[StBernard] St. Bernard Parish Council Responds

[Westley Annis]

Editors Note: This article is also available online at
http://www.CajunCrossFire.com
 
Updated 3/22/06
 
The St. Bernard Parish Council's Response to Mr. Chapman's
Point of View of March 17, 2006.
Council Responses in Bold Print.
    The purpose of this article is not to accuse, but to seek
clarification. 
    
    There is a lot about debris removal in St. Bernard Parish that
tax-paying citizens do not comprehend. Here are some facts as they appeared
in print and were discovered through research. Hopefully, this will help
explain just what is going on and why. 
 
        The research process that was used did not include a single phone
call or conversation with any member of the council or the administration to
clarify any of the questions.  It seems that true research would include
discussion with the very people responsible for the decisions that are in
question.  As evidenced in last week's article- there is the occasion that
the printed media is not always accurate.
    
    We all know that Hurricane Katrina struck our community a
devastating blow.  Nearly every home and business was destroyed. When one
tries to figure the amount of debris generated by this event, it is almost
impossible to calculate. One thing is for certain, it will take a lot of
time and money to remove.
 
        The estimated amount of debris that will need to be removed is in
the range of over 4.5 million cubic yards.  The estimated cost will be over
700 million dollars with the final figure being calculated with approved
FEMA reimbursable prices.
 
    
    According to FEMA guidelines, the Corps of Engineers will clean up
the parish at NO CHARGE for the first 90 days (it was extended by
President Bush). If a community seeks to contract with an outside entity,
the Corps will cover 100% of that cost too, but only for a limited period of
time and that company must be considered a "responsible contractor." On
October 25, 2005 the Associated Press cited that a FEMA policy stipulated
that should a community select a private, non-sanctioned company for clean
up after November 27th , FEMA will only cover 90% of the cost. The remaining
10% must be paid by the community. Since debris removal for St. Bernard
Parish is roughly calculated at $750 million, it would seem that the parish
would have made a beeline to the Corps and sought their "cost free"
services. After all, 10% of $750 million is $75 million . Why pay such a
large amount of money if you don't have to and lack the funds. 
 
        This is absolutely a mis-statement.  The fact is that the Corps uses
its own contractor and the prices of ECC, the Corps contractor assigned to
St. Bernard through Washington, were over twice the cost per yard of the
original emergency contract prices.  But even had the Corps been tasked with
the debris removal contract, ECC would still be reimbursed at only 90% of
total invoiced charges after the June 30th deadline is reached.  Prior to
the June 30th deadline, all category A and B approved expenses are
reimbursed at 100%.  If the June 30th deadline is extended, then the 100%
reimbursement period is also extended.
 
        Additionally, the original contract included a clause that provided
for the payment of invoices based on availability of funds so as to protect
the parish in what was anticipated to be a decreased revenue stream.  The
original contractor also would answer to the parish in terms of the
requirement of using local hires to assist in the economic growth in St.
Bernard.  The local hire rate with the original contractor was over 82%
while the Corps boasted of 18% in other parishes.  Also, in every parish
that had used the Corps, there were ongoing problems with the Corps
performance and responsiveness to the local community.
 
 
 
Remember, St. Bernard's entire tax base was destroyed by hurricanes Katrina
and Rita.
 
        St. Bernard's tax base has taken a major hit.  The assessor has
valued the property tax base to be 74% of the 2004 tax year's rolls.  Sales
tax is significantly low, but much higher than previously anticipated.
 
 
FEMA is very clear about this: FEMA pays 100% of removal costs so long as
federal agencies or their contractors do the work. However, parishes Must
pay a 10% premium if they by-pass this process after November 27th.  St.
Bernard appears to be the only parish to by-pass the process!
 
        See above.
 
 
Why are we paying these millions?
 
        As mentioned, St. Bernard has not incurred any debris related costs
that would not have been incurred with the Corps of Engineers.
 
 
Why are we married to Unified Recovery Group?
 
        St. Bernard is not married to URG, but there was a contract signed
and honored as such.
 
    
    Immediately after the storm, local government commandeered the
Chalmette Refinery as an emergency headquarters. 
 
        Chalmette Refinery was requested and agreed to allow parish
government to use its administration building as a base of operations for
parish government.  Chalmette Refining staff was present and very
cooperative with the use of their building.
 
 
According to WAFB-TV Baton Rouge, individuals representing Unified Recovery
Group (URG) arrived by helicopter at the refinery just four (4) days after
the storm with a proposal to remove debris. This was a private contractor
with NO record with the Corps of Engineers. In fact, they had NO RECORD at
all! URG arrived in Chalmette on September 2, 2005 to get a contract, but
were not incorporated until September 19, 2005, seventeen days later
according to the Louisiana Secretary of State's Office!
 
