“No one tells me what to do”: Meeting notes reveal favored contractors, animosity toward others in Hurricane Matthew recovery

The Zerbys’ home in Craven County, damaged during Hurricane Matthew. It was scheduled to be finished April 29. This photo was taken on April 28. (Photo: Lisa Sorg)

In response to a Policy Watch investigation published last week, the North Carolina Office of Recovery and Resiliency (NCORR) denied that Rescue Construction Solutions (Rescue) received favorable treatment over other general contractors in bidding and scoring related to Hurricane Matthew disaster recovery work.

Hundreds of households — equivalent to thousands of people — remain displaced from Hurricane Matthew, which occurred in October 2016. These North Carolinians are still living in motels, travel trailers, with relatives, or even in their original damaged homes.

However, notes taken by someone who attended weekly meetings about NCORR’s RebuildNC program show that Ivan Duncan, NCORR chief program delivery officer, did give Rescue leeway not afforded to other contractors. The person provided the notes to Policy Watch on the condition they would not be named, because they were afraid of retaliation by the state. Excerpts appear below; Policy Watch deleted some entries because they were very technical and weren’t relevant to the issue.

Among the revelations:

  • Duncan reportedly told inspectors in May 2021, not to visit homes Rescue had built. This allowed Rescue to sidestep oversight.
  • Duncan also allegedly allowed Rescue to delay starting some of its construction projects, according to notes taken in May 2020. That’s important because contractors’ performance and eligibility to bid on future contracts is based in part on their completion rate.
  • Other examples of alleged preferential treatment include Duncan’s edict to pay Rescue to move a household for the second time; other general contractors were not given the same consideration, the notes say.
  • Last year, the notes indicate Duncan also looked favorably upon RHD, another contractor. However, the notes show that RHD hesitated to accept Duncan’s offers.

The meetings were not recorded because Duncan required attendees to turn off their phones and place them in a bucket. In a previous Policy Watch story, NCORR Director and Chief Operating Officer Laura Hogshead said that practice no longer occurs. The notes indicate that Duncan reportedly said he “works in gray areas,” and asked contractors not to put anything in writing or emails. Such correspondence would be public under state open records law.

Rescue has not responded to written questions about its performance. Instead, the company hired a crisis communications firm, which issued a statement last week saying the company had bid properly, but it did not address the questions.

Policy Watch shared these notes with NCORR. A spokesperson for the agency released the following statement Tuesday morning:

NCORR remains committed to helping hurricane survivors rebuild their homes and communities as evidenced by the more than 700 houses already repaired or replaced in eastern North Carolina. We take the Policy Watch allegations very seriously and will thoroughly investigate to determine their validity and whether corrective action is needed. Many of the allegations thus far have been based on unconfirmed or inaccurate documentation, misinterpretation of program policy, or hearsay from unknown sources. For example, it is misleading to say that only certain general contractors had projects inspected. In fact, all projects had recurring inspections by county inspectors, while the lead contractor in charge of construction oversight, AECOM, was also tracking every project. Whether or not every contractors’ projects had an unannounced visit by state officials, they were all were inspected multiple times by qualified experts. This is just one example of how NCORR has been misrepresented in recent coverage. We look forward to sharing factual information to demonstrate that NCORR is not only committed to helping storm survivors recover, but also to full compliance with the law.

Names of individual contractors have been redacted and replaced with company names. Policy Watch added the annotations and highlighting to explain the significance of those passages.

Abbreviations and definitions
GC: General contractor

CRCS, Persons, Rescue, Duckey, RHD, Excel: Company names of general contractors

AECOM: Construction management company that is the liaison between NCORR and the contractors

Sprayberry: Former Director of Emergency Management Mike Sprayberry

Trace: Trace Allard, NCORR director of program delivery

Open procurement: Competitive bidding process

Ryan: Ryan Flynn, former NCORR chief of staff

O&P: Overhead and profit

ECR: Estimated cost of repairs

MHUs: Mobile home units

Jonathan Doerr: NCORR attorney

NTP: Notice to Proceed; when an NTP is issued, the clock starts on construction, which is required to be finished within a certain amount of time, depending on the complexity of the project, usually 90-135 days. Contractors can request time extensions.

