Feds to probe S&WB’s spending of post-Katrina funds
26th December 2017 · 0 Comments
As bad as things have been for the New Orleans Sewerage & Water Board this summer with failed turbines and local flooding events leading to a series of firings and resignations among the agency’s top leaders, things are about to get more testy with last week’s news that the Feds are launching an investigation into the City of New Orleans’ spending of federal funds earmarked for the S&WB.
That news became public at the end of Monday’s S&WB Finance and Administration Committee meeting when it was revealed that the troubled agency will be required to account for hundreds of millions of dollars it was award for post-Katrina recovery.
WWL News reported that the audit will be conducted by the U.S. Department of Homeland Security Inspector General and is set to begin on Jan. 5, 2018. The Department of Homeland Security oversees FEMA, which administered the funds to the City of New Orleans after what was called at the time “the worst disaster in U.S. history.”
“Our objective is to determine whether the Sewage and Water Board of New Orleans accounted for and expended FEMA funds according to Federal regulations and FEMA guidelines,” John McCoy II, Deputy Director of Audits for the Inspector General, told the S&WB in a letter.
According to WWL News. Landrieu administration staffer Katie Dignan told the S&WB’s Finance and Administration Committee last week that the IG informed the state Department of Homeland Security in early December that the agency would launch a probe of the S&WB’s post-Katrina spending of federal funds.
Despite hundreds of millions of dollars in FEMA funding earmarked for S&WB repairs since 2005, the agency’s power and drainage systems continue to struggle.
WWL-TV’s “Down the Drain” investigative series found that millions in FEMA Hazard Mitigation Grant Program funds have been spent on trying – and failing – to repair 100-year-old power equipment used to run the drainage pumps.
Despite FEMA and state officials declaring a management fee the S&WB agreed to pay for the project “not reasonable” and refusing to pay any more FEMA funds for the fees after they reached $7 million, the S&WB has continued to approve increases to the fees, and Colorado-based CH2M Hill now stands to collect more than $28 million, WWL News reported.
Much of the $500 million FEMA and HUD approved for the S&WB after Hurricanes Katrina, Gustav and Isaac remains in Washington, D.C. That money was earmarked for drainage, power and pumps. A little more than one-third of it has reportedly been spent.
Some of that money was only to repair broken infrastructure and return it to its pre-storm condition, but the Hazard Mitigation grants allowed the S&WB to make improvements or purchase new equipment.
Instead, the S&WB has ignored expert recommendations and put most of the money into refurbishment projects that now cost more than brand-new equipment. FEMA and HUD also combined to grant New Orleans nearly $300 million for green infrastructure projects, such as storm-water retention ponds, bioswales and other “living-with-water” initiatives. Less than $10 million of that has been spent.
The last 12 years have been fraught with glaring ineptitude, poor decision-making and failed opportunities to move the City of New Orleans and its infrastructure forward in the wake of the series of devastating storms that a began with Hurricane Katrina.
There is more than enough blame to go around for both the Nagin and Landrieu administrations, the New Orleans City Council and agencies like the S&WB and Department of Public Works.
Former New Orleans Mayor Ray Nagin was in office for four -plus years after Hurricane Katrina and current Mayor Mitch Landrieu has been in charge at City Hall for nearly eight of the 12 years since Hurricane Katrina flooded 80 percent of the city in 2005.
Even the money to fix broken drainage infrastructure has been held up. It took almost 10 years for the city’s Department of Public Works and the S&WB to work out an agreement with FEMA to let the two agencies share an additional $2 billion for street repairs, which would include work on drainage lines and catch basins. But in the 18 months since that agreement, the agencies have spent just $1 million—or half of one percent of the grant.
At the Dec. 18 S&WB Finance & Administration Committee meeting. board members asked how a project to repair Katrina damage caused to the city’s water mains in the French Quarter and Central Business District could have stretched on for four years, with 51 contract change orders added to increase the cost of the repairs.
“Change orders constitute the bulk of our meetings sometimes,” S&WB appointee Stacy Horn Koch told WWL News.
The audit was announced by the project manager for the combined effort to repair roads and utility lines damaged by Katrina, called the Joint Infrastructure Recovery Program, a $2 billion FEMA-funded project.
“The City will work with Sewerage and Water Board to ensure full compliance with any and all requests,” said Landrieu’s Senior Communica-tions Manager Craig Belden.
Belden added that audits have already been conducted on much of the money awarded to the City of New Orleans by the U.S. Department of Housing and Urban Development and FEMA.
On Wednesday, the S&WB unanimously selected a California-based water and utility official to serve as interim executive director of the S&WB for the next five months. Marcie Edwards, the 60-year-old former general manager of the Los Angeles Department of Water and Power, will reportedly be paid $25,000 a month plus an additional $5,000 monthly allowance for housing and other expenses.
Nola.com reported that those numbers would place her annual salary at $360,000, about $140,000 more than former S&WB Executive Director Cedric Grant.
City and S&WB officials expressed hope that the appointment of Edwards, the troubled agency’s third executive director in five months, would bring a measure of stability to the agency.
This article originally published in the December 25, 2017 print edition of The Louisiana Weekly newspaper.
