Recovery schools get help with cash flow

Shortly before unveiling its first complete budget in almost two years, the Recovery School District has received a $15 million infusion to temporarily ease a cash crunch. The district also anticipates getting another $58.4 million for school construction through new legislation in Congress.

Officials however, still have to craft a long-term solution to deal with the cash shortage. The state-run district faces cash-flow issues partially because it lacks a reserve and spent millions on costly academic interventions early on. The district also had to front millions in flood-related construction expenses while it negotiated the amount of reimbursements available from the Federal Emergency Management Agency.

The $15 million in Community Block Development Grants will help the district dig out of the hole, paying off about half of its about $30 million in overdue -- mostly construction-related -- bills, Superintendent Paul Vallas said.

One vendor awaiting payment is Arrighi Simoneaux LLC, a Baton Rouge commercial construction company. The firm did site work for nine modular campuses and renovated 400 bathrooms in 25 schools last summer in the rush before the start of the 2007-08 school year.

The company was paid $37 million, but $2 million is still owed, operations manager Shane Kirkpatrick said.

"We jumped through hurdles to get the kids in schools, to get the project finished. And three months after, we cannot get paid," said Kirkpatrick, who met with state Superintendent Paul Pastorek last week to discuss the outstanding invoices.

Pastorek said this week that state officials will settle the balance with Arrighi Simoneaux. The Recovery District expects to eventually receive $90 million in grants through the Louisiana Recovery Authority.

Vallas said he will tackle the balance of outstanding invoices this month.

Penalties change

More relief will come from FEMA. The agency is now obligated to pay the recovery district at least $58.4 million because of legislation that Sen. Mary Landrieu, D-La., inserted into the 2008 federal omnibus appropriations bill, amending the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the oft-criticized law governing federal disaster assistance.

Pastorek said it could take up to 180 days for the $58.4 million to arrive. Meanwhile, the system will try to secure short-term and long-term cash to ease the budget crunch. Pastorek said state education officials are working with Gov. Bobby Jindal's office and Louisiana Recovery Authority executive director Paul Rainwater to develop a framework to ease cash-flow issues. Officials may reveal the strategy this week before they present a roughly $250 million budget to the state board of education in February, Pastorek said. Landrieu's legislation, which Congress passed in December, altered the way FEMA assesses penalties for Katrina- and Rita-affected school districts not fully covered by the National Flood Insurance Program, a subsidized insurance for policy holders in hazardous regions.

Government facilities, such as public school districts, may be insured by the National Flood Insurance Program if the building is located in the 100-year flood plain. Before the 2005 storm season, many of the more than 100 New Orleans campuses taken over by the state were not covered by the National Flood Insurance Program.

After the 2005 storm season, FEMA established a policy penalizing applicants not covered by the program up to $1 million per building. The agency levied a penalty of up to $500,000 for the desks, chairs, pencils and other contents, and another penalty of up to $500,000 against the damage estimates of each building on a campus.

Under the new system, schools under the control of the Recovery District would get up to a $500,000 penalty per campus, regardless of how many buildings it has. Many campuses in New Orleans had several buildings, even small one-room structures.

The new model applies to Gulf Coast school districts impacted by Hurricanes Katrina and Rita, and could mean millions for public and private schools in St. Bernard, St. Tammany, Plaquemines and other parishes.

Cutting red tape

Landrieu said many of the public projects in Louisiana are mired in red tape and "stuck in the muck." Initially, she wanted FEMA to ultimately streamline grant procedures for all storm-related projects, but FEMA resisted some of her proposals.

"So I basically asked, begged and then forced them to change the process relative to schools," Landrieu said. "It literally took an act of Congress to get this done."

The Recovery District initially faced more than $88 million in National Flood Insurance Program penalties under the old policy. Now the district will pay only about $30 million in deductions. For example, the district would recoup $6 million more for buildings on the Carver Elementary and Carver High campuses, $2.8 million more out of Alfred Lawless High and millions more for other schools. The $58.4 million, however, will pay for construction districtwide.

The $58.4 million would mostly be put into a capital budget, said budget director Ramsey Green. Some of the money could be used to finance a school-facilities master plan, Green said. Officials concede that financing the 10-year rebuilding plan, expected to be presented in May, will be a challenge.

More for repairs

Officials said about $50 million of the more than $150 million spent on renovations in the last two school years came out of the district's operating budget.

"We had to pay everything out of one pot. Now we're not going to be straining the operating budget trying to pay for capital expenditures," Vallas said. "We now have money up front."

Landrieu's legislation also enables FEMA to cut one check for all the money that a school district is slated to receive. It also eliminates a 25 percent penalty for schools wanting to relocate, change the use or add protective measures that the Stafford Act would not pay for. Rainwater helped write the law when he worked as Landrieu's legislative director and chief of operations.

"We can do $58 million more of repairs than before," Pastorek said. "That could mean three brand new schools or as many as 15 or 20 rehabilitations."

It Happened in...New Orleans

pssssst...Do Something!

