Federal Investigation Rumors Regarding The RISE WV Clearance And Demolition Program Are Found To Be True - The West Virginian
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Federal Investigation Rumors Regarding The RISE WV Clearance And Demolition Program Are Found To Be True

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The truth will always be revealed–even if done so a little at a time.

The RISE WV Clearance and Demolition program, which was created to help flood recovery efforts following the June 2016 flood, has been under federal investigation, according to Michelle Penaloza, program manager for the Community Development Block Grant Disaster Recovery Program (CDBG-DR). The federal investigation announcement was made during the December 6 meeting of the West Virginia Joint Legislative Committee on Flooding.

Really, this announcement comes as no surprise. Red flags have been going up all over Greenbrier County for some time that something with this program has not been right.

Greenbrier County officials and flood victims have referred to the program as “a disaster” and have expressed their frustration to anyone who would listen, including Senator Stephen Baldwin (D-Greenbrier, 10), who is a member of the Joint Legislative Committee on Flooding.

It was because of Baldwin’s continued questioning of those in charge of the RISE WV Clearance and Demolition Program, that the truth about a federal investigation finally made its way into the light.

The history of the program begins in 2017 when the The United States Department of Housing and Urban Development (HUD) provided West Virginia with grant money for recovery efforts. Of the more than $149,000,000 that was provided through CDBG-DR grants, $5,875,000 was set aside for RISE WV Clearance and Demolition with the intent to demolish structures that were severely damaged by the flood. These demolitions were originally planned to be conducted on a site by site basis through an application process and would remove structures that would become considered slum and blight. The funds were finally released to the program in February 2019.

According to requirements set forth by HUD, at least 80 percent of the funding was required to go to those in the most impacted counties of Greenbrier, Nicholas, Clay and Kanawha. Fayette, Jackson, Monroe, Pocahontas, Lincoln, Roane, Summers and Webster counties were to share the other 20 percent.

A total of 657 applications were submitted to the program requesting assistance for structure demolition, Penaloza told the committee during their Dec. 6 meeting. Of those applications, 566 were closed for various reasons. Only 47 demolition projects have been completed state-wide, 44 cases still remain open, 7 projects are slated to be complete in December and the remaining projects have received a notice to proceed with demolition scheduled to begin in 2022. Thirty one projects were completed in Greenbrier County–an area that was devastated by the flood.

According to information provided to The West Virginia Daily News back in September by an official at the Greenbrier County Homeland Security and Management Agency, a total of 178 applications by Greenbrier County property owners in need of structure demolition were submitted to the program. Of those, 31 demolitions were marked as complete; five were counted as active incomplete, seven were active “on-hold” incomplete; and 135 cases were closed.

The list of closed cases left many in Greenbrier County scratching their heads trying to figure out why so many people were told they would have their home or business demolished, but didn’t receive the help they were promised.

During the last meeting of the Joint Legislative Committee on Flooding on Sept. 12, Baldwin pressed Penaloza for answers. He told her that his greatest issue is that people who need help are “not being served.” He also expressed concern that people would never get the help they need after program officials noted fund depletion for the clearance and demolition component of RISE WV, and expressed their new focus on housing.

At that time, Penaloza explained that many of the applications originally submitted were denied due to HUD criteria, which states that the structure must be damaged beyond rehabilitation, it must be vacant (including properties with non-paying homeless tenants) and have undisputed ownership, which is a problem for many West Virginia families who have inherited property. In addition, property taxes must be up-to-date and the property owner must sign an agreement for future property restrictions.

Additionally, she noted that a miscommunication occurred when the HUD financed grant began, because many people still thought the money was administered by the West Virginia National Guard, just like the Federal Emergency Management Agency’s Personal Property Demolition Removal program.

“Most people considered this the same program,” Penaloza said. “There were many people in our communities who believed that their property was scheduled for demolition, but that is not the case.”

To expedite the new program, members of the National Guard went into the communities and collected a list of proposed addresses for demolition, Penaloza said. The properties were entered into the program, but they were not properly vetted.

Penaloza then explained that administrative services provided by the West Virginia National Guard (WVNG) as a subrecipient for the RISE WV Clearance and Demolition program ended in April 2021. No reason was given for their departure from the program during that meeting, however, she stated that a technical amendment was submitted to HUD documenting that their services had ended, and a request for the reallocation of $1 million in funding was made by program officials.

As of Aug. 31, the program spent $3.5 million of their original $5.875 million budget, Penaloza continued, describing the reason for the request of additional funding. $1.6 million went toward the actual demolition of 46 projects, while $1.9 million was spent on administrative costs including title searches, payroll, environmental reviews and fleet management.

