New Orleans district of the U.S. Army Corps of Engineers faces $71.2 million reduction in federal funding
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New Orleans district of the U.S. Army Corps of Engineers faces $71.2 million reduction in federal funding

New Orleans CityBusiness | June 6, 2005
By Deon Roberts

In fiscal year 2006, the New Orleans district of the U.S. Army Corps of Engineers is bracing for a record $71.2 million reduction in federal funding.

It would be the largest single-year funding loss ever for the New Orleans district, Corps officials said.

I've been here over 30 years and I've never seen this level of reduction, said Al Naomi, project manager for the New Orleans district. I think part of the problem is it's not so much the reduction, it's the drastic reduction in one fiscal year. It's the immediacy of the reduction that I think is the hardest thing to adapt to.

There is an economic ripple effect, too. The cuts mean major hurricane and flood protection projects will not be awarded to local engineering firms. Also, a study to determine ways to protect the region from a Category 5 hurricane has been shelved for now.

Money is so tight the New Orleans district, which employs 1,300 people, instituted a hiring freeze last month on all positions. The freeze is the first of its kind in about 10 years, said Marcia Demma, chief of the Corps' Programs Management Branch.

Stephen Jeselink, interim commander of the New Orleans Corps district, told employees in an internal e-mail dated May 25 that the district is experiencing financial challenges. Execution of our available funds must be dealt with through prudent districtwide management decisions. In addition to a hiring freeze, Jeselink canceled the annual Corps picnic held every June.

Congress is setting the Corps budget.

The House of Representatives wants to cut the New Orleans district budget 21 percent to $272.4 million in 2006, down from $343.5 million in 2005. The House figure is about $20 million lower than the president's suggested $290.7 million budget.

It's now up to the Senate. Sen. Mary Landrieu, D-New Orleans, is making no promises.

It's going to be very tough, Landrieu said. The House was not able to add back this money ... but hopefully we can rally in the Senate and get some of this money back.

Landrieu said the Bush administration is not making Corps of Engineers funding a priority.

I think it's extremely shortsighted, Landrieu said. When the Corps of Engineers' budget is cut, Louisiana bleeds. These projects are literally life-and-death projects to the people of south Louisiana and they are (of) vital economic interest to the entire nation.

The Corps' budget could still be beefed up, as it is every year, through congressional additions. Last year, Congress added $20 million to the overall budget of the New Orleans district but a similar increase this year would still leave a $50 million shortfall.

One of the hardest-hit areas of the New Orleans district's budget is the Southeast Louisiana Urban Flood Control Project, which was created after the May 1995 flood to improve drainage in Jefferson, Orleans and St. Tammany parishes. SELA's budget is being drained from $36.5 million awarded in 2005 to $10.4 million suggested for 2006 by the House of Representatives and the president.

The project manager said there would be no contracts awarded with this $10.4 million, Demma said.

The construction portion of the Corps' budget would suffer if Congress doesn't add money. In 2005, the district received $94.3 million in federal dollars dedicated to construction. In 2006, the proposal is for $56 million.

It would be critical to this city if we had a $50 million construction budget compared with the past years, Demma said. It would be horrible for the city, it would be horrible for contractors and for flood protection if this were the final number compared to recent years and what the city needs.

Construction generally has been on the decline for several years and focus has been on other projects in the Corps.

The district has identified $35 million in projects to build and improve levees, floodwalls and pumping stations in St. Bernard, Orleans, Jefferson and St. Charles parishes. Those projects are included in a Corps line item called Lake Pontchartrain, where funding is scheduled to be cut from $5.7 million this year to $2.9 million in 2006. Naomi said it's enough to pay salaries but little else.

We'll do some design work. We'll design the contracts and get them ready to go if we get the money. But we don't have the money to put the work in the field, and that's the problem, Naomi said.

The Appropriations Committee in Congress will ultimately decide how much the New Orleans district will receive, he said.

Obviously, the decisions are being made up there that are not beneficial to the state, in my opinion, Naomi said. Let's put it this way: When (former Rep.) Bob Livingston (R-Metairie) was chairman of the Appropriations Committee, we didn't have a monetary problem. Our problem was how do we spend all the money we were getting.

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