[TAPE 1, SIDE A]

CHARLES THOMPSON:

This is Charlie Thompson on January 20, 2000 at 1:10 PM with Billy Ray Hall who is the President of the North Carolina Rural Center. Mr. Hall will you tell us what your present position is here is at the Center and also something about your work as director with the hurricane re-development center.

BILLY RAY HALL:

Sure. The Rural Economic Development Center was created in 1987. Mr. Bill Friday and others and said we needed a long-term look at the rural economy of this state and we needed an organization who would have as its mission to promote the long-term economic development of rural North Carolina with a special focus on low income individuals. So as a typical non-profit we've been at it for thirteen years and we've become a bit atypical in the sense that we've run economic programs funded by national foundations, funded by the private sector, and most recently significant funding by the public sector. We administer part of the clean water bond issue, passed by the citizens of North Carolina last year, or year before last. We also administer micro-enterprise loan program at a level around two million, funded by the Ford Foundation, and we get about eight million a year from the General Assembly to administer. So while we're a non-profit, we're a fairly significant non-profit in doing research and capacity building in rural areas. And so we've been doing that for thirteen years. Most recently thought, the Governor asked me to come over on loan, which I agreed to do, to head up his re-development effort following hurricane Floyd.

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Now I did this on loan from the Center three years ago when we followed up hurricane Fran. This time the request was for me to come over and head up a re-development office which would basically do three or four things. First, we would try to understand the degree and the depth of the damage that was done by this hurricane. Second, we would pursue the public and private resources needed to redevelop our rural areas, including state funds as well as federal funds. And then lastly, we would look at long-term re-development of an area that had just substantial devastation. And I'm doing that now with a staff of seven, to undertake those activities. If you segregate our job, it really means that we put together an initial federal request to go to Congress on last fall. We were successful there in getting roughly a billion dollars committed to the effort here in North Carolina. Then we put together a request for state funding and we were successful in getting 836 million dollars to deal with the hurricane. And now we're hard at work putting together the next federal request to go to Congress, sometime in the next few weeks, and we're also helping to roll out the state programs that were approved by the general assembly. And in addition to that, we sort of coordinate all the folks that are doing different things under the hurricane. We bring them all together and make sure we're doing a concerted and a cooperative effort to bring as much relief and as much potential re-development as we can to the eastern part of the state. My term of duty is about eight months long to the state, which will run through June 30. Fortunately or unfortunately, I keep doing the other job to, so I've got two jobs right now.

CHARLES THOMPSON:

Right. You're mostly likely I think from rural North Carolina?

BILLY RAY HALL:

I'm from eastern North Carolina, the heart of pickle country, which is Mt. Olive, a town of 4600. It was 4600 when I was born in 1948 and in the last census it was around 4600 so it's a typical eastern town with a railroad track down the middle and about 60 percent majority and 40 percent minority population. So, that's where I come from—this is my accent.

CHARLES THOMPSON:

And did Mt. Olive get flooded?

BILLY RAY HALL:

No. Mt. Olive is nine miles south of Goldsboro. Goldsboro is the city, like most cities, that grew up around our rivers. And Goldsboro sits on the Neuse River—it was significantly flooded both by hurricane Floyd and previously by hurricane Fran. So, some of my kin people were living in the area were flooded, but not me. In fact, I had a second cousin that was killed going to work in Goldsboro. So this disaster, besides all the other attributes, got very personal very fast.

CHARLES THOMPSON:

Describe Governor Hunt's process that he went through to appoint you to this position.

BILLY RAY HALL:

Well, Governor Hunt's process probably has as a byproduct appointing me, his process is to, as he has done for the fifteen years he's been Governor, first and second times he's served as Governor, his focus has been to understand government and what it can do for people. Can you hold for just a second—.

BILLY RAY HALL:

The Governor's experience at dealing with hurricanes and disaster, I think, is probably the most significant thing in terms of positioning this state's

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leadership to respond to a hurricane of the magnitude of Floyd. He immediately went into the disaster office, and by knowledge of state government and how it operates, we did immediate responses that were obviously very fast. And when you contrast the Governor of North Carolina sitting in that office at 1 AM making calls to dispatch National Guard to respond to various floods, and you contrast that with other state's where governor's are on vacation during a disaster, it gets to be very obvious the difference. And not that that the way it's obvious, what's more obvious is his degree of involvement in the process. Immediately we were responding appropriately in terms of emergency response. He then new from experience, and the way I got involved in the task, it was not going to be enough money in normal federal programs of disaster to speak to this size of disaster. The housing money they make available is temporary housing, it doesn't deal with long-term recovery. The assistance to the farm community is based on a one-time event of a small nature rather than substantial resources to deal with large disasters. So I came on board to help address what's not going to be normally in the package of available response in the public system. And he knew that I knew how to do that, because I had done it before for him.

