FEMA cuts threaten recovery plans for N.Carolina town

Nathan Layne, Reuters

When Hurricane Helene's flood waters slammed into Lake Lure's century-old dam last September, gouging a massive scar into one embankment and cascading five months' worth of rain down its sides, town commissioner Dave DiOrio worried it might fail. Emergency sirens blared. "DAM FAILURE IMMINENT!" the National Weather Service warned in a social media post, urging 3,000 residents living downstream to seek higher ground. "When it starts breaking out on the sides, I mean who knows," said DiOrio, a former Navy captain with an engineering background. In the end, the dam held. But the disaster galvanized the North Carolina resort town's efforts to seek federal funding for an ambitious rebuilding plan — including $200 million for the dam alone.

The initial response from the Federal Emergency Management Agency seemed encouraging. Deanne Criswell, who then headed the agency under President Joe Biden, told Lake Lure leaders that FEMA wanted to invest in projects that would harden areas against future disasters. Now President Donald Trump's plans to shrink or even abolish FEMA, and push some of the costs of responding to disasters onto the states, have injected uncertainty into Lake Lure's recovery, town officials said.

Since taking office, Trump has declined funding requests from six disaster-hit states for projects to guard against future storms, a category of aid known as hazard mitigation. All of the states are run by Republican governors. Lake Lure officials are centring their plan to rebuild in a more resilient way around a new dam on the 720-acre reservoir. The town, with a year-round population of just 1,400, can draw 10,000 visitors a day during the summer, when people come to relax on Lake Lure's beaches, water ski or hike local trails.

While FEMA doesn't usually build new dams, DiOrio said the town's leaders were thinking big because of the proactive stance on hazard mitigation projects under Biden. He worries that FEMA under Trump is retreating from such investments.

"I think what we're seeing is a de-scoping of FEMA," DiOrio said. "If it does, that leaves us in limbo land."

Helene caused an estimated $60 billion in damage in western North Carolina and killed 250 people across seven states, making it the deadliest hurricane to hit the US mainland since Katrina in 2005 left nearly 1,400 dead. As it does sometimes with major disasters, FEMA covered 100% of the costs for debris removal and emergency protective measures for six months after Helene. That dropped to 90% in late March, but is still above the usual 75%, a FEMA spokesperson said in response to questions.

Those federal funds are paying for the excavators and dump trucks still working to extract debris from the lake. With the town's main attraction closed for the summer, hotel reservations are down sharply and traffic into local shops sparse.

"Without Lake Lure — it's not only our namesake, it's the central part of our community," said Jim Proctor, a town council member who owns eight lake-side cabins, only two of which are occupied. "Believe it or not, nobody wants to have a vacation rental next to a big construction zone." Because the dam held, Lake Lure and communities downstream escaped the catastrophe that befell the neighbouring town of Chimney Rock, whose main street was largely wiped out.

"This lake saved a lot of people, because the flood that came down through the county, this lake caught," said Michael Hager, a lobbyist for Lake Lure and former Republican majority leader in the North Carolina House of Representatives. Trump said last week he plans to start phasing out FEMA and distribute disaster relief from the White House. His administration has taken an axe to some of the agency's hazard mitigation programs, despite research showing such investment can save money and lives.

A 2019 National Institute of Building Sciences study found that every $1 invested in mitigation saves up to $13 in avoided losses. A Chamber of Commerce study put the return-on-investment at 13 to 1.

In April, FEMA said it was ending the Building Resilient Infrastructure and Communities program, calling it "wasteful and ineffective" and more concerned with "political agendas" than helping Americans. The program had funded general mitigation projects, unrelated to specific disasters.

The administration has yet to announce changes to the Hazard Mitigation Grant Program, a separate funding channel routinely offered in addition to recovery aid after a disaster. North Carolina was approved for HMGP funding after Helene.

But in recent weeks Trump has declined HMGP requests from Mississippi, Oklahoma, Iowa, Missouri, Virginia and Arkansas.

The FEMA spokesperson said the Trump administration was focused on addressing "large unobligated balances" of HMGP funding and working with states to identify projects and draw down "balances in a way that makes the nation more resilient." DiOrio said the town was now less confident of FEMA funding for a new dam, a project that could take 10 years. He was reaching out to seek funds from other agencies, including the Army Corps of Engineers. And the dam is just one of several big-ticket items on Lake Lure's rebuilding list. The town wants to move a wastewater treatment plant out of a flood zone, at a projected cost of $35 million, and to replace its century-old sewage system at the bottom of the lake, which could cost $100 million.

FEMA has not yet received engineering assessments to make a determination on aid, the FEMA spokesperson said. The state, meanwhile, faces a greater share of the recovery cost burden after FEMA last month denied its request to extend total cost reimbursement beyond an initial 180-day period.

North Carolina's governor, Democrat Josh Stein, has warned the new arrangement could cost the state an additional $200 million, potentially requiring cuts to funds for roads and schools and less money for communities like Lake Lure.

For Cara Brock, who operates the Lured Market & Grill across the street from the lake, the prospect of a diminished FEMA adds to the uncertain outlook. She said she is barely breaking even and considering a loan to carry her through until next summer when the town's main draw will be open again.

"The burden of trying to help a community like this or all of Western North Carolina — that can't fall on the state of North Carolina," Brock said. "I mean, there's got to be some federal help, right?"