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 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 the 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 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 can't "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 in the early aftermath of Katrina: Either hire private contractors to clear debris or let the U.S. Army Corps of Engineers handle the work. Hiring private contractors allowed many communities to employ local workers and perhaps finish the work sooner than the Corps could. Letting the Corps clear the debris allowed others, including suburban New Orleans' 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, La., just outside New Orleans, is among the communities waiting for a check. FEMA paid the parish about $100 million for debris removal but still 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. AP-CS-05-07-07 1436EDT
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