New Orleans is taking federal taxpayers for a $2 billion ride in Hurricane Katrina spending, the inspector general who oversees the Federal Emergency Management Agency said Thursday, concluding that the city is charging the government for repairs that had nothing to do with the 2005 hurricane and flooding that devastated the Gulf Coast.
Auditors said New Orleans and FEMA struck a deal in 2015 to pay for sewage, water and street upgrades to a system that was already struggling before Hurricane Katrina, and whose repairs should have been born by local taxpayers, not the federal government.
“This massive investment — representing almost $5,200 for every man, woman, and child in New Orleans — while perhaps sorely needed, is not eligible for a FEMA disaster grant because there is no evidence that the damage was caused as a direct result of the storms,” Acting Assistant Inspector General John E. McCoy II said in the new report.
In order to get emergency grant money to pay for repairs, municipalities are supposed to prove that the damage was directly caused by the disaster.
In the case of New Orleans, though, about two-thirds of the city’s water mains were at least 40 years old at the time of the Hurricane, and some 30 percent of them were nearly a century old and “leaking badly” well before the storm, Mr. McCoy said.