Law­mak­ers: State money should have gone to emer­gency hous­ing

The News & Observer - - Front Page - BY LYNN BON­NER lbon­[email protected]­sob­server.com

Leg­is­la­tors crit­i­cized the state De­part­ment of Pub­lic Safety for ap­prov­ing mil­lions in spend­ing on per­ma­nent af­ford­able hous­ing de­vel­op­ments when law­mak­ers wanted the money to go to emer­gency and short-term hous­ing for peo­ple look­ing for places to live after dis­as­ters.

A re­port to a leg­isla­tive com­mit­tee on Mon­day said the de­part­ment did not fol­low state law or best prac­tices when it se­lected the N.C. Com­mu­nity De­vel­op­ment Ini­tia­tive to re­ceive state money and gave it up-front, lump-sum pay­ments of $5.35 mil­lion.

The Joint Leg­isla­tive Pro­gram Eval­u­a­tion Over­sight Com­mit­tee voted to re­fer the re­port to the at­tor­ney gen­eral and other com­mit­tees.

Mike Spray­berry, the state emer­gency man­age­ment direc­tor, de­fended the de­ci­sion to spend the money on per­ma­nent hous­ing, but law­mak­ers said that was not what they wanted.

“Peo­ple have to be held ac­count­able,” said Rep. Craig Horn, a Wed­ding­ton Repub­li­can and a com­mit­tee co-chair­man. “You didn’t give me the impression that we’re go­ing to hold peo­ple ac­count­able.”

In an email, Kim­berly Askew, the Com­mu­nity De­vel­op­ment Ini­tia­tive’s se­nior vice pres­i­dent of op­er­a­tions and ad­min­is­tra­tion, said all its work met re­quire­ments out­lined in its writ­ten agree­ment with the state.

“We used the funds in ac­cor­dance with that agree­ment and are very proud of that work and the pos­i­tive im­pacts it has had,” Askew wrote.

The leg­is­la­ture ap­pro­pri­ated $9 mil­lion for emer­gency and short-term hous­ing for peo­ple dis­placed by Hur­ri­cane Matthew in Oc­to­ber 2016, west­ern wild­fires and trop­i­cal storms, said a re­port from the leg­is­la­ture’s Pro­gram Eval­u­a­tion Di­vi­sion.

The De­part­ment of Pub­lic Safety let the Com­mu­nity De­vel­op­ment Ini­tia­tive use the money for grants and loans for new con­struc­tion and land purchases for fu­ture de­vel­op­ment, ac­cord­ing to the re­port.

Spray­berry said not all the $5.3 mil­lion was spent on new con­struc­tion, that some went to fix­ing homes. By the time the state ap­pro­pri­ated funds, months after Hur­ri­cane Matthew hit, there was no need for emer­gency hous­ing and the state couldn’t find any­one to take the money, he said. Mean­while, com­mu­ni­ties hit hard by nat­u­ral dis­as­ters had long­stand­ing needs for per­ma­nent af­ford­able hous­ing, he said.

If there was no need for emer­gency or short-term hous­ing, said Rep. Ju­lia Howard, a Mocksville Repub­li­can, leg­is­la­tors should have been asked to re­di­rect the money.

“Just to re­build com­mu­ni­ties with new de­vel­op­ment, that was never the in­tent of the leg­is­la­ture or the direc­tive,” she said. “You took lib­er­ties where lib­er­ties should not have been taken.”

The pro­gram eval­u­a­tion re­port said the Com­mu­nity De­vel­op­ment Ini­tia­tive gave loans and grants to de­velop or re­de­velop hous­ing in Fayet­teville, Wil­son and Rocky Mount that were prob­a­bly out­side the leg­is­la­ture’s direc­tive.

The spend­ing in­cludes at least $1.8 mil­lion to buy land for fu­ture de­vel­op­ment in Rocky Mount. The grant went to a lim­ited li­a­bil­ity cor­po­ra­tion af­fil­i­ated with the Com­mu­nity De­vel­op­ment Ini­tia­tive. The LLC could be con­sid­ered for-profit, the re­port said.

Fur­ther, more than six months after the agree­ment with the Com­mu­nity De­vel­op­ment Ini­tia­tive ex­pired, the de­part­ment has not re­cov­ered

$1.3 mil­lion the organizati­on didn’t spend or that was go­ing to be used after the spend­ing dead­line, the re­port said.

In the email, Askew said the Rocky Mount LLC is a wholly owned sub­sidiary of the Com­mu­nity De­vel­op­ment Ini­tia­tive, which is a tax-ex­empt, nonprofit cor­po­ra­tion.

In a writ­ten re­sponse, Spray­berry de­fended the de­ci­sion to work with the Com­mu­nity De­vel­op­ment Ini­tia­tive, and called the lack of af­ford­able hous­ing an emer­gency.

“Ac­cord­ing to the North Carolina Hous­ing Fi­nance Agency, after Hur­ri­cane Matthew there was a short­age of 192,000 af­ford­able hous­ing units in the dis­as­ter de­clared coun­ties,” he wrote. “NCEM (N.C. Emer­gency Man­age­ment) de­ter­mined the Ini­tia­tive, es­tab­lished in 1993, was a solid ve­hi­cle to as­sist NCEM in pro­vid­ing fam­i­lies with an af­ford­able hous­ing so­lu­tion. NCEM in part­ner­ship with the Ini­tia­tive worked suc­cess­fully to pro­vide 433 units in Robe­son, Cum­ber­land, Edge­combe and Wayne coun­ties.”

Spray­berry said the de­part­ment is do­ing an in­ter­nal au­dit, and would get back money left un­spent or spent on projects or ac­tiv­i­ties that were not al­lowed.

He wrote that the Com­mu­nity De­vel­op­ment Ini­tia­tive has been told it must re­turn at least $1.6 mil­lion it has not spent and may have to re­turn $1.7 mil­lion in dis­al­low­able ex­penses if it can­not justify them.

The state may ask for more money back, de­pend­ing on the re­sults of an in­ter­nal au­dit, Spray­berry wrote.

News & Ob­server file photo

Flood­wa­ters wash over Ver­non Av­enue in Kin­ston in Oc­to­ber 2016 after Hur­ri­cane Matthew forced the Neuse River over its banks.

JULI LEONARD [email protected]­sob­server.com

Golds­boro’s Ed­wards Mo­bile Park was flooded dur­ing Hur­ri­cane Matthew. State funds were ap­proved for short-term hous­ing.

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