainstream some of these thoughts into those existing programs.
But what is missing is everything else that gets left.
For example, we have programs that focus on infrastructure
like wastewater, drinking water, roads, but we don't have
something that sort of tries to head off the kind of disaster
relief that we have to provide for private homeowners. In the
flooding arena, the Flood Insurance Program is not solvent.
So those are the areas that need to be covered. There needs
to be some entity that focuses on climate resilience in those
other areas.
Mr. Huffman. Okay.
Ms. McFadden, you testified that you recommend developing a
Federal framework for rating resilient infrastructures. I was
interested in that.
And coming from fire-prone northern California, where our
electricity transmission infrastructure seems to be sparking
fires every time the wind blows, I wondered if you could
envision electricity transmission infrastructure being part of
a rating policy like that.
Ms. McFadden. I would hope that it would be, but I can't
offer a specific recommendation around that. I understand from
my visits to northern California that sometimes it is as much
as clearing brush can make a big difference in the safety----
Mr. Huffman. Although that is not what happened this time.
Ms. McFadden. No. And I would----
Mr. Huffman. This time, it was a jumper in between a pole
and a high-capacity line that failed and dropped to the ground.
And I didn't realize that these devices are so energized that
they can spark fires because of molten metal that can get
spewed when these things fail.
Ms. McFadden. I would defer to NIST to determine the
appropriate people to bring to the table, but I would hope that
there would be a solution there.
Mr. Huffman. Thank you.
And thanks, Madam Chair. I yield back.
Ms. Castor. Mrs. Miller, you are recognized for 5 minutes.
Mrs. Miller. Thank you, Chair Castor and Ranking Member
Graves.
And thank you to all you all for being here today.
Given our discussions in this committee, all of us have
experienced some kind of natural disaster in our states. When a
disaster strikes, it is our state and local communities who are
left to pick up the pieces and rebuild.
Ensuring that communities not only have financing but also
have the knowledge on how to access the financing and the tools
to cut through bureaucracy is crucial. The time after a natural
disaster is so stressful for any community, and any time
cutting through red tape should be minimized. Because you know
what it is like when you are always waiting.
Mr. Wemple, how have communities within the Houston-
Galveston Area Council utilized public-private partnerships?
Mr. Wemple. Thank you, Mrs. Miller.
I would say that public-private partnerships in our region
traditionally have been more around economic development and
commercial development, but there are some very recent
examples, one that we are working on, that looks at resiliency.
There is a community in one of our counties that has a
railroad that comes through it, and it is actually called the
``candy cane'' because it is shaped like a candy cane when it
comes through. It causes a lot of delays, people trying to get
around. It affects their evacuation going forward and actually
has hampered their economic development activities because
businesses don't want to relocate there because it is such an
issue.
They are teaming with our state Department of
Transportation and also the railroad companies and other
private investors to look at rerouting that entire candy cane
part to where it will be better for the community to help with
their evacuation, to help with their economic development, and
actually open up a part of that county to future economic
development along the rail.
And, as a bonus, once that is done, the county will have a
better idea of where they can install large, regional-scale
detention facilities for future floods.
And so that would not happen without that private-sector
investment from the railroads and others. So that is one
example I would offer up.
Mrs. Miller. A majority of communities within my district
are very rural. What are some of the best practices you have
seen in the HGAC to access financing after a disaster?
Mr. Wemple. One other thing that we work with through our
regional council--I have communities that are highly urban,
suburban, and rural. We place a lot of emphasis on helping our
rural communities because they tend to lack capacity to be able
to navigate some of these issues.
And one of the thing we first do at Houston-Galveston Area
Council after a disaster or when funding becomes available is
we put a big list, have an umbrella, here is all the funding
that is available, and we actually provide technical assistance
to those communities to help them navigate that structure.
That is something that could be considered. I mentioned an
investment portfolio approach earlier to looking at resiliency.
And having a body or at least an initiative that provided more
flexibility across those funds would be very helpful.
What we oftentimes hear in our rural areas, ``We have a
great project that needs to be funded.'' ``Well, we can't fund
that because that is an Army Corps of Engineers project,'' or,
``We can't fund that because it is a FEMA project.'' Why can't
we just fund the project and find a way to help that community
be more resilient?
So one thing that could be very helpful would be to work to
increase the flexibility and look at the spectrum of funding
that is supporting more resilient communities and great
projects as opposed to falling within those silos. That would
help a lot with rural communities.
But mostly our technical assistance efforts are one thing
that we pride ourselves on.
Mrs. Miller. What about pre-disaster mitigation?
Mr. Wemple. Pre-disaster mitigation. We also help our rural
counties by conducting the FEMA-required hazard mitigation
plans at the county level. For our rural counties, we just
completed a recent cycle on that as well. So the Regional
Planning Commission is very much a partner in helping provide
that technical assistance and work for our rural communities.
Mrs. Miller. Okay.
My next questions are for Mr. Burns and Mr. Wemple.
Recovering from a disaster depletes capital from communities.
How can communities rebuild capital for future events?
Mr. Burns. I think the important thing to do is what we
talked about earlier, which is encouraging private capital to
come in. The capital just doesn't exist on the public side, and
it won't exist without an economy to generate it.
So I think creating space for private capital to come in.
Also, foundations have been more interested in public finance.
It is really on all-hands-on-deck approach that I think needs
to be taken by all levels of government.
Mrs. Miller. Thank you.
Mr. Wemple. One thing that we saw after Hurricane Ike is
our coastal communities in our NASA area, home to Mission
Control, were heavily damaged. They all bonded together to try
and help pursue disaster recovery funding and mitigation
funding. Right after that happened, NASA announced that the
human space flight program, shuttle program, would be shutting
down, and that was a huge economic shock.
And so one thing that we are encouraging our communities to
do is to diversify their economies so they can better withstand
economic shocks. And, also, that will allow them to generate
more sales tax revenue, more business revenue, property tax as
well.
We have also had communities take a close look at their own
vulnerability. One of our coastal communities found out real
quickly that they were overly dependent on sales tax for their
revenue to do their operations and general services. Because
they were shut down for 2 months after the storm, and when you
don't have any businesses coming in, any sales tax revenue, you
see a reduction in your loss of ability to be able to fund
those operations. So----
Mrs. Miller. What did they do?
Mr. Wemple. What they have done is they have started to
have the discussion of increasing property tax. That is not
always a comfortable conversation, one of those hard
conversations that is out there. And then also just making sure
that they have the ability to pre-position contracts to take on
debt if they need to, as well, to meet future needs.
Mrs. Miller. Thank you.
Ms. Castor. Mr. Neguse, down there at the end, welcome. You
are recognized for 5 minutes.
Mr. Neguse. Thank you, Madam Chair. And apologies for the
delay in my arrival.
And I would be remiss if I didn't first say a note of
gratitude for the leadership of our chair, who did an
incredible job in assisting in leading a delegation to the U.N.
COP25 conference just last week, and a number of the committee
members who had an opportunity to attend, and to see the way in
which the leader of this committee was received by so many of
our international partners as we engaged in topics, including
the one that is the subject of today's hearing----
Ms. Castor. Thank you. You can have 6 or 7 minutes.
Mr. Neguse. I appreciate that, Chairwoman.
This topic is incredibly important for me. My district, as
some of you know, I represent northern Colorado--Boulder, Fort
Collins, the Central Mountains--the most beautiful
Congressional district in the United States, in my view. And,
in 2013, our district experienced historic flooding, which some
of you may be familiar with, along the Front Range of our
state, which destroyed more than 1,800 buildings, mostly
residential homes, and damaged at least 16,000 more, in
addition to destroying 120 bridges and many miles of roads.
And, unfortunately, we lost many people in those floods.
My district is still struggling to recover from those
floods, as recovery guidelines outlined by FEMA currently
require cities, counties, and homeowners to rebuild
infrastructure in the exact way that it had been built
previously in order to qualify for reimbursement, irrespective
of the exigent circumstances presented by some of that
rebuilding.
And I had a chance to tour some of the rebuilding earlier
this year and to see the impracticality of this approach and,
in my view, the shortsightedness of FEMA's approach in this
regard firsthand.
There were new guidelines, as I know you all or some of you
are probably aware, that were recently issued by FEMA, required
as part of the Disaster Recovery Reform Act of 2018, which
addresses some of these concerns but certainly not all of them.
So I think this discussion is certainly a timely one and an
important one.
So, with that, Ms. McFadden--and I apologize that I missed
your oral testimony, but I did review your written testimony
and found it particularly interesting, given that reference to
the catastrophic flooding. In your written testimony, you
state, quote, ``Every year, flooding is the costliest type of
disaster damage. We should stop investing taxpayer dollars in
projects that don't plan for reasonably foreseeable risks.''
And I agree with you. And I think we can all agree that
identically rebuilding infrastructure that was destroyed in a
flood 6 years ago isn't just incredibly dangerous but it
ultimately is not an efficient use of those resources.
And so what would be your recommendations for making sure
that our Federal agencies and our programs are able to help
communities not just rebuild but improve their infrastructure
to make sure it ultimately survives the next disaster?
And I should provide the added context that just getting
FEMA to issue its guidance, which it did just last month, was a
Herculean effort. And while I applaud, you know, the
individuals in the agency who I know work incredibly hard, I
will just tell you, there are a number of us here in the
Congress deeply frustrated by the amount of time it took to
even get to where we are now.
So, with that, if you could expound on that.
Ms. McFadden. Thank you for the question.
I think that the 2013 flooding in Colorado is a painful
example of the problem of having different standards across
different Federal agencies. And I know that your Governor's
office was particularly frustrated at the time, having to deal
with multiple requirements across HUD and FEMA, for example,
where HUD was requiring resilient rebuilding standards and the
fight you mentioned with FEMA to put things back.
I think it is incumbent on the Federal Government to speak
with one voice and to ensure that the rebuilding dollars are
being used to address all foreseeable hazards and not being
backward-looking and not just looking at the risks that the
communities are facing right now but that they are going to
face in the decades to come, as you think about the projected
useful life of infrastructure and housing.
Mr. Neguse. Well, I appreciate that. And I would say, we
welcome any particular statutory recommendations or regulatory
ones that you might recommend, certainly from my part, to this
committee as we consider the recommendations to make to the
full Congress. Because I think this has to be a core component
of the work for us moving ahead.
Ms. McFadden. Thank you. And I will take you up on that
because I know you have been a stellar champion of low- and
moderate-income people. Thank you.
Mr. Neguse. With that, I would yield back the balance of my
time.
Ms. Castor. Thank you.
Mr. Carter, welcome. You are recognized for 5 minutes.
Mr. Carter. Well, thank you very much, Madam Chair.
And thank all of you for being here. This is extremely
important. Resiliency is extremely important to addressing
climate change and addressing what we are doing in our
communities.
Ladies and gentlemen, I have the honor and privilege of
representing the First Congressional District of Georgia. And
just for your benefit and the benefit of reminding my
colleagues here on the dais that Georgia is the number-one
forestry state in the nation. I just wanted to make sure you
all knew that.
But I also represent 110 miles of coastline----
Mr. Graves. Football.
Mr. Carter. I also represent 110 miles of pristine
coastline, the entire coast of Georgia. Over the past 3 years,
we have had three hurricanes, and we barely dodged one this
year, with Dorian, and we were very fortunate to have dodged
it. But this, as you can imagine, has caused us a lot of pain.
And one of the things that has really hindered us has been,
some of the communities are still trying to get some of the
funding from FEMA as a result of the 2017 hurricanes and trying
to recoup some of the moneys that we spent in cleaning up after
that. In 2017, we had Hurricane Irma, and even in Glynn County
and Brunswick, Georgia, we are still having to recoup some of
those costs and fight tooth and nail for them.
I just wanted to ask you, Mr. Wemple, if you have had any
kind of similar issues in the Houston-Galveston area after a
storm like we have experienced.
