La. told: Make do with less (Average mold remediation 9K)

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La. told: Make do with less

Federal official doubts more aid for now

By NED RANDOLPH

Advocate staff writer

Published: Feb 9, 2006

Louisiana must make do with the $6.2 billion in block

grants authorized by Congress on all of its housing

relief, and if it spends the money wisely more could

follow, Don , the former FDIC chairman

overseeing the Gulf Coast recovery, said Wednesday.

“I would support it,” he told a group of Louisiana

bankers at Juban’s Wednesday.

In an amicable luncheon, the former Texas banker

managed to keep the mood light despite the sobering

news of his message: Do with less.

Unanswered were questions from attendees about who

should take responsibility for the failure of the

federal levee system or whether the president would

offer more support in his $18 billion supplemental

bill.

Hurricanes Katrina and Rita destroyed more than

215,000 homes and 18,700 businesses, according to the

Louisiana Recovery Authority appointed by Gov.

Kathleen Blanco.

The Bush administration has put together its own

damage estimates for the state, which are much lower.

has urged Louisiana to follow Mississippi’s

example of using its CDBG money to buy out uninsured

homeowners outside the flood plain, with the rationale

that those inside the flood plain should have had

flood insurance.

However, that distinction would leave most of New

Orleans without housing relief since much of it, and

south Louisiana, lie below sea-level and are protected

by a federal levee system.

“Louisiana can decide to use the money however it

wants,” said.

His staff estimates that 15,000 to 20,000 uninsured

homeowners outside the flood plain have severe flood

damage, and only 30,000 such homeowners inside the

flood plain.

said he is negotiating with the Louisiana

Recovery Authority on an agreed-upon estimate.

“We’re close to a number that’s based on science,” he

said. “On the policy issues, we can go back and

forth.”

The number is critical because it will ultimately

influence how much money the state will be allocated.

So far, the estimate does not include damaged rental

property, which constitutes 43 percent of the housing

units in the area.

Rep. Baker, R-Baton Rouge, who proposed

creating a federal corporation to buy out ruined

properties and redevelop them, estimated the cost at

$30 billion over 10 years, some of which would be

recouped by property sales.

The bill was rejected by the Bush administration.

Baker spokesman DiResto said Wednesday that

’s staff is underestimating the number because

it’s based on damage estimates by the Federal

Emergency Management Agency.

“They themselves admit at this point they have at

least a 35 percent undercount. So it is important to

make sure we know what all the numbers are, and we

don’t have the full numbers yet,” DiResto said.

FEMA also does not include mold damage in its

estimates, he said.

“One of most prevalent problems for people in

rebuilding is the damage caused by mold from water

sitting in their home,” he said. “We believe that if

mold were taken into account … we might see a

substantial bump in every category.”

Mold remediation and remodeling, which is not covered

by typical insurance, costs about $9,000 per home,

DiResto said.

“We just have a hard time accepting the numbers that

have been presented to us,” DiResto said

Fifth District Savings and Loan Association chairman

Nolan asked : If the U.S. Army Corps of

Engineers failed in the levee design and construction

to protect the city, why wouldn’t homeowners be made

whole by the federal government?

“If a homeowner suffered damage because of a failure

by a federal agency of government, why should they

settle for less than 100 percent?” he said.

answered that residents living in the flood

plain should take responsibility for their own

property.

“I have flood insurance for my home (in Amarillo,

Texas) where it rains 17 inches a year,” said the

wealthy former head of First National Bank of

Amarillo. “Is that wasting my money? Yes maybe, but

it’s responsible.”

He added, “There will be very tough decisions, hard

decisions about not only housing, but education and

health issues.”

In terms of property damage, Louisiana experienced

more than three times the destruction to homes and 17

times to businesses than Mississippi, yet it is

earmarked to receive only 54 percent of a flexible

Community Development Block Grant appropriation.

“Congress made that distinction,” said. “Is

that fair and equitable? Obviously there is lots of

debate on that, but it’s important that Louisiana take

the money and spend it wisely and prudently. We would

hope that they spend it on uninsured homes outside the

flood plain.”

The block grants are in addition to federal money

dedicated to fixing and FEMA-awarded dollars to build

schools, public buildings and libraries.

Gwaltney with the Louisiana Bankers Association,

which organized the luncheon, said the message from

was clear: “There’s not going to be an aid

package from the government. We need to develop our

own plan and move on without the assistance from the

government,” he said. “If there is a need as part of

an overall plan, then we plug the government into that

in an appropriate way and seek their approval or

assistance or whatever that is.”

He also said that the state should appear grateful to

the nation.

“It’s not so much about our response to the

administration or making the president look good or

bad. We’ve got a nation that’s watching and we want to

publicly be people they want to help,” he said.

opened the discussion saying that the federal

government has so far committed $100 billion to the

Gulf Coast recovery — much of it paid through FEMA to

contractors to set up temporary trailers, remove

debris and repair levees. A lot of it also came in the

form of rental assistance — none of which was

controlled by the state.

“I never understood the $100 billion figure,” said

Buddy with Regions Bank. “Is the money going to

FEMA, or for housing, or cleanup? I would respectfully

ask you all not to throw that number around without

telling us where the money is going. It’s very

confusing.”

He said, “When you represent that to people they

think, as Sen. Shelby said, it’s going down the rat

hole of Louisiana.”

said he would get that information.

Greater New Orleans Inc. Chairman Henry Shane asked

if the updated FEMA elevation maps for New

Orleans and surrounding parishes, which are not

expected until March, could be rushed since they’re

holding up construction cost estimates and homeowners’

decisions.

“We’re going to lose a lot of people who are waiting

on those decisions,” Shane said.

On future support, refused to answer what would

be in the president’s $18 billion supplemental bill,

which he said will be unveiled in 15 to 30 days.

LRA board member Reilly said he believed the

state can make a convincing case for more federal

support down the road.

“Once we agree on the number of houses, and the

philosophy regarding inside or outside the flood

plain, we can make the case for additional CDBG

money,” he said after the speech.

“I believe at the end of the day the levees make our

case different on the issue of inside or outside the

flood plain, and that all the homeowners, regardless

of flood plain, will be treated the same,” Reilly

said.

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