Senate Committee on Intergovernmental Relations

November 2, 2011

The Committee met to hear invited testimony on Select Interim Charge #1:

Analyze ways to better coordinate existing federal, state, and local housing resources to increase access to affordable housing following a disaster that caused the loss of homes. Review best practices for fulfilling emergency short-term housing needs and developing long-term housing opportunities using existing tools, such as land trusts, land banks, and other available incentives.

Panel 1 Testimony and Discussion

Jerry Patterson, Commissioner, Texas General Land Office (GLO), began by saying problems in the past regarding Charge #1 have been that money was not well-spent. Having observed past recovery efforts such as those from Hurricane Ike, Texas was given $40 million. Of that $40 million, it was unbelievable how much was spent on prohibiting and mitigating fraud and abuse. There is a great amount of oversight involved in the current process.

Patterson then invited Gary Hagood, CFO of the GLO, to speak. Hagood is responsible for the transition of responsibilities regarding Charge #1 from the Texas Department of Rural Affairs to the GLO.  When asked by Chairman West what issues needed to be addressed at the time of the transition, Hagood responded by saying that he was not sure. Hagood stated that audits should be conducted and that while looking at current processes, the GLO found that over 700 contracts had no timelines. As a result, all contracts without timelines had to be re-done. As for the project as a whole, it is scheduled to be finished by December 2015. All audits, including HUD, financial, and HNTB audits, should be complete by the end of November and December.

Chairman West then asked Hagood if there is an accountability process in place with makes sure funds are used properly. Hagood responded by saying there is a great amount of paperwork that has to be filled out and processed. It is “overkill,” which is not necessary. All the agency needs is great accountability. The goal is to let the people do the work that needs to be done, but keep a close eye on how money is spent.

Hagood then broke down the spending figures (budgeted dollars), for Chairman West by stating that 47% overall went to housing, non-housing and administration. Of the 47%, 37% went to non-housing and 10% went to housing.

Sen. Robert Nichols interjected that one problem locals have is following processes. From that, Nichols asked if the agency has contacted and worked with local entities to see what they think the best process might be. Hagood responded “Yes.” Commissioner Patterson added to Hagood’s response, saying that the locals know things the agency does not know and the agency knows things the locals do not know; if put together, one may be able to create a working product. Patterson explained the reimbursement program, outlining the proper paperwork processes and working with contractors. Nichols expressed wanting to be sure locals are involved in the process. Patterson explained that out of the $3.1 billion budget available, $1.4 billion of it is for non-housing.  About $27 million has been spent on non-housing administration. 

Chairman West asked Patterson if there is enough money to meet obligations set forth in the plan. Patterson indicated the GLO will make it happen.  Chairman West asked if the GLO was aware that the TDRA contract did not have any goals.  Patterson stated it has been realized and that it is probably a fatal flaw. Chairman West expressed that the contract has amendments that basically double the size of the contract, which is odd. Members of the panel explained they have been implementing the necessary scope to help implement the housing program. Most of the housing projects have been cleared environmentally and now almost 89% are in local government control. At this point, 34% of the round 1 projects have been completed construction-wise and over 700 construction project sites are complete.

Chairman West asked if HNTB hired Urban Solutions. Commissioner Patterson explained they are a sub-consultant.  Members of the panel explained how employees are paid and that the numbers given are inflated.  Although an intern is paid $60 an hour on paper, it is an inflated number including overhead.

Anne Osburn, Attorney for GLO, explained her involvement in the TDRA contract. Osburn indicated that she did not believe there were significant sanctions in the contract.  Chairman West provided Osburn with a list of amendments that were in the contract and asked her to explain. She claimed she did not remember most of them, but knows there were not specific goals in the contract.

Tim Irvine, Executive Director of Texas Department of Housing and Community Affairs, explained that HNTB developed a model for the distribution of different funds across the state; they worked on developing the model and their input was hopefully employed in the lower river valley.  That was the extent of which HNTB was involved in participation that was impact housing issues according to Irvine.

Walter Diggles, Executive Director of the Deep East Texas Council of Governments, explained how Hurricane Ike damaged Texas and how the emergency need was more for infrastructure than for housing.  Sheltering hubs did not provide great locations for displaced people.  The COG has a contract for 99 homes to be built; 50% of them have been completed.  There are 400 low income homes that need to be repaired and only 52 homes have been replaced. Nichols discussed how many of the homes that need replacement are in his district; many have “blue roofs,” or tarps, on their homes waiting for state relief.

Panel 2 Testimony and Discussion

Denise Hudson, CFO for the Texas Department of Public Safety (DPS), explained the DPS role in disaster relief. DPS is mainly involved in public assistance with help from FEMA; DPS does not provide housing. Public assistance involves waste cleanup, public services, repairs to damaged property, etc.  Nim Kidd, Assistant Director at DPS, added that Texas needs to work with and listen to local governments; ask their opinions on the best practices. Contracts for emergency workers need to be a speedier process.  For Bastrop fires, it took almost one month for some contract workers to be paid. 

Judge John Thompson, Polk County Judge, explained that the ball has been dropped in emergency relief. Thompson stated it took 6 months for the federal government to allocate $3.1 million to Texas for emergency funds and that has had to last for the past 3 years, which is unacceptable.  He argued the closer one gets to local control, the better. Local governments need to be a part of the process because they have personal experience in disasters and have good ideas on how to improve the process.

Ronnie McDonald, Bastrop County Judge, testified that he has revisited the Bastrop fires and explained how volunteers and the community came together to help. Although it is a small rural community and lacks some amenities, it came together and received loads of support from all around.  Bastrop has very little housing, so during the fire citizens had to leave Bastrop to obtain housing. Increasing emergency housing is being worked on but it is a large task. As Bastrop moves toward recovery, attempts to educate people on how to build their homes to be more fire retardant can be made.

