CHARLESTON, W.Va. — The Governor’s Office has continued to contend a pause it placed on a contract to manage federal disaster relief funds did not slow down efforts.
“We’re going to say the pause — if you can call it a pause, which it really and truly it wasn’t even a pause — we’re going to show you that these people will tell you the pause basically created things to start happening,” Gov. Jim Justice said at a Monday news conference.
“They didn’t create negatives, they created positives.”
That’s the position the state took in an April 6 letter to address concerns raised by the U.S. Department of Housing and Urban Development.
The letter was sent from Brian Abraham, general counsel in the Governor’s Office.
“While your correspondence references a ‘suspension of housing recovery activities,’ we have not directed such a suspension but rather have placed an operational pause upon our Rise program while this office concludes an investigation that we have conducted regarding the procurement of consulting services,” Abraham wrote.
“The actions of the prior administration and several individuals at the agency level have created complications which we must now address before further implementation of the plan. We are diligently pursuing remedies in order to avoid unnecessary delay.”
The contract the Governor’s Office was checking out was with Horne LLP to manage the long-term relief money.
West Virginia was awarded $149 million in federal Community Development Block Grants for disaster relief to push West Virginia’s housing, business and infrastructure toward rebuilding over the long haul.
Using the money requires significant buildup, planning and federal approval.
West Virginia made its request to start using federal long-term relief money on Jan. 29.
HUD gave its OK on Feb. 20.
Right around then is when the Governor’s Office started looking at the contract with Horne.
The state Purchasing Department appears to have first informed the state Department of Commerce about the investigation in a March 27 email.
During the Monday news conference about flood relief, Governor Justice contended the pause did not affect the pace of long-term flood relief.
He said some good came out of it. He said the state will save some money by opting out of some work by Horne. And he said the investigation led to a greater priority on providing timely relief.
“Let me make a statement and a question,” Justice said. “The statement would be this: Without question we know we’re going to save millions of dollars by the so-called pause. The next statement is going to be, we know now where the problems were, and we’re going to fix it and fix it in a way where things move at light speed compared to how they were moving before.
“The question is this, for these people here, is there anybody here that thinks the pause slowed things down?”
The federal government has concerns.
Housing and Urban Development sent a letter March 28 — the day after Commerce was informed about the investigation — asking what’s happening in West Virginia.
“The state’s suspension of its housing recovery activities, potential uncertainty surrounding the state agency that will ultimately be responsible for administration of the CDBG-DR grant and the prospect of a substantial reallocation of CDGB-DR funds from housing to economic development or infrastructure activities necessarily raises questions regarding the Department’s prior certification of State capacity and the State’s implementation of the grant in a manner consistent with the requirements of the applicable federal register notices.
“To address these concerns, the State must provide HUD with an update on the overall recovery of the State and outline any potential changes that will impact the overall management of the State’s $149.8 million CDBG-DR program.”
In a May 24 interview with MetroNews, HUD spokesman Brian Sullivan said the federal agency was surprised to learn of the program’s suspension.
“People in the state of West Virginia are desperate to get their homes back,” he said. “Suspending a program when so many people need housing recovery is a problem.”
And even if the contract deserved scrutiny, HUD needed to be looped in, Sullivan said.
“I get it; you want to do things properly. But if you want to suspend the program you’ve got to tell us,” he said. “The people in West Virginia need to know this.”
It’s been more than four months since HUD gave its approval to start using the grant money.
It’s been more than three months since Commerce learned about scrutiny of the flood management contract.
At the end of Monday’s press conference, Justice promised progress would be apparent in just another month.
“Give us a month. Give us a month and find out what happens,” the governor said.