CO: Change orders, adjustments to the construction costs when unforeseen issues arise, such as mold, termites, asbestos

NCORR disputes PW’s coverage of its Hurricane Matthew recovery work: their complaints, our responses

This is one of hundreds of homes damaged by Hurricane Matthew that remain unfinished. (Photo: Lisa Sorg)

The NC Office of Recovery and Resiliency is disputing a previous Policy Watch story that Rescue Construction Solutions received preferential treatment in the bidding and scoring processes. We are publishing their rebuttals and our responses in full, unedited. NCORR sent these rebuttals via email, which are public under state open records law.

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First NCORR rebuttal and Policy Watch responses, May 11, 2022:

Dear Laura-

We have reviewed your email and have included our responses to each item below. Let me also say that we certainly appreciate many of the difficulties your agency has encountered over the years in fulfilling its mission (most of which were referenced in our reporting).

As you will see, however, it remains our firm conviction that, except perhaps with respect to a small handful of very minor matters that do not impact its overall thrust, the story is completely accurate.

Simply put:

  • North Carolina received hundreds of millions in federal recovery dollars to distribute to help lower income families rebuild after Hurricane Matthew.
  • Five and a half years after the storm, hundreds of families remain homeless and their abodes uninhabitable.
  • Over a period of time, NCORR awarded contracts for around $80 million to Rescue Construction Solutions even though it almost certainly should have realized that the company and was in over its head, provided false information in its prequalification application, and has consistently delivered poor performance.
  • Rescue was the beneficiary of NCORR contracting decisions not accorded to other contractors.

As has always been the case, however, we stand ready and anxious to receive additional information – e.g., requested documents and other records — that would shed more light on the matter. In particular, we would very much like to conduct interviews with Ivan Duncan and Sheila Brewington – both of whom have thus far not made themselves available to discuss this important matter with which both were so intimately involved.

Our responses to each of the 20 points you raise appear below.

Sincerely,

Rob Schofield
Director
NC Policy Watch

Lisa and Rob –

NCORR requires the following corrections to sections of the May 9 story that are misleading and, in some instances, false. In addition, to ensure an accurate portrayal of the agency and program, the accompanying opinion piece should be amended to reflect the corrected information as well. Should Policy Watch decline to make any of the corrections, please provide an explanation and supporting documentation which demonstrates why inaccurate information should remain in the story. Specific corrections are shown below with direct quotes from the story in italics.

  1. “At least 1,780 houses belonged to low-and moderate-income households.” – As we discussed yesterday morning during our interview, if this is a FEMA number, it has no bearing on the number of homeowners we will be able to help. FEMA does not measure eligibility for CDBG-DR. It is misleading to use a number from another federal agency that is not associated with CDBG-DR eligibility to set a false expectation.

Response: We do not believe it is at all misleading to report FEMA’s count of the total number of homes damaged by Matthew. We find it somewhat surprising that you would need to ask us if this is a FEMA number. Read more

Here are the documents: The state’s failure, after five years, to help Hurricane Matthew survivors

Herman Jones’s house in Craven County, still unfinished after more than a year (Photo: Lisa Sorg)

I was driving around rural Wilson County searching for a specific house, whose owner — a survivor of Hurricane Matthew — I had matched to property records. “No trespassing” read one sign. “Private property” read another. But a man was fixing his truck in the driveway, so I stopped, got out of the car, and ensuring that I stayed on the public road, asked if I could speak with him.

Sam Cockrell couldn’t have been nicer. He spent more than hour showing me around his property, his damaged home where his father once lived, his belongings crammed into two PODS. I learned he’s a fan of the Washington Football Team, likes motorcycles, and loves to fish.

