In 2005, the hurricane Katrina disaster devastated the Gulf Coast, claiming the lives of 1,836 people and costing 89.6 billion dollars. After almost four years of federally funded recovery, the Gulf Coast is still in shambles. There is a misconception that hurricane Katrina disaster relief dried up and was squandered away by corrupt contractors and politicians. While it would be hard to argue there was no corruption, many of the programs are still well-funded, but they are inaccessible because they are tied up in prohibitive laws, regulations and lending standards.
ICF, the contractor hired to coordinate the repair rental housing and private residences in Louisiana, only repaired 18,000 of 81,000 rental units. ICF distributed about $50 million for repairs to private landlords, who restored 1,073 units with that money, but ICF kept $40 million as an administrative cost.
Billions have gone missing, and much more is "bottled up" in red tape.
Mayor Xavier Bishop of Moss Point, Mississippi is still working out of a trailer today; the money to build a new city hall hasn't cleared the administrative hurdles set in front of it. Even more tame projects, like rebuilding Mississippi roadways, have been a challenge.
Bishop received a $70 million pledge from FEMA to rebuild the infrastructure, but FEMA pulled out and told him that the city would have to reapply with the Mississippi Department of Transportation for the funds, as the program had changed hands. Xavier, like many other Gulf Coast government leaders, is learning a sad lesson: It is difficult or even impossible to pass projects that will create jobs and do meaningful work, so it's best to focus on easily passed work that has the lowest number of bureaucratic hurdles.
These leaders hoped that the recent economic stimulus money would be more accessible, but found it to actually have another string attached: all economic stimulus jobs must be "shovel ready." "Shovel ready jobs don't fill trenches, replace sewers, and build sidewalks," said Mayor Bishop. Unfortunately, those are the kind of projects that the Gulf Coast needs the most.
To pass things through traditional channels, even simple things like burying utility lines take 18 months for approval. "We have the money for it," said Connie Moran, Mayor of Ocean Springs, Mississippi. "It's been there. It was approved several years ago, but just going through the bureaucratic red tape is what's holding it up."
CNN reported that in 2005, in order to build a new pier, the federal government required Mayor Moran to do sonar testing to ensure a 17th century French ship was not buried beneath the sand.
Now that stimulus money is on the way, many local governments are looking to learn from the terrors faced by Gulf Coast cities who tried to use Katrina recovery money and failed. Many politicians feel like they are forced to concentrate on less meaningful projects that create sub-par jobs, just because they know the hurdles are fewer.
Washington set aside $16.7 billion for Community Development Block Grants to repair damaged homes and city blocks from Hurricane Katrina, but over 60% of those funds sit unused today. FEMA's Public Assistance Program set aside $8.2 billion, but only $3.4 billion of that is allowed to be used for non-emergency repairs. The U.S. Army Corps of Engineers received $8.4 billion to restore the levees, but less than 20% of that sum has been spent, though the latest estimate is that the levee repair will not be to prescribed standards until 2011.
$3.4 billion was also be designated from FEMA to repair infrastructure, which isn't enough to repair the damage done to the state of Louisiana alone, much less Texas, Alabama and Mississippi. These strings of under-disperesed and under-funded projects are leaving many Gulf Coast leaders at a loss on how to proceed, and many American taxpayers wondering what they're paying for.
Stories of scandal and fraud are rampant. Henry Waxman, D-Calif. identified 19 contracts using government money that bore "significant overcharges, wasteful spending, or mismanagement." The sum of these contracts exceeds $8 billion.
It is unclear what must be done to ensure that the economic stimulus and recovery act will be successful, and that the remaining Katrina funds are put to their best use in an attempt to revitalize that area. ICF's contract expires this June, which the Louisiana Recovery Authority has chosen not to renew, citing a "largely unproductive management" of the billion-dollar aid program. Their successor will take the reigns at a prime time, able to borrow aid from the economic recovery act as well as New Orleans specific funding.
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