Study: Sediment Makes New Orleans Sink

NEW ORLEANS (AP) -- Heavy sediment deposited in the Mississippi River delta in the last ice age has caused New Orleans to sink and will continue to drag down coastal Louisiana bit by bit for hundreds of years, according to a new study by NASA and Louisiana State University scientists.

The study, published recently in Geophysical Research Letters, adds an important perspective to the puzzle of natural and human factors complicating the effort to save New Orleans.

The weight of glacial period sediments has caused coastal Louisiana to sink between .04 inches and 0.3 inches a year and will continue to do so for hundreds of years, the study said. New Orleans, it said, will sink about 0.17 inches a year, or nearly three feet over the next 200 years.

Parts of the city are 5-10 feet below sea level now.

''It's sort of one of these processes that you can't stop,'' said Erik Ivins, a scientist with NASA's Jet Propulsion Laboratory in Pasadena, Calif., and the study's lead researcher.

The study was done by comparing a 60-year-old catalog of elevation measurements in coastal Louisiana to a model of the Earth's crust over the past 750,000 years that calculated the rate of sinking by both the weight of sea level rise and the flow of sediments into the Gulf of Mexico. The mathematical study corroborates a theory that the Mississippi's sediment load has contributed to sinking in coastal Louisiana.

The heavy load of ancient sediment is found here because coastal Louisiana was the drainage point for the entire North American ice sheet during much of the last glacial period, about 22,000 years ago, Ivins said.

The massive sediment slug was pushed downriver by advancing glaciers and it is still working its way down the Mississippi each year, researchers said.

Scientists have known for a long time that New Orleans is sinking, but recent advances using Global Positioning System technology and updated geodetic data have deepened the understanding of the geophysical forces at play.

The challenge will be to take what science has to offer to help save New Orleans, said Roy Dokka, executive director of LSU's Center for GeoInformatics and one of the study's researchers.

''We have to build smart. We also have to make sure that we understand what's happening exactly,'' Dokka said. ''If we get the science and engineering right, we can save New Orleans for hundreds of years.''

Measuring how much the land may sink is critical for the Army Corps of Engineers. It is embarking on a massive effort to build up levees and flood defenses around New Orleans and the surrounding region of swamps and marshes that are home to fishermen, Cajun culture and such critical infrastructure as ports and oil refineries.

Factors clouding New Orleans' future are formidable: The sea may rise by 3 feet over the next century because of global warming; hurricanes have destroyed important bulwark-like wetlands and barrier islands; ongoing human activities such as oil extraction are causing land loss; and the building of levees actually speed up subsidence.

Scientists are busy trying to evaluate the risks. That work was helped by Hurricane Katrina, which acted as a catalyst for scientific inquiries.

''I wouldn't say anybody was wandering through the dark before, but there is a better body of knowledge, both big picture and detailed,'' said Ed Link, a University of Maryland engineer who's led corps' efforts to study and improve levee building in the storm's wake.

In Court Ruling on Floods, More Pain for New Orleans

There is disappointment but little surprise here at a federal judge’s grudgingly absolving the Army Corps of Engineers of liability in the flooding of New Orleans after Hurricane Katrina. Although the decision, issued Wednesday, was sharply critical of the corps, the judge’s finding has if anything only hardened the ill feelings against the government that have hung over this city since the storm.

The plaintiffs in the class-action suit dismissed by the judge were many of the hundreds of thousands of people who filed claims here against the corps last year because of the levee breaches that flooded the city. They lined up in cars and on foot and jammed the streets around the agency’s district headquarters, acting out what has been a loudly spoken article of faith since the days in 2005 when water covered 80 percent of New Orleans and ruined the homes of thousands: the corps — not nature, not a record-breaking storm surge and not local politics or local negligence — was to blame.

The judge, Stanwood R. Duval Jr. of the Federal District Court here, a son of South Louisiana, heartily seconded that notion on Wednesday, suggesting that the corps was guilty of “gross incompetence.” But Judge Duval said he was powerless to rule favorably on the lawsuit because the Flood Control Act of 1928 granted legal immunity to the government in the event of failure of flood control projects like levees.

Kathy Gibbs, a corps spokeswoman, said the agency agreed with the dismissal, but declined further comment because other suits over Hurricane Katrina damage are pending, The Associated Press reported.

Local reaction to the ruling was muted. In part because the judge said last year that he would probably have to find the corps immune from damages, expectations appear to have been low, even as bitterness over the losses festered along with a desire to fix blame on the agency.

“There was almost a general understanding that — guess what? — they’re exempt from prosecution,” said Bari Landry, president of the Lakeview Civic Improvement Association, in a neighborhood devastated by the failure of the flood walls.

“We knew there was a very good chance this would not go forward,” Ms. Landry said. “I’m not at all surprised.”

Ms. Landry was one of some 350,000 people who filed claims. The lawyers who brought the suit dismissed Wednesday represented about 65,000 of those claimants. They said Thursday that they would appeal, arguing that the corps was not protected by the 1928 law’s immunity clause, largely because a change it had made to its flood protection plan for New Orleans had not been authorized by Congress.