Mr. Wemple. Representative Carter, it is part of the way
that the FEMA work goes, it seems, that our communities are
given approval for a project, they conduct the work, and then
they wait to see if they are going to be reimbursed. And that
causes an incredible amount of stress because that money has
been committed, they don't know if they are going to be
reimbursed or not, and it might actually keep them from working
on other projects that could increase the resiliency for their
community.
It also becomes very frustrating and a long endurance test.
One of our coastal communities had their wastewater treatment
plant, which was located right along the coast--they are a
small community kind of hemmed in by others around them--
heavily damaged wastewater treatment plant. Got damaged again
by Harvey, and FEMA said, yeah, we think it is great that you
want to relocate that wastewater treatment plant, because they
finally found an area where they could move it to.
So they were initially approved, but then not approved,
because, as they talked about the project more, the discussion
became, is it a relocation or is it a new facility? And the
idea was, they would build a new facility, keep the old one on
line, and then bring that one up and turn that one down----
Mr. Carter. Which makes perfect sense, right?
Mr. Wemple. And it is like, no, that is not a relocation,
that is a new facility, because you are not moving the facility
to a new location.
Mr. Carter. Yeah. Welcome to the Federal Government.
Mr. Wemple. So there was a lot of discussion back and
forth, back and forth. We had help from our legislative
delegation on those discussions, as well, and finally have come
around to that project being approved. But it took incredible
persistence and a lot of time and opportunity cost to focus on
making that happen.
Mr. Carter. Right.
And don't misunderstand me. We appreciate FEMA. And we
appreciate them----
Mr. Wemple. We do too.
Mr. Carter [continuing]. Being there. They are there when
we need them, and thank goodness they are there. But it is
situations just like what you have described and just like what
I have described that--it just leads you to believe there has
got to be a better way.
We can streamline this to make it to where, you know,
instead of using this time trying to recoup moneys that have
already been expended, we could be investing in projects that
would make us more resilient, just like the one that you noted
there.
Mr. Wemple. And I would say reducing the complexity that
helps those conversations not happen, where we get caught up in
a couple different words----
Mr. Carter. Right. Right.
Mr. Wemple [continuing]. Would be very helpful.
Mr. Carter. And I want to give you another example. You
know, of course, we have barrier islands on the coast of
Georgia and beautiful--the Golden islands and St. Simons.
Jekyll Island is one of those examples. Jekyll Island is a
State-owned island. And we have had a project going on there,
that we have been working on the revetment structure that
actually is intended for resiliency, is intended to make it
that way. And, again, FEMA is partner in this project and in
providing money for the project. And although we have gotten it
resolved now, it took almost 7 months for us.
Another example of just, you know, bureaucracy and how we
need to streamline this process. Any suggestions?
Mr. Wemple. You know, I think--and as I put some thought to
this, it is interesting. I don't know if it is the massive
amounts of funding that paralyze agencies and people. It is
almost like, when the funding gets very large, all of us just
kind of clench up a little bit, right? And you don't want to be
the entity or the individual that approves some large, massive
investment and didn't have it meet the eligibility criteria,
for example.
And so I think, when we have programs that are able to
quickly move and have strong trust and relationships in the
communities, that then those projects tend to be better
understood and more quickly approved than if it is a situation
where you have people coming into a community who haven't been
there before, don't quite know if this is really the right
project or not. All of that requires a lot more vetting of
those projects.
And so I think entities like the Economic Development
Administration and the U.S. Department of Agriculture have very
strong regional presence and strong connections to their
communities and a certain level of autonomy to approve those
funding projects.
Mr. Carter. Right.
Well, thank you very much.
Thank all of you for being here. It is extremely important.
And I yield back.
Ms. Castor. Thank you.
Now I will recognize myself for 5 minutes for questions.
So a lot of local communities and regional areas are doing
resiliency planning. They have done it without a direction from
the Federal Government or many incentives at all, but it has
grown out of necessity to plan ahead for the impacts of
climate.
Where should this evolve to? How should the Federal
Government encourage those communities to do that, to
incentivize it? We have never really been in the--we are not a
super-land-use-planning type of organization or structure.
But there has to be a way to encourage communities to do
this resiliency planning, to provide the technical assistance
of the Federal Government--I hear that loud and clear--and
ensure that the communities that don't have the resources get
the aid, assistance, grants to protect their areas. Are there
some models now? Is one model the NPO structure? Please give us
your ideas.
And let me start with Mr. Burns on this. What would work?
Mr. Burns. Thank you, Chair Castor.
I would say that the first thing that needs to happen is
all the Federal agencies need to get on the same page in terms
of----
Ms. Castor. So that goes back to the overarching strategic
vision.
Mr. Burns. Yes. So the first thing is we need to get on the
same page, understanding what climate resilience is, how it
impacts us, what are all of the risks.
Ms. Castor. Educate communities, like you said.
Mr. Burns. That is right. And then we can transfer that
down to the communities and have common plans among
communities.
Right now, you have cities adopting their plans, and
everybody is coming up with something a little different. And
it should be, because every community is different. But at the
end of the day, we all need to be on the same page. And all of
the programs need to be designed in a way that climate
resilience is just a permanent box, and every agency
understands what that box means, and that can be communicated
to the communities.
And then streamlining access to capital, whether it be
FEMA, whether it be through private markets. There just needs
to be a streamlining of how we can access capital and the
flexibility----
Ms. Castor. So that needs to be built into it.
Mr. Burns. Absolutely--and the flexibility of that capital.
Ms. Castor. Uh-huh.
Mr. Wemple.
Mr. Wemple. I think what I would add to the testimony--I
agree with the points that were just made.
A couple of models that have been successful in encouraging
adherence to new ideas, like resiliency, hazard mitigation,
when FEMA announced that you had to have a FEMA-approved hazard
mitigation plan to be able to receive hazard mitigation funds
and pre-disaster mitigation funds, people made sure that it was
included in their plans and did it. The grants to help make
those plans possible were incredibly important, especially to
our rural communities as well.
So that is one way to----
Ms. Castor. So that was in areas that had an overarching
resiliency planning effort and those that did not----
Mr. Wemple. Yeah, it was basically you needed to have a
plan that identified your risks and vulnerabilities and how you
were going to mitigate those. Our plans for our region list
those projects in the hundreds, for some of our rural counties.
That effort probably wouldn't have happened without that
requirement and the funding to help get that plan done. It was
a small amount of funding, very critical, very good investment.
And then one that wasn't as required but more encouraged
was the HUD Sustainable Communities effort from a few years
back, where Housing and Urban Development, Department of
Transportation, and EPA came together--HUD led the effort--and
we were actually required to develop a plan that looked at all
those things in concert as opposed to in their individual
silos. Other agencies wanted to join on. USDA eventually joined
on; Economic Development Administration.
So something, again, that informs all the agencies that
resiliency is incredibly important, and here is what we mean by
resiliency, and finding ways to link it to your planning
efforts and to your funding are important.
Our NPO has started to make resiliency part of our scoring
criteria for transportation investments in our region. We are
not required to do that, but we decide to do it because it is
important, because we keep hearing how we had to move the
region forward.
Ms. Castor. So, Ms. McFadden, you were probably involved in
that previous effort through CDBG and the other HUD
initiatives.
Ms. McFadden. Yes.
Ms. Castor. What do you recommend?
Ms. McFadden. I think that it is very important for
Congress to maintain some deference to the state or local
governments to determine who the strongest local leaders are
and not be overly prescriptive, because I have seen different
parts of the country, different sectors, and different areas.
So regionalism is strong and good in some places, and other
places are a little more protective of their turf and stay
within the boundaries of their own jurisdictions.
Ms. Castor. Yeah. Some folks don't want the--they know
better on the regional level rather than the state oversight,
but it is flipped in other areas. How do we structure that?
Ms. McFadden. Well, my recommendation would be to use the
vehicle of the Community Development Block Grant Program, which
is already working successfully in providing funds to more than
1,200 jurisdictions across the country, allowing that local
flexibility.
Ms. Castor. Do you have some thoughts on this, Mr.
Gaffigan?
Mr. Gaffigan. So, just from the Federal perspective, I
think Mr. Wemple made a couple comments that I wrote down about
the need for an overarching coordinating event. And that is the
role of the Federal Government can play, as an integrator.
He talks about all these entities chasing all these
different streams, all with different requirements, and those
requirements changing every time there is a new program. It is
no wonder it takes so long to get these things out, because
they come with all these strings. All these strings have to be
figured out. The rules have to be written. The auditors are
waiting to make sure that they get it done. And so that is why
it is taking a long time.
So if we can focus on the integration role for the Federal
Government in bringing all these partners together, that is
where we are going to have success. And Mr. Wemple talked about
how USDA has that regional presence. I think that is kind of
the model we need to think about.
Ms. Castor. Okay.
All right. Mr. Graves, you are recognized for 5 minutes.
Mr. Graves. Thank you, Madam Chair.
Ms. McFadden, I appreciate you bringing up the issue about
giving more discretion to local governments. I think it is an
important lesson learned that we do need to apply to disaster
planning, to resilience in the future.
Mr. Gaffigan, I want to ask you a question. You cited the
Louisiana model that I am very familiar with and, actually,
created in the previous life. What we chose to do, recognizing
you have got HMGP, PDM, CDBG-DR, Corps of Engineers--you know,
we could go on and on and on--we created the coordinating
entity at the state level, and we blew up parts of five state
agencies, we reconfigured and established the new agency and
said, ``You are in charge.''
Now, recognizing the regulatory and expertise and other
roles of agencies, we created a board of directors. We created
a coastal board of directors, effectively, that included those
various cabinet officials, including some state-wide electeds
that run their own agencies with appropriate expertise. We also
appointed regional representatives. So you had everybody at the
table, and you could never be in a scenario where, you know,
they say, oh, we are waiting on them, because ``them'' was at
the table.
We ended up pulling together 42 funding streams, $26
billion, and made more progress in 6 years than I would put up
against any 40-year period of time.
Now, politically, it took Hurricane Katrina to have people
let go of those fiefdoms. And that is one thing that many other
places around the country haven't experienced. Mr. Wemple, you
all have, in the aftermath of Hurricane Harvey. But you know
what? I said this in my opening, and I will say it again: I
would never wish that upon anyone. And we have got to learn
from those painful mistakes.
Do you think that this has to be at the Federal level, or
do you think, recognizing you have a different scenario in
Texas than you have in Louisiana, than you have in California,
than you have in Florida, that possibly--and I don't have an
answer; I am just curious--do you think that it has to be at
the Federal level? Or do you think that the coordinating role
could be done locally in an effort to allow them to tailor it
to their particular issues and problems and priorities?
Mr. Gaffigan. Yeah, I think that coordination has to happen
there. I mean, you know the old phrase about all politics are
local? Well, all adaptation is local, because that is where you
need to understand the needs and bring the things together. And
those are the players, those are the people who know what is
best.
What we are talking about is just the Federal Government
needs to be a partner in that and to coordinate. They need to
coordinate amongst themselves, firstly, but then also make sure
that they are providing the incentives to these local
communities so they have the support to do what they need to
do. Because it is going to fall down to all those partners.
And that is why I talked, at the beginning, about the
Federal Government is just one stakeholder here. In no way do I
envision the Federal Government being an overall coordinating
body for all the climate resilience. That won't work. They
don't have the expertise; they don't have the money. But they
can be a strong partner in that. And I think that is where the
key lies.
Having the ability to integrate, to bring people together,
that is a role the Federal Government can bring, to bring
information that an entity might not on its own have, but bring
the kind of information and science that is needed to make the
decisions, and, finally, to incentivize, with what resources we
have, those sorts of things that are complementary to ensuring
resilience.
I think that is a model that will work. We thought the
Louisiana model was a good example, and that is why we used it
in our report.
Mr. Graves. Well, thank you.
You know, we found, as we put that model together, there
were numerous funding streams that previously were being spent,
in some cases, actually contrary to the objectives of our
resiliency. In other cases, we found opportunities where
dollars were being managed just separately, and we were missing
the opportunity to establish those symbiotic relationships or
commingling funds.
In fact, we built one project, as I recall, six different
funding streams, and all the different rules and regulations.
And it was like a puzzle, putting it together. We eventually
did it and got it done.
