Sunday, April 15, 2007

LRA Press Release

FOR IMMEDIATE RELEASE:
April 10, 2007
MEDIA CONTACT:Natalie WyethLouisiana Recovery Authority(225) 342-1790natalie.wyeth@la.gov


LRA Recommends Expanding Housing Panel; Homeowners to be Appointed
Board Also Directs Staff to Prioritize Additional Funds, Should Federal Government Waive Cost Share
BATON ROUGE, La. (April 10, 2007) - The Louisiana Recovery Authority (LRA) Board of Directors today recommended expanding the Housing and Community Development Task Force to include homeowners as members and advisors. The board also supported conducting additional "in-flight reviews" of the Road Home homeowner assistance program to supplement other audits and program reviews already in place to assure a high level of quality of the program.
Additionally, the board proposed the consideration of a "Homeowner Bill of Principles" at the group's meeting next month. The principles were originally developed by the Citizens' Road Home Action Team (CHAT) and later supplemented by LRA policy staff.
"We thank CHAT for its input and look forward to an in-depth review of these guidelines at our next meeting," said LRA Housing Task Force Chairman Walter Leger. "They provided us with a very good start and since then we've actually added a few more guiding principles homeowners can use as they continue to move through the program."
Leger also updated the board on policy changes to the Road Home program announced yesterday by the LRA and the state's Office of Community Development (OCD) following the U. S. Department of Housing and Urban Development's (HUD) recent reversal on their previous approval of the program.
Starting Wednesday, homeowners with mortgages will receive a lump sum payment for the full amount of their Road Home grant via electronic transfer in the days following their closing, rather than receiving it in disbursements as repairs are made to their homes.
The policy change follows a similar announcement two weeks ago for homeowners without mortgages. On April 2, 2007, the Road Home program began issuing lump-sum awards directly to homeowners without mortgages.
As of today, the program has received more than 122,000 applications and held close to 95,000 in-person appointments. Almost 62,000 benefits have been calculated totaling $4.7 billion with grants averaging about $76,000. Out of the more than 26,000 homeowners that have returned their award letters, nearly 23,000 have chosen to stay and rebuild in Louisiana. To date, almost 7,000 homeowners have closed on their grants.
The board also passed a resolution authorizing the LRA staff to develop and publish action plans that would prioritize additional funding available for infrastructure and economic development programs should the federal government waive Louisiana's 10 percent FEMA Public Assistance match.
Over recent weeks, editorial pages across the country have called on President Bush to waive Louisiana's federal cost share as the state rebuilds from the first and third most catastrophic disasters in American history. The Washington Post editorial board has endorsed the LRA's push for the waiver three times, while The New York Times has called for the same in two separate editorials. The cost share requirement was waived for New York following 9/11 and Florida after Hurricane Andrew.
The resolution authorized staff to prepare action plans based on a potential $550 million for the Long Term Community Recovery Program, $150 million for the Long Term Regional Recovery Program, and $125 million for Economic Development Initiatives.
LRA Chairman Norman C. Francis emphasized that these recommendations were preliminary and could change, but that it was important to start the public comment process as soon as possible should the federal government act.
Long Term Community Recovery ProgramAccording to the resolution, the state would amend the Long-Term Community Recovery Program within the Infrastructure Program to provide an additional $550 million to fund the implementation of local long-term recovery plans in the most heavily impacted areas of the state. The funds would be distributed to the parishes based on damage estimates previously approved by the board.
Long Term Regional Recovery ProgramIn addition, the state would allocate $150 million to the Long Term Regional Recovery Program to fund specific projects based on regional needs, regional impact, and consistency with the Louisiana Speaks Regional Vision for South Louisiana.
Economic DevelopmentLastly, the resolution recommended an additional $125 million be put toward economic development initiatives including small business assistance, tourism and workforce development:
- The LRA estimates the additional funds could help 8,000-10,000 small businesses in the form of grants, loans, and technical assistance and provide wage subsidies for businesses to offset the increased costs of labor and retain and recruit additional workers. More than 81,000 businesses were initially affected by the storms, while more than 18,000 are still out of business.
- The LRA also recommended putting additional funds toward an aggressive advertising and marketing program developed by the Louisiana Department of Culture Recreation & Tourism to help revive the tourism industry. Prior to the storms, tourism was the second largest industry in the state and the cultural economy was the fastest growing industry in the state.
- Additionally, the LRA supported additional funding for the Recovery Workforce Training Program which addresses the severe shortage of workers in key recovery sectors, including construction, healthcare, and advanced manufacturing.
Should the federal government waive Louisiana's cost share and the board approve the proposed funding at a subsequent meeting, the plan would be sent to the Governor and the Louisiana Legislature for their approval. HUD would have final approval.
During the afternoon session, the board received an update from the Long Term Community Planning Task Force and a presentation on Katrina Cottages from the Cypress Group. The state is awaiting FEMA's approval of Louisiana's plan from FEMA to begin construction at the selected sites and is also working to identify additional sites. Representatives from the Louisiana Housing Finance Agency (LHFA) outlined their plans to provide home ownership financing to residents selected to participate in the alternative housing pilot program.
Board member Sean Reilly later previewed the LRA's proposed legislative package driven by the preliminary results of the Louisiana Speaks regional plan. Key highlights of the proposal include study resolutions related to creating an office of state planning, identifying obstacles to infill development and about how to finance transit-oriented projects.
Reilly also presented the board with the results of an independent actuarial analysis of the structural options, cost and impact of a hurricane catastrophe fund in the post-2005 Louisiana insurance market. The report, commissioned by the LRA Support Foundation, was designed to serve as a tool for policymakers to make decisions on whether and how to design the fund by providing capacity calculations for the fund, financing sources and options, and evaluating the benefits and limitations of several optional structural components of the fund.
"It was important to us that we could put forward some good sound, actuarial numbers on what a catastrophic fund would mean for the State of Louisiana," said Reilly.
The board did not endorse the creation of such a fund, but offered the study to guide policymakers in their deliberations.
The study included different types of properties covered, including residential and commercial, and the effect of increased costs of rebuilding post disaster. The study also examined when the fund would take effect in response to the level of primary industry losses. Finally, the report analyzed the types of insurance lines eligible for assessment to support state bonding capacity in the event that fund losses exceed available cash, start-up capital contributed at the fund's creation and loss modeling assumptions used to calculate premiums. The complete report can be downloaded at:
http://lra.louisiana.gov/assets/%5CParagonFinal032707.pdf.
Board resolutions and presentations for the board meeting are available on the LRA website at
www.lra.louisiana.gov.

Hurricanes Katrina and Rita devastated South Louisiana, claiming 1,464 lives, destroying more than 200,000 homes and 18,000 businesses. The Louisiana Recovery Authority (LRA) is the planning and coordinating body that was created in the aftermath of these storms by Governor Kathleen Babineaux Blanco to lead one of the most extensive rebuilding efforts in the world. The LRA is a 33-member body which is coordinating across jurisdictions, supporting community recovery and resurgence, ensuring integrity and effectiveness, and planning for the recovery and rebuilding of Louisiana.

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