If Judge Duval’s conclusion provided no comfort, his language did, echoing in legal terminology what has been strong criticism of the corps by activists, politicians and the local media.

“While the United States government is immune for legal liability for the defalcations alleged herein, it is not free, nor should it be, from posterity’s judgment concerning its failure to accomplish what was its task,” the judge wrote. “This story — 50 years in the making — is heart-wrenching. Millions of dollars were squandered in building a levee system with respect to these outfall canals which was known to be inadequate by the corps’s own calculations.”

Though the ruling spotlighted many missteps by the corps over the years, it made little of other possible factors, including culpability of former local officials overseeing levees and drainage, and particularly their rejection of the corps’s original plan for floodgates on the drainage canals that so devastated the city.

Supporters of the claimants applauded Judge Duval’s language, suggesting that it might yet fuel their cause. “What we’ve had so far is just a suspicion,” said Joseph Bruno, a lawyer in the case. “You now have a U.S. federal district judge who’s had a chance to evaluate the facts and draw legal conclusions. Now you’ve got a determination where a guy says, ‘Look, but for the nuances of the statute, these people will be called on to pay.’ ”

Sandy Rosenthal of the activist group Leeves.org said: “Clearly Judge Duval is frustrated by what he had to do. It’s outrageous these levees were fragile. He and I agree the corps was responsible for the failure of the levees. It’s a positive thing that Judge Duval outlined all those things in his statements.”

Katrina suit vs. Army Corps dismissed

A federal judge threw out a key class-action lawsuit Wednesday against the U.S. Army Corps of Engineers over levee breaches after Hurricane Katrina, saying that the agency failed to protect the city but that his hands were tied by the law.

U.S. District Judge Stanwood Duval ruled that the Corps should be held immune over failures in drainage canals that caused much of the flooding of New Orleans in August 2005.

The ruling relies on the Flood Control Act of 1928, which made the federal government immune when flood control projects like levees break.

The suit led to about 489,000 claims by businesses, government entities and residents, totaling trillions of dollars in damages against the agency.

The fate of many of those claims was pinned to that lawsuit and a similar one filed over flooding from a navigation channel in St. Bernard Parish. It was unclear how many claims could still move forward.

In his ruling, Duval said he was forced by law to hold the Corps immune even though the agency "cast a blind eye" in protecting New Orleans and "squandered millions of dollars in building a levee system ... which was known to be inadequate by the Corps' own calculations."

But, Duval said, "it is not within the Court's power to address the wrongs committed. It is hopefully within the citizens of the United States' power to address the failures of our laws and agencies."

Breaches at both the 17th Street and London Avenue canals allowed flood water to inundate large areas of the city from near Lake Pontchartrain to the north to the edge of downtown.

Throughout the court proceedings, plaintiffs lawyers knew they faced a daunting task because the canals were, over time, used as flood control projects by the Corps.

"I knew we had an uphill battle. But we had to do it," plaintiffs lawyer Joseph Bruno said. "It's an outrage. Read the opinion: The judge reads through all the negligence by the Corps, but says he had to rule the way he had to."

Bruno said the plaintiffs would appeal to the 5th U.S. Circuit Court of Appeals, but he conceded that overturning Duval's ruling would be difficult.

The plaintiffs tried to bypass the immunity issue by claiming that the Corps used the canals as drainage projects and that the levee failures were brought about by canal dredging.

The ruling was another blow to the people of New Orleans, where loathing for the Corps continues unabated.

"This cost people's lives and property," said Gwen Bierria, 66. She is still living in a government-issued trailer on her property abutting the London Avenue Canal and is among the tens of thousands of people who have filed claims against the federal government for damage from the levee breaches.

"Anybody that calls themselves the Army Corps of Engineers should be embarrassed," she said.

Kathy Gibbs, a Corps spokeswoman, said "the Corps agrees with the dismissal of the case" but declined to comment further because other lawsuits are pending over Katrina damage.

Al Petrie, incoming president of the Lakeview Civic Improvement Association, said that few residents who returned to the neighborhood and started to rebuild based their decision on the success or failure of the levee litigation.

Still, many residents will continue blaming the Corps for the disaster no matter what the courts say, he said.

"Over time, anger tends to quiet down," he said. "It doesn't mean people are less cautious. We're still beholden to the Corps to do this right."

New Orleans activists and politicians said they will not give up on holding the Corps accountable.

"We will stick with our mission of education that this was the worst engineering failure since Chernobyl," said Sandy Rosenthal, founder of Levees.org, a group that has lobbied for overhauling the Corps.

Since Katrina, calls for a makeover of the Corps have gained momentum, and the agency, which has acknowledged mistakes, has re-evaluated its procedures for picking and designing projects.

Duval, in his ruling, agreed that legal and bureaucratic change is required.

"The byzantine funding and appropriation methods for this undertaking were in large part a cause of this failure," Duval said, referring to the politics-riddled process Congress has for funding Corps projects.

The Flood Control Act is counterproductive, Duval said, because it negates incentives for good government workmanship and creates an environment where "gross incompetence receives the same treatment as simple mistake."