Land Use

City Council suprised to learn of revolver money used for proposed medical district

A new financial commitment for the proposed medical district in Mid-City will leave a $25 million hole in a revolving loan fund given to the city from the state to jump start recovery.

The appropriation was described by one of Mayor Ray Nagin’s top lieutenants, Chief Technology Officer Harrison Boyd, during a City Council budget committee hearing Thursday. It took council members by surprise and raised questions about the decision to fund new hospitals for Louisiana State University and the U.S. Department of Veterans Affairs with the $200 million revolver fund. That fund was created as a cushion to let the city start recovery projects without having to wait on FEMA payments.

“The money is being spent at a faster clip than it can be if we want this fund to last for the entirety of our recovery, the way we need it to,” Councilwoman Shelley Midura said. Council President Arnie Fielkow asked Boyd why the administration is depleting the limited recovery account when other sources could be used.

Boyd said the Nagin administration chose to use the revolver “early on” knowing that the $25 million would not be reimbursed. He did not offer any clues on the logic behind the decision. He added that the decision was well within the rights of the city, even though the state made it clear that the $200 million revolver pot was meant to be steadily replenished by incoming FEMA payments so it would last until the city completed its more than 600 recovery projects

The $25 million comes on top of a previous appropriation of $75 million in disaster grants for the 70-acre hospital district. Midura said that while she supports the development of new hospitals, she and other council members were never told how much money the city would be spending on the project, or where it would be coming from. A page dedicated to the project on the city’s Web site sets the amount at $75 million.

“And every dollar that goes to that project means a dollar that doesn’t go to a health clinic or a playground or a school somewhere else in the city,” she said.

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