Arbitration panel tells FEMA to pay $10.8M to N.O.

By Michael Patrick Welch
Contributing Writer

This week, a three-judge arbitration panel of the Civilian Board of Contracts Appeals (CBCA) in Washington, DC unanimously ruled that the Federal Emergency Management Agency (FEMA) must honor its 2006 promise to the City of $10.8 million to pay for one-third of the emergency work performed by police, fire, and emergency medical service personnel in the four months following Hurricane Katrina in 2005.

The fiscal crisis that followed Katrina led the City to lay off nearly half of its non-public safety personnel. However, the City could not lay off first responders despite the lack of local resources to pay for them.

Speaking under the shadow of Katrina’s eighth anniversary Mayor Mitch Landrieu said, “This ruling affirms the hard work put in by so many to serve and protect those in need during our darkest hours.”

In 2009, FEMA retroactively determined that the promised funding would be taken away from the city per FEMA’s policy against reimbursement of regular time salaries for permanent employees. The city filed action in June 2012, but also began mulling over possible cuts to vital city services as a means to pay FEMA back. Now the arbitration panel has agreed with the City’s appeal, and ruled that FEMA must compensate the city approximately $10.8 million. “Funds were legitimately paid pursuant to an approved agreement,” stated the ruling. “The costs were reasonable, and the purpose of the grant was accomplished.”

United States Senator Mary Landrieu called the decision “common sense.”

“This is why I believed it was so important to create this arbitration panel,” said the Senator, who had authored the piece of legislation which established an alternative dispute resolution process during disasters within the Gulf Coast Region: the Sandy Recovery and Reinvestment Act 2013, and a similar process, the Dispute Resolution Pilot Program (DRPP).

“I am grateful to the panel for doing the right thing and to our first responders for their service, both after Katrina and every day.” Deputy Mayor and Chief Administrative Officer Andy Kopplin said of the ruling, “We are grateful that the arbitration panel reviewed those facts and circumstances and recognized that FEMA had been correct in helping the City in the first place.”

According to the city’s press release, FEMA’s choice to pay for the emergency workers was, in the end, less costly to federal taxpayers than replacing laid-off first responders with private contractors paid for by FEMA. FEMA claims to have provided Louisiana with nearly $19.6 billion in assistance as the result of the state’s two 2005 hurricanes.

Attorneys Donna D. Fraiche and Wendy Huff Ellard of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, and Ernest B. Abbott of FEMA Law Associates, PC represented the City of New Orleans in this action.

This article originally published in the September 9, 2013 print edition of The Louisiana Weekly newspaper.