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Saturday, January 12, 2008

Most of $4.5B in Gulf Coast aid unspent

By Brad Heath, USA TODAY

WASHINGTON — Three-quarters of the billions in federal money earmarked to replace schools, firehouses and other public works after the 2005 Gulf Coast hurricanes still haven't been spent, a sign that key pieces of the region's recovery effort are languishing in red tape.

Reports from the Federal Emergency Management Agency (FEMA), provided to USA TODAY, show it has approved $4.5 billion worth of infrastructure projects in Louisiana and Mississippi. Only about $1 billion of that total has been spent.

Much of the rest is sitting in state accounts waiting to be parceled out to the local officials responsible for the rebuilding work, slowed by a complex tangle of local and federal rules.

"It's time for local governments to start making the tough decisions about what they're going to build back and start moving forward on the permanent recovery," said Robert Josephson, FEMA spokesman.

State and local officials overseeing the recovery say they are moving as quickly as they can to get the projects finished. Many require months of planning and construction, and navigating federal rules has sidetracked hundreds of projects, said Andy Kopplin, the outgoing head of the Louisiana Recovery Authority.

"Very simply, it's dramatically slowed down the infrastructure reconstruction process. It slows down the recovery," Kopplin said. "Are we satisfied with the rate of construction? Absolutely not. We'd like it to be double that. But the biggest challenge in spending the money has been FEMA's process."

FEMA's public assistance program gives money to states, which generally use it to reimburse local governments for projects once they're complete. That process has created obstacles for New Orleans and other communities, where local laws say money must be in place before work can begin. The city has borrowed $460 million to cover upfront costs.

"This is the first time we've had any significant dollars to push these projects forward," Mayor Ray Nagin said. As a result, he says, rebuilding work should accelerate this year.

Work also was delayed by mistakes in figuring how much repair individual buildings need and how much each would cost, Kopplin said.

More than half of the 27,000 projects in Louisiana have been revised at least once, a process that can take from a few hours to several months, he said.

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