The slow response by the North Carolina Office of Recovery and Resiliency to get people back into their homes four to six years after Hurricanes Matthew and Florence was brought to light at a legislative hearing Wednesday. It’s in stark contrast to how well neighboring South Carolina has done with its own efforts.
Governor Roy Cooper, a Democrat, started NCORR after Hurricane Florence to “streamline disaster recovery programs statewide and help communities rebuild smarter and stronger,” according to the N.C. Department of Public Safety’s website. The Rebuild.NC website says, “NCORR serves as a leader in building resilience statewide.” Those who have been displaced since 2016 and 2018 and some lawmakers might beg to differ
To date, North Carolina has received $778 million for both storms, which needs to be spent by 2026. NCORR has completed just 789 out of 4,100 projects, or around 25% of homes, either by rehabilitation or new construction. They are currently completing five to six houses a month, compared to twenty-eight a month in 2020 and fourteen a month in 2021. NCORR Director Laura Hogshead blamed the pandemic, supply chain issues, and labor and contractor shortages for the downward trend
In comparison, Col. J.R. Sanderson, senior government advisor for SBP, formerly known as the St. Bernard Project, a nationwide disaster recovery program, testified that the average turnaround time for the South Carolina Disaster Recovery program was 37 days for mobile homes, 56 days for stick built, and 88 days for complete reconstruction, when he ran the project in S.C. from 2015 to 2019 for recovery from Hurricanes Joaquin, Matthew, and Florence. He also said they turned over 110 homes a month, the equivalent of 3-5 per week.
According to the South Carolina Office of Resilience website, the Disaster Recovery Division has rebuilt or repaired more than 3,000 homes since 2015.
Why has South Carolina’s hurricane recovery efforts far surpassed North Carolina’s?
“This is a $70 billion industry in America today,” Sanderson said. “Seven out of every ten grantees are failing.”
He said successful grantees need to have a focused action plan and a needs assessment needs to guide it.
Sanderson told lawmakers that he would grade NCORR’s action plan with an F because it didn’t have defined outcomes and doesn’t match the ways and means to get there.
Sanderson also said that successful grantees need to have an estimated cost to repair where the state determines it, not the contractor, strong auditing programs, a universal technology system of record, be policy-oriented and write good contracts.
“In the DR (disaster recovery) world, we pay billions and billions of dollars for effort,” he said. “I am not looking for a partner, I am looking for an employee. A lot of the bad contracts are effort-based, not outcome based.”
Strong finance departments need to be added as well. Sanderson said contractors need to be paid quickly. “Our average payment time was 10 days from when we got a correct invoice from a contractor,” he said.
Resiliency measures need to be built into the process, as well as having great disaster case management services, and a strong monitoring and compliance program. Sanderson said they had staff members go out to every county in South Carolina that was affected by the hurricanes. “They go out and photograph everything, take an inventory and tell a contractor if they aren’t doing a good job,” he said.
Perhaps one of the biggest factors in South Carolina’s recovery efforts, according to Sanderson, was having one implementation vendor that assigned contractors to housing projects. He said it avoids anyone having to change midstream during the process and avoids bidding on individual contracts.
“Think of the manpower requirements to bid out each home,” he said. “Going out and hiring general contractors would take forever. Let capitalism work here, as opposed to being anti-capitalist and do everything from a centralized government control piece.” He said contractors have to earn market share. If they did good on one home, he would have them assigned to more. If contractors didn’t complete the work on time, they were fined $100 a day.
Rep. Sarah Stevens, R-Surry, asked Sanderson if there was anything in HUD’s requirements that prevented using the one implementation vendor system. Sanderson said no.
Hogshead admitted to legislators that recovery efforts were not going how anyone wants them to go and said she took responsibility.
She did, however, blame the COVID-19 pandemic, government red tape, supply chain issues, and contractor and labor shortages for the holdup, and that her office is working on ways to streamline the process, including reducing the number of documentation requirements for eligibility from 12-14 to 3-4, bringing case management in-house, and working on ways to pay contractors faster.
Sen. Brent Jackson, R-Sampson, spoke with representatives from HORNE, on September 9. HORNE is a professional services firm that has experience with the administration of federal funds. They said they provided a project manager for the implementation of CDBG-DR funds for North Carolina, and it was clear that NCORR’s program choices could have been the reason for the delays.
“HORNE representatives cited numerous examples of NCORR directly ignoring recommendations from proven experts on how to streamline the program,” he said. “To quote HORNE’s testimony, many of HORNE’s attempts to provide feedback or warn NCORR leadership of the impacts that their policies and procedural changes would have on applications and staff were met with criticism. The program was too complex, and instead of getting applicants through basic eligibility requirements from HUD, many unnecessary documents and items were required from applicants, which could delay the applicants’ approval for months.”
Jackson went on to say that HORNE discussed NCORR’s program with HUD, and their representatives agreed that the vast majority of the program’s requirements, especially the documentation for verification aspects, were established by the grantees or NCORR.
Sanderson said those in the disaster recovery industry agreed that NCORR’s system is “overly bureaucratic,” thus the lack of contractors who want to work on the recovery projects.
When asked to evaluate NCORR’s progress, Sanderson said he doesn’t believe that they will meet the federal deadlines and should take steps to contract out their management system.
Stevens asked Sanderson if it was too late for North Carolina to switch over to an implementation vendor process. “You ain’t got nowhere to go but up,” he said. “I would certainly consider it if I were in your shoes.”