Were Hoboken and other New Jersey Towns Shortchanged on Sandy Aid?

NJ Spotlight, Feb. 3, 2014

By SCOTT GURIAN

An investigation into the data raises more questions than answers

An in-depth analysis by NJ Spotlight in collaboration with WNYC/NJ Public Radio has discovered multiple irregularities in how funds have been allocated through the Hazard Mitigation Grant Program Energy Allocation Initiative — the program at the heart of Hoboken Mayor Dawn Zimmer’s allegations against the Christie administration.

An examination of the fund shows that despite a scoring system that awarded various towns and cities points for eligibility based on factors such as population size, population density, and previous FEMA claims, Hoboken has been awarded the same amount — $142,080 — as much smaller towns like Mt. Arlington and Old Tappan, neither of which experienced much damage from Sandy or previous storms.

And Hoboken was awarded far less than Nutley, which was allocated $556,000, despite being relatively unscathed by the storm.

Responding to inquiries from NJ Spotlight, a Department of Environmental Protection spokesman said a proper, objective process was followed in the scoring and ranking of these applications, and that it’s ongoing, so some of these awards might still be adjusted before they’re finalized and checks are cut. He said it’s unfair to draw conclusions from the data at this point. But many details about the behind-the-scenes process remain unclear, and the problems seem to extend beyond simply a few errant numbers.

This investigation’s findings could lend credence to Zimmer’s claim that the Christie administration withheld Sandy aid from her city because she didn’t support a redevelopment project. Hoboken had submitted a $1.3 million proposal to purchase a dozen backup generators for use throughout the city, but it was awarded only about one tenth of what it asked for.

A list obtained from the Governor’s Office of Recovery and Rebuilding — the department overseeing the Sandy recovery process — shows that dozens of municipalities have been awarded exactly the same amount as Hoboken, while others got more or less. So at first glance, nothing looks too out of the ordinary. But a closer examination raises questions about whether there might be more than meets the eye.

In addition to questions about Hoboken’s funding, the NJ Spotlight analysis has found that Jersey City — the state’s second largest city — was awarded hundreds of thousands of dollars less than Newark and Elizabeth, cities of comparable size and storm damage. Jersey City’s mayor, Democrat Steven Fulop, has said he’s felt punished in other ways because he didn’t endorse Gov. Chris Christie for reelection last year.

No Easy Answers

Though there’s sure to be speculation, there’s no proof at this point that politics necessarily played a role in state decisions about who got help and who did not in the aftermath of Sandy. That charge has been vociferously denied by the governor’s office and state officials, and an analysis of the data found several examples of towns where Democratic mayors who endorsed Christie applied for aid and didn’t get it.

What does appear to be clear from numerous conversations with involved parties is that despite a series of mandatory briefings and training workshops — where state officials say they did their best to explain the mechanics of the Hazard Mitigation Grant Program — the application and decision-making process remained murky and confusing for many.

NJ Spotlight has filed public records requests to obtain copies of letters of intent submitted by a number of municipalities that applied for the program. That has uncovered a wide variety of approaches and styles, with some municipalities submitting a separate proposal for each backup generator, for example, while others lumped their requests into a single LOI. Some representatives of municipalities surveyed said they were unaware of the ranking criteria and might have prepared their applications differently had they been better informed.

Speaking privately, one individual involved with the program said the general feeling was that there was little guidance given to municipalities and that state officials were basically flying by the seats of their pants, struggling to respond to an unprecedented disaster without getting overwhelmed and often figuring things out as they went along. In the end, this individual said, with hardly enough federal money in the program to satisfy the demand, it seemed destined for failure and “everyone got screwed” in the end.

As the governor’s office has rightfully noted in press releases responding to Zimmer’s allegations, the Hazard Mitigation Grant Program is not money for direct repair of Sandy damage, but rather aid to help municipalities prepare for future storms.

The HMGP kicks in once the President issues a federal disaster declaration for an area, as Obama did for eight coastal counties in New Jersey after Sandy. The amount of HMGP funding that’s handed out to a particular state is calculated using a formula based on the combined total of FEMA Public assistance, FEMA individual assistance and Small Business Administration loans.

In New Jersey, total Sandy HMGP funding came to around $300 million. It’s worth noting that Hazard Mitigation money does not come out of the $50 billion in Sandy recovery funding Congress authorized. Rather, it’s a separate allocation under the Stafford Disaster Relief and Emergency Assistance Act.

Responding to Mayor Zimmer’s claims that Sandy funds were “held hostage,” the governor’s office shot out a series of statements noting that Hoboken has received nearly $70 million in storm recovery and rebuilding aid to date, but as noted earlier, this is different from HMGP money. The $70 million figure includes FEMA aid to individuals, federal flood insurance payouts, SBA loans, and grants to local businesses. Much of this money came directly from the federal government — without state officials having a say in the matter — and most of it was aimed at individuals and business owners rather than at Hoboken’s city government.

Even out of the $300 million HMGP pot, two-thirds of the money has been earmarked for individuals rather than local municipalities. Of the six HMGP programs, $100 million is going to help residents elevate their homes, and another $100 million is going to help fund property buyouts. The remainder is split between four grants:

$25 million for the Energy Allocation Initiative to help local governments become more resilient during power outages

$50 million for Local Resiliency Projects, to be handed out to local governments by the counties

$7 million for the Liquid Fuel Resilience Program to provide generators to gas stations along key thoroughfares

$3 million for the Planning Grant Program to help counties with their hazard mitigation plans

To recap, out of $300 million in total HMGP funds the state of New Jersey had to hand out, just $75 million was available for municipalities like Hoboken, and the demand for this money was great. State officials say they received letters of intent from cities and towns asking for funding for mitigation projects totaling some $14 billion.

With the supply and the demand so out of whack, there were sure to be grumblings from some applicants who felt they were worthy but left out, or who weren’t awarded as much funding as they felt they were entitled to. “If you look at our recovery programs in totality,” said New Jersey’s “Storm Czar” Marc Ferzan on a recent call with reporters, “I’m scratching my head a little bit about any community that’s [claiming they’re] getting the short end of the stick other than to say that I understand we’ve got very limited resources at our disposal to date.”

But the initial findings of NJ Spotlight’s continuing investigation seem to suggest that there may be more to this story than simple dissatisfaction.

The HMGP Energy Allocation Initiative is just a small fraction of overall Sandy aid money, but it’s one of the few given directly by the state to local municipalities. In light of recent allegations from Hoboken, Fort Lee, and other places of the governor rewarding allies and punishing political enemies, it bears a close examination, whether or not that’s what actually happened here. NJ Spotlight has provided the administration with detailed questions, and they say they will respond again in the coming days.