But I think there is a lot of opportunity there, and I want
to thank you for your in-depth report and testimony.
Mr. Burns, other than your bloodline, which we have issues
with, I do want to thank you for being very thoughtful about
the role that finance plays in this. Because finance
incentivizes the right actions, the wrong actions. And you
talked about how, effectively, financial markets aren't
designed to achieve the right type of outcomes and that we need
to be more thoughtful about how to design the financing
mechanisms that achieves these outcomes where we have more
resilient communities, including access in low-income
communities to housing.
What does that look like for you, in terms of you being a
practitioner? What does that look like? What role does the
Federal Government need to play, what steps, in order to make
that happen?
Mr. Burns. Well, the first thing is, we get most of our
funding from the tax-exempt bond market. And most cities do.
And as I mentioned in my testimony, there is no difference
between the green bonds----
Mr. Graves. The green bonds and the municipals.
Mr. Burns [continuing]. And the regular bonds. So I think
the first thing that needs to happen is we need to create
separation between the two. And that could be through a
discount or a premium or one or the other.
Also, there is a need for tax credits for projects that
don't generate capital, necessarily. For example, a green
infrastructure project that is built behind a neighborhood.
Maybe the water district wants to build a project that doesn't
generate revenue itself but provides a lot of savings, a lot of
benefit. We need to find a way to bring capital, private
capital, into those types of projects.
And, again, the insurance component. There are savings that
come from having the right kind of insurance. There are savings
that come from having preventative insurance. And most of our
programs right now run on insurance from the Federal
Government. If you are talking about----
Mr. Graves. Figuring out how to monetize or capture those
savings and invest it in proactive resilience-type measures,
recognizing----
Mr. Burns. I think that is part of it. It is capturing
savings, but also proactively encouraging capital to come in on
the front end so that we can have that flexibility to make
those investments to create the savings. Because that is the
problem.
Mr. Graves. Yep. You can monetize the savings by creating
the right financial mechanism to allow it to be invested on the
front end and then paid back, effectively.
Mr. Burns. We need the capital on the front end to do it.
Ms. Castor. I want to continue with that thought. And then
how do we really ensure that there aren't communities that are
left behind, that we do not replicate the inequities of the
past?
Because so many communities are going to bear the brunt of
the climate crisis, and it is going to be very expensive to
them. So what are the criteria, what are the checks all along
the way to ensure that we are lifting people up at the same
time and it is not just the wealthy communities with a lot of
resources that get all the grease and the extras?
Mr. Burns. Right. So, a lot of times when you have these
programs, like the tax credit programs, they mostly go to
benefit the developer or the corporation that is sponsoring the
project, and the community gets some ancillary benefits, but
the community is never really put to work. And I think you have
to start putting the communities to work.
So it is hard for the Federal Government to tell the City
of New Orleans what its disadvantaged-business requirements
should be. We already have those, and each community is
responsible for adopting those. So, in New Orleans, ours is 35
percent. We try as much as we can to go above and beyond that
at the Finance Authority.
But I think what the Federal Government can do, as it
creates these incentives and these programs based on
resiliency, incentivize these local cities and governments to
create space for disadvantaged businesses, for Black
businesses, Hispanic businesses, women-owned businesses. Create
the space and the incentives for them to do it. And make it
dependent upon--make the funding, make the access dependent
upon how equitable they are being with those investments on the
ground.
And I think that is the best way to communicate it, from
the top to the bottom. But, at the end of the day, each
community is going to be responsible for making sure that the
investments are going into the right places.
Ms. Castor. And then, Ms. McFadden, do you have some
thoughts on that?
Ms. McFadden. Sure. I agree with all of that. And I would
add that it is really important to strengthen community
engagement at every phase of large infrastructure projects. So,
even with HUD funding, which is intended to primarily benefit
people of modest means, historically there has only been one
time that the public gets to weigh in on what a community plans
to do. I was very pleased that we saw the Trump administration
accept a recommendation to have a continuous feedback loop for
the mitigation money, where the community forms a community
advisory board to let the government know how things are going.
Because it is really important to ensure that these projects
are done for communities and not to them.
Ms. Castor. I have one other question, and then I will
recognize you for another 5 minutes, if you would like.
Mr. Gaffigan, does GAO have any recommendations on the
budget picture for climate?
You know, we don't have a rainy day fund or a disaster
fund. Instead, if we have a natural disaster, there is a
disaster funding bill, maybe a few. It leaves people in the
lurch, the communities that need it. Yes, there is some money
that can go out, but it is so bureaucratic, oftentimes, that
people don't get the assistance that they need.
Does GAO have some recommendations on how we can be smarter
about planning ahead for the increasing extreme weather events
and Federal disaster aid?
Mr. Gaffigan. Yeah. So, at least with the last act, there
is sort of a carveout, 6 percent of funding that can go towards
mitigation. And I know FEMA is working on rules around that.
But I think Congress needs to decide where they want to
target this funding. And they can do that. Particularly if you
are wanting to target vulnerable populations, you could be
explicit in that and have dedicated funding. That is one of the
options. You could also mainstream some of those requirements
in existing programs. But it starts with making that a goal, an
explicit goal.
And it is interesting how--you mentioned being at the U.N.
You are probably familiar with the U.N. Sustainable Development
Goals. And they have a goal around serving these populations.
It is to build the resilience of the poor and those in
vulnerable situations and reduce their exposure and
vulnerability to climate-related extreme events.
So they have set up a goal. We could do that. Congress
could do that. Congress could explicitly target a program to
serve those communities with some dedicated funding. That is an
option.
Ms. Castor. Terrific. Thank you very much.
Mr. Graves, you can have another 5 minutes.
Mr. Graves. Thank you, Madam Chair. I just--I wanted to hit
a few things very quickly.
Mr. Gaffigan, again, in regard to your recommendations, I
agree with virtually all of the recommendations you all have
made. But I do think that we need to recognize--and I think you
affirmed this--that the states need to step up as well. They
need to create some type of coordinating entity, decide what it
is that they want a resilient Indiana, a resilient Texas, a
resilient Iowa to look like, and need to then take all the
tools in the tool chest--and it is going to be everything from
building standards and zoning requirements to how you use your
CDBG funds and HMGP and PDM, as you just mentioned--use all
those dollars to achieve that goal. Everything funnels into
that objective.
Also, I have been incredibly frustrated--I believe Mr.
Wemple discussed this a little bit--at the Federal Government
actually prohibiting the integration. The Corps of Engineers
saying, well, wait a minute, this is our authorized project,
therefore you can't use your Pre-Disaster Mitigation, your
Hazard Mitigation Grant Program, your Community Block Grant
Disaster Recovery funds to advance this project that has been
authorized for 30 years and hasn't been funded.
And what Mr. Palmer made mention of--I won't get into the
full history, but there was an environmental group that sued
the Corps of Engineers, made them pivot from the 1960s project
to build the barrier at the lake to build multibillion-dollar
rings around the entire length of the lake that was not
completed in time for Katrina. The project dated back to the
early 1970s. Today, the Corps of Engineers has a $100 billion
backlog, and we are appropriating a couple billion a year.
Why in the world we would not not just allow but
incentivize--incentivize--the use of the FEMA dollars and CDBG-
DR and others for that purpose? If you have got the most
important resilience project in your community, Mr. Burns, by
God, let's incentivize the money to go there, not prohibit it.
It is crazy what we are doing, and it is really inappropriate.
Now, similarly, in regard to coordinating roles, look, I
have said this twice or three times now. As awful as disasters
are, they are an opportunity to rebuild differently.
You are going through it, you have done it.
You have done it, Ms. McFadden, as well.
We have got to make sure that we take full advantage and we
facilitate and incentivize the right type of behavior. And I am
happy with what happened last year in the Disaster Recovery
Reform Act, where we established the new resilience standard
within FEMA and provided more funds and flexibility in how to
achieve it.
But it is infuriating to watch FEMA come in and do
immediate recovery, and then HUD is somewhere out here years
later, and you have got this gap. And the people that you work
with and the people that I represent, the people that you are
currently--they are just stuck. They have a gap here. Their
home flooded. They were paid for for a hotel for a couple
months. HUD is 2 years out with the money. What are they
supposed to do?
And so then they say, ``Oh, well, we are going to rebuild
resiliently.'' No, my ``resiliently'' is trying to find a tent
to live in right now. This isn't okay, and we have got to do a
better job with this.
And I cringe when I hear you recommend CDBG as the
solution. I don't think HUD is capable. And I know you work
there, and I just--I don't think they are capable, based on our
experience. It took them 18 months to get the rules out for
flood mitigation. I mean, this is inexcusable.
We have hundreds of millions of dollars sitting in the bank
right now for recovery in Louisiana from a disaster over 3
years ago, and people are still homeless. And they can't seem
to connect the dots. This is crazy, that it is happening in the
United States.
And I know I just ranted, but respond, somebody.
Mr. Gaffigan. No, but I think it is consistent with what we
have seen, in that there is not that overall vision and that
coordinating event that can be brought together. And so that is
what is missing, that strategic look. And so you have all these
little streams and all these pieces that can't work together.
Mr. Graves. I just would love to see better coordination at
the Federal level and then those entities at the state level
with their clear objectives on what it is they are trying to
achieve and then having the Federal dollars sort of help
facilitate that.
We have got 30 seconds left. Just tell us about your
family. No. Come on, anybody.
Mr. Wemple. I would just echo the comments here and say
that the citizens that are impacted, they don't distinguish
between FEMA and HUD. They just know that the Federal
Government is not providing them the assistance that they
believe that they are entitled to or need at this time.
And so whatever we can do to, kind of, not have so many
divisions on all the funding--I hate to keep harping on it, but
that is key to all of this. If we start to think that way, then
we will start to act that way, as well, too.
And people say, what do we need the most? I think we need
resilient people. Resilient people means investment in
infrastructure, investment in economy, and investment in
education for those individuals.
One thing we are looking at is working with private lenders
to help them look at their Community Reinvestment Act
requirements to help people become more fiscally strong,
credit-worthy, access to capital, just how to manage their
finances, so when disaster does come--an economic layoff,
something that puts you out of work because your apartment is
out of commission and your business is closed for 2 weeks and
now you are evicted from your apartment--we don't want to have
that type of thing happening. So we are doing what we can to
try and use what is available.
Mr. Graves. Great. Thank you.
Ms. Castor. Do you have a unanimous consent request?
Mr. Graves. Oh, yes, I do. Yes, ma'am.
Madam Chair, I ask unanimous consent to include in the
record testimony of Mr. Burns' adjacent parish, St. Bernard
Parish, the chief strategy and resilience officer testimony,
expressing some of their experiences recovering from Hurricane
Katrina and other disasters.
And I ask that be included in the record.
Ms. Castor. All right. And without objection.
[The information follows:]
Submission for the Record
Representative Garret Graves
Select Committee on the Climate Crisis
December 11, 2019
Written submission for the record from Reese C. May, Chief Strategy and
Innovation Officer, SBP
``Creating a Climate Resilient America: Smart Finance for Strong
Communities''
Select Committee on the Climate Crisis
Chairwoman Castor, Ranking Member Graves, and Members of the Committee,
My name is Reese May and I am the Chief Strategy and Innovation
Officer for SBP--a nonprofit disaster preparedness and recovery
organization committed to shrinking the time between disaster and full
recovery. Since our founding in 2006 we've rebuilt homes for thousands
of survivors, shared our best practices with hundreds of other
organizations, and we've helped lead recovery efforts in disaster
impacted communities all over the country from Louisiana to South
Carolina to New York City, Puerto Rico, Texas and many places in
between.
America's system for disaster recovery is slow and unpredictable
and routinely fails to meet the challenges of devastated communities
and survivors short on hope. Indeed, disaster survivors have perished
on backlogged lists, awaiting recovery assistance that simply failed to
reach them in time. After more than eight years with SBP, I've spent as
much time working in disaster recovery as I spent as a US Marine. I am
often thanked for my military service, but I am certain that the reform
of our disaster recovery policy and regulation is more important to
America and to Americans than either of my tours in Iraq. I appreciate
this opportunity to share SBP's experiences on behalf of survivors
waiting around the country and to offer suggestions on how we might
improve.
