RALEIGH — On March 6, the Joint Legislative Subcommittee on Hurricane Response and Recovery heard updates from members of Gov. Josh Stein’s new organization tasked with disaster recovery with regard to the status of Hurricane Helene recovery activities.
Officials from the Governor’s Recovery Office for Western North Carolina (GROW NC) called on to testify before the committee included Deputy Secretary for the Department of Commerce Division of Community Revitalization Stephanie McGarrah and Western North Carolina Recovery Adviser Jonathan Krebs. Both McGarrah and Krebs were named to GROW NC by Stein on Jan. 7.
Throughout the hearing, members of the committee expressed concern and skepticism that GROW NC would be any different than former Gov. Roy Cooper’s Office of Recovery and Resiliency (NCORR), which has failed to get citizens back into homes over the last eight years following Hurricanes Matthew and Florence.
“Our goal is simple: We want GROW North Carolina to start off on the right track,” said Rep. Brenden Jones (R-Columbus), who chaired the meeting.
“North Carolina cannot afford another failed disaster recovery program,” Jones said. “The failures we saw with NCORR and eastern North Carolina cannot be repeated. I sincerely hope those leading this effort have learned from those mistakes.”
In her opening remarks, McGarrah reviewed the $59.6 billion estimated to cover damages and other needs. Of the $59.6 billion, $44.4 billion is estimated direct costs, $9.4 billion is for estimated indirect costs and $5.8 falls under the category of strengthening and mitigation needs.
McGarrah recapped “lessons learned” from NCORR and the state’s pandemic recovery office before explaining how her division of GROW NC would be different. Her presentation included increased data and funding transparency, engagement with stakeholders and setting “clear expectations about what CDBG-DR is,” which she described as a “last resort” federal funding source.
In terms of transparency, Stein announced the operational launch of GROW NC’s website on March 4. The website contains updates on GROW NC’s work, a data dashboard and other resources. The public can visit the GROW NC site at wncrecovery.nc.gov
McGarrah told lawmakers that U.S. Housing and Urban Development (HUD) requires action plans to be submitted prior to receiving any Community Development Block Grant – Disaster Recovery (CDBG-DR) funds. She said HUD identifies “Most Impacted and Distressed” regions and requires that at least 80% of CDBG-DR funds be spent in those areas. North Carolina will get $1.2 billion for unmet needs and $186 million for mitigation uses, per McGarrah.
“I know it’s frustrating when you’ve had your house damaged or destroyed and you find out that these dollars are long term and it’s slow, and that’s not really slow on our part,” McGarrah said when asked about deadlines and the speed of funding. “We’re doing everything we can, but we have to work through HUD and the federal requirements, and that is very frustrating.”
North Carolina’s draft HUD Action Plan currently would distribute funds received across the areas of housing, infrastructure and economy, with the majority of funds spent in the area of housing.
McGarrah’s presentation broke down the funding for each of the three focus areas. Infrastructure would receive $194 million, and $111 million would go to economic revitalization of commercial districts. For housing, $807 million would go to reconstruction and rehabilitation for owner-occupied units, $53 million to workforce housing for ownership and $191 million for small rental R&R and a multifamily construction program. An estimated 74,000 homes were destroyed or damaged by the storm.
“We heard about, you know, you mentioned about some delays, but time, again, we’ve seen disaster programs move at a snail’s pace. People are waiting,” Jones told McGarrah. “Are there some concrete deadlines that we should hold you accountable for getting homes and businesses rebuilt in North Carolina? And, the second part of that question — if you don’t, what should we do as the legislature?”
McGarrah prefaced her reply by saying GROW NC doesn’t have plans for rebuilding businesses and that it would need to be a separate discussion.
“So we have six years from the date of the grant agreement,” replied McGarrah. “I know that’s too long. I would like to see it happen faster. I think we’re going to try to make it happen faster, but I think, realistically, when you look at where you run into problems, there are people in situations that it’s really easy to rebuild or rehab their home.”
