CHARLESTON, W.Va. — A month after Gov. Jim Justice said long-term flood relief efforts would start moving at lightning speed, the U.S. Department of Housing and Urban Development continues to label the state a slow spender.
That’s an official designation used by HUD, representing states that are spending less than 10 percent of the monthly pace to fully use a grant by its closeout date.
Housing and Urban Development has granted West Virginia $149,875,000 to put toward long-term flood relief efforts, including housing, infrastructure and economic development.
By the time of HUD’s most recent tally, as of July 1, West Virginia still had $148,405,568 on hand.
West Virginia had about the same on hand the prior month, $148,428,791.
So HUD indicates West Virginia spent $23,223 from the end of May to the end of June.
On June 4, after simmering controversy over the way West Virginia had handled long-term flood relief, Governor Justice promised improvement.
“The next statement is, we know now where the problems were and we’re going to fix it in a way that things move at light speed compared to how they’re moving before,” Justice said.
The governor concluded his news conference that day by saying, “Give us a month. Give us a month and find out what happens.”
A report released last month by the Legislative Auditor said it wasn’t clear that West Virginia’s efforts had resulted in anyone receiving full assistance from the Rise West Virginia flood recovery program as of June 1.
That drew a sharp rebuke from the Governor’s Office, which released a statement saying “Legislative Auditor is wrong on Rise.”
HUD has labeled West Virginia a slow spender already at the beginning of June, May and April. HUD just approved West Virginia’s spending from the grant at the end of February after West Virginia applied for approval in late January.
West Virginia Adjutant Gen. James Hoyer, whom Justice named point man for long-term flood relief, says the goal is to move with deliberate speed.
By that he means moving as swiftly as possible to provide the help West Virginians still need after the devastating 2016 floods, but with the care to ensure the state is fulfilling its responsibility without cutting corners.
“I think we’re doing a pretty good job of taking care of people from the standpoint that we’ve got the program moving in the direction it needs to go,” Hoyer said Friday while updating media about long-term flood relief progress.
He added, “I think we’re moving at a pretty good pace right now, based on things we still have and challenges we still have to work through.”
Rise West Virginia is working through 448 long-term flood relief cases now, Hoyer said.
When the West Virginia’s Action Plan for long-term relief was approved by HUD, state officials estimated about 1,000 housing units were needed.
Of the current 448 cases, 131 are now in construction management, Hoyer said. That means they are assigned to a contractor to start to work the housing piece.
Another 164 are somewhere in the case management process, usually moving through environmental compliance approval.
And the rest, 153, are unassigned, Hoyer said. Those might need reconstruction, rehabilitation or replacement — but the specific need still hasn’t been identified by officials.
“From a deliberate standpoint, overall I’m relatively happy with the pace we’re moving at,” Hoyer said. “But related to that particular piece I’m not happy with our speed at that point.”
He agreed that the state needs to continue to be careful with how it uses the federal grant money.
“You don’t want to be in a position where two years from now the HUD inspector general comes in and says ‘You guys spent this $30 million the wrong way.'”
He said state officials are in regular communication with senior staff at Housing and Urban Development.
“The primary reason in my mind that we’ve got to do that is that will help us on the compliance side. If we’re talking regularly to HUD and we’re documenting and they’re documenting the conversations and we do something and then the HUD IG comes back in, we’ve got the trail that says we did this because we collaboratively agreed this is how we’re supposed to make this thing happen,” Hoyer said.
“The HUD folks are going to hear a lot from us and we’re going to have a lot of interaction over the next 24 months as we move this thing down through there.”
One big question is the validity of contracts worth millions of dollars to help the state with management of long-term relief and with construction.
Agreements with construction contractors are valued at $71,430,000.
Those are seven contracts with Thompson Construction Group of South Carolina ($49 million), Danhill Construction Company ($15 million), Appalachia Service Project ($3.18 million) and River Valley Remodeling ($4.25 million).
A legislative audit released last month concluded that the contracts were awarded unlawfully.
They actually were executed prior to this winter’s official release of funding from U.S. Housing and Urban Development. And the West Virginia Development Office did not comply with the Purchasing Division statutes, the audit concluded.
The Legislative Auditor recommended the state cease payments under the contracts, terminate them and put them out for competitive bid again through West Virginia’s purchasing rules.
“We still are clarifying with HUD where we stand on the three existing contracts. I believe by the end of next week we will have an agreement with HUD,” Hoyer said.
“In that process what we’ve done is through the Governor’s Office we’re bringing in the legislative leadership, we’re going to engage the state Auditor, the Attorney General so we have one consistent state of West Virginia voice on this.”
Much of the early controversy focused on work on a smaller contract with Horne LLP to manage long-term flood relief. Hoyer said there is still an agreement for Horne to carry out its work.
“We have to fix the contract process within our selves, the State of West Virginia, and then make sure it meets HUD’s requirement,” Hoyer said. “They’re under a letter that authorizes them to continue to work with us.”
Last week, Congressman Evan Jenkins said he had sought assurances from HUD that the agency would not take back $149 million in flood relief funds.
“I was very concerned about would this be jeopardizing the funds that have not been allocated at this point? Can we be sure there’s not going to be a claw-back?” Jenkins said.
At the time, Jenkins said, he came away feeling better.
“I was reassured that we are not in danger of having HUD take back the funding,” he said.