SBP History and Background
SBP began six months after Hurricane Katrina when our founders,
Zack Rosenburg and Liz McCartney, a DC-based criminal defense lawyer
and educator, visited New Orleans to volunteer and were shocked by the
lack of recovery progress. Homes were not yet being rebuilt at scale
and families were losing hope. There were few resources and almost no
organization and, as a result, disaster survivors were experiencing
unnecessary suffering and being pushed beyond their breaking point.
Survivors like Mr. Andre, a proud American WWII veteran who owned
his home before Katrina. For months he lived out of the back of his
Ford Ranger pickup truck, eating community meals served from a tent in
St. Bernard Parish.
He applied repeatedly for assistance, quietly driving each morning
and night to a remote government lot to ask for a FEMA trailer. He
repeated the process every day for months and was denied assistance.
One night, he broke down to his fellow survivors over dinner at the
food tent--ashamed that he needed help, that he could not continue on
his own. Eventually, eight months after the storm, Mr. Andre got a FEMA
trailer which was delivered to his property without a key. He still had
no truly secure place to lay his head or keep his belongings.
Nightmares like this one play out in disaster-impacted communities all
over the country causing needless human suffering and pushing survivors
beyond their breaking point.
This notion of the breaking point is central to SBP's work. While
different for every individual, we all have one. After disasters, an
individual's breaking point is determined by three critical factors:
1. Time--the amount of time it takes to make a full recovery.
2. Predictability--does a survivor have a clear path to recovery
or are they staring into an abyss of uncertainty?
3. Access to Resources--Are survivors able to access the resources
they need to fully recover and to survive while they do so?
Imagine for a moment constituents in your district: hardworking
families who achieved the American dream of home ownership until a
tornado, flood, or hurricane erase it all in an instant. How many of
your vulnerable neighbors could survive a two year wait for hope repair
funds? How many could handle the administrative redundancy of applying
separately to three different federal agencies for assistance, only to
apply again to state and local programs years later? How many families,
who pay their taxes, who are current on their mortgage, could self-fund
a $35,000+ flood repair because they didn't live in a mandatory flood
zone and so were not required to have flood insurance? These are the
families SBP serves. When disaster recovery is protracted and
unpredictable, and when families are unable to access resources, they
are at increased risk of being pushed beyond their breaking point.
Beyond the breaking point we lose hope. We lose our ability to be
productive members of our community. We lose the ability to focus on
our work and care for our families. In communities across the country I
have seen this hopelessness manifest in the form of domestic violence,
drug and alcohol abuse, and worse. SBP's mission is to reduce the time
between disaster and recovery because by doing so we will prevent
needless human suffering and fortify our fellow Americans against their
breaking point.
In New Orleans in 2006 SBP began rebuilding homes one or two at a
time. We partnered with local and national businesses, schools and
churches to bring additional resources and volunteers. We later
partnered with Toyota to improve our organizational efficiency and
reduced our construction time by 48%, cutting in half the amount of
time it took us to return families to their homes. To keep costs low
and reach even more families we partnered with AmeriCorps to enlist
service-minded individuals to help recruit and lead volunteers on
construction sites conducting high-quality, low cost home repairs for
families unable to afford market rate contractors. I began with SBP as
an AmeriCorps member in New Orleans. After completing two tours in Iraq
as a U.S. Marine, disaster recovery became my new mission.
Part II--Expansion and Interventions
In 2011, after an EF-5 tornado devastated Joplin MO, community
leaders contacted SBP to ask if we could share what we had learned. A
partnership was formed and SBP began work in Joplin. In late 2012,
Hurricane Sandy impacted New York and New Jersey and SBP began
partnership and direct service operations in New York City and along
the New Jersey shore. We continued our expansion to South Carolina,
Texas, Florida, Puerto Rico and other impacted communities to help
begin rebuilding more quickly and to mitigate human suffering however
possible.
Our expansion was not only geographic but also operational. It did
not take long to recognize that while each disaster and community are
unique; the ways that disasters affect communities are often the same.
If we really wanted to shrink the time between disaster and recovery,
and fortify humanity against the breaking point, we would need to do
more than rebuild homes after they'd been destroyed. So we crafted our
five strategic interventions aimed at increasing the efficacy of the
disaster recovery ``industry''.
Today we build homes quickly, efficiently, and affordably using
volunteer labor and Toyota Production System-inspired workflows and
processes. We share our model and our resources with other
organizations to increase the capacity of partners and raise the
capacity of other groups. We help communities and individuals prepare
for disasters through a variety of trainings and guides. We advise
state and local disaster leaders on the most effective tactics,
techniques, and procedures for administering federally funded long-term
recovery programs. Finally we advocate for changes to federal policy
and regulation that will positively impact the lived experience of
millions of disaster impacted Americans each year. These strategic
interventions are aimed at reducing time, increasing predictability,
and making resources more widely and easily accessible thereby ensuring
fewer Americans are pushed beyond their breaking point.
Part III--Successes and Challenges
My first person experience in more than a dozen communities has
given me a clear look at long-term recovery efforts around the country.
I have had the great privilege to meet some of the most thoughtful and
deeply dedicated government employees from FEMA, HUD, SBA, and others
as well as hundreds of servant-leaders in state and local governments
who rise to the needs of their community.
I have met thousands of volunteers who cannot be categorized in any
way other than profoundly American. They do not seek to help survivors
of any specific political party, race, or religion. They simply give
freely of themselves, their time, their energy, their expertise, and
their dollars to help their fellow citizens in need. I say the
following in the spirit of continuous improvement: America's system for
disaster recovery does not currently match the empathy or the will of
our citizen volunteers.
For an example of typical delay and lack of predictability consider
long-term recovery CDBG-DR funds that flow from HUD to impacted
communities. When disasters occur, Congress must first appropriate
funds, then HUD must issue a federal register outlining the regulations
for the use of those funds, then state and local governments must
produce action plans, then HUD must approve these plans, and only then
are disbursements made to state and local governments. The state and
local governments then begin long and complicated procurement and
contracting procedures to hire contract teams that take still more time
to scale up and reach capacity.
The result is that it routinely takes two years for long-term
recovery assistance to reach the first eligible families. It can take
six years or more to reach the majority of eligible applicants and, all
too often, not all eligible applicants are served. Many fall through
the cracks of local programs while others self select out before
receiving assistance, unable to deal with the uncertainty and delay.
America built the transatlantic railroad in six years but somehow we
struggle to deliver long term housing assistance to our most vulnerable
citizens affected by natural disasters.
Another significant challenge is access to capital markets funds
for quick and immediate repairs. There is a bit of a donut hole when it
comes to financing for long term recovery efforts. Those with the most
resources are the top half of the donut. These folks are self-insured.
However, not all is doom and gloom. change is not impossible. There are
also bright spots at the state and local levels worth celebrating and
highlighting:
FEMA and Puerto Rico's forward thinking and creative
approach to STEP programs and difficult ownership verification are
bright spots that show how innovation can drive better outcomes and
results for survivors, taxpayers, and government at every level.
South Carolina's Disaster Recovery Office has led one of
the most efficient and productive federally funded housing recoveries
in memory. CDBG-DR funds made it to citizens in month thirteen and
services have been provided effectively, efficiently, and predictably
throughout. It is rightly held up as a model for other state and local
governments to emulate.
But innovation will be necessary to keep pace as more Americans in
more disparate regions are affected by more frequent and intense
natural disasters. The Disaster Recovery Reform Act has made a good
start but more can and should be accomplished. Below, I offer four
recommendations that could further improve disaster recovery and
prevent more Americans from being pushed past their breaking point.
Create Single Application for Disaster Assistance
Disaster survivors are often required to complete duplicative
applications with multiple federal, state, and local agencies, many of
which require identical information that is often already in the hands
of other government agencies. A survivor is expected to know that they
must apply to FEMA and that they can appeal FEMA's initial decision if
they disagree. Survivors are expected to know that if FEMA refers them
to SBA the attendant loan application is something they need to fill
out regardless of their ability to repay--because denial from SBA may
make them eligible for additional assistance from FEMA and is an
important factor in determining an individual's eligibility for long
term assistance from HUD. They'll also need to apply again to a state
or local program years later when HUD funds arrive. I've been looking
at this process for years and I still don't understand the logic.
Think of the proud, hard working citizens, in your district. Folks
who identify as givers and are loath to ask for help. How can we expect
them to navigate this labyrinth in their most difficult days? A single
application for assistance can simplify this process help reduce the
burden of application for those most in need.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Improve FEMA's Capabilities for Damage Assessment and Analysis
Following large-scale disasters FEMA currently deploys teams of
individual inspectors to assess damage to homes one at a time using
paper and pen or tablet devices. After Hurricane Michael in Florida,
SBP worked with FEMA Individual Assistance Data and aerial imagery
provided by the National Insurance Crime Bureau to compare individual
assistance awards amounts to visible destruction in the images. Based
on a very small sample of that data in one community, local officials
asked and FEMA reinspected seven properties where five received
additional assistance and one award went from $1100 to $34,000. Imagine
the impact of this at scale.
When actual damages are underestimated, families are deprived of
much needed assistance and are required to navigate the complicated
appeals processes I've described and visualized above. Meanwhile,
private sector insurance and financial companies are deploying modern
drone, AI and other technologies to develop more accurate and timely
damage assessments. FEMA should pilot the use of this technology and
analysis via a Private-Public-Partnership with technology and insurance
industry actors, NGOs, and state and local governments. The pilot will
identify ways to quickly improve the speed, accuracy, and consistency
of FEMA's damage assessment capabilities.
Recovery Acceleration Fund
Across the Hurricane Harvey impacted areas in Texas, thousands of
homes have already been rebuilt by nongovernmental organizations and
volunteers while HUD funds are just beginning to reach survivors
through state and local government programs. According to the Texas
General Land Office's October report construction had been completed on
fewer than 200 homes more than two full years after Hurricane Harvey
made landfall. More than 13,000 have applied for assistance. The real
limiting factor here is available, usable funding.
Under today's post-disaster federal funding model, non-FEMA
federally authorized funds take at least 24 months to reach affected
communities. However, eligibility for these funds is knowable as soon
as HUD publishes the federal register. HUD and state governments should
work together with NGOs and investors to create a marketplace where
private and social impact capital can be deployed to quickly repair
homes for qualified low to moderate-income survivors. Private funds can
be reimbursed with CDBG-DR funds when they ultimately reach the
affected community. This `reimbursement' pathway is common in state and
local action plans for survivors who can self-fund repairs, but no such
mechanism exists for low to moderate-income families using private or
charitable assistance.
Such a mechanism would effectively transfer delay and suffering
from vulnerable families to investors' balance sheets. Families like
Ms. Benjamin in Houston, TX who is 81 years young and disabled. Her
daughter and granddaughter live with her in the family house. Before
Harvey, with a household income just under 80% of the area median
income, they had enough income to get them by and they were living a
happy, normal life. After Harvey, they have struggled to recover. She
used FEMA funds and savings to make repairs but there is still more
than $6,000 worth of work left to do. Though she is eligible for CDBG-
DR assistance, her family--like so many others--cannot afford to wait
any longer on local programs to deliver assistance.
If the Recovery Acceleration Fund were implemented today nonprofit
organizations could scale up their assistance efforts since funding
would be available immediately. Overall repair costs would be reduced
because houses wouldn't sit untouched falling into further disrepair.
Most importantly thousands fewer disaster survivors would be pushed
beyond their breaking point by protracted and unpredictable recovery.
State and local governments must attract more sustainable private
investment
Federal resources are but one stream of the assistance needed for a
full recovery. Many state and local governments may need access to
capital markets to launch recovery efforts more quickly, often at a
time when some lenders may look skeptically at recovery prospects.
State and local governments can and must create better conditions for
private and social impact investment to hasten recovery efforts as
well.