CHARLES THOMPSON:

For another hurricane?

BILLY RAY HALL:

For hurricane Fran. I did the re-development effort under hurricane Fran also. We were able to go get federal money and put together a state response package and improve the way we respond to disasters after Fran that a lot of people say helped us a great deal in getting ready for this disaster. The redevelopment effort now picks up that speed, and with the Governor's leadership,

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we pursue resources whether at the federal and then putting the state package together, which we did. His comfort with me doing the analysis and then his expectation that we package that with outreach to various groups. He and I plan and think a lot alike, so allows me to do that work for him and get it to him. That's how I got there, it's not because he just happened to think of me or I was available—it's because that's where my experience was for the last twenty-seven years, I've done rural economic development work. In his previous administration I was a deputy secretary for natural resources and community development agency and have been doing economic develop—, rural economic development work all my entire career. So, I was ready to go. Here I am back again.

CHARLES THOMPSON:

Well, let's talk about the flood itself.

BILLY RAY HALL:

Sure.

CHARLES THOMPSON:

What are the effects of the flood as you describe them?

BILLY RAY HALL:

I think anytime you start talking about numbers they are only understandable when you put them in relation to something. For example, if you say you had a hundred dollars worth of damage and you're in a developing nation where you house costs 150 dollars and is made out of natural materials, it's a lot different than in America when you have a hundred dollars worth of damage. So the first thing to do is let's put perspective. This was a six billion dollar disaster in North Carolina. The entire agriculture output for the state of North Carolina last year was seven billion dollars. So six billion dollars is huge relative to this state's economy, relative to our resource base. And that is big by any stretch of the imagination—60,000 homes being damaged, 17,000 are uninhabitable and 7,000

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are totally destroyed. So you get really huge numbers to go along with the fifty-one people who are actually—, lost their lives. And you begin to get a feel for the size. The second thing to look at is in the agricultural community—we lost 190 million dollars of cotton in the fields that were flooded. In addition, we lost over 300 million dollars of other crops in the field for a total of 538 million dollars worth of crops that were washed away. Now, if that wasn't bad enough for the farmer the farm community in eastern North Carolina lost 281 million dollars worth of structures, equipment, like tractors and combines that were flooded and washed out, washed away in some cases, barns that were destroyed. So they lost not just the 581 million dollars in crops, they lost another 281 million dollars in structures and equipment, plus they had the damage to their land—literally, thirty to fifty million dollars worth of damage to their land. Another sixty-five million dollars worth of damage to their waterways and stuff, where trees were in the creeks and stuff. So, looking at the scale of disaster it just boggles your mind at the scale that was playing itself out. If you want to take it down to a specific case, FEMA, which is a national flood response agency, has been around for about twenty years. In that twenty years with all the disasters you and I have heard about throughout the last twenty years, they've actually had destroyed properties that they helped acquire with the local resources of about 20,000 units of property—21,000 to be exact. In this flood in North Carolina they will assist us in acquiring 11,000 structures, so we're going to acquire in one disaster, in one period of time, more than half the amount of structures that have been acquired. And we remember TV scenes of the Midwest floods and the earthquakes in the

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west and we think, “Well, wow, they were huge.” What I'm telling you is by size this is as big a natural disaster for a state as has been experienced in America. And that plays its way out. The third perspective to put on these numbers, and this is what a lot of people forget, we in the South and particularly in eastern North Carolina have a lot of poor people. Those poor people by force of circumstance moved to the cheaper land they end up being along the creeks which are the flooded areas, they're in low-income housing and they're sitting there with low wealth. And when this flood came, it struck those people primarily. An example, Princeville is a town of 700 home—2100 people—all seven hundred were flooded. Seven of them had flood insurance in the whole town. O.K. Now 80 percent of that town is classified as in poverty—80 percent of those homes are classified as living in poverty. That's less than around $20,000 for a family of four. And what that tells you is, that this is a disaster that sucked away a lot of our resource base, a huge impact on our farming and business community, but also devastated an already poor population. And plays it way out all the way down. So, the third perspective I would put on is, that this disaster was very non-selective in the sense of it being a disaster. On the other hand, because we have moved people around those creeks, primarily minorities and primarily low income, that's who took the brunt of this—the least stable, the least insured. So, it's been terrible. That's the best way I can describe it. And when you work your way out of there, we need very badly to get probably close to three billion dollars worth of assistance from the federal government to have even a chance of recovering from this six billion dollar disaster. We've got about two billion so far headed our way

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or targeted for North Carolina. We still have to win it in competition with other states. And we've got about 800 million dollars worth of support out of the state, or a little over 830 million. We will still need another billion, in my mind of this effort, to make it work and then we're still short. I mean you still have a long way to go.

