Why Is ReBuild NC involved in disaster management in western North Carolina?

This article originally appeared on Inside Climate News, a nonprofit, non-partisan news organization that covers climate, energy and the environment. Sign up for their newsletter here.

SWANNANOA—People are living in campers in fields of debris off U.S. 70, the main thoroughfare through the small town of Swannanoa, east of Asheville. Cars are buried nose-first under dirt and rock.

On side streets, homes have been gutted and abandoned, emblazoned with official signs that say “unsafe.” A woman walking her terrier remarked, “I saw a child’s ball. That kid lost everything.”

At Eagle Rock Church, several people sifted through clothing and blankets while others picked from an array of canned food. A man filled large tanks with water from the church’s well so he could flush his toilet. Propane tanks and coats were in high demand.

“The outpouring of support has been awesome,” said Pastor Ramona Nix, her dog, Duchess, by her side. She had met President Donald Trump in Asheville the week prior, where he floated the idea of dismantling the Federal Emergency Management Agency (FEMA).

“We’ve never asked for government help,” Nix said. “The red tape you have to go through has been ridiculous. He meant what he said.”

It’s been four months since Hurricane Helene flooded and flattened thousands of square miles of western North Carolina. Recovery will likely take decades, and possibly longer, if FEMA is dissolved.

That could leave the state government to fund and manage a complex $60 billion recovery and rebuilding program.

But since 2016, North Carolina has bungled recoveries after Hurricanes Matthew and Florence, as ReBuild NC overspent its $779 million federal budget by more than $220 million, and ran out of money to complete the work.

On his first day in office, Democratic Gov. Josh Stein said publicly that ReBuild NC would not be involved in Hurricane Helene recovery. Instead, the agency would focus on finishing its work in eastern North Carolina, where, because of years of financial and logistical mismanagement, more than 1,100 people have been stranded without permanent homes since Hurricane Matthew in 2016, and Florence two years later, according to current figures.

Gov. Stein reorganized parts of state government and formed the Governor’s Recovery Office for Western North Carolina to oversee some of the work.

But in fact, ReBuild NC is working on Helene recovery, state records show. The agency has key responsibilities in case management for storm survivors—even though records and homeowners’ accounts show it is still failing to fulfill those same duties for survivors in eastern North Carolina. And even though the state Division of Emergency Management could have activated a contract already in place with an outside company.

An interagency agreement between the N.C. Division of Emergency Management and ReBuild NC obtained under public records law reveals that ReBuild will leverage “its technical expertise and operational capacity,” will “act as the operational lead” and administer the Disaster Case Management Program on behalf of NCEM.

Job postings on government websites show ReBuild NC was accepting applications for case managers in mid-January.

ReBuild NC will receive $21.7 million from FEMA via the Division of Emergency Management to do the work, said Justin Graney, a division spokesman. The agreement was signed by Division of Emergency Management Director Will Ray and Jane Gilchrist, who was chief of staff at the Department of Public Safety, the agency over ReBuild NC.

Graney said no current ReBuild NC case managers are working on western North Carolina recovery. The majority of new hires are headquartered at the Buncombe County Disaster Recovery Center, with additional personnel fanned out across western North Carolina, he said, but did not provide names or job titles.

The Division of Emergency Management plans to hire 75 case managers by March, at which point it will be fully staffed, Graney said. They will conduct outreach and meet with long-term recovery groups and disaster survivors living in hotels through the FEMA Transitional Sheltering Assistance Program.

Graney said the case management for Helene, funded by FEMA, differs from ReBuild NC’s previous work, which received money and oversight from the U.S. Department of Housing and Urban Development.

“This is not a construction management type of program, which is what [ReBuild] managed,” Graney said.

However, ReBuild NC was in charge of not just construction but also case management for Hurricane Matthew and Florence survivors. Initially the agency oversaw a contractor, Horne LLP, to do project management, including case management. ReBuild NC then hired its own employees to do that work when the contract with Horne was not renewed. (Jonathan Krebs, an advisor to Gov. Stein for Helene recovery, previously worked for Horne as a managing partner for Government Services.)