Creative, public-private partnerships that make productive use of
tax credit incentives and development programs, Opportunity Zone
investment vehicles, paired with the potential for Community
Reinvestment Act credit offer creative ways to attract institutional
investment, grants, and other social impact capital. These funds can
power programs like the Recovery Acceleration Fund and other
innovations. State and local leaders must experiment and develop
programs that attract this investment in long term recovery and in
projects that better protect their communities from future disasters.
Support and follow up
SBP is committed to shrinking the time between disaster and
recovery and preventing unnecessary suffering in the process. We must
bring disaster recovery outcomes back in line with American values.
Timely and predictable disaster assistance preserves the dignity of
survivors and reaffirms the value of citizenship--in uncertain times,
for those who need it the most. Needlessly complex, delayed, and
unpredictable disaster assistance does the opposite.
SBP is a willing partner to Members of this Committee, relevant
federal agencies, state and local governments, and other organizations
interested in piloting and testing the approaches we recommend
above.Thank you for this opportunity to submit comments and please call
on us if we can assist in any way as you proceed.
Very Sincerely,
Reese C. May
Chief Strategy and Innovation Officer, SBP
Ms. Castor. Well, I would like to thank our witnesses for
being with us today.
Without objection, all members have 10 business days within
which to submit additional written questions for the witnesses.
I ask our witnesses to please comply as promptly as you are
able.
[The information follows:]
United States House of Representatives
Select Committee on the Climate Crisis
Hearing on December 11, 2019
``Creating a Climate Resilient America:
Smart Finance for Strong Communities''
Questions for the Record
mark gaffigan
Managing Director,
Natural Resources and Environment
Government Accountability Office
The Honorable Kathy Castor
GAO has reported that the federal government's fragmented and
reactive approach to funding disaster resilience presented challenges
to effective reduction of climate-related risks.
1. GAO reported that Congress could consider establishing a federal
organizational arrangement to identify and prioritize climate
resilience projects for federal investment. You testified that
strategic goals for climate resilience need to be established and a
federal structure is needed with the authority to lead, identify and
integrate all stakeholders, define responsibilities, and address how
the effort will be funded. As Congress considers establishment of such
an approach, what lessons can we apply regarding the current approaches
to federal investment in order to increase efficiency and effectiveness
and speed delivery of those investments?
Currently, the federal government does not have a strategic
approach for investing in climate resilience projects--that is, an
intentional, cross-cutting approach in which the federal government
identifies and prioritizes projects for the purpose of enhancing
climate resilience. Federal agencies may take actions to invest in
projects with potential climate resilience benefits related to their
own mission areas using funds from federal programs designed for other
purposes. However, no federal entity looks holistically at the federal
government's investments to strategically prioritize projects to ensure
they address the nation's most significant climate risks and provide
the highest net benefits relative to other potential projects. As we
reported in 2019, a strategic and iterative risk-informed approach for
identifying and prioritizing climate resilience projects presents an
opportunity to enhance the nation's resilience to climate change and
reduce federal fiscal exposure. In particular, such an approach could
help target federal resources toward high-priority projects--namely,
those that address the nation's most significant climate risks and
provide the greatest expected net benefits relative to other potential
projects--that are not already addressed through existing federal
programs.
Congress could apply several lessons from current programs, and
several opportunities exist to increase the impact of federal
investment in high-priority climate resilience projects. These include:
ensuring that there is adequate and consistent funding
for climate resilience investment,
encouraging investment by nonfederal players and
complementary resilience activities (e.g., climate-resilient building
codes and zoning regulations that limit development in high-risk
areas), and
allowing investment funds to be used at various stages of
project development such as project design, implementation and
monitoring.
2. As part of a broad-based federal strategic arrangement for
evaluating federal exposure to climate risks, how important would it be
to require that agencies evaluate the impacts of climate change on
their missions, budgets, and operations, and report to Congress on any
additional authorities they may need to address those impacts?
We and others have reported that understanding the federal
government's fiscal exposure to climate change risks is increasingly
critical for policymakers charged with making sound investment
decisions and acting as stewards of the federal budget over the long
term. According to the U.S. Global Change Research Program's Fourth
National Climate Assessment, a significant portion of climate risk can
be addressed by mainstreaming--integrating climate adaptation into
existing investments, policies, and practices such as planning,
budgeting, policy development and operations and maintenance. However,
as we reported in our 2019 high-risk list update, beginning in 2017,
the administration revoked policies that had identified addressing
climate change as a priority and demonstrated top leadership support
for executive branch action. For example, a 2013 executive order that
required agencies to develop adaptation plans--plans to evaluate the
most significant climate change related risks to, and vulnerabilities
in, agency operations and missions and outline actions to manage these
risks and vulnerabilities--was rescinded in 2017. As such, limiting the
federal government's fiscal exposure by better managing climate change
risks remains on our list of high-risk areas needing attention by the
executive branch and Congress.
Nevertheless, according to the Fourth National Climate Assessment,
mainstreaming may prove insufficient to address the full range of
climate risks. Additional, strategic federal investments in large-scale
projects--such as those discussed in our October 2019 report--may also
be needed to manage some of the nation's most significant climate
risks, since climate change cuts across agency missions and poses
fiscal exposures larger than any one agency can manage.
3. Your testimony reports that of the 17 recommendations GAO has
made to agencies to improve federal climate change strategic planning,
14 remain unmet. GAO had made 62 recommendations related to the
Limiting the Federal Government's Fiscal Exposure by Better Managing
Climate Change Risks high-risk area. Twenty-five of those
recommendations remain open. What should Congress do to help implement
GAO's recommendations to limit federal fiscal exposure and improve
federal climate change strategic planning?
Congress can continue to conduct oversight of these issues. These
recommendations can be found in the ``What Remains to be Done'' section
of the 2019 high-risk report. Limiting the federal government's fiscal
exposure to climate change requires significant attention because the
federal government has revoked prior policies that had partially
addressed this high-risk area and has not implemented several of our
recommendations that could help reduce federal fiscal exposure. We are
ready to provide briefings on the status and importance of these unmet
recommendations and the strengths and limitations of various paths
forward laid out in our work.
When disasters occur, the destruction they cause must be addressed
immediately, and disaster relief funding must be delivered
expeditiously.
4. GAO research has identified challenges faced by states and local
governments in navigating complex disaster recovery programs. What
progress can you report from HUD and FEMA in implementing program
changes to reduce program complexity and accelerate disbursement of
recovery funds?
The Federal Emergency Management Agency (FEMA) has acknowledged
that the complexity of disaster assistance programs can present
challenges. FEMA's 2018-2022 Strategic Plan, which is organized around
three high-level strategic goals, entirely dedicates 1 of the 3 goals
to simplifying and streamlining processes. In the course of conducting
over 50 engagements related to the 2017 and 2018 disasters, we have not
encountered an overarching effort or mechanism at FEMA that is
specifically dedicated to achieving this strategic goal. However, we
have observed examples of efforts to streamline and simplify within the
policies, procedures, and guidance of individual programs. The most
sweeping of these was a recent end-to-end review and redesign of the
Public Assistance program's delivery model. In 2015, FEMA began working
with a contractor to help implement a redesigned Public Assistance
program. In the redesign, FEMA developed a new, web-based project
tracking and case management system to address past challenges, such as
difficulties in sharing grant documentation among FEMA, state, and
local officials and tracking the status of Public Assistance projects.
Both FEMA and state officials involved in testing the redesigned
delivery model stated that the new case management system's
capabilities could lead to greater transparency and efficiencies in the
program. Similarly, in a memo to all FEMA staff about the 2020 Planning
Guidance, the Administrator laid out several expectations for FEMA's
Mission Support, Grants Program Directorate, and Office of Response and
Recovery in reducing complexity.
Nevertheless, in the course of conducting recent work, we have
continued to encounter examples of difficulties that delay or limit
recovery efforts and frustrate officials at different levels of
government as they attempt to navigate disaster recovery programs. For
example, in October 2019 we reported that both the complexity of the
Public Assistance application and the relative lack of experience at
different levels of government, including within FEMA, with wildfire
damage of the magnitude experienced, created challenges and
frustrations for local governments dealing with wildfire devastation.
In that report, we recommended a comprehensive assessment of operations
including policies, procedures, and training to enhance future wildfire
response and recovery. In October 2019, we also reported on challenges
with the grid recovery in in Puerto Rico, including uncertainty about
FEMA funding eligibility, capacity constraints, uncertainty about the
timing and amount of federal funding available, and the need for
coordination. For example, according to local officials, FEMA had not
provided sufficient guidance on how it would implement new authorities
and determine eligible uses of FEMA funding to guide grid recovery
efforts. Further, while multiple sources of federal funding were
available, each funding source had different eligibility criteria,
requirements, and time frames.
Challenges navigating across multiple programs administered by
different federal departments and agencies is not unique to the
recovery in Puerto Rico. For example, we found similar problems in 2015
when we examined the efforts to enhance disaster resilience during the
recovery from Hurricane Sandy. In our analysis of the frameworks that
guide the nation's efforts to prepare for, respond to, recover from,
and mitigate the risk for disasters, we found 17 separate departments
and agencies that have a role to play. Particularly, but not
exclusively, for our nation's largest and most costly disasters, when
recovery funds have been appropriated through a supplemental
appropriation, state and local governments are left to work out how to
use a patchwork of programs designed for different purposes and
initiated at different points toward a comprehensive recovery and
hazard mitigation approach. It will be important for FEMA to continue
to make progress toward its strategic goal of reducing complexity and
for all relevant federal departments and agencies to pay attention to
opportunities to help disaster assistance recipients pursue more
comprehensive recovery and hazard mitigation approaches.
With regards to the progress with HUD programs, we noted in March
2019 that the ad hoc nature of the Community Development Block Grant-
Disaster Recovery (CDBG-DR) had created challenges for CDBG-DR
grantees, such as lags in accessing funding and requirements that may
vary for each disaster. We also found that grantees had difficulty
coordinating with multiple federal agencies. We reported that because
HUD lacks permanent statutory authority, CDBG-DR appropriations require
HUD to customize grantee requirements for each disaster. We concluded
that establishing permanent statutory authority for a disaster
assistance program that meets verified unmet needs would provide a
consistent framework for administering funds going forward. Therefore,
we recommended that Congress consider legislation establishing
permanent statutory authority for a disaster assistance program
administered by HUD or another agency that responds to unmet needs in a
timely manner and directing the applicable agency to issue implementing
regulations. Since that report, legislation that would permanently
authorize CDBG-DR has been passed by the House and referred to the
Senate. It is important to note, however, that while a permanent
authorization--no matter to which agency--may provide more stability
and predictability in the functions that the CDBG-DR program serves, it
will not reduce all of the complexity officials at different levels of
government encounter when they must work across federal programs.
5. GAO has reported that, due to an artificially low indicator for
determining a jurisdiction's ability to respond to disasters that was
set in 1986, the Federal Emergency Management Agency risks recommending
federal assistance for jurisdictions that could recover on their own.
GAO has recommended that FEMA adjust its methodology for determining
local capacity to ensure that the agency is focused on disasters that
exceed local capacity. In the DRRA, Congress directed the FEMA
Administrator to update the factors considered when evaluating requests
for major disaster declarations. What progress has the agency made in
implementing this provision?
The Disaster Recovery Reform Act of 2018 (DRRA) requires FEMA to
initiate rulemaking to update the factors considered when evaluating
governors' requests for major disaster declarations, including
reviewing how FEMA estimates the cost of major disaster assistance, and
consider other impacts on the capacity of a jurisdiction to respond to
disasters. DRRA requires the FEMA Administrator to initiate the
rulemaking by October 2020. As of January 2020, FEMA reported that it
is currently reviewing the six regulatory factors used to determine
whether to recommend that the President declare a major disaster and
has begun the process of developing a Notice of Proposed Rulemaking,
which it anticipates publishing in 2020. Until FEMA implements a new
methodology, FEMA will not have an accurate assessment of a
jurisdiction's capabilities to respond to and recover from a disaster
without federal assistance and runs the risk of recommending that the
President award Public Assistance to jurisdictions that have the
capability to respond and recover on their own.