CHARLES THOMPSON:

That still doesn't make up for the seven billion.

BILLY RAY HALL:

Well, you want to put it another context, tobacco took its third—, we were in the crop season and it was roughly eighty or ninety million dollars worth of tobacco still in the field—it was flooded, destroyed. But that was the second year for the farmer who, three years earlier, was farming at X amount in two years he took a thirty-five percent reduction in quota. This year we're in now, he had disaster strike him and take his tobacco crop, and now he's got a reduction in quota again. So, the farmer is the one, if I had to guess, in a terms of a way of life, farming is the most at risk as a way of life for being lost in major areas of rural North Carolina.

CHARLES THOMPSON:

So, really the eastern part of the state was already under siege economically and so forth—it's a huge challenge for your Center I'm sure.

BILLY RAY HALL:

Well, the rural Center, ironically, was producing a report that was to look at the good and the difficult in rural North Carolina. And the good was about the growth around our urban areas and some of our other areas like Wilson and Greenville, that seemed to be digging their way into or up to a better economy. But it was also talking about places left out which a lot of eastern North Carolina was. Which meant that they really had a long way to go and then you hit them

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with a double blow—a disaster on top of bad farming. And so it's a tough story to put in perspective, but it's also a challenge that we can't walk away from because their part of our state, their part of our potential.

CHARLES THOMPSON:

Right so the flood has helped fine tune the efforts of the Center?

BILLY RAY HALL:

Helped fine tune a lot of efforts. The Rural Center, obviously, we're focused very tightly now on some major responses to eastern North Carolina and trying to look at the disaster as a way of not only focusing on those problems, like the need for water and sewer and information technology and others, but also as an opportunity to say, “OK if we're going to go in an rebuild let's at least rebuild correctly, let's do it smart or smarter.” Let's also take advantage of at least the public focus, the Erskine Bowles Commission that just been faced—, looking at rural development issues, it fed in very well. So, if you're going to have a disaster, certainly, if you wanted public attention focused the national attention from the governors, press, to the—, just the national media looking at a disaster, all the way down to just good timing, if there can be such a thing, around the disaster. A lot of ideas were on the table and cooking. And so I think it's a good opportunity. I mentioned earlier wearing two hats with the Rural Center and the disaster recovery. I also have a third hat. The tobacco settlement created the North Carolina Tobacco Foundation and I serve on that Foundation that's chaired by Mr. Friday and we worked together to create this Rural Center. And so we have an opportunity there to focus their attention while we're focusing the state and national attention.

CHARLES THOMPSON:

You said, “Let's do it correctly, let's do this”—, can you describe what some of those efforts would be?

BILLY RAY HALL:

Correctly, means that when you're in a community that's growing slowly and let's say you're learning as you go. In other words, first of all, you're diversifying out of agriculture and so you're learning your way into a small manufacturing base and you just put it wherever you can. You're limited planning background and planning professionals as a small community, so you really don't avail yourself of say long range planning and defining flood plains and getting flood maps. You develop infrastructure as the growth takes place, so you follow rather than shaping the growth by placing the infrastructure in. And in eastern North Carolina we've done, I think, a very good job of following some opportunities. Now the problem is you don't need to follow some opportunities to have smarter growth, you need to lead opportunities. You need to decide this is a good area for industrial growth and you need to build the industrial support structure. Similarly, you need to look at hazardous areas and get out of them. It would have been great had we had strong professional planning and understanding among the citizenry about the danger from floods and understood it and not developed in those flood plains. Those 11,000 units of property are going to cost over 440 million dollars of public money to acquire—they would have been much better had they been built outside those flood plains and not flooded with this disaster. And so, I think, whether it's looking at infrastructure and planning for the development of a community, this time have the benefit of, hopefully, to lead opportunities or lead in terms of the growth of the area with a

