Sandy Recovery Costs Up 50% and City Calls That a Victory

Tuesday, September 02, 2014

Destroyed beach house in the aftermath of Hurricane Sandy on November 4, 2012 in Far Rockaway, NY (Shutterstock)

The costs of pushing papers in the name of Sandy rebuilding have increased by more than 50 percent over the city's initial expectations.

Yet, the strangest thing about this story may be that the de Blasio administration considers that rate of inflation a victory.

Under then-Mayor Mike Bloomberg, last July the city inked a deal with a consortium of four outside contractors for $50.2 million to process the thousands of applications for the Build It Back program, which uses money from the $48 billion Sandy federal aid package to repair damaged privately and publicly-owned housing.

On Tuesday, Mayor Bill de Blasio announced that he is breaking that contract into pieces that will total $77 million.

But it could have been much worse. Two of the companies had all but finalized contract amendments in the latter half of last year that would have pushed the costs even higher — to nearly three times the original contract price, according to Build It Back director Amy Peterson. She said some of those costs were legitimate because federal requirements were more onerous than expected. But Peterson said she was able to tamp down the total increase by realigning duties and eliminating some tasks.

“People didn't know what we were going to need when we bid out these contracts and so all of these things got added on over time,” she said. “And it was only now that we were able to say this is what we want, and this is how the city is going to manage this, and this is how we will move forward.”

As part of the latest renegotiation, Peterson said the city will terminate its agreement with the lead contractor, the Philadelphia-based Public Financial Management, which was supposed to manage the project. Instead, city employees have taken over the oversight role, she said, which has both saved money and reduced bureaucracy. 

PFM was originally slated to receive more than $4 million but now will get about $2 million, she said. WNYC previously reported PFM was no longer playing a role in the day-to-day operation of Build It Back.

According to the mayor’s office, another contractor, the San Francisco-based URS Corp., was expected to get nearly $20 million for running the customer service operation, according to the July 2013 contract. That amount was headed towards $75.9 million under an amendment and has been brought back to $40.4 million.

Solix, a New Jersey company that checked applicants’ eligibility for the program, was due to receive $9.9 million, then $48.5 million. Now, the de Blasio administration has offered $23.3 million.

The latest iterations of the contract have not been finalized, and Peterson said they will expire next summer, after which some additional services may be required. A spokeswoman for PFM said the company could not comment. URS and Solix did not return requests for a response.

A fourth contractor, the Center for New York City Neighborhoods, has not been affected by the amendments or the latest pull back. The non-profit organization headquartered in Manhattan is expected to continue to receive up to $13.5 million for providing financial counseling to homeowners.

The city also announced Tuesday that it had begun repairs on 535 Sandy-damaged homes, beating the mayor's goal of reaching 500 construction starts by Labor Day.


More in:

Comments [2]

Staten Island resident from Staten Island

My families house was destroyed. It took months to reach out to city & state officials and still nothing has been done due to the red tape involved and change of administration. Then Cuomo comes to SI and decides to lower the cost on the Verrazano Bridge and that was a big publicity stunt and he & his staff were not to be seen again. Deblasio and his tale of two cities also came to Staten Island when he was campaigning and now we have reached out numerous times to his offices and even his alleged Chief of Staff, Emma Wolf and around and around we go with no answers. Right now SI residents feel like we have a bunch of novices running city hall & our state.

Everything must change!!! Staten Island needs to get the vote out! It's either Teachout or Corruption!

Sep. 04 2014 01:27 AM
Clare Hilger from Rockaway Beach, NY

As Rockaway Beach homeowners, who have been registered with Build it Back since Spring of 2013, my husband and I have not been able to start the process of rebuilding our home. Build It Back does not have any time lines by which they need to abide. I am glad to hear the mayor is trying not to spend too much on adminstrative costs, because I can attest to the fact that customer service represtatives do not know the details of my case and they have lost important paperwork. We were told by Build It Back that we were ideal candidates for this program and we will most likely recieve the funding we need to rebuild a taller, stronger home. We are renting a home and paying a mortgage on a home. This cannot last. The mayor has a home and he needs to see that the people the city has declared they will assist get that assistance in his term of office. This issue has gone out of the news and your story makes it seem like everything is going great. The reality is that this program needs accountability and timelines, two things which they have yet to provide.

Sep. 02 2014 10:15 PM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.


Latest Newscast




WNYC is supported by the Charles H. Revson Foundation: Because a great city needs an informed and engaged public


Supported by