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Louisiana cities, parishes don't have money for basic services

CHALMETTE, La.—Cities, parishes, school districts and sheriffs offices along Louisiana's Gulf Coast are out of money to pay for basic services—water, sewer, fire, security—that are necessary before rebuilding can begin. Officials say their pleas for help are falling on deaf ears in Washington.

"We're in a crisis situation, a real state of emergency," said Jack Stephens, sheriff of St. Bernard Parish, which has been reduced to a physical and economic wasteland just east of New Orleans. "I need a truckload of money. I don't need a truck load of water."

But it is illegal to use Federal Emergency Management Agency (FEMA) funds to pay for ongoing operating costs like deputy sheriff salaries or city maintenance work. A newly passed federal loan program was supposed to get some money flowing, but authorities here complain that bureaucratic hurdles and regulations are getting in the way. And some have balked at taking the loans, saying they can't afford to be on the hook for new debt.

U.S. Rep. Charlie Melancon, a Democrat who represents much of the storm-ravaged areas, blamed the slow financial response on a culture of incompetence at FEMA and a bias in Congress against giving unrestricted money to Louisiana for fear it will be wasted or siphoned off by crooks.

"It's either intentional or it's the worst case of incompetence I've seen in my entire life," he said. "If you don't trust the state, then give the money that needs to go to the parish governments ... but get them the money."

FEMA did not return multiple calls from Knight Ridder Newspapers.

Fiscal conditions vary depending on how bad the parishes were hit. But none have suffered more than St. Bernard, where officials say 100 percent of the homes have been destroyed and 75 percent of city operations infrastructure, such as vehicles and buildings, has been wiped out. Unlike New Orleans, which has the relatively unharmed French Quarter generating economic activity, or Jefferson Parish, the closest thing to normal anywhere nearby, St. Bernard went under several feet of water for days and now looks like an abandoned war zone.

The list of needed replacements is mind-boggling: 11 new fire trucks, a $25 million water treatment plant, new pipes to replace the wrecked ones underground. St. Bernard Parish Council President Joey DiFatta can count at least $200 million worth of immediate repairs without blinking an eye.

"Every time we turn around there's a new issue," he said. They'd like to solve the problem without help but there's no tax base to finance the government. Sheriff Stephens estimates he needs $1 million a month just to survive, after shedding more than half of his 400 or so employees.

He said there has not been a single recorded taxable sale made in 49 days, and no people to send property tax notices to—lethal for a budget that depends on sales and property taxes.

Stephens was prepared to break the law and use FEMA money to pay his deputies on payday Thursday, until he found out that Murphy Oil—one of two oil refineries in the parish—donated $2 million, part of which went to the sheriff's office. It was Hibernia Bank that stepped in with an unsecured $500,000 loan that helped Stephens meet his payroll two weeks ago.

Stephens said he could not understand why the federal government can't do what private business has—just hand over the dough.

"To let a jurisdiction in the state of Louisiana fail while we provide billions of dollars of relief to every country in the world when they're in a jam just doesn't make sense to us," Stephens said. "It makes me sad to think that there are members of Congress who would turn their backs on us and not understand the loss and the pain and the suffering. It's brutal."

St. Bernard is not alone. Nearby St. Tammany Parish, north of New Orleans, and Plaquemines, to the south, are also hurting for money.

"I've got a lot of municipalities that are not being reimbursed and they're not going to make it," Kevin Davis, president of St. Tammany Parish, told a local television station. The small towns of Pearl River and Folsom were said to be in particularly dire fiscal straights.

"Those are smaller municipalities without a lot of cash flow," said Suzanne Parsons, spokeswoman for the parish. She said a state law allowing water-damaged property to be reassessed at a lower value in mid-year could produce more fiscal strain in coming months.

The jurisdictions directly hit by the storm are not the only ones suffering. Those trying to provide services for Katrina's evacuees are also finding their budgets strained. The city of Baker, about 90 miles north of New Orleans, is one example.

The federal government has taken a cow pasture on state prison land right outside the city limits and turned into a 573-unit trailer town. Now Baker, whose population was 13,700 before Katrina, is struggling to pay for new infrastructure and security, including a new police and fire substation and possibly new law enforcement officers.

"We have a very serious cash flow problem," said Baker Mayor Harold Rideau. "Everybody's getting their money, but not the little towns."

The Baker and East Baton Rouge Schools are also experiencing financial distress as they try to educate 5,000 additional students now living in the trailer park, area hotels and homes. Combined, they've had to hire 172 new teachers, nurses and counselors to handle the influx.

Baker School System Superintendent Lester Klotz said he's incurring about $5,000 a day in additional costs, and FEMA has already informed him that the agency will only pay a fraction.

He said the school has enough money to get though the holidays. And after that?

"You asked a question we've been asking every day," Klotz said. "FEMA says it's a disallowable expense."

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(Root reports for The Fort Worth Star-Telegram. Knight Ridder Newspapers correspondent Aaron C. Davis of the San Jose Mercury News contributed to this report.)

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(c) 2005, Knight Ridder/Tribune Information Services.

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