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lot better knowledge. It also pointed out some problems. For example local governments, like a lot of us, when it's not a problem you really don't pay a lot of attention to it. Most of our flood plain maps that drive the discussion locally about what you should and shouldn't do, are over twenty years old. And you got a twenty-year-old flood plain map—the guy builds his house with good intentions, he's not in a flood plain, he's not required to have insurance, so I don't have insurance—I bet you don't. A five hundred year flood comes along it not only gets his house, it gets the guy's a half-mile away higher—because this was a five hundred year flood. Had it been a hundred-year flood though it still would have got those houses, because they probably weren't drawn correctly. You pour as much cement in Wake County and Durham and Johnston County as we've poured in the last ten years, and I'll guarantee you there's a lot more water hitting the Neuse river right now than there was ten years ago. Now, thankfully, we've got the Falls of the Neuse, but still a five-hundred year flood event made it very clear—Falls of the Neuse will not stop a twenty inch rain storm from flooding huge areas of eastern North Carolina.

CHARLES THOMPSON:

A lot of the highways follow those bodies—, those rivers and creeks as well, right?

BILLY RAY HALL:

We had a thousand roads closed during this disaster. We had three inter-states that were affected, two that were closed—sections of inter-state highway, roads that were washed completely out. But we learned. One, that water is incredibly powerful: whether it washes a car off the road as it did when the eighteen inches of water washes a vehicle off and kills the family of a highway

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patrolman, or whether it's the water that's rising and cutting out the highway and instead of driving off in a bump, it's a forty foot hole that's been washed out of the highway. So we learned some pretty valuable lessons. The other thing we learned with eight communities on the coast—you're terribly at risk if you are depending on NC 12 to get you out of harm's way. I think those people will think a lot more in the future about getting out earlier, because when that road was closed there was no way out and the water was rising.

CHARLES THOMPSON:

So, is it safe to say that future development should not be along rivers at all? That when this buyout happens we're going to restore those to wetlands or what exactly?

BILLY RAY HALL:

No, I think what it says is that there have to be appropriate uses made. Certainly, the creek beds and other areas are appropriate for natural resource activities. It is not a bad thing to grow crops and especially if you are cognizant of when the flooding is likely. The same thing is true for recreation. Recreation that is built when flood proofed a park can withstand a flood pretty easily when it goes back out. When we look at reservoir camping facilities they're flooded every year five or six times and they go right back into production. There are things that are appropriate uses in those flood plains and there are things that are totally at risk when you develop them in the flood plain. And what we've got to do is figure out a way to make those uses apropos. By contrast, wind as opposed to water, we know creates havoc. And when you look at the coast, it's always amazing to people to see some houses standing and the house next door torn down. It has a lot to do with the construction standards that are employed.

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We know we've got to look at some higher level standards around wind in highly susceptible areas. We know in flood plains we've got to look at structures that are flood proofed, that are elevated, if you build in them. We've got to think about appropriate things to do in a flood plain, like natural resource based recreation and tourism. I wouldn't cut it off. I mean, there are people who say, “Let's draw a hundred-year flood plain and get everybody out.” I think they missed the idea that you can develop in harmony with nature as long as you respect it. Once you test it, though, it can come back and bite you.

CHARLES THOMPSON:

You said that there was thirty to fifty million dollars worth of damage to the land itself—?

BILLY RAY HALL:

You want me to define that?

CHARLES THOMPSON:

Yes, please.

BILLY RAY HALL:

Well, whenever you are looking at farm land that's been shaped, roads have been built in, it's been structured, terraced, it's got wind rows in it, it's got drainage fields built so that it's productive, raw land, but still productive with a lot of work done to it. When that water came up and washed away all those roads and all those ditches and those wind rows and the things that were done, that land that was damaged—eroded substantially, has to be pulled back in place. Where I got the figure of thirty to sixty million dollars is what we're still aggregating the effect on, as farmers go in and try to restore that land to production. And that's not to mention land that was destroyed that's around the highways. That highway is not counted as a land destruction but it was destruction to an infrastructure on the land and the land. But I was speaking

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specifically to farmers who took a hit in their base for producing their product and they have to rebuild that land—reframe it, restructure it, re-put the wind rows in, re-do the ditches, the highways or the dirt roads on the farm. And then just a lot of work to bring that land back from where it was.

