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Issue identified 3-5-2019 by Murray Wennerlund while reviewing Mellissa Capello's Reconstruction with Elevation zero grant award.
Restore Louisiana Homeowners Program managed by the State of Louisiana OCD-DRU and IEM Inc. had created a "One Size Fits All" grant calculation spreadsheet to quickly identify if a homeowners grant award was greater than any duplication of benefits. This was used to process thousands of homeowners.
A flaw was discovered to only effect homeowners in Solution 2 Reconstruction that use any federal assistance or funds that are considered duplicative to the HUD CDBG-DR grant. Homeowners that used Flood Insurance (NFIP), Increased Cost of Compliance (ICC) funds or SBA Disaster Loans may have incurred costs not recognized by the programs first grant calculator.
The initial screening calculator used by OCD-DRU and IEM assumed the home was to be elevated less than 3 feet. When select homeowners reported elevation costs covering 3' 1" or more the program did nothing to adjust the original grant award calculator. Homeowners were required to follow HUD elevation policy published December 2016 which required them to elevation to no less than base flood elevation plus 2 feet (BEF+2').
This requirement in most cases added 10's of thousands of dollars to the actual cost but are not reflected in the eGrant Award calculator.
In Action Plan Amendment 9 voted and passed July 13, 2018 by the RLHP Task Force included a table to adjust the grant award costs to homeowners that required elevation. The Elevation Allowance Table for RLHP Repair/Reconstruction Projects listed on page 29 of the RLHP Manual version 5.1 identifies what the program will offer the homeowner in additional grant funds to elevate their homes to match HUD elevation requirements.
The issue become very apparent and clear when a homeowner uses the State of Louisiana OCD-DRU Solution 2 Reconstruction and Elevation Allowance calculator using price per square foot change for elevation above 3'.
Home Square Footage: 1,771.78
Reconstruction cost estimated by old grant screening process offers $108 per square foot which includes elevation up to 3'.
$108 * 1,771.78 = $191,352.24 Material / Labor.
The program adds 20% for contractor overhead to the reconstruction costs.
20% Overhead: $191,352.24 + $38,270.45 = $229,622.69
The state then deducts any and all Duplication of Benefits.
Let's say the homeowner has over the first screening amount in DOB.
$253,439.33 DOB - Reconstruction costs $229,622.69 = Grant Award using first screening calculator -$23,816.64.
The RLHP grant award calculator would show that the homeowner was over the total grant award by $23,816.64 and the state would simply list them as a Zero award and stop the grant process.
Now let's take the real world numbers and costs and apply them to a calculator developed by the state for Reconstruction and Elevation homeowners.
The difference is now the elevation costs are included in the reconstruction estimate section of the grant award.
In the case of our 1,771.78 sqft home our elevation allowance according to APA 9 and the RLHP Manual 5.1 (Dec. 2018) the homeowner would be awarded $34.28 + 20% overhead if elevating above 6'.
So the $108 + 20% figure used in the first calculator does not apply because the homeowner is elevating above the 3' limit this calculator placed on all homeowners.
$108 + $34.28 = $142.28 per sqft + 20% ($28.46) overhead = $170.74.
If the original calculator used the actual costs the homeowners new grant award would be as follows.
$170.74 * 1,771.78 = $302,513.72
The original DOB would still be $253,439.33
The final grant award would then be, $302,513.72 - $253,439.33 = $49,074.39
In this case, the homeowner required to reconstruct their home elevated over 6' incurred an additional cost of $49,074.39 which the original one size fits all calculator did not take into account the elevation allowances that are offered.
Each of the estimated 41 homeowners in Solution 2 Reconstruction and Elevation need to have the same calculation.
The state created the "Solution 2 Reconstruction and Elevation Allowance calculator using price per square foot change for elevation above 3 feet" and applied it to homeowners Feb. 12, 2019.
We feel that the state owes it to the homeowners that did everything right by applying to the SBA and taking the SBA loan, NFIP and ICC funds and followed FEMA FVL and HUD Elevation requirements. They did follow the program to perfection, it's just the program failed to calculate their real costs of reconstruction and elevation.
Date: 3-5-2019 Updated: 3-5-2019 Subject:
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Date: 12-30-2018 Updated: 3-4-2019 Subject: How To Research
FOIA State of Louisiana OCD-DRU 5-23-2018: Request copies of any communications between the Governors Office (J.B. Edwards) and Restore Louisiana Homeowners Assistance Program related to waiving state requirements that contractors working for Restore LA or IEM Inc tasked with rebuilding, repairing homeowners homes damaged by the 2016 floods (DR4277, DR4263) be licensed and insured as per state contractors licensing board rules, regulations and state laws.
(State of Louisiana Reply)
Your public records request, dated May 23, 2018, was received by the Division of Administration on May 23, 2018. We are conducting a search for records. Once the search is finished, the records will be reviewed for privileges and exemptions. We will contact you as soon as the review is completed, and all non-exempt records will be made available to you.