6. GAO has reported that the risk for improper payments increases
when billions of dollars are being spent quickly. For many years, GAO
and the Inspector General community have identified internal control
weaknesses in the federal government related to agencies receiving
supplemental funds for disaster assistance. Have payment integrity
provisions helped assure that all federal disaster recovery funds are
being spent as efficiently and effectively as possible? Has
implementation of those provisions had any effect on the pace of funds
disbursement, either to accelerate or delay communities receiving
disaster recovery funds?
We have not conducted the work necessary to fully answer this
question. However, the payment integrity provisions in the disaster
supplemental appropriation acts can serve as a critical transparency
tool for controls over disaster funds. Nevertheless, implementation of
these provisions has varied. In June 2019, we reported that, of six
selected agencies, one agency did not submit required internal control
plans to Congress for funds appropriated following the 2017 disasters.
Of the five agencies that did submit the required plans, four were not
timely and all lacked necessary information, such as how they met OMB
guidance and federal internal control standards. These issues were
caused, in part, because OMB lacked an effective strategy for helping
agencies develop internal control plans for the needed oversight of
these funds. Because OMB did not establish an effective strategy for
timely communicating requirements for agency reporting in internal
control plans, federal agencies lacked the information needed to meet
the statutory deadline. As a result, Congress and others did not timely
receive agency internal control plans. We recommended that the Director
of OMB develop a strategy for ensuring that agencies communicate
sufficient and timely internal control plans for effective oversight of
disaster relief funds. OMB disagreed with this recommendation and
stated that they do not believe timeliness and sufficiency of internal
control plans present material issues that warranted OMB action. We
continue to believe that future internal control plans could serve as a
critical transparency tool for controls over disaster funds.
Regarding the pace of funds disbursement, we have not conducted the
work necessary to answer this question. Nevertheless, our Framework for
Managing Fraud Risk in Federal Programs acknowledges that managers'
defined risk tolerance may depend on the circumstances of individual
programs and other objectives beyond mitigation of fraud risks. For
example, in the context of disaster assistance, managers may weigh the
program's objective of expeditiously providing assistance against the
objective of lowering the likelihood of fraud, because activities to
lower the risk related to fraudulent applications, such as conducting
inspections, may cause delays in service. Alternatively, managers may
define their risk tolerance as ``very low'' with regard to providing
certain disaster assistance in order to provide a high level of
certainty that the assistance is actually going to those in need as
opposed to fraudulent applicants. Accordingly, when developing an
antifraud strategy, managers should consider benefits and costs of
control activities, such as the benefit to the program of reducing the
likelihood or impact of a fraud risk.
7. The National Flood Insurance Program (NFIP) and the Federal Crop
Insurance Corporation are sources of federal fiscal exposure due, in
part, to the vulnerability of insured property and crops to climate
change. Federal flood and crop insurance programs were not designed to
generate sufficient funds to fully cover all losses and expenses, which
means the programs need budget authority from Congress to operate. GAO
has described these programs as providing coverage where private
markets for insurance do not exist, typically because the risk
associated with the property or crops is too great to privately insure
at a cost that buyers are willing to accept. Has GAO studied the
current state of the market for private insurance to assess whether
private insurers are able to compete with discounted NFIP and crop
insurance rates, or to provide insurance products that may complement
federal programs to bring more affordable insurance solutions to
market?
Yes, we have conducted work on private insurance and the National
Flood Insurance Program (NFIP). Specifically, in July 2016, we reported
on barriers to the increased use of private flood insurance.
Stakeholders we spoke with for that report--private flood insurance
companies and organizations in the insurance and lending industries--
told us that a primary barrier to private participation in the flood
insurance market was the ability of the private sector to compete with
the NFIP's discounted rates. Stakeholders said insurers needed to
charge premium rates that reflect the full risk of potential flood
losses, but with NFIP charging discounted rates that were not
actuarially sound, private companies found it difficult to compete in
the market. Other barriers cited in our report included an uncertain
regulatory environment for private flood insurance and some recent (at
that time) changes to NFIP by FEMA. Specifically, we found that a 2015
NFIP policy change could discourage consumers' use of private
insurance. FEMA had stopped allowing policyholders to obtain a refund
of their unused NFIP premium if they obtained a non-NFIP policy. Since
we issued our report, in March 2018 FEMA reinstated the ability of
policyholders to cancel their NFIP policy and be eligible for premium
refunds, on a prorated basis, if they obtained a duplicate non-NFIP
policy effective October 1, 2018.
With respect to crop insurance, we have not assessed the current
state of the market for private crop insurance, but we plan to initiate
work in the future that addresses climate change and agricultural
issues, potentially including the crop insurance program. However, we
have issued several reports addressing crop insurance more generally,
and in our 2019 High Risk List, we identified the federal government's
role as the insurer of property and crops as an area where government-
wide action is needed to reduce federal fiscal exposure.
8. Has GAO analyzed trends in economic versus insured disaster loss
and default rates for uninsured disaster survivors with federally-
insured loans, and what have those studies found with regard to actions
Congress can take to mitigate uninsured economic loss?
We have not conducted work analyzing trends in economic versus
insured disaster loss and default rates for uninsured disaster
survivors with federally-insured loans.
references page
FEMA, Memorandum for All FEMA Employees: Calendar Year 2020 Annual
Planning Guidance (Washington, D.C.: Dec. 12, 2019).
FEMA, 2018-2022 Strategic Plan (Washington, D.C.: Mar. 15, 2018).
GAO, Climate Resilience: A Strategic Investment Approach for High-
Priority Projects Could Help Target Federal Resources, GAO-20-127
(Washington, D.C.: Oct. 23, 2019).
GAO, Disaster Resilience Framework: Principles for Analyzing
Federal Efforts to Facilitate and Promote Resilience to Natural
Disasters, GAO-20-100SP (Washington, D.C.: Oct. 23, 2019).
GAO, Wildfire Disasters: FEMA Could Take Additional Actions to
Address Unique Response and Recovery Challenges, GAO-20-5 (Washington,
D.C.: Oct. 9, 2019).
GAO, Puerto Rico Electricity Grid Recovery: Better Information and
Enhanced Coordination Is Needed to Address Challenges, GAO-20-141
(Washington, D.C.: Oct. 8, 2019).
GAO, 2017 Disaster Relief Oversight: Strategy Needed to Ensure
Agencies' Internal Control Plans Provide Sufficient Information, GAO-
19-479 (Washington, D.C.: June 28, 2019).
GAO, High-Risk Series: Substantial Efforts Needed to Achieve
Greater Progress on High-Risk Areas, GAO-19-157SP (Washington, D.C.:
Mar. 6, 2019).
GAO, 2017 Hurricanes and Wildfires: Initial Observations on the
Federal Response and Key Recovery Challenges, GAO-18-472 (Washington,
D.C.: Sept. 4, 2018).
GAO, Climate Change: Analysis of Reported Federal Funding, GAO-18-
223 (Washington, D.C.: Apr. 30, 2018).
GAO, Disaster Assistance: Opportunities to Enhance Implementation
of the Redesigned Public Assistance Grant Program, GAO-18-30
(Washington, D.C.: Nov. 8, 2017).
GAO, Crop Insurance: Opportunities Exist to Improve Program
Delivery and Reduce Costs, GAO-17-501 (Washington, D.C.: July 26,
2017).
GAO, Federal Disaster Assistance: Federal Departments and Agencies
Obligated at Least $277.6 Billion during Fiscal Years 2005 through
2014, GAO-16-797 (Washington, D.C.: Sept. 22, 2016).
GAO, Flood Insurance: Potential Barriers Cited to Increased Use of
Private Insurance, GAO-16-611 (Washington, D.C.: July 14, 2016).
GAO, Hurricane Sandy: An Investment Strategy Could Help the Federal
Government Enhance National Resilience for Future Disasters, GAO-15-515
(Washington, D.C.: Jul. 30, 2015).
GAO, A Framework for Managing Fraud Risks in Federal Programs, GAO-
15-593SP (Washington, D.C.: July 28, 2015).
GAO, Crop Insurance: In Areas with Higher Crop Production Risks,
Costs Are Greater, and Premiums May Not Cover Expected Losses, GAO-15-
215 (Washington, D.C.: Feb. 9, 2015).
GAO, Hurricane Sandy: FEMA Has Improved Disaster Aid Verification
but Could Act to Further Limit Improper Assistance, GAO-15-15
(Washington, D.C.: Dec. 12, 2014).
GAO, Considerations in Reducing Federal Premium Subsidies, GAO-14-
700 (Washington, D.C.: August 8, 2014).
GAO, Hurricanes Gustav and Ike Disaster Assistance: FEMA
Strengthened Its Fraud Prevention Controls, but Customer Service Needs
Improvement, GAO-09-671 (Washington, D.C.: June 19, 2009).
GAO, Hurricanes Katrina and Rita Disaster Relief: Continued
Findings of Fraud, Waste, and Abuse, GAO-07-300 (Washington, D.C.: Mar.
15, 2007).
U.S. Global Change Research Program, Impacts, Risks, and Adaptation
in the United States: Fourth National Climate Assessment, vol. 2.
(Washington, D.C.: November, 2018).
Questions for the Record
damon burns
President & Chief Executive Officer
The Finance Authority of New Orleans
The Honorable Kathy Castor
1. In your testimony, you recommended that Congress work to ensure
a market for affordable insurance. In your experience, how are
retrofits to homes currently accounted for in the National Flood
Insurance Program? As FEMA works to adjust its flood insurance rating
methods, what are the sorts of flood and storm mitigation measures that
should be accounted for to reduce risk and insurance rates? How
important is it to your strategic program for community resilience
finance for federal insurance to discount insurance costs based on
those resilience characteristics of homes for your borrowers?
The National Flood Insurance Program as currently structured does
not adequately account for climate resilience retrofits. The majority
of homes across America lack the proper protection against catastrophic
climate events. Financial markets have not fully adjusted to the
realities of climate change and the risks placed upon cities. Prior to
Hurricane Katrina, The Finance Authority of New Orleans had an
approximately $395 million balance sheet mostly composed of residential
mortgage backed securities. Today that portfolio is valued at around
$20 million as a direct result of homes and infrastructure not being
resilient enough to withstand a major climate and financial disaster.
FANO's story is a cautionary tale of the wide-ranging effects
climate events can have on a community. Moving forward, we must ensure
that every home and the public infrastructure supporting those homes is
protected from climate events. This can be accomplished by the Federal
Government using its financial resources to create a market for climate
disaster insurance tied to the existing mortgage market.
The tandem of a climate resilience mortgage and insurance product
would provide upfront capital to allow the homeowner to invest in
climate mitigation measures such as roof fortification, stormwater
management systems, solar panels, permeable pavement, energy efficient
equipment and other measures specific to certain geographies. Many
communities do not have adequate resources to fix these problems on
their own. Innovation is needed and it must begin with the public
sector. FANO is actively recruiting private financial institutions and
corporations to play a role in addressing our climate challenges but
more support is needed from the Federal Government to make American
cities first-class.
2. What do communities most need in terms of technical assistance
to ensure that planning is inclusive and that investments drive
resilient outcomes for everyone in the community?
Community education regarding the realities of climate change is a
critical need on all levels of society. Municipalities, private
companies and non-profit organizations must cooperate to fully
understand the severity of this issue. In my estimation, the issue of
climate change is not fully understood and accepted by all community
stakeholders.
Congress should provide direct financial support for cities to lead
the effort to educate America about the opportunities and risks of
climate change. Community design sessions focused on green and smart
infrastructure is an example of how cities can utilize technical
assistance funding. All cities should be required to deliver a climate
resilience plan built by their respective communities. This is also an
opportunity for cities to collaborate by sharing knowledge and
solutions with an eye toward innovation. America should have the most
innovative cities in the world.
3. How can Congress help ensure that minority- and women-owned
local businesses can take advantage of redevelopment and climate
resilience investments, which would provide additional economic
benefits to localities?
