Two years after Hurricane Matthew, North Carolina has distributed almost none of its HUD recovery funds

Funds granted to the state, designated to help low-to-moderate income families rebuild and repair their homes damaged from Hurricane Matthew, have barely been given to those who need them.

North Carolina Governor Roy Cooper addresses Carolina Beach residents during an emergency meeting, where Council later issued a mandatory evacuation order for all residents. (Port City Daily photo/Johanna Ferebee)
North Carolina Governor Roy Cooper addresses Carolina Beach residents during an emergency meeting, where Council later issued a mandatory evacuation order for all residents. (Port City Daily photo/Johanna Ferebee)

SOUTHEASTERN, N.C. — North Carolina has spent just a tiny fraction of the $236 million federal grant funding allocated to help low-to-moderate income families repair or rebuild homes damaged during Hurricane Matthew in 2016.

Only recently has the state started spending any funds at all. As of March 2018, the state had spent $0 of the $236 million.

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Still designated as a “slow spender” by the U.S. Department of Housing and Urban Development (HUD), why has North Carolina dragged its feet?

‘Slow spender’

HUD grants are just one stream of funding given to the state following Hurricane Matthew.

According to a Governor Roy Cooper press release, Hurricane Matthew caused $4.8 billion in damages to the state, mitigated by $630 million in assisted funding. In May, Governor Cooper proposed to pour another $139.5 million toward Hurricane Matthew relief efforts into the 2018-2019 State Budget.

Regardless, some legislators asked Cooper, where are the HUD funds?

Later that month, eight Republican North Carolina congressional delegates, including Representatives David Rouzer and Walter Jones, signed a letter addressed to Cooper, criticizing the state’s lag in spending.

“Any further delay may also have unacceptable consequences on any future disaster aid requests,” the letter states.

The congressional delegates wrote that it was troubling to learn the HUD funds, specifically designated to help low-to-moderate income families rebuild or repair their damaged homes.

“North Carolina has the potential to lose millions of dollars in disaster relief aid if it continues to allocate funds at this rate,” the letter states.

Less than one percent

Brian Sullivan, spokesperson for HUD, told Port City Daily in April that HUD would like to see the state give its designated funds to those in need.

“If it were on par, it wouldn’t be classified as a slow spender,” Sullivan said. “In any event, we’d like to see things further along.” 

The first portion of North Carolina’s $236 million HUD total was released in December 2016, with a nearly $200 million grant. Later in May and August 2017, HUD added more to the pot.

“Clearly people’s needs begin the date of the disaster,” Sullivan said. “Every place is unique, it’s the grantees who have to explain why they haven’t spent any money to date.”

HUD’s most recent grant finance report, dated August 31, 2018, shows North Carolina has spent less than one percent of its total allotted amount.

These federal funds flow from HUD, are released to the N.C. Department of Commerce, then N.C. Emergency Management, and in theory, eventually end up with families who need help rebuilding their homes — two years later.

What the state says

Gregory Thomas, spokesperson for North Carolina Emergency Management, said the state’s rate of spending is very common.

“Of the 13 states given this kind of funding for 2016 storms, only four are considered on pace,” Thomas wrote in an email.

The funds are tangled in red tape because, in the early life of the program, Thomas said funds were needed for getting programs up and running.

“Lengthy federally-required environmental, county-wide inspections have to be completed along with detailed individual applications before funds can really begin to flow for projects,” he said. “In just the last few weeks as environmental reviews complete, we have already awarded nearly $1.4 million to over 60 families.”

In the meantime, Thomas said the state has built a “robust” team to manage long-term recovery. This will ultimately increase the rate of recovery, he said, that will, in turn, assist Hurricane Florence victims.

“Florence was a devastating storm, and unfortunately many North Carolinians have experienced repeat flooding,” Thomas said. “However, the work we have done is expected to help to get housing recovery to impacted families more quickly.”

Two years later, another storm

In July, the state’s emergency management director Mike Sprayberry said the state recovery team was working with counties to complete HUD’s protocol. In a letter addressed to Representative Brenden Jones, Sprayberry offered an update on Hurricane Matthew recovery and the state’s HUD spending.

“It is typical of new grantees to see their spending rate increase over time,” he wrote. He said HUD calculates spending based on a three-month average of spending. HUD’s “slow spending” category is designated for states where spending is less than 10 percent; North Carolina’s is currently at less than one percent.

“Though our CDBG-DR [federal Community Development Block Grant] spending has increased it can take some months to move out of the slow spender category,” he wrote.”There is no danger of losing federal relief money, and I respectfully request legislators and other partners refrain from suggesting such so as not to discourage eligible survivors from applying for assistance.”

In HUD’s monthly finance report, North Carolina’s closeout date for the $236 it has been granted is five years out, in Dec. 2023.

“The Department recognizes that there are many things that could disrupt recovery efforts: litigation, subsequent disasters, limited construction seasons due to weather, or other extenuating circumstances,” the finance report states. “Nevertheless, HUD has determined that eight to ten years after a disaster, it is unlikely that a grantee will be able to identify new eligible activities that are connected to the event.”


Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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