Southeast Texas County Defends Hurricane Ike Spending

Chambers County officials are defending their spending of tens of millions of federal dollars for cleanup from Hurricane Ike after a federal audit questioned whether the money was properly used in the Southeast Texas county devastated by the September 2008 storm.

An audit report released in December 2010 by the Department of Homeland Security Office of Inspector General recommended that much of the $45 million already paid to contractors and approved by county administrators be disallowed. The review cited non-competitive contracts, shoddy or non-existent record-keeping and ineligible and unsupported costs.

“Chambers County emphatically denies all the unfounded allegations made (or inferred) with respect to any wrongdoing,” the county said in a 42-page written response, which county officials gave to The Associated Press on Jan. 3.

Chambers County was swamped by as much as 17 feet of water 10 miles inland, leaving behind more than 13 million cubic years of debris that included hazardous materials considered immediate public health and safety threats. The county eventually received $56.8 million in Federal Emergency Management Agency money through the Texas Division of Emergency Management. It was part of $2.5 billion that FEMA delivered to Texas for Hurricane Ike response.

Four of the five debris removal contracts totaled $44.6 million in Chambers County. Auditors questioned all of the expenditures, saying unreasonably high hourly rates were paid on one contract and FEMA had no assurances that reasonable rates were paid on the other three. It said contracts were awarded non-competitively and neither the county nor FEMA had documentation to support how they determined the hourly rates were reasonable.

The audit also found the county didn’t monitor time and material contracts and claimed $4 million in ineligible and unsupported costs.

Chambers County responded to the audit findings by saying FEMA, the county and contractors were in “constant negotiation” for two weeks in the wake of the storm with FEMA ultimately approving and setting “what they deemed as reasonable rates for the contractors to be paid.”

“When determining the rates, factors such as the salt-water environment and contact with hazardous materials were taken into account – something normal equipment operations usually do not entail,” the county said. “We did not set or recommend those rates, FEMA did, and they reimbursed for them.”

County officials also said they were dealing with a first-of-its-kind FEMA debris removal program and that county residents and landowners “have expressed many thanks” because there was no way they could have covered the cost themselves to remove the unprecedented amount of storm debris.

“Under emergency circumstances as they existed, FEMA contracts for debris removal were handled with our best, good faith effort to follow the law,” the county said.

Its response included copies of memos, letters, e-mails and other documentation between county officials and federal and state agencies involved in the cleanup, and how emergency disaster declarations authorize suspension of some procedural laws and rules.

County officials said the debris fields “posed a widespread threat to health and public safety,” that people who chose to ride out the storm on the battered Bolivar Peninsula were missing and their bodies were believed to be in the debris.

“The debris field operations weren’t just about removing hazardous materials, it was about finding human remains and helping families find closure,” the county told auditors.

Auditors noted the county’s “justifications,” but said none was sufficient. They’ve given federal and Texas emergency management officials until mid-February to advise them whether their recommendations will be accepted.