[StBernard] FEMA reimbursement criticized

[Westley Annis]

FEMA reimbursement criticized
Katrina cleanup funds delayed
By Michael Kunzelman, Associated Press  |  May 8, 2007

NEW ORLEANS -- More than 20 months after Hurricane Katrina, many communities
in Mississippi and Louisiana are still haggling with the Federal Emergency
Management Agency over how much money the government will reimburse them for
debris removal and infrastructure repairs.

FEMA says it audits all Katrina projects to root out waste and fraud. Local
officials, however, say the agency has needlessly dragged out the process
and has not clearly defined what prices it considers reasonable.

Millions of dollars are at stake for cash-strapped communities still
struggling to rebuild. Some communities say that if FEMA does not reimburse
their expenses, they may have to borrow money or raises taxes to cover
debris-removal contracts.

In Mississippi, two dozen counties and cities could lose a combined $18.4
million because FEMA questions whether they paid too much for the work, said
Mike Womack, director of Mississippi Emergency Management Agency.

Womack said local governments paid for debris removal at a statewide average
of about $17 per cubic yard. The state and FEMA agreed that 20 percent over
that average -- or $19.95 per cubic yard -- was a reasonable rate, according
to Womack.

Jones County, Miss., about 100 miles inland, is in danger of losing more
than $2 million. The county spent about $9 million to remove 300,000 cubic
yards of debris, paying contractors about $27 per cubic yard.

"They say that's the best price they could get," said Womack, who wrote a
letter to FEMA last month defending the rate.

Jones County 's administrator, Charles Miller, said FEMA told the county its
bid price was reasonable in the early aftermath of Katrina. It was not until
this past March, he said, that the county learned FEMA was questioning the
rate.

"Had we known at the time that the price was too high, we would, of course,
have rebid it," Miller said.

Andy Dial, president of the county's Board of Supervisors, said Jones County
may have to borrow money or raise taxes to plug a gap in its $30 million
annual budget if FEMA does not cover the remaining $2 million.

"I think it's ridiculous," Dial said. "When you make a promise to help, I
think you ought to keep your end of the bargain."

Randy Walker, a FEMA infrastructure chief for Mississippi, said about 80
percent of communities "did it the correct way," obtaining competitive bids
for debris-removal contracts and paying reasonable rates. He said
Mississippi communities paid for debris removal at rates ranging from $7 to
$55 per cubic yard.

Walker said local governments cannot "throw out the bid laws" in the
aftermath of an emergency.

Last summer, Mississippi withheld nearly $17 million in federal
reimbursement money from Harrison County, the state's most populous coastal
county, while FEMA probed a "multitude of discrepancies" in bills
contractors submitted for debris removal. FEMA inspectors could not find
stumps to match hundreds of trees workers said they cut.

Gulf Coast communities had a choice soon after Katrina: Either hire private
contractors to clear debris or let the US Army Corps of Engineers handle the
work.

Hiring private contractors allowed many communities to use local workers and
perhaps finish the work sooner than the Corps could. Letting the Corps clear
the debris allowed others, including Jefferson Parish, La., to avoid a FEMA
audit.

"There was no out-of-pocket expense for us," said Marnie Winter, director of
the Department of Environmental Affairs for Jefferson Parish. "We're not
waiting for that money like all the other communities."

St. Bernard Parish, just outside New Orleans, is among the communities
waiting for a check. FEMA paid the parish about $100 million for debris
removal but owes about $70 million, said David Peralta, the parish's chief
administrative officer. St. Bernard also is waiting for $30 million in
reimbursement for sewer repairs, Peralta said.

Peralta said FEMA has "kind of implied" that it is looking into whether the
parish paid reasonable rates. Peralta defended the Katrina contracts, saying
officials tried to solicit competitive bids without delaying the work.

"We didn't have a whole lot of choices in those first few days," he said. 
 


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