Congress should provide financial incentives and support to cities
that actively invest in minority and women owned businesses focused on
climate resilience. I recommend the following solutions:
1. Technical assistance funding for educating and training
minority and women owned businesses to capture the opportunities
provided by a city investing in climate resilience.
2. Federal tax credit program for minority and women owned small
businesses that start climate resilience-based companies and/or
projects.
3. Financial incentives for cities that prioritize operating and
capital budget spending on minority and women owned businesses.
4. Below-market or tax-exempt funding for minority owned financial
institutions to invest in climate resilience businesses and community
development projects.
5. Funding for minority developers and homebuilders to encourage
housing innovation in distressed communities.
The Honorable Garret Graves
1. Being from coastal Louisiana, you and I both know that people
are always going to live by water. With that reality, it's necessary
that communities have the tools they need to adapt to safely live by
water.
a. How do you suggest we monetize certain gov. functions and
infrastructure that will be necessary to build resilience?
Climate resilience based financial products are limited in today's
market. Property Assessed Clean Energy (``PACE'') financing is gaining
momentum but less than half of U.S. states have passed legislation to
activate this method of financing climate resilience. PACE financing
allows a property owner to finance climate resilience and green
measures on its annual property tax bill. The cost of resilience to the
property owner is spread over a 20-year period and can be passed on to
future property owners until all improvements are paid for.
PACE financing is becoming popular because it is otherwise
difficult to fully finance climate resilience improvements with
conventional bank financing. Commercial banks limit the amount of
improvements that can be made and require a more aggressive payback
term. Alternatively, PACE financing allows a property owner to use
their tax bill as a financing tool. As a result, PACE lenders or
investors have seniority over the mortgage lender for the underlying
property. This has made commercial banks uncomfortable and led to many
states rejecting PACE based financing for their cities.
Existing mortgage and insurance products do not allow a property
owner to maximize climate mitigation. However, a combination of PACE
financing with a climate resilience-based mortgage and insurance
product would stimulate climate mitigation investing. The Federal
Government should require states to allow PACE financing or develop
alternative plans for financing climate resilience. It is unacceptable
that states are exposing its citizens to danger by ignoring the
realities of climate resilience. Every state should be held accountable
for a solution to mitigate climate risks.
b. How do you see green infrastructure playing a role as we adapt
for the changing climate?
Green infrastructure is the foundation of climate resilience
investing for cities. Cities must lead the way by transforming our
public spaces into climate resilience projects that protect and
beautify our communities. Prioritizing and incentivizing investment in
green infrastructure will fuel capital markets, increase innovation and
give disadvantaged minority communities a chance to rebuild. A
coordinated green infrastructure strategy for all levels of government
is needed to make green infrastructure a reality.
2. For some communities, federal disaster insurance is not an
option. The National Flood Insurance Program (NFIP) exists for those in
a 100 year floodplain, where communities often see reoccurring floods.
However, when disaster strikes areas where flood insurance is not
required or when communities are devastated by exceptional disasters
other than floods, the taxpayer steps in to help anyway. In these
cases, homeowners receive payments from taxpayer-funded disaster
assistance programs without ever having to pay premiums.
a. Given your financial and public service background, how can the
federal government reconceptualize its approach to comprehensive
disaster coverage to ensure that homeowners are able to afford the
insurance coverage they need, without leaving the taxpayer on the hook
again and again?
A missing link in the U.S. mortgage market is a connection to
climate resilience. FHA has taken a step forward by creating an Energy
Efficient Mortgage (``EEM'') product that allows homeowners to upgrade
their homes with green or climate resilient features. However, more
support is needed to ensure a climate resilient housing stock in all
cities. FHA's EEM provides the homeowner with some assistance but it is
typically short of what is needed to completely mitigate climate risks.
A new form of comprehensive homeowner's disaster insurance should
be considered to increase the amount of upfront funding and long-term
protection available to homeowners. The U.S. government has the balance
sheet to create a market for this type of insurance product. This new
climate resilience insurance product can be delivered through the
nation's housing finance agencies and green banks alongside their
existing single-family mortgage programs. Housing finance agencies
issue over $20 billion in mortgage revenue bonds annually with a
minimal amount of those funds dedicated to making homes more climate
resilient.
Creating a climate resilience product will incentivize housing
finance agencies to form partnerships with insurance companies and
commercial banks. The desired end result of this collaboration is a
more climate resilient America and increased economic opportunity.
Cities will be able to physically transform their housing stocks with a
U.S. government supported climate insurance product.
references page
PACE Nation Fact Sheet https://pacenation.org/wp-content/uploads/
2016/10/PACEBasics_2016 _10_7.pdf
Questions for the Record
chuck wemple
Executive Director
Houston-Galveston Area Council
The Honorable Garret Graves
1. It is extremely important to begin the recovery process as
quickly as possible after a disaster, and you know this well having
recently suffered from Hurricane Harvey. In your opinion, what are the
top two roadblocks that have kept your response to Harvey from being
the most efficient and successful way to expedite disaster recovery at
the lowest possible cost?
Many recovery activities are locally initiated immediately after
the first stage of response; long term recovery committees are
established, chambers of commerce reach out to returning businesses,
schools coordinate openings with returning residents, and volunteers
and advocacy groups begin working with homeowners to begin repairs and
bring stability and hope. Local governments assess their emergency
reserves and options for debris pick up and ensuring basic services are
working and their communities are safe. The role of federal assistance
in recovery should not be overlooked. It is a critical part of helping
communities bounce back after a disaster and to successful recovery of
local economies.
After working through several disasters over the past 15 years,
there are two consistent phenomena that get in the way of rapid
recovery. It is important to understand that I am referring to recovery
and not the initial response immediately after a disaster. (1) The hope
of quickly delivered federal funds coupled with caution that only
certain things will be covered by the federal assistance. Help is on
the way, but only for certain things, and the funding has a lot of
requirements that don't necessarily line up with the most effective
projects, and the rules are somewhat different each time so how do we
proceed with recovery? Substantial time and effort is spent considering
what do we fund locally and what is too large to fund locally or is a
better fit for federal funds? With housing the effect is amplified due
to extensive qualification and eligibility criteria that result in
approximately 1 in 4 applicants receiving assistance. And when we add
on the complexity of numerous federal agencies all offering
individualized types of recovery funding, communities end up chasing
possible aid and can encounter rerouting (``We can't fund that, that is
a USACOE project'') and become discouraged and fatigued while waiting
for approvals. Which takes me to the second major roadblock. (2) The
long delays in moving funds from the federal government to communities
and citizens in need of help. It's a strange limbo or purgatory. An
announcement comes that Congress has approved recovery funds and help
is on the way. Then there is a wait for federal register announcements
and guidance--which is an important and critical step to make sure
funds are appropriately programmed and spent--but takes too long. Homes
that could have been quick and efficient repairs deteriorate and become
more costly tear-down and replacement projects. And households remain
fragile longer and have an effect on local economies and the social
fabric of a community. It is often the case that communities wait more
than a year after a disaster to receive the first disbursements of
recovery aid. Housing and infrastructure damage advances during this
time and becomes more costly to address and recovery is slower than it
could be.
2. I appreciate your comment that economic resiliency and financial
strength rarely get the attention and consideration it merits because
it is often overshadowed by infrastructure and housing needs after
natural disasters.
a. How can we do better up front with pre-disaster mitigation?
First launch a national campaign, an aspirational message, that we
all have a role in preparing our communities, businesses and homes to
withstand disasters and to strengthen our ability to bounce back after
adversity. That individuals, community organizations, employers,
cities, counties, states, and our federal government are all in this
together to support and hold each other accountable. That we should not
shy away from the need to understand our individual and community
vulnerabilities and the risks they bring in a period of more active
weather and more frequent storms. To raise awareness that mitigation is
much less costly than recovery. And then to invest (individual, private
sector, and government) in real projects and initiatives that have
noticeable impact on improving our economies and communities. Tie
federal aid to a demonstrated understanding of mitigation needs and
actions. An example for communities could be fire-wise programs or the
community rating system, comprehensive mitigation plans that also
address economic resiliency, and financial literacy training for
individuals. Its important to understand that mitigation is not just
physical infrastructure but also includes local economies.
b. What are some examples of projects in your region that could be
financed now to achieve best use federal funds and achieve cost
savings?
I'll offer three very different projects that could have a high
return on investment.
(1) Relocating a severe bend in a section of railroad that cuts
through the heart of one of our small cities in a growing county.
Locally referred to as the Dayton candy-cane due to its location and
hook-like configuration, the rail and roadway configurations result in
frequent and substantial delays in the movement of goods and people,
hampers evacuation and emergency services and limits economic
development and resiliency in one of our rural counties on the edge of
urban growth. The County has worked with our regional council to
develop an alliance with local governments, the private sector, and
State and Federal funding agencies to reconfigure the rail and
roadways, establish proper overpass options, and open up a portion of
the County that has been cut off from economic development. This
project will also create flood mitigation opportunities within the
city, create a more vibrant downtown and commercial district, and
increase the options of freight movement out of our major seaport,
improving local and regional economic resilience. Despite commitments
of local, private and government transportation funding, the project
has a substantial funding gap that could be met with federal mitigation
funds. The link is improved evacuation routes, better drainage, and a
stronger economy. This project illustrates the new perspectives that
need to be adopted as we look to increase economic resiliency by
preparing or natural disasters while also looking to strengthen local
economies and increase public safety. Traditional thinking tends to
focus on very specific pieces of infrastructure like culverts, floodway
improvements and shoreline protection which are important--but often
don't have well-developed links to their impact on a community's
economic resilience and accelerating economic development.
(2) Upgrades to the water supply system in one of our rural cities.
Damaged by Hurricane Ike and further impacted by soil contraction
during a recent historic drought, the city water system experienced
decreases in water pressure in portions of its water supply system and
portions of the community did not have adequate hydrant pressure to
support fire fighting trucks. One of the affected areas included a
business park and several businesses were prepared to leave the
community because their enterprises could not be served in the event of
fire. The city purchased a pumper-style fire truck (which transports
its own water) to meet fire suppression needs and businesses remained
in the community--but growth and resiliency are not at levels that
could be achieved with a proper functioning system. It is important to
note that the fire truck was purchased using a federally-funded
recovery loan through the Economic Development Administration and
administered by our regional council. Mitigation funds that are not
tied back to specific disasters--but are designed to better prepare and
strengthen communities against disasters would be a good fit for the
water supply project. The community is working hard to serve the needs
of its residents and businesses. Additional investment of federal funds
would help cure a chronic problem and accelerate their ability to
withstand future disasters.
(3) Relocation of a wastewater treatment plant in one of our
coastal communities. One of our cities has completed the appropriate
planning and land acquisition to relocate its sewer facility from a
highly vulnerable location along the coast of Galveston Bay. Local
officials have worked diligently to secure local funding and work
through federal recovery funding requirements. The project has been a
priority for several years. An additional investment of mitigation
funds (on top of recovery funds) would further strengthen the proposed
new facility and increase the community's ability to maintain essential
services and speed up the return of its residents after future storms.
I provide this example as a situation where persistence in a local and
federal partnership has paid off and a small additional investment
could increase the return on investment.
c. Can you provide your thoughts about how communities can obtain a
healthy tax base in order to have that economic resiliency and be
better prepared for when disaster strikes?
Resist the temptation to grandfather structures from compliance
with new flood elevation codes. Invest in code enforcement and
assistance programs that result in durable housing. Consider tax
incentives for homeowners and businesses that implement improvements
that strengthen their ability to endure less damage and disruption from
disasters (go above and beyond minimum requirements). Work with banks
and financial institutions to leverage community reinvestment act funds
to increase the fiscal literacy and financial security of their
residents. Understand where their residents work (often outside the
immediate community) and partner with other communities to ensure jobs
and employers are stable and diverse (be aware of the adverse effects
of being a bedroom community for an employer outside the community).
3. You make an important point that the solution is not as simple
as increasing funding, that we can spend the money already available
better and more efficiently. Where and how can we do that? Which
federal agencies or programs have you encountered where this
inefficiency is happening?