        The fact is that URG is a conglomerate of companies.  Yes, there was
a presumption that the company was a legitimate company in good standing
based on the principals' reported performance in other hurricane clean up
efforts.  Additionally, we were negligent in contacting the Secretary of
State's Office in the middle of a post disaster situation.  There is no
arguing the date of incorporation for URG.  The state office of contractor
licenses allowed for a grace period for all general contractors to become
licensed and incorporated in Louisiana, which was met by URG.  By the time
the council received proposals from a request for proposals for debris
removal the company was registered with a license in good standing.
 
    
    Interesting thought the often told story is that help did not
arrive in St. Bernard until FIVE days after the storm. Furthermore, the
first help to arrive was a group of Canadian Mounties from Vancouver. But it
seems URG beat them. How could URG find local government when no one else
could?
 
        The implication here is that there was some hidden location of
government, only to be accessed by certain people.  Mr. Chapman could have
known the situation, had he asked or been present to search for water and
food, dig holes for human waste, pull bodies out of attics, flooded homes,
and flood waters, move six thousand people to safety, and maintain a
presence in our parish.
 
        Obviously, URG came to St. Bernard to solicit work.  Upon their
arrival and continuously afterwards, the company representatives offered
assistance to the parish and residents by providing equipment and supplies
to help meet some of the emergency needs that were experienced.
 
 
Why didn't they bring water? 
 
        They did bring water as well as other essentials.  How dare Mr.
Chapman disgrace the disaster recovery by minimizing the life and death
situation that was experienced by so many, some of whom did not make it.
Frustrations and emotions may run high, but it is unacceptable for such a
curt remark to be made.
 
 
The company in question, Unified Recovery Group (URG), is a conglomerate
composed of four entities: McInnis Services, CARAL, BLD Services, and IED
Disaster and Construction Specialists. It is interesting to note that one
member of this partnership.  IED was incorporated on the same day as URG
September 19, 2005) and has the same address (7602 GSRI St. Baton Rouge, LA)
according to the Secretary of State's Office. That should raise a few
eyebrows.
 
        Indeed, eyebrows should be raised that a company was formed to
address the disaster situation.  If eyebrows are raised based on companies
being formed in the face of disaster, many of our own professionals who
returned to find alternate work and formed companies to do so should also be
ostracized.
 
 
    It seems that St. Bernard negotiated a contract with a business that did
not exist just days after the storm, before help arrived. Is this fair to
say?  What is worse, they did so with out any real evaluation. To quote the
Parish President: "They showed up one day, came in by helicopter and made us
a proposal. It was a couple of days before we discussed it, myself and the
council people and we hired them."
 
        The contract was negotiated and there was ample language in the
contract that would allow the government to modify or amend the contract.
 
    
        Who negotiated the contract? It appears that duty fell to Clyde
Martin, head of the Public Works Department, who has since resigned. The
parish contracted with URG on an "emergency basis" without getting
Competitive proposals. What was the emergency? The debris was going nowhere!
The Parish was still underwater! Debris couldn't be removed until the parish
dried out, so there was time to consider other choices and lower bids.
 
        The contract was largely negotiated by the president's legal
counsel.  There is no doubt that there is ample question of the timing issue
of enacting a contract, but there was more to debris removal than signing a
contract and then having machines show up the next day.  Furthermore, just
clearing the roadways of the tons of sludge to allow for movement within and
eventually into the parish was an emergency in and of itself.  But again, it
is very easy to have a vantage point that sees things from a suspicious
stance and interprets everything from there, despite not being involved at
all in the process.
 
    
    Since this contract, the biggest in St. Bernard history, was signed
without bids, it raised questions. Therefore, in November 2005 bids were
solicited and 12 companies presented proposals. Despite the fact that some
of URG's costs were higher and URG was not a Corps contractor, URG won the
long-term contract. Why? By making this move St. Bernard Parish Government
committed itself to pay 10% if the clean up! 
 
        Yes, there was a Request for Proposals that went out.  It was not a
bid process.  Mr. Chapman knows the difference but chose to present
misinformation for some reason.  The proposals had some companies with
higher prices and some with lower prices in different aspects of the debris
removal process.  The fact is that FEMA has the ultimate say in terms of
what the contractor, any contractor, will be reimbursed.  The negotiation
between St. Bernard and the contractor is to assure that what the FEMA
approved prices are is what will be accepted.
 
        To repeat the point.  Any contractor, even the Corps, would have
committed the parish to a 10% cost share after June 30th, unless extended by
congress.
    In response to criticisms, the Parish President responded in his
typical form: "Anyone questioning [his] contract with URG is part of a
political push to try to get him to use the Corps of Engineers." Gee.
Imagine having to be "pushed" to receive free federal help instead of paying
millions for it!!!!
 
