Auditing The Storm: Cities, State Scramble To Spend Community Storm Grants
More than half of the federal disaster funds being offered to Oklahoma for recovery from the violent storms of 2013 are in the form of community development grants.
But that cash aid comes with strings attached. And those strings have state and local officials scrambling to figure out how to spend the money effectively and whether they can meet federal deadlines in spending all of the grant funds, totaling $146 million. Whatever is not spent will be left on the table.
The U.S. Department of Housing and Urban Development has approved two rounds of community development block grants tied to Disaster 4117, which covers the severe tornadoes and storms that struck in 21 counties between May 18 and June 2 last year. These grants can be used for housing, economic development, infrastructure and prevention against future damage.
The state of Oklahoma was awarded $93.7 million, to be distributed to local governments; Moore received two direct awards totaling $52.2 million.
One of the biggest challenges in spending the money is a requirement that more than half of the grant funds be spent to benefit low- to moderate-income people or areas affected by a disaster. Low to moderate income is defined as those living at or below 80 percent of a metropolitan area’s median income level. In Oklahoma City, that equated to $48,000 for a family of four in 2013.
In Moore, the only neighborhood hit by the May 20, 2013, tornado that qualifies as low- to moderate-income is a seven-square-block area west of Interstate 35. That has prompted planners in Moore to look for ways to spend the grant money in other areas and still meet the requirements.
The state faces the same stipulation in distributing the money to communities; it must ensure communities spend the grants to benefit lower-income households.
In addition, the state and Moore have just over three years, until Sept. 30, 2017, to obligate how the money will be spent, and two years after each of those decisions to actually spend the money. All of the Disaster 4117 block grants must be spent by Sept. 30, 2019.
Officials are working to develop enough projects that qualify for the disaster funds and address the disaster’s unmet needs before the 2017 deadline.
“We’re walking a timeline tightrope, but we want to make sure everything we’re doing is effective and meets the needs out there,” said Vaughn Clark, director of community development at the Oklahoma Department of Commerce.
Less Than Expected
In late December, the state of Oklahoma and Moore were awarded the first round of HUD disaster-relief grants for the storms.
Moore received $26.3 million, and the state $10.6 million. In addition to other conditions, the state was required to spend 32 percent of the grant in Cleveland County, where most of the storm damage occurred.
The state’s amount was less than officials expected.
State planners wrote in an action plan, which outlines for HUD how the funds will be spent, that the disaster’s “total amount of unmet need far exceeds” the $10.6 million and the state hoped for a second allocation of HUD funds.
“I think the amount might have been low because they were trying to estimate what was unmet following the insurance payments, the FEMA payments and other payments,” Clark said in an interview.
Oklahoma City, which suffered some damage from the May 20 tornado but substantially more in the storms on May 31, was not directly awarded HUD funds. That left some city officials feeling the destruction they had to address was being overshadowed by Moore’s.
“We will eventually get some money,” said Frank Barnes, emergency manager for Oklahoma City. “I think at the federal level, when they give it to Moore, they don’t realize it is only going to the jurisdictional boundaries of Moore.”
The state decided to award Oklahoma City $8.7 million of its $10.6 million grant to pay for street, drainage and infrastructure projects in areas affected by the May 20 tornado and for street and curb damage caused by debris cleanup, said Steve Rhodes, urban redevelopment specialist for Oklahoma City. Those projects could help the state meet the HUD income and other requirements, he said.
But the proposed projects don’t address the more significant damage from the May 31 storm, Rhodes said. Projects there will more easily meet HUD’s income requirements, he said.
In early June, HUD awarded an additional $25.9 million to Moore, about the same as in the first round. The state got significantly more: $83.1 million. Still, the state’s grant came with a new set of issues.
The additional funds were eligible to be spent in 57 counties that had fallen under disaster declarations in Oklahoma since 2011; 40 percent of the money had to be spent in Cleveland County and Creek County, which experienced severe wildfires in 2012.
While the expanded period for disaster events is helpful, it also means the state will likely not get HUD’s approval of its spending plan for at least two more months, meaning the state will have around three years to get the money obligated to projects locally, a relatively short amount of time, Clark said.
“Yes, we have had to do quite a bit in a little bit of time,” Clark said. “But HUD has been flexible with us up to this point, so hopefully they will continue to be as responsive as they have been.”
Decisions for Moore
For Moore, the HUD block grants are the first that have been awarded directly to the city. It is looking for ways to spend its $52.2 millions in the time allowed and in accordance with federal requirements.
“It’s a lot of money,” said Moore City Manager Eddy. “We’re grateful for the money, but it’s a lot of money to try to spend, for a community our size, in a five-year period (by 2019.”
Elizabeth Jones, community development director for Moore, acknowledged that “there are a lot of strings attached,” but said she is confident the city can spend the funds on eligible projects within the deadline.
Because only a narrow piece of the tornado’s swath of destruction qualifies as low- to moderate-income, Moore must look for other ways to meet HUD’s income requirements.
Jones said in addition to possible projects in that area, the city is considering using some funds for housing rehabilitation and new housing in other parts of the city to benefit low to lower-income people.
Because Moore has never dealt directly with HUD on grants, the federal agency early on helped guide the city through the process. Moore has already used some grant money to hire three new employees to help navigate the program. Oklahoma City also has offered assistance to Moore to set up and operate a housing rehabilitation program.
The city will hold public meetings to hear residents’ views on how the money should be spent, Jones said.
The Lion’s Share
Meanwhile, the state is seeking proposals from affected communities around the state on how to spend its $83.1 million.
“Obviously, there’s going to be lots of communities and counties that want to do projects,” Scott said. “But if they don’t benefit low to moderate income individuals, then we have to take a look at that.”
Rhodes said Oklahoma City has other disaster-related projects that the state’s second round of HUD grant funds can be spent on.
“Are there additional unmet needs? Yeah,” Rhodes said. “Can we get the money there and allocated and awarded and spent in time? Those are the challenges. But we’ll certainly do it.”\
Oklahoma Watch is a nonprofit, nonpartisan media service that produces in-depth and investigative journalism on public-policy issues facing the state. For more Oklahoma Watch content, go to www.oklahomawatch.org. The data team for Investigative Reporters and Editors and the Investigative News Network assisted with the project.
The Oklahoma Tornado Project is made possible by a grant from the Corporation for Public Broadcasting.
As a community-supported news organization, KGOU relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.