By Karen Sudol and Melissa Hayes, The Record (Hackensack, N.J.)
HACKENSACK, N.J. — Just as a second round of federal disaster aid is reaching New Jersey, Governor Chris Christie’s administration faces a critical juncture in the Superstorm Sandy recovery: Can it fix a litany of grant funding problems identified by storm victims, advocacy groups and lawmakers who are doubtful that much will change?
As New Jersey began to dole out $1.8 billion in relief aid last spring, legislative and state offices were flooded with complaints about lost paperwork and unknowledgeable representatives. A disproportionate number of African-American and Latino applicants were denied aid, a housing advocacy group said. And a company charged with overseeing programs that provide grants for the repair or rebuilding of homes was quietly fired by the state because of “performance-related concerns.”
Christie has placed most of the blame on Congress for delaying approval of the aid and has pointed to stringent federal requirements that have caused further delays. But he has acknowledged that New Jersey made mistakes and can do better. And while the state appears to be taking steps to avoid similar problems when overseeing the distribution of an additional $1.46 billion, critics still have concerns.
“I wish I could say that the state would do things better and differently than what they did with the first pot of money, but it doesn’t appear that they’ve heard any of the complaints, criticism or suggestions for the last six months,” said Staci Berger, the president and chief executive officer of the Housing and Community Development Network of New Jersey, a statewide association of 150 community development organizations. “People would have more respect for the process if the governor and administration said we did a bad job in this and we’re going to fix it. That’s the part that doesn’t ring true.”
Sandy victims have taken issue primarily with the slow pace at which the money — intended to help homeowners and businesses recover from the damage incurred during the storm that hit on Oct. 29, 2012 — has been distributed.
On the commercial end, the state Economic Development Authority has issued only about $13 million of $100 million in grants to 270 of 1,540 businesses that have applied, a spokeswoman said.
The New Jersey Main Street Alliance, a small-business advocacy group, said many businesses had been forced to resubmit paperwork multiple times and had seen a high turnover rate among grant administrators. Corrine Horowitz, the group’s business representative, said the alliance wanted the state to expedite its awarding of grants and hold a hearing for business owners with concerns.
An Economic Development Authority spokeswoman said the agency had made changes to speed up the process, such as reducing the number of documents required by applicants.
But the bulk of the complaints have been made about the state’s residential housing assistance programs.
The Fair Share Housing Center, an organization that defends the housing rights of the state’s poor, received a slew of complaints about the way Louisiana-based Hammerman and Gainer Inc. administered the state’s largest housing aid programs for storm victims. One particular focus was the Reconstruction, Rehabilitation, Elevation and Mitigation program, known as RREM, that offers up to $150,000 for the repair, rebuilding and raising of homes.
The housing center says it found that African-Americans and Latinos were rejected at much higher rates than Caucasians applying for the same relief. It also discovered that there were problems with the data being used to award grants, resulting in erroneous denials. Of those who appealed denials, 80 percent were awarded money.
At just about the time the housing center’s findings were released in December, it was learned that Hammerman and Gainer Inc. had been fired — something state officials disclosed only in response to media inquiries. The state agreed to pay the company a $10.5 million settlement to sever the contract. But the firm filed a request for arbitration last month, arguing that the state still owed HGI $18.43 million.
Another outstanding question is how the company billed the state for $51.2 million for seven months of work even though the three-year contract was capped at $67.7 million. HGI appears to offer as an explanation that it performed work outside the scope of its contract and at an accelerated rate. The company says state officials agreed to pay the firm for this additional work and manpower.
Adam Gordon, the housing center’s attorney, said that without the state’s specifying why HGI was fired, it was hard to ensure that similar problems would not occur with the new round of financing.
“I think this is really a cautionary tale about what happens in an absolutely critical disaster recovery situation when there’s an outside contractor hired and there’s really no oversight from the state,” Gordon said Thursday. “The state ends up spending tens of millions of dollars and does not get the results that it needs to help people return to their homes.”
Carol Davis, a resident of the Silverton section of Toms River, is one of thousands of storm victims who remain on a waiting list for money to elevate her home. She said it was hard to navigate the various grant programs, and she’s constantly trying to keep neighbors — many who have been unable to return to their homes — informed of new programs and deadlines.
She recently asked the governor at a town hall-style event in Toms River if the state could better train program staff and mail residents information about new grants and deadlines.
Christie told her that the state had improved the way it disseminated information after receiving complaints.
After the event, Davis said she still thinks the state could do a better job.
“The grants should be knowledge to everybody, it shouldn’t be a secret,” she said.
Christie has noted that New Jersey has earmarked more money for recovery than both New York City and New York state — New Jersey has set aside $1 billion, with New York and New York City putting aside $240 million and $370 million, respectively. But he admitted at that event that the state needed to improve its programs going forward.
“We’re working on ways to become better at it,” he said. “I never promised you, nor would I, that this was going to be mistake-free. We’re setting up a whole separate government in essence to run these programs, and it’s hard.”
The state’s past experience could provide vital lessons in distributing the next round of money, which is expected to begin in late spring or early summer.
Officials from the state Department of Community Affairs, which contracted with HGI and is now administering the housing programs, said they had taken steps to improve the housing rehabilitation program, including better training of staff and the overhauling of its information technology systems.
“Given these meaningful improvements, the challenging experience that some RREM applicants have had in the past will not likely continue, moving forward,” said Lisa Ryan, a department spokeswoman. “Every day we strive to enhance, streamline and improve the program so that we get all eligible RREM awardees the help they need to get their homes and lives back to normal.”
Photo: acccarrino via Flickr