Rate of spending to drop by about a third, however
New Orleans Mayor Mitch Landrieu plans to extend for 90 days the city's controversial recovery-management contract with MWH Americas, which expired Wednesday, though at about two-thirds the roughly $1.2 million per month that City Hall has been paying the global engineering firm.
View full sizeFEMA has obligated $422,206 to rebuild Wesley Barrow Stadium in Pontchartrain Park, a project the Ray Nagin administration pegged at $4 million. Hurricane Katrina damage at the stadium was photographed in January 2006.Deputy Mayor Cedric Grant, who oversees the $1 billion effort to rebuild public assets damaged by Hurricane Katrina, said that as he attempts to reduce the city's reliance on third-party consultants, he'll scale back the staff provided by MWH to about a dozen employees who will be required to report to City Hall. The company's employees had been working from an office across the street.
MWH staffers also will have to document their hours on timesheets, as well as the specific work they're conducting on particular projects, he said. Those changes come after a scathing report this year by New Orleans' inspector general that found evidence of excessive and improper billing by the company.
Meanwhile, tasks handled by two other recovery consultants hired by former Mayor Ray Nagin -- Telecommunications Development Corp. and its subcontractor, Integrated Disaster Solutions -- have been reassigned to municipal employees, Grant said. Several council members raised questions about Nagin's decision to pay those firms in part using money in a state-financed revolving loan.
As officials attempt to redefine the city's agreement with MWH, Grant said he still is trying to verify how much money the city may owe the company, which already has been paid $29 million under a deal Nagin signed in December 2007. Under its terms, MWH can earn as much as 8 percent of the cost of city recovery projects.
Nagin initially said the cost of MWH's work would be borne entirely by FEMA, which must pay to restore facilities damaged by the flood. But when the Nagin team added capital projects not directly related to Katrina to the firm's docket, it obligated local taxpayers to those costs.
City may owe $9 million
Company officials claim the city is least $9 million in arrears, Grant said. But while records in Nagin-era files turned over in May to the Landrieu administration don't reflect such a large debt, Grant said the company has given him additional, more accurate records to determine the actual bill.
"It appears that the information is actually there," Grant said. "It was just collected in a way that makes it indiscernible."
Poring over the records will take "probably another couple of months," he said.
Given the shoddy record-keeping and lax oversight, Grant acknowledged that he isn't sure precisely how many people the firm has assigned to the city's recovery-management contract over the past 2 1/2 years. But he said he's confident it's far more than the 10 to 12 workers he plans to keep around through September.
To further reduce its reliance on MWH, the Landrieu administration has purchased the same software program that the firm uses to maintain documents related to the city's 655 recovery projects, Grant said. The $8,000 investment will allow City Hall to maintain in-house control of the raft of documents -- from memos to purchase orders to building specifications -- that until now largely were held by the contractor, he said.
Grant, a veteran bureaucrat who worked in Mayor Marc Morial's administration, has said it's hard to make sense of Nagin's recovery blueprint, even with the help of officials from the Governor's Office of Homeland Security and Emergency Preparedness and the state Legislative Auditor's Office, who have moved into City Hall temporarily -- and at state expense -- to aid in the task.
Grant told the City Council's Recovery Committee on Wednesday that analyzing the list of recovery projects is "a continual moving target." City Hall and FEMA continue to argue over how much the federal agency should pay for more than 100 projects, while scores of others have budget shortfalls.
In all, the $1 billion recovery program is $300 million over budget, officials have said.
For example, FEMA has obligated $422,206 to rebuild Wesley Barrow Stadium in Pontchartrain Park, a project the Nagin administration pegged at $4 million, Grant said. As with other projects, the Nagin team "did a design that was what people might have preferred but not what we could afford or what FEMA would pay for."
Though city officials are back at the bargaining table with FEMA, Grant said the new administration and council may have to decide whether to use limited money from federal block grants and local bond revenue to plug funding gaps -- and if so, what other projects will lose out.
'Hard choices'
"In many of these instances, these will be hard choices," he said.
Grant also reiterated his concern that City Hall may not have enough money to maintain its rebuilt facilities.
"As we look at the program that was developed, I don't think there was any correlation between maintenance and capital," he said. "Parks and Parkways, Recreation and Property Management (departments) are not nearly funded at the level to support this kind of program.
"So my question is: What are we doing, folks?" he said. "I don't see any miracle happening here that gives us a whole lot of operating money to keep these things going."
Councilman Arnie Fielkow, who began serving his second term in May, chastised Nagin, with whom he often clashed, for ignoring the will of the previous council and crafting a rebuilding effort that does not reflect "the common-sense priorities of the city." Fielkow vowed to work with the Landrieu administration to quickly rebuild key infrastructure.
"All of us that are on the council want to see recovery happen all over this city, in all five council districts," he said.
Michelle Krupa can be reached at mkrupa@timespicayune.com or 504.826.3312.