Ken Clark, Galveston County Commissioner, testified about Hurricane Ike.  Over 700 homes needed repair, and 306 have been repaired. Infrastructure projects, including fire houses, are being worked on. Have experienced over-regulations, and building back the infrastructure has been a very slow process.  A critical issue is information sharing.  If there was the ability to cross pollinate all the different information sources such as FEMA, the county, the housing corporation, etc. the process would move much quicker; when doing debris cleanup, the state, county, and city needed to integrate their cleanup efforts such that it was a smoother process. Clark also stated there needs to be more relief for local businesses and people need to get back to work. Extra non-housing projects have been submitted, more than they could handle, because they did not want to lose their allocation.

Eric Wilson, Galveston Assistant City Manager, explained that Galveston received $500 million for Hurricane Ike relief and received a lot of help from the federal and state government. At the beginning, the Texas Dept. of Rural Affairs took control of the disaster recovery process and it was going well. The process started changing when funds were not allotted for doing environmental evaluations. Contracts had to be renegotiated with engineering firms, which led to delays.  The city’s software went into lockdown for 45 days. With GLO taking charge, the process has been improving and getting questions answered has gotten easier. The state and FEMA were meeting with Galveston officials and arguing about who would pay, but Wilson told the state and FEMA he needed to get started and worry about who would pay later.

Stella Rodriguez, Texas Association of Community Action Agencies, explained how important community action agencies are and noted they are locally governed. She explains that not all community action agencies are the same because each addresses the issues of their particular area. However, the over arching goal of all of these agencies is to propel people out of poverty and into self-sufficiency via case managers. She explained that the action agencies were able to assist after Hurricane Ike with basic needs and utility assistance. In regard to the wildfires, her action agency was used as a relief center and administered a program that allowed residents to use utility vouchers for hotels, helping place approximately 300 families. The agencies are also involved in long-term wildfire relief, helping relocated families receive their gas, food, and utility vouchers—as well as rebuild their homes.

Justin Bragiel, General Counsel for the Texas Hotel and Lodging Association, explained that lodging is important when people are in need of short-term housing whether they are first responders or displaced citizens. He noted that hotels face a lot of pressure from outside organizations to be able to accommodate displaced people. He said information re. short-term housing needs to be condensed and released to hotels, the public, and government agencies so that everyone knows what to expect in the case of a natural disaster. He explained that the Association could get this information to 80-90% of hotels.

David Mintz, Texas Apartment Association, noted that the association had difficulty helping Hurricane Katrina refugees and those of the less severe Hurricane Ike. He explained the challenge faced was explaining how natural disaster agreements work, citing the problem of people evacuating in the middle of the night and terminating their lease. He also explained that after the hurricanes it was very difficult to obtain accurate background checks on new residents. He said there needs to be a better mechanism to gather information about available housing units, explaining that the Assn. tried to create its own database after the Bastrop fires. He recommended the state offer some kind of immediate assistance to people who need to make quick repairs on their property after a natural disaster.

DJ Pendleton, Executive Director of the Manufactured Housing Association, explained the Assn. is there primarily for temporary units, working mainly with FEMA. They help to transport and install temporary FEMA units by contract. Following the fires, he was asked how many available inventory they had, causing him to agree with Mr. Mintz that communication is a problem. He noted that they also had to compile this information themselves, and suggested a continual database. In regard to permanent housing, Pendleton agreed with the idea of a template or state-recommended template to put forth to the state government for a process. He would like to advocate that disaster victims should be able to choose their living amenities in this template, allowing businesses to be competitive. Lastly, he noted the issue with tax and insurance increases when people are moved into new homes following a disaster.

Panel 3 Testimony and Discussion

David Danenfelzer, Texas State Affordable Housing Corporation, began by discussing the Corporation’s land banking program titled “Affordable Communities of Texas” that started in 2008. The program was created to utilize neighborhood stabilization funds to buy up foreclosed assets.  The Corp. has been able to reach out across 25 counties to buy up vacant lots and foreclosed homes to rent and build affordable housing. Since 2008, millions of dollars have been accrued in state funding, plus hundreds of thousands of dollars in donations. This program can work in multiple communities, especially when it comes to disaster relief when housing projects are needed.

Nick Mitchell, Executive Director of Community Development Corporation of Brownsville, began by stating how he has been cleaning up the mess of Hurricane Dolly for the past three years.  He recommended the state give Texas counties the ability to permit and enforce billing codes statewide.  If buildings and homes are up to these standards, lives will be saved.  In partnership with the federal government, Texas needs to streamline its environmental improvement process.  Our goal is to get houses on the ground in 8-12 weeks but this cannot happen if it takes such a long time to get environmentally cleared. The rapid reconstruction program is being developed to replace housing to large amounts of people displaced by natural disasters. They plan to build 20 homes in the community for people displaced by past natural disasters. They are working with designers to plan a house that can be built in 8-12 weeks and can be expanded if necessary. Mitchell stated the 20 houses should be completed by summer.

John Henneberger, Co-Director of Texas Low Income Housing Information Service, stated that immediate post-recovery housing is good, but long-term housing recovery is not up to par. There is a 3-step pilot program that they will try to implement. People who lost their homes need to be qualified for assistance fast such as in 1 or 2 weeks not 6 months or 9 months. The pilot program will try to get people back into a home after 8 weeks, not 3 years after a disaster. Insisted in figuring out a way to prevent spending $90,000 on a FEMA trailer that is then sent to salvage; figure out a way to eliminate that step and get people back onto their property in 8 weeks.

Chairman West explained in his final remarks that collaboration needs to take place to make sure this first hearing is not duplicated and that this process can run smoothly.