CHARLES THOMPSON:

You've talked a lot about the various figures that are coming from—, the dollar figures from federal and the state governments. How will those monies be allocated? You mentioned 7,000 homes and so forth—,

BILLY RAY HALL:

Well, most all of the programs you talk about are specific in where they go. And what you're trying to do is to identify needs in those categories and match them up with appropriate federal agencies. For example the emergency, which is to get people in temporary housing, to get the roads restored, the debris removed, the health care, the mental health counseling that needs to go on. That's the normal disaster response. That's about a billion dollars worth of effort and it's administered through our emergency management operations at the state and federal level. It goes directly to individuals or governments that are trying to respond to disasters like the washed-out waste water treatment lines that have to be rebuilt. So that's figure comes into play. Then you back and think about additional needs. And we divided the initial needs or needs that are out there in three categories: housing. We know that while people's houses were destroyed and their in temporary housing they've got to get in permanent housing, they've got to have their house that was damaged rebuilt. So, when you look at the federal money coming in, we asked for and got additional money from our General Assembly to help deal with the housing problem. In fact, 350 million will go

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through our standard housing programs to assist people with restoring their homes, or acquiring new homes.

CHARLES THOMPSON:

So the first billion includes those trailers people are living in—.

BILLY RAY HALL:

Those are temporary housing and stuff like that and cleaning up the roads and redoing the water lines and that type of thing. The next set of resources starts with housing, which we are getting help, in this case from the state for about 350 million, the next category of need is agriculture and the farm community. The package that was passed by the General Assembly has 150 million in grant money going to the farm community to help pay for their crop losses and their equipment losses and restoring their land. And that 150 million will go directly into the farm community to help them survive, based on paying like seventeen to eighteen percent of their losses. That's what you'll actually get. You won't get anywhere near what you need to restore, but you'll get some money. So the economy was second and then equal but third on the list is public health and environmental issues like making sure we go out and close up landfills or junk car places. We're going in and making sure that they're—, first of all, environmentally sound. So we have to close them off and test them and that type of thing. But allocating money through those agencies that deal with the public health and the environmental health is sort of a third area. So those programs were administered by the normal program administrators but with a target toward dealing with the flood disaster. And so in each case where we had resources we were trying to attack housing as a first priority and then health, environment, and economy sort of followed that and

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were run through the standard programs of state government and local government to deal with those problems.

CHARLES THOMPSON:

How can people apply for that money? How do you find those very poor people out there who have no experience calling into—.

BILLY RAY HALL:

Well, you find them two or three ways. One is you engage a lot of grass roots community to get the word to them. And you work very aggressively to get them to register as having been damaged. We've got 80,000 plus people now registered as having been damaged by this disaster. We're getting very close to, I'd say, the larger majority of these people. We're in probably the 90th percentile now of people who were damaged. We're still doing outreach working with schools, with churches, with non-profits to find the elderly and others who may not have registered. Once you're registered you're sort of in the system, and we can track you, we can find out if you're getting assistance. We can look at your housing need and we can come back in and say when we hold a meeting and talk about housing, or set up housing councils, which we are doing in twenty-six counties, those people are available, they have your name, they know you had housing damage. So they're checking looking for you and we're getting the word out so you'll look for them to come in and apply for the housing assistance. Similarly, I'm working with the agricultural community and we'll be holding regional meetings with agricultural leaders to say, “Here's how you get agricultural help. Go apply here, this is how it will work, and this is how you get the money.” But fisherman, fisherwomen, the same thing. We're putting out rules

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this month, then we're going to reach out through their networks and get them to be aware, come in and apply, and then move the money towards them.

CHARLES THOMPSON:

You are going to have hearings coming this month?

BILLY RAY HALL:

We start January 31st and go into early February. We'll hold six regional meetings and the primary purpose is to share with individuals, the media, local leaders, if you have a housing problem here's the program that is available at the state level, and here's how you apply. If you are a farmer and you have a loss due to disaster, here's where you go to apply and here's what's going to be available to you. Then we'll take time and stop and say, “OK, this is what we're doing, what else do you think, or what comments do you want to give us to take back and work on in Raleigh?” And we'll listen.

CHARLES THOMPSON:

So it will be a public forum where people will go to the microphone and ask questions?

BILLY RAY HALL:

Absolutely. Ask questions, make comments. They may have some things that we can probably do better, and we'll be listening for those ideas. They may point out problems we are not aware of, and we want to be able to respond to those. But it seems to me it's a two-way thing. One is to bring your state programs out there and make sure they can avail themselves of it, and second, is to bring their ideas back to improve the way you are responding to the disaster.

CHARLES THOMPSON:

What are the communities that are the sites for those hearings? Can you name them?

