Pallone Calls on HUD to Require Transparency, Accountability in State Distribution of Sandy Funds

Mar 26, 2014 Issues: Hurricane Sandy, New Jersey

Letter highlights racial, income disparities and inequities in NJ vs. NY funding levels

WASHINGTON, D.C. – Today, Congressman Frank Pallone, Jr. (NJ-06) sent a letter to U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan regarding the agency’s review of the State of New Jersey’s Community Development Block Grant – Disaster Recover (CDBG-DR) Action Plan amendment.  The amendment, released in February, details how the state plans to spend $1.46 billion in federal Sandy recovery funds.  In the letter, Congressman Pallone outlined several concerns regarding the distribution of aid and urged Secretary Donovan to ensure that the funds are distributed fairly, swiftly, and transparently by the state of New Jersey. 

Pallone stressed the importance of ensuring that financial assistance reaches New Jerseyans who need it most.  The Sandy Aid package, passed by Congress in January 2013, requires that 50% of CDBG-DR funds be used for activities that benefit persons of low and moderate income.  Pallone requested that HUD require that the state take action to ensure that aid is being properly administered to low and moderate income residents and without racial disparities.  Additionally, Pallone asked that homeowners who apply for a grant under the State’s Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program be reimbursed for work they undertake while waiting for the necessary funds to be allocated to them.

Pallone also urged HUD to compel the state of New Jersey to make the criteria and guidelines being used to rank grant applications available to the public.  Many of his constituents are frustrated that they have not even been able to learn the status of their application to a particular program. Pallone stressed the need for applicants to have access to timely information regarding recovery programs, as well as the status of their requests.

“New Jerseyans were promised help when Sandy destroyed their homes and businesses, and access to the critical recovery programs funded through Community Development Block Grants is instrumental to delivering on that promise.  Unfortunately, New Jerseyans have been facing road blocks instead of a straightforward process,” said Pallone.  “There is more that must be done in order to ensure that this next round of federal funding is spent fairly, efficiently, and gets to the families that need it most.”

Pallone also requested clarification from HUD on the criteria used to determine the funding levels for areas still working to recover from Superstorm Sandy.  Specifically, Pallone asked for an explanation as to why the second allocation for the entire state of New Jersey is only slightly higher than the allocation for New York City alone.  Congressman Pallone, whose district suffered some of the worst damage from Superstorm Sandy, requested that the methodology by which these allocations were determined also be made public.

Below is the full text of the letter:

March 26, 2014

Honorable Shaun Donovan

Secretary

U.S. Department of Housing and Urban Development

451 7th Street SW

Washington, DC 20410

 

Dear Secretary Donovan,

I write today regarding the Department of Housing and Urban Development’s (HUD) review of the State of New Jersey’s Community Development Block Grant – Disaster Recover (CDBG-DR) Action Plan amendment.  Before you approve the second round of CDBG-DR funds for the State of New Jersey, I ask that you carefully consider some of the concerns I outline in this letter.

The Sandy Aid package requires that 50% of CDBG-DR funds be used for activities that benefit persons of low and moderate income.  Concerns have been raised that not enough emphasis has been placed on ensuring Sandy recovery funds get to those that need financial help the most.  An analysis by the Fair Share Housing Center in New Jersey found that only 37 percent of resettlement grants awarded in New Jersey were awarded to low and moderate income households.  HUD must review the state’s needs assessments and determine that New Jersey is properly administering its aid programs with respect to low and moderate income residents.  This should also include a greater emphasis on financial assistance to low and moderate income renters.  I am also concerned with potential racial disparities in the aid distribution process.  Analyses show that black and Hispanic citizens were more likely than whites to get rejected by the State’s Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program and Resettlement program.  This inequity should be corrected as the second tranche of CDBG-DR funds are allocated.

HUD should review the New Jersey CDBG-DR Action Plan amendment to determine if the state has set forth comprehensive information regarding the policies and procedures guiding recovery programs.  HUD guidance states that “During the term of the grant, the grantee must provide citizens, affected local governments, and other interested parties with reasonable and timely access to information and records relating to the Action Plan and to the grantee's use of grant funds.”  My constituents need to know exactly what the eligibility criteria are for these grant programs, as well as the process for being approved, placed on the waiting list and appealing a denial of their application.  Many of my constituents are extremely angry that they have not been able to learn the status of their application to a particular program, and that clear guidelines for grant programs administered by the state are difficult to locate.  Further, the State has not publicized its criteria or methodology for ranking the applications it received, and I believe the State should be compelled to do so.  A greater focus on accountability and transparency is critical as the second round of CDBG-DR funds are distributed in New Jersey. 

My staff has had lengthy discussions with HUD staff regarding your agency’s rejection of New Jersey’s request to reimburse rehabilitation expenses for applicants to the state’s RREM program.  I understand that HUD must comply with the National Environmental Policy Act (NEPA), however my staff has asked whether it is possible to “stop the clock” and disallow work to continue only once a homeowner enters into an agreement with the State and funds are actually allocated to them.  Homeowners are barred from being reimbursed for work on their home from the moment they apply, when there is still uncertainty around whether they will truly be allocated funding.  It is possible their application could be denied, or they could be placed on a waiting list for funding only to find out down the line that the state does not have the funding available to assist them.  Additionally, I would like clarification as to whether homeowners can be reimbursed for work they undertake after they receive an environmental review from the appropriate state agency, but before their application is formally approved. 

I also request detailed information on the criteria used for determining the funding allocations for New Jersey, New York, New York City and other grantees working to recover from Superstorm Sandy.  The second allocation for the entire state of New Jersey, $1.463 billion, is only slightly higher than the allocation for New York City alone.  Given the tremendous challenge New Jersey faces rebuilding from this catastrophic storm, I believe it is important that the methodology by which these allocations were determined be made public. 

I would like to invite you to New Jersey to meet with mayors and other elected officials in my Congressional District who have been on the front lines of the recovery effort in New Jersey.  Elected officials in my district are frustrated and angry with the aid distribution process and I believe their perspective will be valuable as HUD continues to review and oversee New Jersey’s usage of CDBG funds. 

As you know, my district suffered some of the worst damage from Hurricane Sandy.  The second allocation of CDBG-DR funding to the State of New Jersey is critical to our rebuilding effort.  It is our responsibility to ensure the funds are distributed fairly, swiftly, and transparently.  Please do not hesitate to contact me if I can be of assistance in any way.

Sincerely,

 

                   FRANK PALLONE, JR.

                 Member of Congress

                         6th District of New Jersey