I-Team: Hazard Mitigation Hearing

Published: Dec. 1, 2011 at 1:25 PM CST|Updated: Apr. 25, 2012 at 5:59 PM CDT
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Pat Forbes answers questions from legislators regarding HMGP.
Pat Forbes answers questions from legislators regarding HMGP.

NEW ORLEANS, LA (WAFB) - A Louisiana senator is asking for a suspension of a controversial program that's been the center of numerous news investigations.

The program in question is the Hazard Mitigation Grant Program, HMGP. It's meant to help Hurricane Katrina victims elevate their homes to prevent possibly flooding again. The state has already spent nearly half of the $750 million it received, so the other half is still up for grabs for contractors.

Wednesday evening, members of the Select Committee on Hurricane Recovery grilled the program's executive director.

"The state is supposed to be fair and balanced," said committee chairwoman Karen Carter Peterson.

The state's Office of Community Development, OCD, has taken intense heat since two whistle blowers came out in August alleging two OCD officials of funneling home elevation contracts to specific contractors. Both officials have since been suspended with pay pending the outcome of a multi-agency investigation.

Several small contractors packed City Hall in New Orleans as the Peterson grilled OCD's Pat Forbes.

"To have those contracts at risk, that means food on the table ultimately for some people. Do you understand that?" asked Peterson. "Should the process be fair?"

"The process is fair and it sounds as if you're saying we should not have suspended...," said Forbes.

"No, you know what, you're not going to put words in my mouth. No, stop! Stop! You're not going to put words in my mouth," said Peterson.

In the past six months, OCD has revised the program's rules for contractors three times.

In June 2011, they said contractors had to finish a project within a timely manner: 180 days for an elevation and 360 days for a project from scratch. In September 2011, contractors had to be licensed and warrant their work for the next five years. But it's what came in November 2011 - bonding requirements saying all projects now have to be backed by bonding companies - that's got small contractors up in arms.

"Right now, I'm totally shut down as far as new projects. I'm totally shut down, I can't write anything because I can't produce," said Brimmer Construction Services, LLC owner Charles Brimmer.

"To get a bond, it's not the easiest thing in the world especially for smaller companies. You need a lot of capital to get bonded.  Smaller companies just don't have that," said Ed Keenan, owner of EA Keenan, LLC.

Brimmer is licensed and insured, but said when it comes to bonding, he simply doesn't have the funds. Many of the contractors share his story, which is why Forbes now said state is considering an alternative for these contractors.

"We'll limit the number of projects that they can do at any one time so the homeowner and the contractor and the state's exposure's all reduced," said Forbes.

In the meantime, contractors like Brimmer said their livelihoods are on the line.

"My future to feed my family is in limbo, and we are the small contractors. We're not trying to be the big contractors," said Brimmer.

The committee members said they're starting to lose faith in a federally funded program meant to prevent another Katrina-like situation.

"There are people involved in these processes whether it's homeowners. In this case, it's small business owners - people who employ Louisiana people and have families they have to sustain," said Peterson.

Forbes said OCD plans to have a rough draft of that alternative program ready for review by the end of this week.

As for the multi-agency investigation, it's still ongoing.

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