Houston Chronicle reports hurricane rebuilding fund diversion

Mike Synder of the Houston Chronicle this weekend picked up on the story about Governor Perry’s diversion of funds away from hurricane impacted areas.

Read the full story here.

A Texas plan for distributing hurricane recovery funds provided less than half the money needed for housing and business recovery in Galveston and Orange counties while giving too much to inland counties that sustained little damage, a top federal housing official has told Gov. Rick Perry.

State agency leaders met with Department of Housing and Urban Development officials in Washington on Friday to try to resolve concerns that led HUD to reject the state’s plans for distributing $1.7 billion in federal Community Development Block Grant funds, the second batch of money provided to Texas to help residents, business owners and local governments recover from Hurricanes Ike and Dolly in 2008.

The dispute over Texas’ so-called “weather model,” a formula for distributing recovery money based on weather conditions and storm surge rather than on actual damage estimates, has dragged on for months. At stake are hundreds of millions of additional dollars that leaders of coastal communities say their residents need to rebuild homes and businesses.

In a Dec. 18 letter to Perry, Mercedes Marquez, a HUD assistant secretary, said the federal agency estimated that Galveston County’s unmet housing and business damage needs — damages not covered by insurance or other federal programs — totaled $1.087 billion, 41 percent of the federal funds available, while Orange County’s needs amounted to $340 million, or 13 percent.

The Texas approach, Marquez wrote, led to allocations of 18 percent, or $468 million, to Galveston County and 3 percent, or $78 million, to Orange County.

The state provided 10 percent to counties in deep East Texas while the federal formula would provide these counties just 2 percent, Marquez wrote.

The letter offers this information as guidance and doesn’t instruct the state to use the federal approach. HUD rejected the state plan in November based on problems with public participation and lack of information about county-level allocations.

Leaders of communities who have objected to the state formula, however, say the letter shows that HUD agrees with their concerns about the criteria Texas used to distribute the funds.

“Our concern was that the (Texas) formula was designed to spread money across the state of Texas and put dollars into communities that really sustained little damage,” said John Simsen, Galveston County’s emergency management coordinator. “It goes back, fundamentally, to what you really think the money is for.” …