FEMA dispute threatens to entangle Virgin Islands storm victims

Companies rebuilding storm-damaged homes in the U.S. Virgin Islands under a federally funded program say they haven’t been paid in months and are threatening to place liens on the houses.

The dispute highlights what critics call the slow pace at which the Trump administration has distributed aid money to the Virgin Islands and Puerto Rico following a string of devastating storms in 2017. The U.S. Federal Emergency Management Agency (FEMA) says it’s simply following the steps required to ensure the money is spent properly.

3 subcontractors owed more than $60M

In a letter dated Feb. 22 and obtained by Bloomberg News, the three companies — Polaris Engineering Inc. and Lamar Contractors LLC, both based in Louisiana, and SLSCO Ltd. of Texas — say they’re owed more than $60 million in “severely past due invoices, some of which are nearly one year old.”

The companies were hired to perform repair work in the wake of Hurricane Maria, which struck 18 months ago.

Without prompt payment, “we will have no choice but to assert our rights to assert lien(s) on their property,” the letter’s authors write. “We truly hope to reach an amicable resolution to this horrible situation.” None of the companies responded to messages seeking further comment.

A lien is a claim on a house which typically prevents the homeowner from selling or refinancing the property.

The letter was addressed to AECOM, lead contractor for the rebuilding efforts. AECOM confirmed the authenticity of the letter, and said that it hasn’t paid its subcontractors because it has yet to be paid by the Virgin Islands.

“While we are still waiting for many of our outstanding invoices to be processed and paid, we would like to thank Governor Albert Bryan for diligently working to expedite the release of recovery funds,” AECOM said in a statement. “Our top priority continues to be helping the people of the U.S. Virgin Islands return to a new normal as quickly as possible, and we are committed to doing everything we can to provide the timely payment of services.”

Reached by phone on Tuesday, Bryan’s communications director, Richard Motta Jr., said he would find out the status of that money. He didn’t return subsequent calls or emails.

Call for paperwork

The construction is being funded by FEMA’s Sheltering and Temporary Essential Power (STEP) program, which since Maria has committed to spending more than $222 million in the Virgin Islands. The territory has so far spent $137 million of that money, according to Abigail Dennis, a FEMA spokeswoman.

FEMA will only allow the Virgin Islands to spend the rest of the money once the territory has provided the necessary paperwork, Dennis said. She said that the territory has yet to do so.

“The work has to be done properly and up to code or no payment is issued,” Dennis said by email.

The challenges of storm recovery in the Virgin Islands echo those in Puerto Rico, which has become a poster-child for problems in the aid process.

Unequal treatment?

Puerto Rico Governor Ricardo Rossello, in an appearance Tuesday before the House Natural Resources Committee, said the island territory had suffered from unequal treatment due to its commonwealth status, badly undermining its recovery prospects.

Related: KCC estimates insured losses from Hurricane Maria will be $30 billion

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