McGarrah said GROW NC plans to hire about 30-40 more people to help get the work done, and Jones reminded her that NCORR hired 200 and still failed.
Krebs updated the committee on the status of the state’s Hurricane Helene expenditures to date, federal match programs and loans as well as which state agency funds were fully expended.
Additionally, Krebs reported two agencies have over-obligated their funding; the N.C. Department of Public Instruction and the Department of Agriculture and Consumer Services.
The Department of Public Instruction was given a $50 million appropriation and has expended $29.9 million but has $57 million more in obligations for a deficit of $36.9 million. Similarly, the Department of Agriculture and Consumer Services was allotted $210,000 and spent around half of that amount but has obligations of $670,000, putting the department in a $560,000 hole.
The state has received $1.65 billion in federal funding so far, and the General Assembly has issued multiple rounds of relief funding totaling over $1.1 billion. That figure may reach more than $1.6 billion once the $545 million contained in House Bill 47 is enacted. The bill has passed both chambers unanimously and is expected to receive its final vote in the House before heading to Stein’s desk on either March 11 or March 12.
Jones thanked Krebs for his presentation, telling him, “You’ve walked into this hornet’s nest of North Carolina in the recovery.”
“I’ve heard terrific things about you. I’ve had great conversations with the governor and I fully expect that you’re going to do a great job,” Jones continued. “But you know what would have been even better to see on that? That we had done something for Lake Lure, that we had done something for Madison, that we had three houses getting built, or we had 30 houses getting built.”
Jones went on to tell Krebs everything he presented to the subcommittee was good and needed, but “that doesn’t get people back in their houses.”
“I’m tasking you as this body, even though you don’t work for us, help us help you. Let’s do the right thing. Let’s get this red tape out the way,” said Jones, adding GROW NC needs to tell the legislature what they need to get things done.
“And I said this in my last meeting and it offended some people, but this state has pissed away the taxpayers money, and we’re not going to do that again,” Jones said. “We’re asking you to help us help you make this work fast, make it work quick. We don’t have six years to do this, understood?”
Krebs acknowledged Jones’ remarks and offered several suggestions, including the need to streamline permitting processes.
Rep. Mark Pless (R-Haywood) asked Krebs questions about the $807 million to reconstruct homes destroyed in the flood, the $53 million for new workforce housing and $191 million for multifamily construction.
“Did you hear we had a rainstorm back in September?” Pless asked Krebs, who replied with a “yes.”
“The governor’s told us, the previous governor and this governor says, ‘I need $53 billion to fix western North Carolina.’ I need enough money to fix … this is your estimate, 73,700 houses,” Pless said to Krebs. “And you’re building houses to sell with money that’s supposed to be helping these flood victims. How are you going to explain that?”
Krebs replied, “Well, as we’ve discussed in this hearing, there are some people who may not be allowed to build back where they were. And so being able to help them purchase an affordable house is a critical part of a holistic solution for recovery.”
“So they were destroyed by the flood, and you’re going to make them buy a new house out of the floodplain?” asked Pless.
“I’m not making them do anything but offering them options,” said Krebs.
“But this 807 is for the people that were affected by the flood,” Pless pressed. “We don’t need an increase in housing stock. We need a disaster area rebuilt.”
Pless later expressed he believes GROW NC will not have the funds to finish what they promised.
“You’re going to come back to us in a few years and say we would love to finish these, but we can’t because we don’t have enough money,” said Pless. “You’re building stuff that wasn’t there to begin with. What can you say about that?”
“I think the intent for the $191 million representative plus was to repair and rebuild rental housing that was destroyed during Helene. That’s the priority,” McGarrah responded.
McGarrah later added communities were hit by the storm in different ways, but GROW NC has heard they “need to put more money in rental housing or to put more money into workforce housing.”
As questions wrapped up, Jones indicated the subcommittee would likely be calling GROW NC back for an update sometime in June.