Consider designating an agency to coordinate various recovery and
resiliency funding streams to reduce rerouting of funding requests
(``can't fund that here, try another agency''). FEMA's ESF-14 function
could be a framework worth revisiting. The Department of Commerce
Economic Development Administration's funding integration effort in
Region VI (bringing a full suite of funding partners out to regions to
consider projects in a workshop setting) is an excellent example of
reducing the silos of funding agencies and focusing on a more efficient
approach to federal investment.
Agencies who are tasked to undertake massive amounts of recovery
funding can become semiparalyzed with the intense scrutiny and
responsibility of programming billions of dollars. This results in
delays (see comment 1 above), frustration, reduced efficiency, and
investment in eligible projects that maybe important but not
necessarily the highest priorities of local communities. Increasing
flexibility by focusing on projects and investments that make a
community stronger (not just build back) and reducing restrictions on
which agency can fund which projects would substantially increase
efficiency and speed up the delivery of federal assistance to
communities in need.
4. From your experience in emergency management, do you think the
public adequately knows what resiliency means and what role they have
in preventing it?
Terms like resiliency and mitigation are somewhat abstract and can
be hard for the public to nail down--and as a result can mean very
different things to different people and also sound like something
someone else or an organization needs to do (like a corporation or
government). Terms like prepared, durable, strong, and bounce-back are
aspirational and can be easily tacked to individual and community goals
and actions. ``How can I help my neighborhood bounce back after a
flood? How can I be better prepared if the factory shuts down and I
don't get paid for a month? Voting for the bond will help prepare and
protect my neighborhood.'' These simple shifts to less bureaucratic
words can help.
a. Do community leaders?
The considerations regarding word choice and messaging mentioned
above can become even more important when considered at the level of
community leaders. Are we seeking to make our schools more resilient or
is better prepared and safer the message/goal? Are we investing in more
resilient roads, housing, and drainage or more durable roads and higher
quality housing (via codes and ordinances)? Another consideration is
that mitigation and resiliency projects can take longer than office
terms and be less of a priority than immediate short-term needs
expressed by the constituents of elected officials. Lastly, economic
development traditionally focuses on large-prize ventures and can
result in communities being overly reliant on a single employer or a
single type of business. There is a natural appeal in attracting a
large employer--say one that brings 500 jobs. But a local economy can
better weather down turns and disruption with a diversity of 10
employers each providing 50 jobs. Conventional thinking tends to focus
on the immediate short-term result and will require a shift in thinking
that considers how economic development decisions affect resiliency.
b. What about leaders in small and rural communities? How do we
educate them to be ready for extreme weather events?
Work with networks and national organizations that support small
and rural counties like the National Association of Counties and the
National League of Cities. Leverage the strong relationship with
federal agencies that have high levels of knowledge about small and
rural communities and a proven track record in improving communities--
specifically USDA and the Economic Development Administration. Allow
flexibility in existing funding streams to help build capacity since
local government staff and community leaders in these areas often wear
many hats and can benefit from targeted technical assistance. The
earlier comments regarding clarity of language and word choices in
messaging are universal and apply here, too.
c. What role should the federal and local governments have to
further education of risk and resiliency in their communities?
A critically important role to show that we are all in this
together and need to work together to be better prepared and adapt to
future threats. See earlier responses regarding launching a ``We are
stronger together'' aspirational campaign, items 2.a., 2.c., and 4.a.
Questions for the Record
marion mollegen mcfadden
Senior Vice President, Public Policy
Senior Advisor, Resilience
Enterprise Community Partners
The Honorable Kathy Castor
1. You testified regarding the extensive disaster resilience and
recovery work that your organization has conducted in all 50 states,
and currently in Puerto Rico, the United States Virgin Islands,
Florida, Georgia, Texas, Louisiana, North Carolina, Washington, D.C.,
New York, Michigan, Illinois, and California. With this experience and
your 15 years of experience in disaster recovery with HUD, what are the
top three greatest barriers to the efficient and resilient recovery
from disasters that communities face?
Thank you again for the opportunity to share my thoughts with the
Committee. The first major barrier is the lack of codification of CDBG-
DR, which leads to confusion on the ground and perpetuates a lack of
interagency communication.
Second, investments in communities are being made in an inequitable
manner, because the Federal Government does not prioritize serving low-
and moderate-income communities. Data show that homeowners receive
disproportionate assistance compared to renters, and white applicants
receive a disproportionate share of available benefits. Damage
assessments frequently underestimate the need of low-income survivors,
leading to fewer resources in communities where they are needed most.
Finally, the lack of a federal framework and incentives for
resilient infrastructure are a real barrier. Communities need guidance
on how to implement best practices. State and local capacity challenges
with regard to planning and implementation are real and only the
Federal Government is in the position to share the best available data
in a way that can be absorbed locally.
2. What can Congress do to reduce risk and costs before disasters?
Congress can task Federal agencies with working together to provide
the best available risk data to communities in a manner that is easily
useable at the address or block level. Congress can promote adoption of
modern codes and ensure that all federally-funded infrastructure
projects--not just disaster recovery projects--are built to resilience
standards. Finally Congress can increase annual Housing and Urban
Development Community Development Block Grant (CDBG) program funding
and mandate that a portion of the funds be used to identify and address
local risks, so that all communities have access to resources to
prepare for the changing climate.
3. How can we help accelerate the pace of disaster recovery and
reduce disaster recovery costs?
CDBG-DR has become an indispensable tool in the federal
government's disaster recovery arsenal, but exists only when created by
appropriation. Congress must fund a recovery package after each
disaster on a one-off basis. Grantees need to then study the rules,
make policy choices, and build up their own disaster programs. This
leads to a delay of as much as nine to 12 months from when the disaster
hits to when CDBG-DR funds start reaching communities on the ground.
First, Congress can permanently authorize the CDBG-DR Program to enable
a formal rulemaking process. Grantees and stakeholders will have an
opportunity to weigh in through comments and advisory panels to ensure
that the new regulations reflect best practices and lessons learned
from past disasters.
I. Direct HUD to promulgate formal regulations with a public
comment period.
Provide deadlines for when this process needs to begin and
end. Both H.R. 3702 and S. 2301 direct HUD to issue a proposed rule
within 6 months of enactment, provide a 90-day period for public
comment and publish the final rule within one year of enactment.
II. Codify the LMI benefit standard.
The CDBG-DR Program is based on the annual CDBG Program, in
which no less than 70 percent of funds must benefit LMI persons.
Lawmakers should include this 70 percent LMI benefit standard in CDBG-
DR authorizing legislation. Both H.R. 3702 and S. 2301 include the
codification of the LMI benefit. To complement this, legislation should
also direct HUD to step up enforcement of the LMI benefit and fair
housing laws and regulations.
III. Authorize more disaster recovery staff and direct hire
authority.
Authorize and appropriate additional funding for more
permanent full-time employees in the Office of Disaster Recovery and
Special Initiatives (DRSI) at HUD. Additionally, Congress should
authorize DRSI with direct hire authority so that the office can
rapidly hire and reprogram staff as needed following a major disaster,
as is done at FEMA. The current staffing level at DRSI is woefully
insufficient. New disasters add pressure quickly, while current hiring
processes are slow. Introduced legislation does not authorize direct
hire authority.
IV. Direct agencies administering disaster recovery funds to
families (HUD, FEMA, SBA) to develop a common application for disaster
assistance applicants.
Direct agencies to create a common application through which
applicants can input their personal information, see the full menu of
federal disaster assistance options, and learn their eligibility for
different programs. A common application will place burden of
determining eligibility with the agencies providing the disaster
assistance. The common application will save time for survivors and
agencies by centralizing data on applicant eligibility and unmet needs
and reduce opportunities for duplication of benefits. On the backend,
the common application will also standardize and streamline data
collection in a single portal for data on damage assessment, unmet
needs and aid disbursement. This data can then be shared with grantees,
so they have full information and prevent duplication of benefits. The
portal should include information from FEMA's disaster relief programs,
the National Flood Insurance Program, SBA's Disaster Loan Program, and
CDBG-DR.
V. Authorize a CDBG-DR Reserve Fund.
Authorize a CDBG-DR reserve fund that can be used for
immediate post-disaster costs and capacity building in advance of a
congressional appropriation of CDBG-DR. If a grantee knows that it is
going to get a larger grant, then it should begin its post-disaster
planning process and building the capacity to administer recovery funds
as soon as possible. Both H.R. 3702 and S. 2301 authorize this fund to
be used for providing technical assistance and capacity building
immediately following a disaster. The Senate bill also authorizes HUD
to allocate funds to grantees for disaster homelessness assistance
within 14 days of a disaster declaration, provided that such funds
serve families experiencing or at risk of homelessness that are not
receiving rental assistance from FEMA. Lawmakers should strongly
consider broadening authorized uses for the Reserve Fund and
specifically authorize pre-disaster planning and community engagement
grants and rapid response bridge grants for small businesses.
VI. Institutionalize mitigation and resilience as part of CDBG-
DR.
Congress should include a set aside for mitigation in future
CDBG-DR appropriations and direct HUD to incorporate mitigation
activities into the CDBG-DR Program's core set of eligible uses, like
housing, infrastructure and economic development. According to a study
by the National Institute of Building Science, each dollar the federal
government invests in mitigation saves $6 in future disaster recovery
costs.\1\ H.R. 3702 and S. 2301 include this provision by requiring HUD
to allocate no less than 45 percent of the amount allocated to a
grantee for unmet needs.
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\1\ https://www.nibs.org/page/mitigationsaves
4. How can we help low-income communities and communities of color
be more resilient to extreme weather and other effects of climate
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change?
While it is often said that natural disasters do not discriminate,
we have seen repeatedly that low-income people are hit hardest; are the
least prepared; and are the least able to recover on their own. This is
generally not a surprise, given that socially vulnerable groups are
more likely to live in areas prone to experience disasters and suffer
their after-effects. These homes tend to be less stable in the high
winds of hurricanes and tornados, posing additional risk to individuals
and families who cannot afford to upgrade or pay for housing in a
different location that may be safer. And with small businesses, we
have found that getting them to re-open their doors may require
technical assistance, grants, and access to highly-risk-tolerant
capital.
The Federal Government should provide equitable infrastructure and
mitigation investments in all neighborhoods and require building to
modern codes so that projects and homes can withstand more damage.
Disaster recovery planning must take into account fair housing
planning, specifically looking language barriers and the needs of
people with disabilities, including seniors and people without access
to private transportation. Communities must be more cognizant of flood
plains and building in vulnerable areas, which is most likely to occur
under stronger leadership from the Congress and Federal agencies.
5. You've recommended that we develop a framework for rating
infrastructure resilience that prioritizes community needs to ensure
that investments made in infrastructure systems are both efficient and
equitable? Are there metrics for social equity that we should be
looking at that can help us get beyond property values so that our
investments focus on protecting people?
Federal agencies should develop a framework for rating and
evaluating resilient infrastructure design. The framework should serve
as a best practice guide to help cities design, build and operate
infrastructure to ensure its long-term viability and to deliver other
environmental, economic, and social benefits, where feasible. Once a
rating system is designed, federal agencies should then condition the
receipt of federal funds on projects meeting a required resilience
rating.
The rating framework would help agencies ensure that federally
funded projects are evaluated consistently and that federal investments
are yielding resilient infrastructure systems. This consistency could,
over the long term, create more efficiency and reduce operating and
insurance costs, as well as mitigate risk. And predictability would
remove a current obstacle to private investment. While no such
framework exists, we would be happy to explore how our free
Opportunity360 tool \2\ might be useful for identifying vulnerable
communities.
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\2\ https://www.enterprisecommunity.org/opportunity360
Ms. Castor. This is our last hearing of the year. I am
really proud of what the committee has done, but the big work
lies ahead. We need everyone's help and support. If you have
additional recommendations for the committee, please pass them
along.
I want to thank our professional staff and all of the
members for all their terrific work this year.
And to everyone, have a lovely holiday season.
Thank you. We are adjourned.
[Whereupon, at 4:13 p.m., the committee was adjourned.]