During a recent meeting with Department of Housing and Urban Development (HUD) Secretary Ben Carson in Washington D.C., Gov. Albert Bryan Jr. addressed a host of issues related to the ongoing hurricane recovery efforts in the territory.
Bryan highlighted several key areas where HUD could make improvements to the hurricane recovery efforts and requested that the secretary consider making changes to the Community Development Block Grant Disaster Recovery Program (CDBG-DR) within his discretion that could benefit the territory.
The governor requested that HUD increase the territory’s share of $2 billion appropriated by Congress to strengthen and modernize the electric grids in the U.S. Virgin Islands and Puerto Rico to $350 million from the $67 million allocated initially.
“HUD made a preliminary decision to allocate $67 million to the Virgin Islands, which is barely three percent of the total, leaving the balance for Puerto Rico,” Gov. Bryan said. “We understand that this initial decision is not final and is still under review, and ask that HUD consider our economic position and acknowledge that the Virgin Islands needs at least $350 million of these funds to make a meaningful impact in strengthening the grid and lowering the high cost of electricity in the Virgin Islands.”
“What is important for them to understand is that the territory has two completely separate electrical grids, and we are working on giving St. John the independence it needs, which essentially means we need to construct a third grid. It is our job to ensure that the decision-makers in Washington understand that we have the base costs of two separate governments, and sometimes three,” Bryan said.
Congress allocated the $2 billion to CDBG-DR as part of its $89 billion disaster relief bill, which was passed in 2018 and left the allocation of those funds to the discretion of HUD Secretary Carson.
Along with highlighting the importance of modernizing and hardening the territory’s electric grid, Gov. Bryan also addressed challenges with drawing on CDBG-DR to match FEMA public assistance funds.
“One of the biggest challenges we face in our recovery efforts is the difficulty in providing local matching funds for the FEMA Public Assistance Program. The Virgin Islands is projected to need as much as $400 million in local matching funds to access as much as $4 billion in FEMA grants,” Bryan said.
“While HUD CDBG-DR funds can be used for this purpose, current rules are counterproductive and burdensome and should be simplified for this purpose. The Virgin Islands has already set aside $169 million in the first two tranches of our CDBG-DR allocation for matching purposes, so we hope that HUD will include use of CDBG funds for matching purposes in the third tranche,” he said.
The governor also said, “Because FEMA programs are reimbursement programs and because of the serious cash flow problems our government faces following both storms, it would be beneficial to create a ‘floating fund’ with a portion of our CDBG-DR funds that could be used to fund FEMA approved projects upfront, with FEMA reimbursement funds being used to replenish the floating fund.”
Gov. Bryan also requested that HUD utilize environmental assessments completed by the United States Army Corps of Engineers (USACE) to expedite three dredging projects in the territory, which are delayed due to pending environmental assessments by a separate government entity.