He’s been living in a Comfort Inn for going on a year. He’s tired of it. He wants to be back in the shade of his pine trees. He wants to move into his new home, a 1,000-square foot Carson floor plan with a both a front and back porch that will keep him cool and dry.

In Craven County Herman Jones was tinkering in his workshop where he restores old radios. “Would you like to talk about your experience with Hurricane Matthew and your home?” I asked.

“Boy, would I,” Jones replied. And for the next 60 minutes he told me of his myriad frustrations with the contractor, Rescue Construction Solutions, and their subcontractors. He gave me a tour of his home, with its sticky back door and uneven kitchen floor. The ruined pile of concrete that had work crews had left open in the rain. The air vents that had been installed upside down.

These are real people, not just figures on a spreadsheet, not just “applicants.” They have been traumatized by Hurricane Matthew — and in some cases, Florence. And they’re still living motels, with relatives, in damage houses, in travel trailers, for months, even years.

How could this happen? All these people, likely thousands considering the number of households still displaced, without a permanent home five and a half years after Hurricane Matthew.

I needed to answer the questions: Who’s accountable? How is the system broken? Who has the power to fix it? What’s at stake? Who’s winning? Who’s losing?

The NC Office of Recovery and Resiliency is in charge of the homeowner recovery program for Hurricane Matthew disaster relief. And through sources and documents, I learned about a contractor, Rescue Construction Solutions.

It’s not the only contractor in the program, but it has the lion’s share of projects.

A month after trips to courthouses, database and property records searches, dozens and dozens of phone calls and emails, plus logging 1,000 miles on my Prius, I finally could write the first story, published yesterday. Simply put, it’s about how NCORR’s lack of oversight, its management of the disaster relief program and the plodding pace of Rescue Construction Solutions in particular, is holding up progress.

At stake are the happiness and peace of people like Sam and Herman and Sheri and Bill and Denisa and Judy and James and Gloria and Patricia, and all those people — not just “applicants” — who just want to go home.

Here are the public records requests. I filed the first one on April 12, and told NCORR I could accept the documents on a rolling basis. That means they could send the records as soon as they got them, rather than wait for all the documents to come in.

I have received very few documents from NCORR not even from requests filed nearly a month ago. I filed another request on May 9 with the Division of Emergency Management and the Department of Commerce asking for documents related to background checks for contractors; these two agencies were in charge of the program in 2018 when contractors were prequalified.

On Tuesday, May 2, I interviewed NCORR Chief Operating Officer Laura Hogshead on Zoom. With her permission, the interview was recorded.

Policy Watch immediately shared the audio and video with NCORR. On Thursday, May 4, NCORR requested a followup interview, which occurred on Monday, May 9. Again, the interview was recorded.

Hogshead also corresponded with me several times by email over the weekend of May 7-8.

I emailed Sheila Brewington, president of Rescue Construction Solutions, twice. She didn’t reply, but a crisis communications firm representing Rescue called me, then issued a statement — again not answering the questions.

These are some of the documents I cobbled together to report the story:

  • Bid worksheets
  • A Wake County civil court case against Rescue that started in 2017, and should have been disclosed by the company when it applied to be prequalified, and again when it bid on projects
  • A federal court case involving work at Fort Bragg. In that litigation, Rescue sued the bonding company for the general contractor over a pay dispute. The general contractor had fired Rescue for allegedly botching a roofing job, and didn’t want to pay. The court did force the contractor to pay Rescue. However, on page 4 of the document, there is a reference to Rescue’s “unworkmanlike and untimely performance.”
  • The changes in scorecard measurements in the summer of 2021
  • Rescue’s pre-qualification application, dated June 2018
  • NCORR’s invitation to bid on the modular project dated July 16, 2021

Here are spreadsheets. All personal information has been removed.