Public Records Requests
Division of Administration
State of Louisiana
Date: 1-4-2019 Updated: 1-4-2019 Subject:
Requested date: 5-23-2018
As of May 11, 2018
1. Total number of households pending Homeowner Responsibility (Solution 2) and Homeowner Escrow (Solution 1).
Reports do not currently exist that are responsive to your specific public record request. However, with respect to item 2, HUD does publish a quarterly report, the most recent of which is attached, that shows at page 8 of 49 that as of in the first quarter of 2018, 1978 grant awards to LMI households were executed, for a cumulative total of 3321.
Attachment download: Flood DRGR 1st Quarter Reports
Date: 1-4-2019 Updated: 1-4-2019 Subject:
- Franklin Associates, LLC Louisiana Housing Corporation 2/12/2016 6/30/2019 $7,143,250 $3,618,750 To perform environmental reviews and homeowner inspections. CDBG-DR funds represented are related to 2016 Flood Work. Other components of the contract funded through other sources.
- Alpha Media and Public Relations pending New Corp. 5/28/2016 7/7/2016 $33,413 $33,413 Restore LA Marketing and Outreach.
- GrantAnalyst.com, LLC 192237977 Louisiana Department of Agriculture & Forestry 3/16/2017 3/15/2018 $6,100 $6,100 ?Online grant application management system.
- Spears Consulting 837070833 TruFund Financial 5/15/2017 5/15/2018 $40,000 $40,000 Marketing/Public Relations spent as of 11.30.17.
- Start Corporation 859805285 Louisiana Department of Health and Hospitals 12/1/2015 6/30/2018 $2,802,482 $2,802,482 ?To provide support services required to help individuals rebuild their lives after homelessness, institutional care or other disruptions due to the Flood of 2016. (multiple sources of disaster funding)
- Volunteers of America 0750049916 Louisiana Department of Health and Hospitals 12/1/2015 6/30/2018 $49,999 $49,999 To provide support services required to help individuals rebuild their lives after homelessness, institutional care or other disruptions due to the Flood of 2016. (multiple sources of disaster funding)
- Westaff 788265564 TruFund Financial 5/4/2017 11/30/2017 $25,686 $25,686 Temp Services.
- Xerox Corporation 137644035 Louisiana Department of Agriculture & Forestry 10/16/2017 6/30/2018 $988 $988 Copy machine
You will be receiving, or have already received, an e-mail invitation to access a dropbox from which you will be able to access the documents referenced below.
Please click on this link to view the contracts: Dropbox Link to document download.
Date: 1-4-2019 Updated: 1-9-2019 Subject:
Freedom of Information Request Date: 6-1-2018: I would like to know who and what department created the webpage at this address: http://www.doa.la.gov/Pages/ocd-dru/for_training.aspx
I find it not useful at all and when so many public records are missing from the OCD-DRU website pages I feel this is a waste of government resources to allow to be viewed by the public.
State of Louisiana Response dated 6-5-2018:
Your public record request e-mail, dated June 1, 2018, was received by the Division of Administration on June 1, 2018. Upon review, your e-mail does not present a public records request as described in Louisiana R.S. 44:1(A)(2). As such, we are unable to provide a response.
>>>> NOTES <<<<<
Web page was removed and replaced with a redirect to the main page. The state did not acknowledge the report.
Date: 1-4-2019 Updated: 1-4-2019 Subject:
Freedom of Information Request dated 6-18-2018.
Copy of the OCD-DRU policy regarding NFIP (National Flood Insurance Program) ICC (Increased Cost of Compliance) funds with respect to the calculation of duplication of benefits (DOB).
>> State of Louisiana Response 6-22-2018 <<
See attached manual and/or view at this link:Attached Homeowners Manual version 3.1 and download link
pages 51 to 52 of the document pertain to NFIP (building and ICC) and DOB calculation.
Date: 1-4-2019 Updated: 1-4-2019 Subject:
Freedom of Information Request: 6-26-2018, Copy of the "Declined SBA Award Policy".
This document is referenced in
1. "Draft ReLa Program Management Policies (Attachment VII) Page 31 of 189"
2. "Homeowners Manual version 3.1 page 52 under SBA Verification"
>>> Response State of Louisiana <<<
The "Declined SBA Award Policy" is found on page 52 of the manual you refer to in your email below. This is the current policy:
"Applicants who have applied for an SBA loan but have a record of declining the loan or have not executed the SBA loan may be considered for RLHP funding, but awards will be adjusted to account for any SBA DOB. If a low to moderate income (LMI) household has declined an SBA loan, a hardship will be presumed and the SBA loan will not be considered a duplication of benefit. SBA loan declination is defined as an applicant having never executed the SBA loan documents."
When the "verification" paragraph states: RHLP Declined SBA Award Policy – it is referring to the paragraph above it in the manual (see snip image below).