Case management has long been in disarray. Homeowners have complained on social media, testified before state lawmakers and written letters to North Carolina officials, including Gov. Stein, when he was attorney general, about the lack of communication and incorrect information they received from case managers.

Graney said the Division of Emergency Management, not ReBuild NC, will manage funds, as well as “ensure that the program provides suitable customer service to disaster survivors across western North Carolina.”

Stein’s office did not answer questions sent by email about whether the governor was debriefed on ReBuild NC’s role before announcing the agency would not be working in western North Carolina. Instead, a spokesperson provided a statement: “Governor Stein is approaching the recovery efforts in western North Carolina with four pillars: urgency, focus, transparency, and accountability.

“In addition, he established an advisory committee that includes people on the ground in western NC—many of whom were personally impacted by Helene—which will allow him to remain agile and ensure our office’s work is making a difference in a meaningful way. He looks forward to partnering with the General Assembly so that [ReBuild] can finish the job in eastern North Carolina.”

A legacy of troubles

In late September, as Hurricane Helene barreled up the spine of the Appalachians and destroyed parts of western North Carolina, ReBuild NC was in financial crisis. Beyond overspending its $779 million budget for the previous two storms by more than $220 million, it was chronically late paying stipends to hurricane survivors and owed contractors money. Work on many homes had stopped—or never started—because there was no money to pay the contractors.

To cut costs, ReBuild NC had laid off more than 40 people a month earlier, primarily housing specialists, but also several employees who wrote flood insurance policies for homeowners who lived in 100-year flood plains. The agency stopped placing people in motels, an expensive option for temporary housing, and opted for apartments instead. ReBuild NC has spent nearly $84 million on temporary housing as of this month.

At some point between Helene’s landfall and mid-November, emails show leadership at Emergency Management and ReBuild NC began planning to provide disaster case management services for western North Carolina.

On Nov. 18, state lawmakers summoned Laura Hogshead, ReBuild’s embattled executive director, to testify before an oversight committee about ReBuild NC’s troubled finances. At that hearing, several lawmakers said they could not trust the agency to manage disaster recovery in western North Carolina.

“Why in the world with ReBuild’s past history would we give y’all the west?” said Sen. Brent Jackson, a Republican who represents five counties in eastern North Carolina.

Hogshead indicated she wanted ReBuild NC to work on Helene disaster recovery. “I would submit [ReBuild] has the expertise. We know what to do and what not to do. We can get the funding quicker. We’ve done this recently and a different entity would have to relearn hard lessons.”

The next day Graney confirmed with Inside Climate News that the Division of Emergency Management had partnered with the North Carolina Office of Recovery and Resiliency, ReBuild’s formal name, “to coordinate and staff the North Carolina Disaster Case Management Program with case managers. NCORR will not be managing FEMA funding and is providing disaster case management services only.”

At the time, FEMA was still reviewing the budget and scope of work for those services, so the document was not finalized.

Two days later, on Nov. 20, Hogshead left the agency. State personnel laws limit what is publicly known about her departure, but at the committee hearing Hoghead told lawmakers she would not resign.

The Division of Emergency Management had another option besides ReBuild NC. It had a “pre-positioned all-hazard contract” with a consulting firm, North Highland, based in Charlotte. The company works in several industries, and has a division devoted to emergency management.

Agencies can award these advance contracts before an incident occurs, according to the FEMA website, “to conduct a deliberate procurement process outside of the pressure and immediate demands of a disaster. It also helps to ensure that applicants have contractors ready to perform work quickly after an incident occurs when needed most.”

North Highland officials did not respond to emails seeking comment.

Graney said even with the North Highland contract, it would still take time to execute it, hire personnel and establish the program. “The decision was made to not execute one of the pre-positioned all-hazard contracts for disaster case management,” Graney said, and to handle it within state government at ReBuild NC.

Back in Swannanoa, a gutted one-story home sat behind two tall, slender fir trees. A wall clock emblazoned with an illustration of a unicorn sat by the door. A QR code on the front of the house read “Help Mark Rebuild.” And the mailbox stated, in raspberry letters, “Imagining a Better Future.”