Times-Picayune: "Appeal: FEMA shorted Charity - Storm damage claim cites rule violations"

BATON ROUGE -- The Federal Emergency Management Agency violated its own rules and relied on inexperienced personnel as it assessed the damage done to Charity Hospital by Hurricane Katrina, according to documents filed by state officials in the latest skirmish in the three-year battle over damage payments.

State officials also dispute earlier accusations by FEMA that they failed to adequately safeguard the building after the Aug. 29, 2005, hurricane, causing additional damage that the federal government says is not its responsibility to pay.

The claims are contained in a 50-page appeal prepared by the state in its bid to reverse FEMA's December ruling that declared the storm-related damage to the hospital to be $121 million and offered up to $150 million to settle the claim. The offer was well short of the $492 million the state believes it is owed. Louisiana officials, citing three studies the state has commissioned since the hurricane, have long insisted that the hospital was more than 50 percent damaged and, as a result, the federal government owes the full replacement cost for a new hospital.

The result of the appeal could go a long way in determining whether the state can finance a planned $1.2 billion medical complex in Mid-City that would take over the teaching and research functions previously housed at Charity. State officials have planned to use the federal replacement cost, along with $300 million set aside during the Blanco administration, to minimize the amount that must be borrowed to finance the project.

A lower federal reimbursement could force the state to scale back or borrow more than planned -- which could prove difficult, given the shaky credit markets and a state borrowing limit.

The appeal also comes as the issue has taken on a higher profile in Washington with the recent announcement by Homeland Security Secretary Janet Napolitano that a "decision team" is being established to settle long-running reimbursement disputes between the state and FEMA.

FEMA initially estimated the damage to the hospital at $21 million, but raised its offer to $150 million in December. The federal agency has said that the poor post-Katrina condition of the hospital was partly because of decades of pre-storm neglect, and that the hospital sustained further damage in the months following the storm because the state failed to make emergency repairs.

The state's appeal disputes those arguments, and said FEMA offered "various vague, unspecific and factually wholly unsupported reasons" for denying the state's claim.

"The contention that the Applicant failed to protect its Charity Hospital assets is just plain wrong, in addition to being arbitrary and capricious," the state Office of Facility Planning and Control wrote in the appeal, noting that it has spent more than $5 million thus far to safeguard the building.

According to the appeal, workers retained by the state boarded up 480 exterior windows and doorways in September and October 2005, and completed temporary repairs to the roof by the end of October that year. By mid-October, or about six weeks after the storm, partial power had been restored to the top 17 floors of the building.

Starting in early December 2005, the state began biweekly inspections of the facility to identify "building envelope and security failures" and make needed repairs, the state said.

The state said FEMA has offered just two examples to support its claim that the building was not protected: an instance where standing water was observed in a second-floor corridor, and an open sixth-floor window -- both of which were noted in a Feb. 1, 2007, site visit.

The state appeal adds that most of the FEMA employees who helped prepare the initial damage estimates "were inexperienced" and the agency has "never undertaken a complete room-by-room, floor-by-floor assessment of the damages to the entirety of Charity Hospital," as the state has done with the help of three teams of consultants.

The appeal was sent to the Governor's Office of Homeland Security and Emergency Preparedness, which has 60 days to review the document and forward it to FEMA's regional office in Dallas.

Once FEMA receives the appeal, it has 60 days to issue a ruling. If the state disagrees with the ruling, it has the right to a second appeal, which would go to FEMA headquarters in Washington, and could include oral and written presentations.

Ben Playa, GOHSEP's executive counsel, said he expects the matter to be settled in Washington, as the Charity appeal is the largest and among the most contentious of the hurricane-reimbursement issues under negotiation.

"There's the expectation that we would probably have to take it to the second appeal," Playa said.

A spokesman at FEMA's Gulf Coast Recovery Office in New Orleans had not seen the appeal as of late Monday afternoon and did not respond by deadline to a request for comment.
Original Article:
"Appeal: FEMA shorted Charity - Storm damage claim cites rule violations"
Tuesday, March 17, 2009
By Jan Moller, Capital bureau