BILLY RAY HALL:

I can't name them off the top of my head. I said I had all the information a while ago but—, what we'll do is do two in the southeast, one will

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be in Bergal (?) and one will be in Lumberton. Then we'll do two in the sort of central eastern part of the state, one in Kinston and it seems like New Bern or Rocky Mount, and then one in Halifax and one in the northeast, maybe Burtee County (?) or somewhere. But it'll be two in the southeastern portion, two in the middleeastern portion, and two in the northeastern portion.

CHARLES THOMPSON:

Maybe one in Greenville. I remember seeing—.

BILLY RAY HALL:

I'm betting one's in Greenville. There's a list around here.

CHARLES THOMPSON:

Right. I've heard a lot about the FEMA representatives as I've traveled around, and some of those have been sensitive and some haven't. And some people are very dissatisfied with how FEMA has calculated the amount of loan or grant that they are going to get. Will state people go back in behind those federal people?

BILLY RAY HALL:

Well, first of all, most of the FEMA people are working with a state counterpart in one way or another. Now the reason why the people are dissatisfied is a lot of things that we naturally take for granted are not necessarily true when you are doing a response to a disaster. First of all, you expect people to understand you, to be comfortable talking to you. And what you do in a disaster if you are a federal agency with only 2,500 employees, 2,500 I believe nationwide, is they have a huge number of employees that are on call—they come in just for disasters and help do this work. Now they generally do very good work but they may have a bad day plus an accent and for most of us in the South that does not go down well, and so everything—, given you're in a disaster and you're already having real problems and frustrations, now you got a person across the desk that

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doesn't sound like you. You know, that irritates the system. There is some of that. The other part is just the reality. People make personal judgments about how much damage there is to your house. When that guy comes out to fix it and tells you what the price is, you got a problem sometimes. And what we do is, first of all, we appeal within the existing system. We have an individual advocate program that's created within the emergency management program. If you feel like you've been had or taken advantage of or treated wrong, you are open—, there is a number for you to call to protest. And then they are to investigate on your behalf. They are your advocate with the system. Now the system sometimes responds, sometimes you end up appealing up ladders. That happens. That is very frustrating to a person that's living in a trailer with two other members, or two other groups of a family. And so, I understand that. You know, like I said I've got family that were flooded and they're just as mad as anybody else. And I've got a brother—, I guess a nephew-in-law, that is very upset at the appraisal they put on his damage. Now what we're doing is on case by case, we're handling those. But where we see a broad range of issues beginning to emerge we develop a state response. We're now meeting with the federal agencies to say, “There are some inconsistencies emerging here, we need to sit down and figure out what's causing this inconsistency. Two houses next to each other, three feet of water, one has a much higher level of damage estimated, two different folks estimating and we're seeing this too many times in this area.” And so we're sitting down with the federal folks and dealing with those in blocks. Generally, it's on an individual basis, but if we can detect a consistent, or inconsistency, in an area, we'll raise

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that with the federal folks and go sit down a try to resolve that. The bad news is, it takes time. And for the person that's frustrated, they're just twice as frustrated. And the scary thing for a lot of people is if you don't hurry up and get some response their going to move. If you ship your children off to Raleigh or to Virginia or to New York to live with kin people while you try to survive in FEMA city, in a eight by twenty mobile home, how long are your children going to be up there and you're trying to get to work in an area without a home and you're waiting for a response. How long can you wait? A month, two months, were four months out now. You understand my point? And we're moving remarkably fast according to everybody. But the truth is, four months is four long months. If I took my wife away from her grandchildren for four months, they'd bury me or her because one of us would be headed back the other way and the other one would be—, and that's just reality. So, we got to work at it.

CHARLES THOMPSON:

A lot of these people are so poor that there's no other way for them to go anywhere that they—, unless they get some money for their house and land that they have, how can they reestablish themselves?

BILLY RAY HALL:

They can't. And if you were a renter—.

CHARLES THOMPSON:

They're stuck in these trailers.

BILLY RAY HALL:

If you are a renter in eastern North Carolina you got a double whammy. First of all, you we're renting very low-income property as a general rule. There is no rental property—, basically there's just thousands of needs for rental units in eastern North Carolina. Very few of them are low-income rental units and there you are. You used to live in a very small house at seventy-five to a

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hundred dollars. It's washed away and your belongings. You're living in a mobile park, very little or no transportation, you're trying to get to your job and find a place to rent and there are no places to rent. So, it's a—, it can be incredibly frustrating.

