Times-Picayune: "Feds plan to settle FEMA's bill for Charity - Napolitano calls for meeting to nail down damage amount"

U.S. Homeland Security Secretary Janet Napolitano said she plans to call state and federal officials together in Washington, D.C., soon to try to settle a three-year dispute about how much FEMA owes Louisiana for Hurricane Katrina damage to Charity Hospital.

The eventual outcome -- state and federal officials remain almost $350 million apart -- is a key piece of the financing puzzle for a proposed $1.2 billion academic medical complex in lower Mid-City to replace University Hospital and the shuttered Charity building.

Napolitano, who spent parts of two days touring the New Orleans area, did not say when she would convene a meeting or exactly who would be involved.
Separately, a top Louisiana State University official said Friday that the school's lawyers and the state Office of Facilities, Planning and Control are putting the final touches on an appeal of the $150 million that the Bush administration offered during its final weeks in office. That was up from FEMA's original $23 million.

The state maintains Charity, whose basement flooded after Katrina, sustained more than $246 million in damage, a threshold that under the Stafford Act effectively means the building is totaled, with the state due $492 million as the estimated cost of rebuilding it.

Charlie Zewe, a spokesman for LSU, which operates the hospital, said the appeal will be made public by the middle of next week.

In some cases, FEMA appeals have taken more than a year, although that process might be short-circuited if Napolitano brokers a deal.

The ongoing dispute about Charity Hospital led U.S. Sen. Mary Landrieu, D-La., to add a provision to the federal stimulus bill signed by President Barack Obama last month that calls for binding arbitration of disputes between local governments and the Federal Emergency Management Agency.

The measure does not say how the appeals will work.

Napolitano said she expects to unveil that process soon, though she offered no specifics.

In Landrieu's office, aides said the senator wants to be engaged with Napolitano's staff as it designs the arbitration panel. The primary questions are who will sit on the panel, whether it can hear disputes that have yet to travel through the existing appeals process and, if so, whether applicants must surrender their appeals rights for binding arbitration.

Landrieu spokeswoman Stephanie Allen said Landrieu's priority is an "independent panel." But she said the senator's staff is reviewing models across federal agencies to suggest to the secretary.

Meanwhile, the federal government last month gave the state an explanation of why it continues to reject Louisiana's request for $492 million.

In a Feb. 4 Charity assessment, FEMA maintains that the state did not adequately secure the hospital after the storm to prevent continuing dilapidation.

The document notes that the state presented an asset protection plan in July 2007, but "FEMA has observed that none of this work has been initiated. . . . (The state) does not demonstrate measures to suspend continuing damages related to Hurricane Katrina and minimize the vulnerability of the facility."

Jerry Jones, the state facilities director, has made the argument repeatedly that the catastrophic nature of Katrina made it difficult to secure the facility immediately and determine what damage can be attributed directly to the storm.

In its increased offer, FEMA gives some credibility to that claim, approving an additional $51 million as part of the total compensation proposal because of "the magnitude of the impact of the disaster" and "to recognize that the actual cause of much post-storm damage could not conclusively be determined."

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Original Article:
Feds plan to settle FEMA's bill for Charity - Napolitano calls for meeting to nail down damage amount
Saturday, March 07, 2009
By Bill Barrow, Staff writer

Online: http://www.nola.com/timespic/stories/index.ssf?/base/news-3/123640703227...