Status of Rescue projects as of April 2022

All 1,486 complaints lodged against all contractors, not just Rescue. Rescue had 585 complaints, although that could be expected since the company had so many projects. Other companies with more than 100 complaints: Excel Contractors, 297; Persons Service 222 and Thompson Construction 172.

Wake County leaders unite to celebrate new non-discrimination ordinances

Elected leaders from across Wake County came together Tuesday to celebrate their unified adoption of non-discrimination ordinances. (Photo: Equality NC)

On Tuesday the Campbell University School of Law hosted elected officials from across Wake County as they celebrated new LGBTQ-inclusive non-discrimination ordinances in Raleigh, Knightdale and Morrisville.

Leaders from those communities signed a joint ceremonial document in support of protections from discrimination in employment and public accommodation in places like restaurants and hotels.

As Policy Watch has reported, the new ordinances became possible when a state ban on new local protections — including nondiscrimination ordinances for employment and housing — was lifted. The ban was a legacy of the  brutal fight over HB 2 and HB 142, the controversial laws that excluded lesbian, gay, bisexual and transgender people from statewide nondiscrimination protections.

Since the ban on new ordinances expired, 18 communities across the state have adopted non-discrimination ordinances.

Campbell’s law school has taken the lead in helping resolve complaints filed through the ordinance process.

Kendra Johnson, executive director of Equality North Carolina, applauded the signing in a statement Tuesday.

“Today we celebrated the commitment of Raleigh, Knightdale and Morrisville to making their communities inclusive of all,” Johnson said. “No one should have to fear bigotry based on their ZIP code, nor should they have to move to avoid discrimination. Having non-discrimination ordinances sends a clear and powerful message that all people are welcomed and included in their home communities.”

In its statement, Equality NC stressed new and proactive state and federal protections are still needed.

“We celebrate this commitment to equality and look forward to North Carolina being a stellar example of what diversity and equity look like in legislation,” the group said in its statement. “The momentum behind these signings shows that North Carolina stands ready, and we encourage others to communicate to their local leaders now is the time to pass LGBTQ protections, demand that our state lawmakers fully repeal discriminatory laws and enact proactive protections, and urge our elected officials in the United States Congress and the NCGA to support comprehensive nondiscrimination laws.”

As Policy Watch reported last month, North Carolina has so far resisted a national wave of anti-LGBTQ legislation. But LGBTQ advocates and Democratic state lawmakers warn of gathering momentum for such laws on the political right. With elections looming, the political calculus at both the state and federal level could soon change.

Poverty, barriers to opportunity loom large for women as NC emerges from the pandemic

North Carolina receives a D+ grade on the Poverty and Opportunity Index

A new report on the status of women in North Carolina suggests that while modest progress has been made since 2016, far too many women are being held back economically.

The NC Department of Administration’s Council for Women and Youth Involvement recently released the report produced in partnership with the Institute for Women’s Policy Research.

While North Carolina ranks tenth in the nation when it comes to women-owned businesses, many more women are struggling to make ends meet.

According to the report, women have experienced a disproportionate number of job losses since the start of the pandemic. As of December 2020, 18 percent of women in North Carolina reported applying for unemployment benefits. Over 15 percent reported having a hard time paying their usual household expenses.

North Carolina ranks 44th nationally for its share of women with health insurance.

Lyric Thompson, policy director for the International Center for Research on Women, said even before the pandemic North Carolina was moving in the wrong direction in terms women’s workforce participation.

One policy change that would make a difference is paid leave, according to Thompson.

“The United States is one of the only countries in the world that does not mandate paid leave in some form, and North Carolina is one of a handful of states that does not have pregnancy protections, paid leave protections, you name it,” explained Thompson during Tuesday’s virtual panel discussion.

Lyric Thompson, International Center for Research on Women

While Gov. Roy Cooper provided paid parental leave for state government employees in 2019, that benefit is not widely available in the private sector.

Higher rents, fewer options

Adrienne Spinner with the NC Housing Coalition said the pandemic further exploited the ability to cover the most basic needs for some families.