CHARLES THOMPSON:

Let's talk about agriculture. Agriculture, obviously, is the largest industry in eastern North Carolina, it's been hit very hard as you've outlined. You didn't mention the poultry and livestock industries.

BILLY RAY HALL:

Well, I should have. Livestock suffered about a 12 million dollar destruction. Two million chickens and turkeys were killed—flooded out. You see pictures of them. About 30,000 pigs were drowned and you see pictures of those where they were standing on top of their pig parlors and the water was at the top and they were out on top of them. I think seven hog lagoons ran over. I don't think we had any breaches that I remember off the top of my head. But the water level just rose up, rose up and over.

CHARLES THOMPSON:

Only seven flooded? Only seven lagoons flooded?

BILLY RAY HALL:

Seven breaches in the sense that a breach is defined as either breaking or overflowing. And our sense is the technology did relatively well in a terrible disaster. I think the question for all of us though and as a public policy commitment, the Governor and those of us working to promote rural development, are looking at ways to either retrofit them with new technology that is not susceptible to flooding or to move them out of the flood plain. And we pursued, and are still pursuing federal money, to do buyouts. The state Clean Water Trust Fund provided some money to begin buying, doing the buyout.

CHARLES THOMPSON:

I think I read fifteen farms were going to be bought.

BILLY RAY HALL:

The estimate was fifteen would be bought, with the five million or so that was made available. I think the key here is that, given the magnitude of the disaster, the loss of livestock was not as much as anybody would have guessed. The fact that we've developed in the flood plains and are at risk environmentally in the flood plains is just hyped. I mean the awareness is super-heightened by the lagoons washing. Same thing is true about the public wastewater treatment plants. When they went out and the line was dumping raw sewage, everybody down that creek that depended on that creek realized it not just the hog farm. But the hog farm is part of it—so it Kinston's public wastewater treatment plant, Seven—, Seven Springs doesn't have one, Goldsboro, Kinston. If you're sitting in New Bern, you're about to get all their waste coming at you. And if you're the fisherman sitting just beyond in Oriental, you're sitting there watching that plume coming down there and—.

CHARLES THOMPSON:

Somebody described the color of pink—, Pepto Bismal or something.

BILLY RAY HALL:

Yep. Fortunately, the Lord was good. He sent Irene on the tail end of Floyd, and while she didn't come in land, she stirred up the water and surprised everybody. It kept it from actually creating as much environmental damage to the coastal waters as we had anticipated. In fact, that's probably the highest profile political debate right now with the package that we've got. We had estimates where we had the federal officials and the state officials look at this flood right after it occurred, they estimated nineteen million dollars worth of damage. We're still gathering numbers, but it's very clear some of our fisheries, like white shrimp

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and some others, have down very well. Now they won't get any money. I've got eleven million that we made available, but those fishermen who lost their nets, their boats, no fin fish for their catch, they will get some help, the same way the farmer will who lost his crop. But it's got a lot of public attention because we had a great year. Who expected Irene to come in and clean up the water and the shrimp to do well? We didn't, I didn't, the federal officials didn't. But we're thankful. I think the public debate will subside immediately when they find out that only if you had a certified loss do you get any assistance from the state. And that will end that debate I think.

CHARLES THOMPSON:

OK, in other words people aren't getting a free ride off this.

BILLY RAY HALL:

The farmer has to have a certified loss of his cotton crop, he's got to show you what got lost, he's got to show you how much he had planted, he's got to show you the loss. He gets certified and then we mail him a check for seventeen cent on the dollar. The fisherman has got to be in a fishing industry that was declared a loss industry. In other words, the white shrimp is not going to get any money. If he happened to be in fin fish and he was in trout or whatever that got hit hard, there's a loss in that industry and he makes an application, and he can show that he lost his equipment, his nets, or did not have the catch he had last year, then he's eligible for some help. That's how the system will work. This is a good whipping boy right now.

CHARLES THOMPSON:

What are the long-term prospects for agriculture in eastern North Carolina?

BILLY RAY HALL:

Great. I think there are two or three things to keep in mind. One, the devastation to our tobacco industry is proceeding. And so will we grow other crops? I believe so. Will we have to be creative in how we grow those crops? Absolutely. Is biotechnology and forestry and niche markets with products ranging from catfish to toulapia (?) to others all going to be part of that mix? Absolutely. Have we got ingenious farmers in eastern North Carolina who know how to package things? Yes. So, my outlook for farming is that we probably will have a group of niche marketers. The larger farmers will continue to aggregate, so we will continue to decline in the number of farms. And people ought to remember we went from 225,000 farms to 45,000 farms in the last thirty years. We've been going down every year as people move out of farming and take advantage of new technology and new fertilizers and equipment and so on. But I would say the agricultural industry is in a severe state of flux. But is the potential there? Yes. Do we have the resources to couple with that potential? I believe we will. That's not to say we're not in a bad cycle though. You can't be raising cotton, corn, and soybeans and selling everyone of them for less than you got in them and not know we're in a bad cycle.