Date: 1-4-2019 Updated: 1-4-2019 Subject:
We publish stories with the intent to help others that follow in our post disaster footprints.
Disaster victims often do not want to relive the ordeal but many that have just became victims or have been searching for answers may learn from your experiences of disasters long past. It is our goal to share with others so we all may rebuild and recover faster. Sharing experiences, post disaster experiences, from cleanup to rebuilding and all points in between. Let's document the processes each victim had to complete after the Presidential Disaster Declaration or the Emergency Declaration has been signed into action.
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Date: 12-30-2018 Updated: 12-30-2018 Subject: Your Story
"Gross Negligence, Gross Incompetence and Willful Misconduct, Restore Louisiana Homeowners Program" the series.
Tonight's episode entitled "Gross Incompetence Elevation Costs" episode 1.
NOTE: You might find this a bit humorous, but it's actually based on documented facts of 2 groups separated by 10 years working on flood recovery projects.
Restore Louisiana Homeowners Assistance Solution 2 Reconstruction program is closing in on it's first complete home elevation and reconstruction project.
Despite being handed the full Reconstruction program policy and procedures, Solution 2 Reconstruction team is still in the beginning phases of creating Process and Procedures.
According to research, outsourced workers and management have taken nearly one year to process one homeowner and still have yet to document the steps in processing Solution 2 Reconstruction homeowners.
Historical data shows state workers employed as workers worked more efficiently than outsourced companies hired by state workers.
It was found in the year 2008 that state workers awarded 18,914 homeowners with elevation grant money using the system they called, "Simplified Award Process." Current state outsourced management (2018) refuse to follow the 10 year old proven simplified processes and are determined to make a complicate process more complicate than rocket science.
The states Simplified Award Process distributed 18,914 checks in the amount of $30,000 to homeowners in less than one year. Outsourced Solution 2 Restore Management has yet to establish procedures to determine foundation costs even after being given the procedure by the Solution 1 Reconstruction team.
Stay tuned for the onsite Solution 2 Reconstruction podcast series coming next year, maybe, if policy doesn't change.
Date: 12-30-2018 Updated: 12-30-2018 Subject: State Contractors
Comment: Insurance will be needed or you will get nothing. But even then you will need to know how to navigate a system that the states create to make it impossible for them to navigate. Insurance required to cover federal assistance received.
Financial disaster recovery planning team within the Administration grant funding.
OCD-DRU trainer for all county, parish, city, town planning and zoning departments for HUD compliance training.
Resource: HUD OIG Report 2013-FW-0001
>> Start snip of report page 19,20 <<
Some States Did Not Take Sufficient Steps To Protect the Invested Federal Funds
Some States did not require adequate homeowners' insurance for the homes built or rehabilitated with Disaster Recovery funds. Texas initially did not require insurance. It modified its program for the Katrina, Rita, and Wilma second allocation and, along with Louisiana and Florida, required insurance for 3 years. Alabama adopted a deed restriction that "strongly encouraged" insurance. For the Gustav, Ike, and Dolly allocation, Texas again modified its program and stated insurance was required, but its policy, like Alabama's deed restriction, stated only that failure to maintain insurance "may" impact future disaster assistance. However, Mississippi took an aggressive stance by requiring a transferable covenant that required insurance at all times. These variations occurred because HUD allowed the States maximum feasible deference in the implementation of their Disaster Recovery programs as allowed by the State CDBG program.
HUD needs to adopt a best practice to address the issue of insurance to ensure that the Federal funds invested in the assisted homes are protected in the event of future hurricanes or disasters. Since Hurricane Katrina in 2005, an additional 10 hurricanes and other storms have hit the States and caused damage. Further, our audit of Texas13 found that Hurricane Ike had damaged homes repaired or replaced by Katrina, Rita, and Wilma grant funds, which lacked insurance. In one extreme case shown in figures 10 and 11, an uninsured home suffered significant structural damage, and the homeowner inquired about additional disaster assistance for his recently replaced home.
The Texas audit also found that of a sample of 59 Katrina-, Rita-, and Wilma funded homes tested, 38 homes were later damaged by another hurricane or storm. Of the 38 homes, 23 did not have insurance. Based on a projection of the sample results, at least 133 of 453 reconstructed or rehabilitated homes or homes awaiting reconstruction lacked insurance and were damaged or are at risk of being damaged by another storm. The report concluded that if Texas changed and improved its action plan and policies, an estimated $60.2 million in program funds could be saved.
For Hurricane Isaac, which struck in August 2012, initial reports estimated damage to 13,000 homes in Louisiana located in the same areas previously affected by Katrina. Since Louisiana required insurance for only 3 years, there is the potential that damage had occurred to Disaster Recovery-assisted homes completed before 2009 that may lack insurance, as the State's required insurance period had expired and nothing would prevent homeowners from seeking additional Federal assistance.
>> End snip of report page 19,20 <<
Date: 12-30-2018 Updated: 12-30-2018 Subject: Transparency
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