St. Bernard sewage reveals waste: FEMA hauls it rather than build new plant

Saturday, September 01, 2007
By Bill Walsh
Washington bureau

WASHINGTON -- When floodwaters were finally pumped out of St. Bernard Parish after the 2005 hurricanes, local officials had hoped to move quickly to rebuild basic services, including the sewage-treatment system, so 66,000 displaced residents could return home.

They hadn't counted on "44 CFR 206.226."

That's one of the myriad federal regulations that tell FEMA what it can and cannot pay for when disasters strike. It turns out that a new sewage-treatment system in St. Bernard Parish wasn't covered.

A new system would have run about $38.6 million plus an additional $8 million to ring it with a levee to protect it from future flooding. But instead of footing the bill, FEMA encouraged locals to make repairs to the old, antiquated system. Two years later, they remain at loggerheads.

While officials negotiated and navigated through the complex regulations, federal taxpayers have paid $41.4 million through mid-August for heavy trucks to haul raw sewage away, almost 90 percent of what it would cost for the new system. And the trucks are still rumbling through St. Bernard's streets today.

Members of Congress may have thought that when it approved $110 billion for Gulf Coast recovery, spending the money would be the easy part. They were wrong. As the gatekeeper for most federal disaster money, FEMA hews strictly to the Robert T. Stafford Act and a host of federal regulations that spell out in mind-numbing detail how disaster money can be spent. Although the agency has shown signs recently of being more flexible in how it interprets the rules, the recovery throughout southern Louisiana has been characterized by legalistic arguments over arcane federal regulations.

Some say those rules, designed to protect against waste and fraud, are a hindrance when it comes to addressing a disaster on the scale of Katrina. When Congress reconvenes this month, Louisiana lawmakers, including Sen. Mary Landrieu, D-La., and Rep. Charlie Melancon, D-Napoleonville, are expected to push for changes that grant FEMA more flexibility in responding to catastrophes.

"Why is the federal government haggling with folks over what degree of repairs are recoverable after a major American city was put under water by failed federal levees?" said Andy Kopplin, executive director of the Louisiana Recovery Authority. "Why not give the community the money and make them document every red cent?"

Push for consolidation
The regulation that has delayed St. Bernard Parish from building a new sewer system is Title 44, section 206.226 of the Code of Federal Regulations. It says that for FEMA to cover the costs of replacing damaged public property it must be "cost effective." Cost effectiveness is determined by the "50 percent rule," which is further explained in the 333-page FEMA "Public Assistance Policy Manual." Under the rules, FEMA will pay only to replace a facility if the repairs would cost more than 50 percent of totally rebuilding.

In painstaking detail, FEMA surveyed the damage at St. Bernard's seven sewage-treatment facilities after the storms and determined that repairs would cost $16.25 million. That was nowhere near 50 percent of the price tag for rebuilding all seven treatment plants from scratch, which would run upward of $150 million.

FEMA said it was willing to spend $16 million on repairs so St. Bernard could get its old system up and running again -- and the waste-hauling trucks could stop -- but a new plant was off the table.

Locals protested that it made no sense to rebuild the old system, which parish officials had planned to scrap before the storm. It was outdated and obsolete. Two of the treatment plants were out of compliance with current environmental standards; one was nearly 50 years old and another was on the property of the historic Chalmette Battlefield, where Andrew Jackson whipped the British in the last major military engagement in the War of 1812.

St. Bernard's plan was to consolidate its seven treatment plants into one. It would be cheaper to operate. It had the backing on environmental agencies and watchdog groups who worried that the current system was prone to accidents. It even had the backing of the U.S. Department of the Interior, which wanted to get rid of a wastewater-treatment facility on one of the most prized battlefields in the country.

A bout of optimism

St. Bernard officials thought FEMA would embrace the idea. And in a future flood, locals would only have to protect one plant, not seven.

"Everyone was in favor of doing this," said Chris Merkl, the parish director of public works. "The FEMA people saw what we saw. Why reinvest in rebuilding this old facility? Let's move ahead with what we had planned."

In a 16-page proposal in January 2006, Parish President Henry "Junior" Rodriguez made his case for a consolidated system. A few days later, FEMA Public Assistance Coordinator Jeffrey Bower wrote back with encouragement.


"We are optimistic regarding approval of the consolidation project," Bower wrote.