CHARLES THOMPSON:

Right. And the major alternatives, hogs and poultry, have taking a beating.

BILLY RAY HALL:

Catching hell aren't they? They're catching it aren't they?

CHARLES THOMPSON:

I'd like to talk a lot longer, but let me get to the last question. How do we prepare for future floods? Have we learned something that?—.

BILLY RAY HALL:

Oh, God yes. I think it's like when we came together after hurricane Fran. We learned a lot of things about our ability and our public capability, if you will, to respond to a wind disaster, a hurricane. We realized that we had been so fortunate for thirty years not to have a major hurricane, that when it came budget time we didn't put computers into the disaster office. Whenever we were talking about a disaster we said counties work together and plan but we didn't call on them to adopt flood ordinances. Think about it, we didn't have a flood. We didn't require them to develop interagency agreements. We didn't develop the aircraft capacity to deal with some of the issues that would emerge. We learned all that from Fran. We made a lot of proposals and addressed—, this disaster came along and said, “Wow, you did a really good job, but you forgot what happens in this kind of disaster.” For instance, we staged several tractor trailer loads of ice when the storm started coming in, ready to disperse because we knew power was going. Smart idea right? Who would have guessed that the road would be out? So, now we've got another plan. The plan is how do you fly it in? And we learned that with this disaster. With flooding, we also learned that twenty-year-old flood maps are not good. They're not good for public policy, they're not good for individual decisions on where to locate. We learned that if you're in the path of hurricanes, you as a state need to address how you deal with it as it comes forth. The Rainy Day Fund, which was our answer, was 326 million dollars. Now think about it, we had a six billion dollar disaster. We used every dollar that was available to us in the Rainy Day Fund without draining it, and still had to pull 500 million dollars out of regular state programs. We've got to address that question, because if the

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researcher out in the Midwest is right and floods are a part of our history now for the next coming years, we've got to be smarter about this. And we've got a legislative study, which is charged specifically with developing ideas on how we do long-term financing, similar to what Florida did. They charged the—, they charge a fee on land transfers that goes into a fund, they have alternative sources of money depending on the disaster. We've got to look at some instruments like that. We've also got to be smarter about doing mitigation efforts and planning for future risks. And we didn't used to plan a lot for risk, I mean risk wasn't that big a deal. We were planning where to put the plant, we didn't have any idea that you ought to make sure it was out of the way of danger. And so we're learning and I think Floyd will unfold an additional set of improvements in our ability to deal with disasters.

CHARLES THOMPSON:

Piggybacking on that question, will we see manufacturing plants and other development entities want to locate in North Carolina, knowing about these floods, or is that putting a damper on it?

BILLY RAY HALL:

The good news about all this, I guess, is that if you at manufacturing, whether it was Fran, Floyd, Hazel, a manufacturing facility is not usually significantly damaged. Now the ones that are sitting in the flood plain and got flooded, very few, in fact the survey that was done by our Department of Commerce said the major manufacturers were minimally impacted by the disaster. Given that you build outside the flood plains, generally, and given that we're getting smarter about this, our potential as a manufacturing location if you add a weather risk I don't know that it's even substantially different. First of all

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you have insurance. You're comparing it to other areas and say you're trading off a risk of a hurricane against standard northern disasters in terms of snowstorms and that kind if thing and the outages. So I don't know that the community out there will place very much additional risk to being in North Carolina. There is nothing to have told them to (?). Now, for the first few months it's on everybody's mind that place is devastated. You know we had tourists call us and say, “Well, I guess we won't come to North Carolina because the beaches are all destroyed.” The truth is the beaches weren't hurt very bad by hurricane Floyd. We had people canceling their mountain vacation because they heard North Carolina was devastated. And that's a mindset, but that mindset will go away very quickly. Plus, with a little bit of advertising you can show a few pictures of the coast and few pictures of the mountains and people will get the answer right away. They are pretty much in good shape. I'm optimistic, but I also know we're going to have a long way to go to get out of this hole we're in.

CHARLES THOMPSON:

Thank you very much.