North Carolina Struggles to Hand Out Storm Aid

LUMBERTON, N.C. — After Hurricane Matthew flooded her childhood home two years ago, Deborah Maynor borrowed $124,000, bought a new house on higher ground, and waited for federal aid to reimburse her for her losses.

She was still waiting for her payout from the state, which is responsible for disbursing long-term federal disaster aid, when floodwaters from Florence lapped under her new house.

Maynor is one of 106 homeowners in this low-lying city 20 miles from the South Carolina border who were still waiting for money needed to relocate, renovate or elevate their homes after Matthew when Florence hit.

“There’s no reason, none at all, it should have taken this long,” said Maynor, 51, who is waiting on a Federal Emergency Management Agency grant that has taken state and local officials more than a year to process. “It makes no sense that the state is sitting on all this money to help these people. I look at all these people who are suffering because of Florence, and I wonder if they would be suffering as much if the state had moved faster.”

She is not alone in her frustration. North Carolina — hampered by internal bureaucratic problems, staff shortages and trouble meeting a myriad federal environmental and contracting requirements imposed by the Department of Housing and Urban Development — has had an especially hard time distributing money earmarked by Congress to help low- and moderate-income homeowners.

As of Sept. 1, the state had spent just $2 million of $236.5 million of a federal Community Development Block Grant program. The state’s heels-in-tar pace places it near the top of localities deemed “slow spenders” by the housing department.

So far, only 53 of the 1,100 families who have applied for the grant money have received it, according to Sadie Weiner, a spokeswoman for Gov. Roy Cooper.

North Carolina has distributed about $750 million, mostly in federal aid, since Matthew struck in 2016. But its struggle to distribute some of that money in a timely fashion is emblematic of a larger challenge encountered by states ill-prepared to oversee extensive, federally funded rebuilding programs as storms as devastating as Florence, Maria, Harvey and Matthew increase in frequency and intensity.

“North Carolina is now faced with a completely unique challenge,” Weiner said. “We are recovering from two historic storms in two years that affected many of the same people.”

Traditionally states, and not the federal government, have been responsible for hashing out the details of assessing damage, processing claims and distributing funding in the wake of national disasters, a system intended to give local decision-makers control over how their communities are rebuilt.

But states and cities, unaccustomed to dealing with the complex logistical and oversight issues of administering programs geared at fast-tracking billions in capital projects, are now finding themselves overwhelmed by the demands, even though such challenges have been well-documented since the aftermath of Hurricane Katrina in 2005.

Many of the areas most prone to repeated hurricanes, especially Louisiana, Texas, Puerto Rico, and now North Carolina, have all experienced similar problems as they adjust to a new normal in which disaster agencies are permanently mobilized — and federal disaster money is now one of the single biggest sources of government money used to help rehabilitate or preserve low-income housing.

“We are really good at disaster recovery programs, hazard mitigation, helping individual people who are in trouble, but not at this kind of thing,” said the state’s emergency management director, Michael Sprayberry, who contends that the lessons learned under Matthew will help the state more efficiently distribute post-Florence disaster funding. “We have had to hire and stand up a completely new staff — roughly 50, 60 new people — so this is a whole new ballgame.”

It took more than 10 months to comply with federally mandated environmental reviews and other red tape, Sprayberry said, which is contributing to the frustration.

“There will be a news release from HUD saying that the state is going to be receiving funding, which right then sort of automatically raises the level of expectations,” he added.

Much more money is likely to arrive soon. The financial losses from Florence could be double the $4.8 billion in total statewide damage caused by Matthew, Weiner said, citing preliminary modeling conducted by analysts for the state.

In the first week after the storm, twice as many people — 80,000 — registered with FEMA compared with the same period following Matthew, she said.

Even before Florence struck, Sprayberry, aware that his staff members were still struggling with Matthew, met with HUD officials in Washington to ask for more technical assistance, going so far as to request that a department official embed with his staff full-time.

The request was rejected. On Monday, Cooper called Housing Secretary Ben Carson, requesting more flexibility in allocating the new amount of federal cash that is expected to exceed the Matthew funding, state officials said.

In the midst of a ferocious legislative election year, the issue has become a flashpoint. The state’s entire Republican congressional and Senate delegations wrote to Cooper, a Democrat, in May to complain that, “North Carolina has the potential to lose millions of dollars in disaster relief aid if it continues to allocate funds at this rate.”

Cooper’s team fired back, claiming that the process was slowed by a reduction in state staff members who handled housing department grants, part of an effort to roll back the state’s commitment to low-income housing under Cooper’s predecessor, Patrick McCrory. “They are trying to blame people for their own screw-ups,” McCrory said. “Look at South Carolina, they had to deal with the same storm, and they are building lots of housing. They are not getting it done. Period.”

South Carolina has spent about $5 million of the more than $146 million allocated by HUD, but is considered on pace, in part because the state had already assembled a team to organize reconstruction efforts after Hurricane Joaquin in 2015.

Federal officials have been encouraged by recent improvements. But they expressed serious concerns about the state’s system for distributing the Matthew aid, in the days before Florence formed as a hurricane in the Atlantic, according to internal HUD memos obtained through a request under the federal Freedom of Information Act.

“The State’s recovery efforts were slow to start and no reconstruction activity has been completed,” HUD planning department staff wrote in a memo on Aug. 27.

HUD attributed slow recovery efforts to a “lack of clarity” over which state agencies had the authority to run the program and expressed concerns that the contracting process was still too disorganized. Weiner said most of the shortcomings identified by the department had already been addressed, and some funding in the state’s FEMA program had actually been distributed ahead of schedule. The HUD money only represents a fraction, about 15 percent, of the total grants that will ultimately be given to Matthew’s victims, she added.

But the block grant money is increasingly important, local officials say. FEMA’s reconstruction funding is strictly constrained by federal funding caps — with money available for only 800 of the 3,000 applicants for the program.

The bureaucratic distinction does not mean much to homeowners like Maynor, who recently received some good news: A contractor will soon inspect her old house to assess a reimbursement price.

But the mood remains grim on Lumberton’s predominantly African-American west side, which remained underwater over the weekend as water flowed through a hole in a dam on the Lumber River.

“There are 106 families in this town who have been told, over and over, help is on the way,” said Chris Howard Jr., a Lumberton councilman who lost one house in Matthew and another one, newly purchased, in Florence. “My constituents have basically gotten nothing, so far.”