        If Mr. Chapman has an issue with the president, he should take it up
with him and not bring a personal issue into the accusatory questioning of
pertinent issues.  Again, the Corps contractors are not free, no more than
any other contractor is.
 
    
    When one Councilman asked: "why Unified when other companies charged
less for certain items" the response was less that satisfying. Only two
councilmen opposed the contract. 
    
        
    Setting this controversy aside for a moment, URG began the clean-up.  By
Christmas they had amassed a fee totaling $30 million dollars. Today that
figure has approached $75 million. When the Parish President
presented this bill to FEMA, FEMA balked. They refused to just hand over $30
million dollars without careful oversight as to where all that money had
been spent.
 
        The fact is that every invoice submitted for debris removal is
connected to a project worksheet that is accompanied by boxes and boxes of
documentation- the debris documentation is not being questioned.  In fact,
the second contract that was drafted after the requests for proposals were
received has not been executed because of the ongoing negotiations about
prices for services.
 
    
    URG then threatened to "pull the plug" on clean up unless it
Received payment. The parish council responded on February 22, 2006 by
seeking its own funding source. They first sought a line of credit from a
local bank.  The bank was too smart for that one. The parish has no tax base
and thus no visible means or repaying any loans. The council then decided to
float a bond issue for $24 million to make a partial payment to URG so the
clean up could continue. That puts the parish and its residents, you and me,
on the hook directly for $24 MILLION DOLLARS. Money that did not have to be
spent! 
    
        Any contractor has a limit as to how far out they can be extended.
Because the process of reimbursement takes so long and because the rules
have constantly changed, there have been many delays, long before any issue
of reconciliation of the first project worksheet funds came into question.
 
        Secondly, the council met with the State Treasurer who encouraged
the council to seek a line of credit to address the timing gap between
receiving obligated funds and receiving invoices.  We did so.  The local
bank did respond that they were not able to handle that large a line of
credit.
 
        The council did begin a process that allows for a procedural option
to bond money to address the timing gap for payment.  The council DID NOT
BOND out any money.  Mr. Chapman knows this but again chose to purposely
incite the public with misinformation.
 
 
    Some news reports have reported that FEMA has finally turned over
the money to the state, but the state will not release funds to the parish
because St. Bernard cannot account for nearly $31 MILLION dollars of
expenses. How can that be? Certainly checks were cut and recorded.  What is
the result of all of this? Today, clean up in St. Bernard Parish appears at
a standstill. When residents enter the parish we see few trucks, cranes, or
bulldozers in operation. We do see the same piles of muck all over
neighborhoods. In fact, the situation is getting worse because more people
are returning to gut their homes and no one is picking up the trash.
 
        There is money in the pipeline to be released to St. Bernard Parish
as the accounting documentation needs are satisfied.  There is not money
missing!!  The state auditors are requesting information in specific formats
that have been and continue to be provided.  The easiest way to stir the
public in this situation is to cry foul and corruption and then just move
out of the way and let the pandemonium begin.
 
        Again, the debris invoices and the initial funds are separate
issues, but the state has decided to hold everything.
 
        Ironically, the reason there has been a dramatic increase in debris
in the parish is the fact that the parish's volunteer gutting program headed
by David Dysart has reached incredible numbers and is doing fabulous work,
another positive note that Mr. Chapman conveniently overlooked.
 
 
    This week the hammer fell. URG decided to terminate all debris
removal in St. Bernard as of Saturday, March 11, 2006 at 6 AM because of
non-payment.  Clean up has STOPPED!!! What happens now? 
 
        The parish administration has continued to answer the documentation
requests, that is what happens now.  Instead of simply refusing to accept
responsibility, the council has requested assistance from the legislative
auditor's office in the accounting of all FEMA funds.  It is no secret that
there will be millions of dollars to flow through this government and if
there is a specific program to follow for accounting, we will be at the
front end of the process.
 
    
    If you look around, the termination of debris clean up should come
as no surprise. Much of the equipment has been parked or for sale around the
parish for weeks. Worse, it is now seven months since Katrina and FEMA has
no intention of either picking up the tab or sending in the Corps to do what
should have been done in the first place at no cost to St. Bernard
residents. That window is now closed. 
 
        Yes the accounting format has slowed and eventually halted the
debris clean-up, but again, debris clean up is reimbursed at 100% by any
contractor at approved costs until June 30th and then a 10% cost share
starts, even for the Corps, unless the deadline is extended.
    Why is FEMA playing hard ball?  Likely because the time has run out.
But also perhaps because our leadership abused them too much, humiliating
them with a cane, cursing them in public, wearing crude tee-shirts,
demeaning their efforts, and making them appear fools before their superiors
and the media.  It was all grand theater, but did it serve the needs of our
community? No!
 