There was plenty of reason for optimism. In his speech in Jackson Square two weeks after Katrina, President Bush emphasized the need to rebuild basic municipal services to kick-start the resurgence of the Gulf Coast. "Our goal is to get the work done quickly," he said at the time. He added, "When communities are rebuilt, they must be even better and stronger than before the storm."

But the guiding principle at FEMA is to replace damaged facilities to their pre-storm condition, nothing more.

"We're watching everyone's wallets here," said Jim Stark, director of the FEMA office in New Orleans.

Under the rules, FEMA doesn't merely inspect the damage to a facility and cut a check. It must develop a detailed document, known as a "project worksheet," that spells out the scope of work to be done and how it will be financed in accordance with federal disaster regulations.

At first, St. Bernard officials say, they were encouraged by FEMA to classify their plan as an "alternative project," one of the many terms sprinkled throughout the Stafford Act and the regulations. The strategy would free the $16 million FEMA was offering for repairs so St. Bernard could spend it instead on building the consolidated system. But "alternative" projects also carry a 25 percent penalty, meaning the parish would only get about $12 million, far short of what it needed.

Next, FEMA encouraged St. Bernard to apply for money by classifying its project as an "improvement" under federal rules. There was no penalty associated with "improved" projects, but financing would be capped at the total amount of repairs, a little over $16 million. Before the storm, St. Bernard planned to issue bonds to pay for a new sewerage system. When its tax base was obliterated in the flooding, it was in no position to pay the more than $30 million needed to foot the part of the bill FEMA wouldn't pay.

FEMA had also made clear that while the parish could get money for an "improved" project, the agency wouldn't pay for the $8 million levee to go around it. The Stafford Act forbade mitigation of "improved" facilities that replace old ones, they were told.

By late summer, FEMA's Bower, who had been so encouraging, was gone, and so was optimism over a new sewage-treatment system. In October, the parish made another request for full financing, this time as a "relocation project" under 44 CFR 206.226. A month later, FEMA officially said no.

What had irked the locals as much as the denial was what they saw as duplicity on FEMA's part.

"Don't encourage me to do this and then turn around and reject it. Tell me you aren't going to do it up front. I can take it. I'm a big boy," said Merkl, the public works director. "For two years, we could have been doing improvements and there wouldn't have been any hauling trucks now."

Rodriguez, the parish president, seethed as he pointed to a chair in his temporary trailer where he says a FEMA official sat and promised consolidation would be fully financed by the federal government.

"I just wish I had tape-recorded the meeting," Rodriguez said.

Money on the table
John Connolly, who now oversees FEMA public assistance projects in Louisiana, said the agency never promised to pick up the whole tab.

"Yes, we encouraged them to work with us," Connolly said. "But the agency did not make a commitment. . . . We made a pledge to take a hard look at it. We gave them an answer they didn't like."

Connolly says that FEMA is no happier with the waste-hauling costs than the locals are. The agency was so alarmed at the mounting costs that it balked at paying the bills. The Unified Recovery Group, the private company doing the work, threatened in March to let raw sewage run in the streets unless it was paid the $24 million it was owed. A settlement was quickly reached and a new contractor now hauls the sewage.

Still, FEMA officials put the blame on St. Bernard for not taking the money available to make repairs and get its old system back on line. FEMA says that had St. Bernard made repairs, hauling costs wouldn't be nearly as high as they are.

"St. Bernard hasn't taken the money on the table," said Gil Jamieson, who oversees FEMA operations in the Gulf Coast. "St. Bernard isn't doing what they need to do."

Recently, there have been signs that a resolution could finally be in the offing.

FEMA has revised its treatment-plant repair estimate in St. Bernard upward to $23.5 million, about half the cost of the new system and a levee to protect it. In June, the Louisiana Recovery Authority earmarked $26.3 million for infrastructure improvements in St. Bernard. Together, the two pots of money would be enough to pay for a new consolidated sewer system in the parish.

But, once again, there are procedures to be followed. St. Bernard must officially request that FEMA reclassify the project from a "repair" to an "improvement" so it can get access to the $23.5 million. As of last week, FEMA officials said the money would be available for St. Bernard's sewer consolidation, all they had to do was ask.

Bill Walsh can be reached at bill.walsh@newhouse.com or (202) 383-7817.

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