“We saw this with the eviction crisis. There are folks that had to work in and out of the home, and even though wages didn’t go up for a lot of folks, housing costs did,” she explained. “We are severely lacking in quality affordable housing stock in this state and across the country. It is a crisis.”

Spinner said to reduce that inequity, North Carolina must increase its housing stock and reduce the instability families are facing.

“And then if we are going to see women going back to work, and returning to work full-time, that cannot be done without affordable childcare,” Spinner added. “Right now, childcare costs more for some folks than in-state college tuition.”

Universal Pre-k should be a priority, Spinner added.

Adrienne Spinner, NC Housing Coalition

For women of color the strain is greater

NCDOA Secretary Pam Cashwell said the 2022 Status of Women report highlights that poverty remains a persistent problem.

“North Carolina remains 38th in the country for the percentage of women living in poverty. That number is 13.6 percent overall, but again there is a great disparity between women of color and white women,” Cashwell said Tuesday.

“In North Carolina households headed by single women with children are more than five times as likely to live in poverty that households headed by married couples with children.”

Dr. Jada Brooks, an associate professor with the University of North Carolina School of Nursing, said domestic violence is yet another problem made worse by the prolonged pandemic.

“Often times this hasn’t been highlighted in North Carolina. The everyday lives of women, including the exposure to violence, all of those things can really compromise women’s health.”

Spinner told the online audience that North Carolina must have more equitable policies that help uplift the most marginalized.

“Just because you’re helping someone doesn’t mean that someone else gets less. If you uplift the most marginalized folks in society, we all rise.”

Lifting the most marginalized should also include a hike in the state’s minimum wage above $7.25 an hour, stressed Thompson.

“There’s zero statutory requirement on equal pay by race or gender. So, there’s really a lot of tools we could use,” Thompson said.

Higher education offers some protections

NCDOA Secretary Pam Cashwell

The report notes ‘higher levels of educational attainment are associated with higher earnings and increased job opportunities’ but educational attainment among women varies greatly across NC counties.

In 45 of the states 100 counties, the share of women aged 25 and older who have earned a bachelor’s degree or higher is less than 20 percent.

Hyde County has the lowest percentage with just 10% holding a bachelor’s or higher.

Greater representation could change the landscape

One way to change the current economic landscape is to get more women elected to public office.

“In North Carolina, women are slightly more likely to vote than women nationally, but we are not well represented in executive and legislative elected offices,” said Sec. Cashwell, noting North Carolina has only had one female governor.

In the NC Senate, 20 percent of the seats are held by women. In the NC House, women hold 28 percent of the seats.

“We clearly have more work to do.”

North Carolina Supreme Court Associate Justice Anita Earls said from her perspective the most important thing is to make it more financially affordable for women to run for office and then hold office once elected.

North Carolina Supreme Court Associate Justice Anita Earls

“We think of political participation as voting, but that’s just a one-time piece,” explained Earls. “’All the other element of political participation, including working on campaigns, running for office yourself, engaging in all the activities that hold your elected-officials accountable, when you have less financial resources, you have less ability to do all those things.”

Judicial public financing helped bring greater female representation to North Carolina’s courts until the legislature repealed the program in 2013.

But Earl said the state is fortunate to have some dedicated organizations that help train women how to run for elected office, something she said was ‘crucial’ to her own success in winning a seat on the state’s highest court.

Earl said another avenue to increasing female representation is by serving on the hundreds of boards and commissions across the state.

“Hopefully it will begin to create more of a pipeline for women to step up the plate and say ‘I have had a leadership role in this setting, and I am now ready to run for public office.'”

Bonus content: Before becoming the State Organizing Director for the NC Housing Coalition, Adrienne Spinner was a community volunteer who ran for public office in 2018. Even though she did not win that race, she has given a lot of thought to promoting equitable policies that uplift women and people of color. Spinner shared her thoughts this week on how to succeed in having more women serve in elected office.