        Mr. Chapman should stop by the president's office and address him
personally, or come to a council meeting and speak to him directly.  Agree
or disagree with the president's issues, there is a lost concept here and
that is the parish leadership is made up of seven councilmembers and the
president- Mr. Chapman knows this he helped form the charter.  There are
eight people in the process and to lump everyone together is a
misrepresentation of the actual leadership.
 
        For the council to address each other or the president in the news
media only serves to create the same political chaos as some of our
neighbors.  Believe us, private discussions occur amongst the leadership and
feedback is often shared for the betterment of our community.  We will not
defend what is wrong, but we will not accept being redressed with inaccuracy
and innuendo for some unspoken cause, masked by the "good of the public".
It only serves to hurt everyone in the process.  And after the masses stop
yelling supportive catcalls, they then realize that there was little to be
accomplished by such wasted energy.
    
 
    So here are some questions: 
 
1.  Who is URG, really?  
There is no hidden identity here.  Mr. Chapman identified the conglomeration
of companies; it is what it is.
 
2.  Who is IED Disaster & Construction Specialists, really?
Same as number one.
 
    3. Why did we contract on September 2nd with a business that came
into existence on September 19, 2005, seventeen days later?
Answered above in the text.
 
    4. Who are the investors in IED, URG and it partners?
We have no knowledge of who is an investor or not.
 
    5. Is there any connection between URG and IED and local people?
If this is intended to ask if there are local officials connected to URG,
the answer is no.  If it means are there connections to other St.
Bernardians, we do not know the answer to that- see #4.
 
    6. Who is working for URD?
If this means URG, then there are numerous subcontractors working for URG,
82% of the workforce included local resident hires.
 
    7. Why did local government contract with them without bids?
Everything that was done was in compliance with the state regulations.  A
request for proposals was done to avoid simply having an unqualified company
lowball a price and the parish be stuck with no choice.  The request for
proposals were handled and evaluated by the public works department as is
customary and then a recommendation was made to the council.  The vote to
select URG was 6-1.
 
    8. Why did local government renew the contract when they were NOT
the low bidder?
Answered in #7.
 
9. Why did local government forgo FREE debris removal t o
commit the citizens to 10% premium on $750 million dollar contract with an
unapproved contractor after November 27th? 
This was answered in the text several times and shown to be quite
inaccurate.  Even choosing Corps contractors incurs a 10% cost share after
the June 30th deadline.
 
10. Why did St. Bernard even consider refusing FREE debris removal
at all?
Answered in the text over and over again.
 
11. How much of the total tab will St. Bernard taxpayers have to pay
since neither FEMA nor the state appear willing to advance funding?
The funding mechanism is being addressed and will be resolved to avoid the
taxpayers carrying the burden.
 
12. Will URG sue the parish for non-payment?
There has been no evidence of that. Their representatives have not indicated
that to be their strategy.
 
13. Is the parish bound if elected officers contract with a company
that does not exist at the time of the contract?
The contract was valid as explained in the text of this article.
 
14. How is St. Bernard going to cover the expense of additional
clean up if it lacks a tax base?
This is why Mr. Chapman should be writing articles to Washington expressing
the need for appropriate extensions on debris clean up work.  That is what
we continue to do.  At the time that the 100% reimbursement ends, we will
make decisions as to how to best proceed at that point, based on our entire
situation then.
 
15. How is St. Bernard going to pay back the $24 million bond issue?
Not a relevant question based on the facts.
 
16. How is St. Bernard Parish going to pay URG millions it already
owes?
Through the FEMA funding that will be released.
 
17. Why is it worth any amount of money to taxpayers for a
particular company to get the contract to clean up the parish? Where is the
advantage?
Maybe we should do it in-house and take 10 years just to get the debris
picked up- not a good option.  The advantage is the faster the clean up
occurs the faster the rebuilding can begin.
 
18. When will clean up begin again, in earnest, so people can move
home and put their lives back together?
It is anticipated that monies will start being released as soon as this week
and hopefully debris crews will start up in the next two weeks following
that.
 
19. Will the parish be cleaned BEFORE the next tropical storm or
hurricane arrives?
Come on Ron.  The tropical storm season starts in June.  There will be
debris into the summer for sure.  But, you can bet that every pressure that
can be brought will be.
 
20. Who is making all this money?????????
We would guess the people doing the work.
 
 
We meet every week for a committee meeting and would gladly invite you and
our constituents to participate in what we do.  We agree that people need
answers and we are committed to giving every answer we can.  Please
understand that we are not only elected officials, we remain victims of the
storm as well and share the same frustrations.
 
This council has remained dedicated to getting through this disaster.
 
 
Sincerely,
St. Bernard Parish Council
    

 

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