A quarter of Katrina aid money still unspent

McClatchy NewspapersAugust 27, 2010 

BILOXI, Miss. — More than a quarter of the $20 billion in Housing and Urban Development relief funds that were earmarked for Gulf Coast states after Hurricane Katrina remains unspent five years after the storm, a fact noticed by at least one congressional leader who's eager to spend it elsewhere.

In June, U.S. Sen. Tom Coburn of Oklahoma, the top Republican on the Permanent Subcommittee on Investigations, ordered data from the Department of Housing and Urban Development on how much remains unspent from the Community Development Block Grants that were earmarked in hurricane relief funds for Gulf Coast states after the 2005 storms. The answer: about $5.4 billion, comprising $3 billion of the $13 billion earmarked for Louisiana and $2 billion of the $5.5 billion for Mississippi.

Coburn suggested some of these funds could be used to help cover federal budget deficits and said that "serious questions need to be asked about whether this money was appropriately designated as emergency funding."

Officials in Mississippi, however, said that the unspent money is earmarked for needed recovery projects and that they are moving as fast as federal red-tape, litigation and arbitration and other hurdles will allow.

"We've rebuilt our entire infrastructure and have broken ground on every major building project," said Mayor Tommy Longo of Waveland, Miss., ground zero for the storm.

Still, Mississippi Gov. Haley Barbour has urged local governments to move faster on projects and to find new projects when plans for others fall through. "We're working very hard not to (lose any federal money). That's one of the reasons I've pushed so hard to get everything started," Barbour said.

Leaders of Gulf states still have requests pending before Congress for more federal dollars for hurricane projects. For Mississippi, a major unfunded request is about $1.3 billion in environmental restoration and hurricane mitigation work on the barrier islands and coastal marshlands. Congress so far has appropriated only about $400 million for this work.

"It has been authorized by Congress," Barbour said, "and we would have liked to have seen the appropriation this year, but that didn't happen. We are going to keep plugging."

State and local government leaders have over the last five years decried the federal bureaucracy and red tape they've encountered with Katrina projects funded by HUD and the Federal Emergency Management Agency.

For instance, a federal grant program for rebuilding small rental properties was held up for months because of a regulation deep in the HUD rulebooks that requires lots of paperwork before building anything near a propane tank, hundreds of which are used to heat homes in relatively rural south Mississippi.

"If you look at the complexity and the scope, I think having already done $3.5 billion is really great," said Lee Youngblood, a spokesman for the Mississippi Development Authority, which is administering the $5.5 billion in HUD funds. "We've had other states contacting us after they've had disasters saying, 'Ours is not as big as yours, but how did you do it?' You wouldn't get calls like that if you weren't doing a decent job. This using CDBG as disaster recovery is something that had not been done before."

Said Barbour: "They've modeled almost all the Louisiana projects on what we've done in Mississippi. In subsequent disasters, states have come to look at us and look at our accountability systems, because our error rate has been so low and federal government departments and agencies have praised our auditing and systems of control."

When asked to look back at the five-year mark, local leaders are proud of accomplishments.

"We have completed repairs on all county facilities damaged as a result of Hurricane Katrina; over 80 percent of our FEMA large projects are completed and closed out," said Jackson County Board of Supervisors President Mike Mangum.

Gulfport Mayor George Schloegel said his city had finalized contracts for all infrastructure repairs south of the CSX railroad tracks, $90 million worth of work funded by FEMA.

However, Harrison County Supervisor Connie Rockco said she thought that all the federal bureaucracy and red tape resulted in "a lot of money being wasted." She said disaster recovery on the federal level "needs a lot of work."

Katrina water and sewerage infrastructure work, for which hundreds of millions of dollars has been earmarked for Mississippi through HUD and FEMA, has been very slow in getting started and completed.

FEMA has held up $355 million in water and sewerage repair in East Biloxi for nearly a year, angering local leaders, who say the delays probably will increase costs. They say that FEMA keeps changing the rules on the project.

"We have had a good working relationship with FEMA," said Mayor A.J. Holloway. "But this project has been a disaster."

The city says it initially suggested to FEMA that camera technology be used to evaluate how much of the old system could be salvaged. They also noted that East Biloxi had lost about 45 percent of its population, based on school enrollment, so a smaller system perhaps could be rebuilt.

FEMA said it wouldn't pay for a study of what could be salvaged, so Biloxi had engineers start designing a project to replace the whole system.

"Then, FEMA says hold on, because they've discovered PVC pipe in other cities down here that could still be used," said city spokesman Vincent Creel. "So then we're back to square one, but how do we know where this pipe is, because you won't pay to (use cameras) to check the lines? Then, FEMA says, 'OK, we'll pay you to televise the lines.' Meanwhile, we're at a standstill. We're already trying to do work in five to seven years that would normally take about 20 years."

Creel said Biloxi had seen great accomplishments on Katrina projects, though, despite obstacles.

Of the city's 33 major federally funded Katrina projects, including the East Biloxi water and sewerage, 12 are complete, 12 are under construction and plans and designs for the other nine have been submitted to various agencies and are awaiting approval to begin.

By spring of next year, the city plans to have finished the largest building ever constructed by the city of Biloxi, Creel said, the 70,000-square-foot Biloxi Downtown Library, Community and Civic Center.

Youngblood wouldn't venture a guess on when all the federal money would be spent, although he says most construction projects will be done within "a short number of years."

"Some of these programs, such as the small-rentals, have 10-year compliance guidelines," Youngblood said, "so some piece of this will be living on for as long as a decade."

(Pender reports for the Sun Herald in Biloxi, Miss.)

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