State fires grant contractor

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Assurances are that applications for elevation funding will continue to move forward

With little explanation or notice, New Jersey ended a multimillion-dollar contract with the firm hired last year to oversee a grant program aimed at helping homeowners after Hurricane Sandy.

Officials with the state Department of Community Affairs said this week that the work of the housing recovery centers will not be interrupted, and that the homeowners who are awaiting word on a grant through the Rehabilitation, Reconstruction, Elevation and Mitigation, or RREM program, will still deal with the same staff members, and their applications will continue to move forward.

Hammerman and Gainer Inc. of Louisiana won the $68 million contract last year, which was set to expire in May 2016, according to published reports. They were to manage the state’s distribution of Sandy recovery money, which totaled close $800 million, including about $600 million for the RREM. Instead, the contract was terminated on Monday.

“We’ve recently concluded our relationship with HGI as New Jersey transitions to the next phase of disaster recovery,” reads a statement released via email by Lisa Ryan, a spokeswoman for the DCA. “The Housing Recovery Centers, call center (1-855-SANDYHM (726-3946)) and reNew Jersey Stronger website are operating as normal with no change to applicants.

“The daily work of helping Sandy-impacted New Jersey families get back in their homes and communities as quickly as possible is occurring as normal. DCA staff remains available to answer questions about application status and our various recovery programs for Sandy-impacted residents,” the statement continued.

Ryan said there was little she could add to the official statement, and said she could not offer a reason for the contract’s ending.

State Sen. Jeff Van Drew said Monday that he’s looking for answers, but so far, he had little details to offer, either. He said there have been concerns raised about how the money has been distributed. He also said that homeowners who have applied for grants should not worry about the change.

“It’s supposed to be, I will say, relatively seamless,” Van Drew said.

Under the RREM, residents could receive up to $150,000 to repair storm damage and to elevate homes above the levels of future floods. But many applicants have complained about the pace of the process.

HGI states that it provides a wide range of administrative services, and describes itself as the largest African American-owned third party administration firm in the United States. One section of the company specializes in post-catastrophe recovery.

No one from the company immediately responded to a request for comment.

A published report citing state documents indicated that the state will pay HGI $10.5 million, including a $9 million unpaid balance and $1.5 million for work in the transition period.

This week, two congressmen criticized the way the contract was ended.

U.S. Reps. Bill Pascrell Jr. and Frank Pallone said representatives should have known earlier about the decision to end the contract with HGI.

“It's simply unacceptable that it took seven weeks for us to learn that the contract with the firm handling the largest Sandy recovery program had been terminated,” reads a statement from the Democratic lawmakers. “The manner in which this information has come to light is concerning and Gov. (Chris) Christie’s administration must come forward and explain why HGI was terminated and put forth a plan to execute the RREM program moving forward.

“We fought alongside our colleagues in Congress to secure these Sandy recovery funds in the face of tremendous opposition from the Tea Party and we won't stand for any more excuses as to why so many New Jerseyans are still waiting for much needed help. We have both heard numerous accounts from constituents that critical storm aid has been slow to come, and today’s news raises serious questions about the efficiency with which the Christie administration has managed this important program. The people of New Jersey deserve a full explanation about the lack of transparency of the recovery grant programs and how this much needed funding has been distributed.”

Rather than state how much money has been distributed so far through the RREM, Ryan pointed to the website, which states more than $430 million has been awarded through the RREM statewide. But it does not seem as though homeowners have seen any checks yet. The site indicates that award letters have gone to 4,303 homeowners, and that $100,000 has been reserved per applicant until a final award of construction amount is known.

“Once the final award is determined, this amount will be adjusted to the final total award,” the site states.

The site shows $15.5 million set aside for RREM awards in Cape May County, and $62.1 million for Atlantic County through the program.

Van Drew said the atmosphere in Trenton right now is far more political even than usual, owing to the intense national attention brought to Christie over the George Washington Bridge lane closure scandal. He said it is time to get down to business and get the money moving to the people who need it.

“We need a path forward here. I mean, there’s people waiting,” Van Drew said. “People have been waiting a long time.”

The Fair Share Housing Center, a public interest organization devoted to defending the housing rights of New Jersey's poor, has been critical of the state’s distribution of Hurricane Sandy-related funds. In September, the FSHC sued the state in superior court for access to manuals, guidelines and documents related to the implementation of Sandy recovery programs.

A press release from the governor’s office on Jan. 15 stated that the RREM Program is encumbered by numerous federal requirements in place largely in response to abuse and fraud post-Katrina.

“New Jersey and all other states receiving CDBG Disaster Recovery funds must abide by these federal regulations before awarding any construction-based grants. Despite these difficulties, the state has sent preliminary award letters to 4,300 Sandy-impacted homeowners, committing $100,000 per application until the final grant award for each applicant is known,” the release stated.

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