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State and local representatives from the Gulf Coast told lawmakers Tuesday that the Federal Emergency Management Agency has underestimated the cost of many projects to rebuild after hurricanes Katrina and Rita, and that the process for seeking funds has been a significant cause of delays.

In testimony before the Senate Homeland Security and Governmental Affairs Ad Hoc Subcommittee on Disaster Recovery, the officials said FEMA's project worksheets -- the documents used to determine the scope of work and estimate costs -- are one of the biggest roadblocks to post-hurricane recovery. The worksheets, compiled with documents provided by local governments and approved by FEMA, become the basis for funding the Public Assistance Program.

The worksheets "have been a persistent area of difficulty and challenge as we have worked to recover from the devastation of Hurricane Katrina and the subsequent flooding," New Orleans Mayor Ray Nagin told the subcommittee.

According to testimony from Nagin and others, FEMA has been low-balling the costs of many rebuilding projects, with actual costs as high as four to five times the amount allocated through the project worksheets.

While FEMA has obligated 81 percent of Louisiana's project worksheet funds, a state official said even the full sum on the worksheets would not cover the costs in Louisiana.

"We believe that at least 75 percent of our projects are grossly undervalued," Jeff Smith, acting director of the Louisiana Governor's Office of Homeland Security and Emergency Preparedness, told the subcommittee.

In addition, Smith said there is a difference between funds obligated for the completion of new tasks and money needed to cover the cost of completed projects that went far over budget. The fact that FEMA has obligated money for ongoing projects does not guarantee that the state will get reimbursed for completed projects that exceeded budget estimates.

Smith said it is safe to assume that FEMA would need to spend two to four times more than it projected to cover costs.

James Walke, the director of the public assistance division of FEMA's disaster assistance directorate, disagreed, saying state and local officials had "concurred with many or most" of the processed worksheets.

Sen. Mary Landrieu, D-La., expressed concern that small towns or localities may feel pressured to accept the sums on the worksheets because they lack the resources to appeal FEMA's allocations.

Henry Rodriguez, the president of Louisiana's St. Bernard Parish, said many subcontractors hired to work on projects have not been paid because of underestimates on worksheets and delays, causing them to refuse to bid on future projects.

"There is no assurance you're going to get paid with FEMA," Rodriquez said. "The only thing consistent with FEMA is inconsistency."

Rodriguez said that under normal circumstances, state or local governments would be able to pay the contractors and get reimbursed by FEMA. St. Bernard Parish, however, was completely destroyed in the storm and spent its reserve fund within weeks. Every home in the parish was declared unlivable, eliminating its tax base.

Landrieu asked FEMA to give the subcommittee a breakdown of how many project worksheets had been immediately agreed upon by FEMA and the relevant local authority, and how many had been debated and agreed upon, vehemently disagreed upon but approved or formally appealed.

Landrieu said these numbers would give the subcommittee and Congress as a whole a better idea of the extent of underestimations and where the flaws are in the project worksheet process.

"What's stymieing this recovery is not the will of the people; it's the bureaucracy of the government," Landrieu said. "We're going to plow through this."

COMMENTS

• Fed Worker misstated the facts. The levee's are owned by the Feds but the annual funds for maintenance were managed by the various levee committee's in NO they misspent, if I remember correctly they had 25 separate entities. Rather maintaining the levee's they wasted on what they considered other competing needs dan ketter Posted July 13, 2007 12:40 PM
• The levees are owned by the Corps of Engineers, a FEDERAL, not STATE agency. Money for federal levees does not get funneled to the state, the Corps and Congress decide what projects get funded. The hurricane protection system upgrades began in 1966-67, after Hurricane Betsy struck the area in September 1965. The money appropriated for the levees has NEVER been given to the STATE, it was moved around WITHIN the Corps budget to other projects, rather than used as it was intended, on levee protection. The system was supposed to be completed within 10 years. Forty years later, it's still not finished, and Katrina-Rita proved it to be seriously flawed. The budget fight for proper funding continues. Money intended for the levees last year was not only cut by the President (check it out), the remaining funds were shifted from one part of the system to another part of the system, and Ms. Landrieu and the rest of the LA contingent had to fight to get the full funding reinstated. LA and New Orleans have enough trouble with corruption, so please place the blame for levee underfunding where it belongs in this case...with the Administration, not the locals. fedworker Posted July 12, 2007 2:37 PM
• When I had tornado damage to my house I wanted an estimate from the contractor who had previously done work for me. He said to get the insurance adjuster out only when the contractor could review the damage with him. I definitely was not to meet the adjuster alone or allow him out by himself. The contractor then would give the adjuster the estimate in his needed format once the damages were approved. I followed this advice and my damages were appropriately reimbursed. My wife and I gave this advise to others in our neighborhood. Those that did not adhere to the procedure got less from their insurance companies than those who did (regardless of the insurance carrier or contractor). I'm not sure if this is due to the diligence of the contractor in making sure all damages are pointed out; an adjusters inclination (or habit) to miss small things when there's a huge (or any) number of claims being countered by the contractor's effort; or appreciation by the adjuster for having his workload lightened by the contractor. At any rate my wife and I were satisfied, the contractor was satisified, and the adjuster seedmed satisfied (there was no "you forgot this or that" to worry about). Don't know if this would work with FEMA, but it'd be worth a shot. I can't believe that with all their bad press they wouldn't be anxious to reach quick accomodation where possible. I would (and if they've got a 14 for me I'd be glad to help FEMA out!). R. J. Smith Posted July 11, 2007 3:10 PM