National Disaster Resilience Competition Grantees Seek Three Extra Years to Spend Awarded Funds – Why Extension is Good Public Policy
In 2014, the United States (US) Department of Housing and Urban Development (HUD) launched the National Disaster Resilience Competition (NDRC) and in early 2016 awarded almost $1 billion to 13 jurisdictions across the country to pursue the funded projects.
Last week, The New York Times ran an article describing the status of the NDRC projects; highlighting the fact that time is running out to complete these projects by September 30, 2022, the date on which the funds will expire. This deadline was established in the 2013 legislation ( Public Law (P.L.) 113-2, enacted January 29, 2013) that appropriated the funding in response to Hurricane Sandy and other major disasters that occurred between 2011 and 2013.
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The New York Times article reported that NRDC grantees are collectively seeking to extend the spending deadline for three years through September 30, 2025 and have brought this request to the attention of their congressional delegations. While the deadline is still more than two years away, it would be beneficial from an implementation standpoint to resolve the funding uncertainty sooner rather than later. As The New York Times article noted, grantees were operating on tight timelines before the COVID-19 pandemic, and the resulting disruption in contracting and construction efforts places completion of these projects in jeopardy given the limitation on availability of the Federal funds.
The $1 billion in funding for the NDRC came from Community Development Block Grant-Disaster Recovery (CDBG-DR) funding which, according to the 2013 legislation, had to be under contract (“obligated”) with grantees no later than September 30, 2017. While the contract/obligation deadline was met, the “inside baseball” problem is that the language of the 2013 appropriation triggered a separate provision at 31 US Code (USC) 1552 which effectively requires that CDBG funds be expended within five years of the end of the obligation period, hence the September 30, 2022 deadline.
Congress can address the deadline by including any of several approaches in forthcoming appropriations legislation. The cleanest option may be to amend the CDBG-DR language in the 2013 legislation by inserting after the “obligation” language a provision along the lines of “notwithstanding any other provision of law, these funds shall be available for expenditure through September 30, 2025.” This approach gets the job done for NDRC and provides the additional benefit of extending the availability of regular CDBG-DR funds awarded for 2011-2013 disasters.
NDRC grantees have long known that there would be challenges in completing these activities by September 2022 given the late start of the NDRC effort vis a vis enactment of the 2013 legislation, the complicated nature of the projects, and the compounding effects of current economic and public health issues. A few grantees have made good progress in expending NDRC funds, but even that minority will be hard pressed to fully execute their projects in the next 28 months.
Substantial planning has already been devoted to these projects, permitting and environmental review has occurred in many instances, and construction bidding and work is imminent. At a time when all levels of government seek ways to stimulate economic recovery in the wake of the pandemic-induced downturn, the effort to extend the availability of NDRC funds is good public policy. Congress should act on this request soon and provide the 13 state and local government NDRC grantees with the assurance that these projects will be seen through to completion.
Stan Gimont is is a Senior Advisor for Community Recovery with Hagerty. Stan joined Hagerty after 32 years of service with HUD. With Hagerty, Stan provides strategic advisory support focused on HUD Programs, housing issues, and long-term community recovery. From August 2016 through July 2019, Stan served as HUD’s Deputy Assistant Secretary for Grant Programs. In this role he provided management direction and oversight for all aspects of the Community Development Block Grant (CDBG) Program, including long-term disaster recovery (CDBG-DR), the HOME Investment Partnerships Program, the National Housing Trust Fund, as well as HUD’s environmental review responsibilities. From 2017 through 2019, his leadership helped to secure $40 billion in CDBG-DR funding in response to major disasters, such as hurricanes Harvey, Irma, and Maria. As Director of HUD’s Office of Block Grant Assistance from 2008-2016, Stan managed approximately $60 billion in federal funding to assist the nation’s communities in addressing housing, development, and disaster recovery needs. Among Stan’s notable achievements as Director is the implementation of the Neighborhood Stabilization Program in response to the 2008-2010 housing crisis, oversight of CDBG-DR funding for New Jersey and New York in response to Hurricane Sandy, and management of HUD’s National Disaster Resilience Competition in 2014-2015.