HUD releases $168 million in NC hurricane relief money after a year-long delay

Aug. 2--RALEIGH -- The U.S. Office of Housing and Urban Development intends to publish within weeks a Federal Register notice that is required for North Carolina to receive a $168 million Hurricane Matthew disaster relief package, a HUD senior official said Friday.

Funds were included in the budget act signed into law in February 2018 and HUD announced nearly $16 billion in mitigation grant awards in April 2018, including $168 million for North Carolina and $157 for South Carolina. But the necessary register notice never came.

N.C. Republican Sens. Richard Burr and Thom Tillis pushed to include a provision in a federal supplemental disaster relief bill earlier this summer requiring HUD to publish the notice by Sept. 4. In the House, Democratic Rep. David Price has used his position as chair of the Appropriations subcommittee overseeing HUD to push for release of the funds.

Friday's announcement does not mean the North Carolina Office of Recovery and Resiliency (NCORR) will immediately be able to spend the $168 million, which is slated to be used for disaster mitigation projects. NCORR, which is overseeing the expenditure of Community Development Block Grant-Disaster Recovery (CDBG-DR) funds, must first submit to HUD an action plan describing how it intends to spend the money.

According to a timeline presented by a HUD senior official Friday, the Federal Register notice will be published within a few weeks -- or within the statutorily required time period, and the states will then be able to use the guidelines in that notice to write the action plans. HUD anticipates reviewing those action plans between February and April 2020, with reviews taking 60 days or fewer.

At that point, HUD will make the funds available to grantees in the individual states via a line of credit.

Disaster relief in N.C.

North Carolina legislators have been critical of NCORR and emergency management for their oversight of $236.5 million in CDBG-DR funds the state can already access, pointing to HUD's designation of North Carolina as a slow spender. Gov. Roy Cooper and N.C. Emergency Management have, in turn, insisted the formation of NCORR and giving the office the ability to receive disaster relief funds will help grant money flow more quickly.

During an interview last month, Mike Sprayberry, the director of N.C. Emergency Management, described his frustrations with HUD, particularly concerning the $168 million.

"We have a very difficult time managing expectations when HUD puts out a news release and says that, 'We are awarding $168 million to the state of North Carolina for CDBG-DR for mitigation,' and they did that on maybe April 8, 2018. ... We still don't have a Federal Register so that we can write a state action plan so that we can turn it in for approval so that we can get the money to be executed," said Sprayberry, whose department NCORR resides in.

NCORR could use the $168 million, Sprayberry added, to fund infrastructure projects, as well as buyouts, home elevations, demolitions and rebuilds.

North Carolina is also still waiting for HUD to release a Federal Register notice outlining how $336.5 million in Hurricane Florence CDBG-DR funds can be spent, as well as an additional notice indicating how much the state will receive via the supplemental appropriations for disaster relief act.

North Carolina reaction

During a visit to the White House two weeks ago, Cooper discussed with senior Trump administration officials the need for the notice, as well as the importance in giving states flexibility in funds' use.

Upon Friday's release, Cooper said in a statement, "As we approach the three-year anniversary of the storm we have to keep working with Washington to make this process quicker and more effective. North Carolina still feels the impact from two historic storms in two years and we have to safeguard against future storms."

HUD Secretary Ben Carson has heard repeatedly from North Carolina's delegation in recent months.

Tillis met with Carson on Wednesday, according to a release from the North Carolina senator's office, and encouraged the secretary to release the funds well before the September deadline.

In a statement, Tillis said, "Although relief from a natural disaster can never come soon enough, North Carolinians will now have additional resources that I fought hard to secure so that our state can rebuild more resiliently."

Burr echoed Tillis in a statement Friday, saying, "For North Carolina another hurricane season has already begun. It's critical we not only continue to recover from recent hurricanes, but also address the long-term vulnerabilities of communities to better prepare for future natural disasters."

During an April hearing of the House Appropriations subcommittee, Price told Carson that delays to the publishing of the Federal Register notice are harmful not only to North Carolina, but to every state set to receive disaster relief funds.

Carson then told Price the notice would be published by May 1.

"While this funding is certainly welcome," Price said in a statement Friday, "the extensive delay underscores the need for heightened congressional oversight of this administration's approach to disaster relief and targeted reforms to make CDBG-DR more efficient."

HUD's recovery plan

HUD officials said Friday that they intend to publish Federal Register notices releasing the mitigation funds in two tranches, with the first one of about $6.9 billion that is set to go to nine states, including North and South Carolina, published soon.

A second tranche of about $9 billion slated for Puerto Rico and the U.S. Virgin Islands will be published later, although HUD officials did not give a date.

The $15.9 billion program marks the first time HUD has allocated funds specifically for mitigation, something that is typically the purview of the Federal Emergency Management Agency's Hazard Mitigation Grant Program.

During Friday's briefing, HUD officials said that while CDBG-DR funds are typically used to cover unmet needs, they had in the past allowed states to use leftover grant money for mitigation projects on a case-by-case basis. With the CDBG-DR mitigation program, a HUD senior official said, the agency is hoping states propose projects such as hardening infrastructure, updating utility grids and taking steps to prevent flooding.

Asked why it had taken HUD 16 months from the time of the award to announce its intent to publish a Federal Register notice within a few weeks, Brian Sullivan, a HUD spokesman, said, "It's a new federal program that required design from the ground up."

HUD will likely be able to publish future CDBG-DR mitigation Federal Register notices more quickly, Sullivan added.

This story was produced with financial support from Report for America/GroundTruth Project, the North Carolina Community Foundation and the North Carolina Local News Lab Fund. The N&O maintains full editorial control.

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