She added that the demolition of commercial structures “ate up a huge part of the budget,” but “that is why, with the new additional million dollars, [the] focus is on residential families.”

At the end of that meeting, Penaloza noted that there were no plans for continued clearance and demolition projects to be completed in Greenbrier County, instead Nicholas County, also devastated by the flood, would be the new focus.

Although much of the information provided at the September meeting left more questions than answers, there was no mention of an investigation of any type. So, Greenbrier County officials and flood victims remained confused and concerned about the future of the “slum and blight” program–as it is most often referred to–and continued to express their frustration.

Three months later, during the most recent meeting of the Joint Legislative Committee on Flooding, where the federal investigation was announced, Penaloza began to update the committee on progress made by the program since she last spoke before them.

She stated that HUD had reallocated the additional $1 million with the “caveat” that program officials provide them with a “corrective plan.” She said they hope to demolish 91 additional properties with that extra funding.

With mention of the corrective action plan, Baldwin began to question Penaloza as he had done on prior occasions. He expressed concern that it has taken the program years to help people, and that it seems they are still in the eligibility review process of many applications. This time, his questions were finally met with answers.

“We asked the West Virginia National Guard to be moved…last September 2020 because we were having issues with eligibility review,” Penaloza told Baldwin. “So, from September 2020, our agency has been on all the eligibility reviews for the program…daily eligibility review.”

After a brief discussion, where it was noted that even after the “moved” status of the National Guard, it has still been 15 months with very little progress, Baldwin pointedly asked Penaloza “What’s the hold-up? What’s the pause in the program? What are we dealing with that we have not been told about. Something, obviously, is not adding up here and I’m just concerned about my constituents who are trying to move forward.”

“I understand,” Penaloza interjected. “So, in September 2020, I went to my director and said we only have eight projects completed by our subrecipient, so I need daily oversight. We asked them to be moved. So from September 2020 to where we are, I know it’s only 47 projects, but it is a little bit of progress.” She added that applicants were sent letters in July informing them of their status and their right to appeal.

She said the main focus of RISE WV has been to try and get everyone back into their home by Christmas, instead of focusing on the clearance and demolition component.

“Again, we can only move as fast as our corrective action plan with HUD can do. Please know that every program is transparent. When we did identify areas of concern, I used my compliance team, we have our eligibility review for the projects and we have been transparent with HUD. So, when HUD came in to monitor in August, they monitored, at that time, every single project we had completed,” Penaloza said to Baldwin and other committee members.

“So, we are still kind of in this corrective action,” she continued. “To answer your question, Senator, yes, there were problems, but we have sent all of that to HUD and this is what we got back…they get 60 days to respond to our corrective action [submitted in early November 2021], but we are hoping that we have it by the end of the year so we can move full force come January.”

Baldwin then asked “Is this program, or has it been, under state or federal investigation?”

Penaloza responded “Yes, it has.”

Baldwin, noticeably concerned, then said “We have talked about this program for the last three meetings. That has never been mentioned.”

“Sir, it’s currently under investigation,” Penaloza said, adding that the investigation is by HUD.

“We have been 100 percent transparent on everything that we have discovered and for us to walk away with one finding–I know it doesn’t feel like a success story, but it really is.”

The HUD finding, Penaloza had earlier explained, was that a “duplication of benefits analysis” was not conducted by the WVNG and that applicants did not sign a subrogation contract, which provides security in case of negligence by a third party. Additionally, HUD noted one concern stating that the tieback to the flood and damage verification was “not strong enough.”

As part of the corrective action plan, Clearance and Demolition Program officials must show that recipients are receiving the exact amount of funding that is needed for demolition, based on property area and abatement, that recipients have not received funding from any other source and that each recipient has completed the subrogation form, Penaloza said.

She added that there hasn’t been a pause in the clearance and demolition recovery efforts due to the investigation, but that they “have continued to work the program.”

“Is it the 566? No, it was never going to be that,” Penaloza said. “We do have what I really feel is most important–we now have a program that meets the requirements for the federal HUD grant, and our state is not in jeopardy of an allowable cost that we would have to pay back. That’s the most important thing with this program moving forward.”

She noted that the RISE WV Clearance and Demolition Program is separate from the RISE WV Housing Program, which has been very successful in helping flood victims move into a new home.

“In housing, you have made tremendous strides,” Baldwin noted. “I can’t thank you enough.”

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