Editor's Update May 13: Former U.S. presidents George H. W. Bush and Bill Clinton announced May 13th several grants to communities along the Gulf Coast that are still struggling to recover from Hurricane Katrina. The Bush-Clinton Fund awarded a $2 million grant to the city of Waveland, Mississippi, to bridge the gap between what federal funds provide and what the local community must pay to restore infrastructure.

Where's The Money?
Billions Have Been Approved by Congress for  Katrina Recovery, But the Money Isn't Hitting the Ground

By Keith Burton - GulfCoastNews.com     Filed 5/5/06

We caught up with Waveland's Mayor Tommy Longo outside his office. He was talking to an elderly resident who was trying to get the city's help in removing her destroyed home but had missed a FEMA deadline for a right of entry and Longo had to explain the bad news. The woman had been out of town staying with relatives since Hurricane Katrina hit and the local media there didn't carry information on the deadline.

We went inside to the trailer that is Waveland's City Hall to talk more with the mayor. Even though it was mid morning, Longo looked as if he had worked all night. In a way he has. The mayor was clearly physically exhausted, his hands trembling slightly and his eyes sunken in their sockets from too many days of struggle.

Waveland, which was ground zero for Hurricane Katrina, is mostly a city that today exists largely in Longo's mind, the destruction from the storm was so complete. But Longo is a fighter, and daily works to find the money and resources to restore the city he loves. This is not simple task and and one that every city and county in the Katrina Disaster Zone faces. The key issue is money.

Almost every week there is a new announcement about millions of dollars in federal Hurricane Katrina recovery money coming to the area's hard hit cities. News reports are filled with announcements of billions of dollars in aid on their way to the Gulf Coast, with money for almost everything it would take to rebuild the Coast's devastated towns and cities. But you look around, and except for debris removal and FEMA trailers, nothing is happening.

THE KATRINA CAVEAT

Congress has approved billions of dollars in aid, and more money for Katrina-related recovery is being debated in Washington. It would be easy to think that with all of that money, the damages from Katrina should be quickly disappearing. But that isn't happening. You could almost call what is happening the Katrina Caveat because most of the aid money from Washington is not hitting the ground.

The reason is that almost all of the money requires local governments to meet a matching portion out of their own pockets. Money that the hard-hit cities and counties do not have.

Most of the money that the federal government is authorizing for hurricane recovery requires as much as a 10 percent local match before the city or county can access the money available. This matching money is almost impossible for most communities to find. That's because their revenue, from property and sales taxes, plus their current day-to-day expenses, are so meager they cannot put up the cash to draw down the federal aid.

This aid and the required matching money are not small change. The damages to the public buildings, road, libraries, water and sewer lines total in the multi-million of dollars for each local community.

The Mississippi Department of Transportation faces a similar issue. While the federal government has provided over a billion dollars in federal money to help rebuild damaged highways and bridges, MDOT must first spend their own money and then they are reimbursed. The problem is that MDOT doesn't have a billion extra dollars in the bank to spend, which limits how much money they can spend at any one time for roads and bridges. So while the federal emergency billion is available, only a bit of it can be drawn down at a time. And MDOT has chosen not to use money they have already in the bank for existing work for additional projects needed for Katrina related work.

For smaller cities like devastated Waveland, Bay St. Louis, Pass Christian, Long Beach and D'Iberville, they do not have the money to get the aid they need.

For example, Waveland officials know that their city's water and sewer system was largely destroyed. While portions are working, it is on a wing and prayer, according to Mayor Tommy Longo.

Longo said the hurricane's salt water over-ran the system and corrosion is now eating away at pumps and lift stations. He told GCN recently that city engineers estimated after the hurricane it would last only a few months. Now it has been many more months and the system is beginning to fail.

Kathy Pinn, Waveland's public information officer told GCN recently that:

"Our infrastructure has been totally compromised, so, 100% of the infrastructure south of the railroad tracks in Waveland will have to be replaced.  All water, sewer and gas lines must be replaced.  FEMA requires that we pay 10% of the costs.  Before we can even begin the process of going out for bids, we have to have 5% of the total cost in our bank account.  The latest estimates are that $22 million will be needed to do the reconstruction south of the railroad tracks. They are still assessing the needs for north of the railroad tracks. 

"FEMA has a 90-10 match and the Mississippi Emergency Management Agency (MEMA) will give us 5 percent of that if we have the other 5 percent which would be approximately $1.1 million.  Also we relied on gas service for City revenues. This 10 percent match is required for all public buildings and roadways that must be rebuilt," Pinn said.

Waveland lost all of its public buildings, fire engines and police cars and almost all of its commercial businesses and 80 percent of all of its homes. The city barely has enough money in the bank to operate the rest of the year.

This is similar to what the other cities are facing throughout the Katrina Disaster Zone. Cities large and small are finding it nearly impossible to put up the required matching money to get the federal aid dollars in the bank. As a result, nothing is happening.

The cities are hoping that somehow, a federal or state aid package will be found that will fund the needed matching money. Some cities are also borrowing money to access the federal aid. But for the most part, the counties and cities cannot afford to borrow any more.

There may be an answer in Mississippi from another federal Katrina aid program.

THE FICTION OF RELIEF

The state recently started helping homeowners who lost their homes from Katrina's storm surge who were outside the federal flood zones. The federal government provided nearly $5 billion in aid for the program, which would provide up to $150,000 in grants to homeowners to help them rebuild the their homes.

But only a portion of the money was to go for homeowners. Officials with Mississippi Development Authority, the agency administering the program, tell GCN that almost a billion dollars of that money will be spent in a program to help local cities with infrastructure money. But that program has yet to be developed, according to MDA spokesman Scott Hamilton, contacted by GCN.

"We will have to file an action plan with the federal Housing and Urban Development agency as to what we plan to do with the money," Hamilton said.

That process is not speedy. What people generally don't know about all the federal relief money is that this money is being filtered through various federal agencies like HUD, FEMA, the Federal Highway Administration and more. All of which have their own guidelines and regulations that local governments must hurdle over. In many cases, the agencies themselves are just now making up the rules for distributing the money.

What this means is that the needed relief money so generously approved by Congress and the president remain fictions of relief.

This fiction of relief has convinced the nation that states in the Katrina Disaster Zone are doing okay. After all, didn't they just get billions in aid? Yes, and unfortunately, no.

The state initially estimated that some 29,000 homeowners would participate in the grant program. But Hamilton says that they may have overestimated the number of people that could participate. There are a lot of caveats that would make it hard for many homeowners to participate. But the result may be that it will free more of the money that was anticipated for homeowners, money that could go to the cities to help them with their local matching money problem. But this won't happen quickly. Or maybe even in time to keep Waveland's water system running.

The problem is systemic. Most of the cities have yet to see a dime of all of this aid money, and Hamilton says that neither has the state. He didn't know who in the state was even coordinating this activity. He said the MDA's responsibility was just the grant program for homeowners at this time.

Local officials are struggling with the reality that they have to figure out how to get the federal aid money and that too has been nearly impossible. A program to provide manpower to sort through the maze of where the relief money is and how to apply for it has not been established. Local officials have hundreds of community buildings, streets, drains and water and sewer systems that need repairs. They know it will take time to sort this all out and the larger cities with the manpower and money are doing so. But it is also a challenge and is why so little has been accomplished.

Perhaps is it time that Congress end the local matching money requirements on major disaster recovery funds.