Friday, May 16, 2008

Road Home smooths way to appeals

The state Friday will unveil a new way to appeal Road Home grants, promising to lift thousands of disgruntled applicants out of a "black hole" of languishing complaints about lowball grants while putting the brakes on plans to collect overpayments.

The move is part of a larger effort by the newly combined Louisiana Recovery Authority and state Office of Community Development to assume direct control of certain procedures once left to Road Home contractor ICF International.

For example, LRA director Paul Rainwater has stepped in to stop ICF from hiring a collection agency for grant overpayments, which the state is required to recover under federal housing rules. A month ago, ICF moved to hire a subcontractor to retrieve excessive payments ICF believes it made to as many as 5,000 of the estimated 135,000 to 140,000 Road Home grant recipients.

But Rainwater now says he wants ICF to freeze collections work and wait for state officials to review each case. The LRA wants to make sure it's cost-effective to seek a repayment and to collect money only when it seems absolutely necessary under federal rules, using special caution in circumstances where the homeowner has already applied the money to rebuilding costs.

"We realize we can't get blood out of a turnip," Rainwater said.

He went a step further and said he didn't want liens placed on properties where overpayments have been made, promising instead that the state would set up flexible, no-interest repayment plans.

Rainwater also said he would abolish a policy of fining ICF the full amount of any overpayment and find another way to fine the company for mistakes made in bulk, hoping that will take away an incentive for the Virginia-based firm to aggressively pursue homeowners.

Rainwater, Gov. Bobby Jindal's recently empowered point man for recovery, said it was time for the state to "take ownership" of a Road Home process that ICF has driven since it was hired two years ago.

Rainwater said he recently replaced Office of Community Development officials who were too chummy with ICF, a process he called the "de-Baathization of OCD," in reference to bans on members of Saddam Hussein's Baath Party after the U.S. invasion of Iraq.

"It's been like hitting someone with an umbrella; what I need is a bat," he said.

Jindal gave him that figurative bat through an executive order in January, and he has responded by putting state officials in ICF's housing centers and by revamping the much-criticized appeals process.

According to protocols released early to The Times-Picayune, ICF will no longer use informal "dispute resolution," and any complaint not resolved within 60 days automatically gets a formal appeal review by a panel that will include three state officials, in addition to ICF employees. And state legislators will be allowed to sit on the panel, providing more transparency for the lawmakers who have been some of ICF's strongest critics.

Unlike in the past, when rules prevented Road Home from talking to a homeowner once he filed a formal appeal, an appeals adviser will be required to contact the applicant within 15 days to make sure the process is clear and that the applicant understands file details.

Some homeowners have expressed concern that they could lose the right to appeal by signing a new document to collect a $30,000 elevation grant. The Road Home Elevation Incentive Agreement, a document sent in recent weeks to about 115,000 applicants in flooded areas, says the home-raising grants can't be appealed and asks applicants to acknowledge that the elevation money is their "FINAL disbursement of Road Home funds" and "that all resolutions and appeals regarding my Road Home compensation have been concluded."

Rainwater said that language was never intended to quash pending appeals or to keep people from appealing other Road Home grant calculations. He said the section was put in the agreement to show that the elevation grant has to be the last dose of financial help provided, so the state can be sure it doesn't exceed the maximum of $150,000 in total Road Home money to each applicant.

Asked whether the agreement could be used to shut down some appeals, Rainwater said, "Over my dead body." But some homeowners say they still are afraid to sign a legal agreement until the language is changed. State officials said they would look into the possibility of sending an amended agreement or advisory to allay those fears.