Government & Politics

City is $8 million behind in payments to contractor MWH

The city is seven months — and $8 million dollars — behind on payments to the company managing most of its recovery projects, according to a letter sent Wednesday by the company to New Orleans Inspector General Edouard Quatrevaux.  The letter was part of the city’s official response to criticisms of the company’s billing practices aired by Quatrevaux in a March draft report.

Recovery contractor MWH Americas told Quatrevaux that it had not received payment for “most of the Contract services it has performed” since Sept. 1. The disclosure came as an aside within a larger argument against the inspector general’s contention that the company enjoys preferential treatment from the city.

As of February, MWH had been paid $29 million for its work, which began in December 2007, the inspector general report said.  Of that, $22 million came from a $200 million revolving-loan fund provided by the state as a tool for jump-starting work on projects. The hefty bills charged to the revolver fund, which was designed to be steadily replenished by FEMA payments, raised eyebrows locally and in Baton Rouge.

Last month, the state halted reimbursement payments to MWH, and after the inspector general’s draft report was leaked in March, the Governor’s Office of Homeland Security and Emergency Preparedness launched its own review.

During a City Council budget committee hearing Thursday, one of Mayor Ray Nagin’s top recovery aides told council members that the city had spent about $125 million from the recovery pot and been replenished $28 million, with another $11 million in reimbursements pending. Nagin aide Harrison Boyd said that another $25 million has been reserved for costs related to the new U.S. Department of Veterans Affairs hospital proposed for Mid-City. That money won’t be reimbursed, Boyd said.

Diresto said Friday that the money is allowed to go to the hospital site even though it won’t be reimbursed because of a 2007 amendment made to the agreement establishing the revolver account.. The amendment allows the use of the recovery fund  to cover costs related to the hospital site and Sewerage & Water Board properties.

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  • Soooo…uhm, I thought earlier in the week this company was defending its Over-Billing the city and now the City owes them? Can y’all clear this up a bit more?
    Editilla obviously failed those tests in elementary school: “The state gives Nola 200 Million Apples. C Ray takes 22 Million of those Apples and gives them to MWH who has a total of 29 Million. So how many Apples does MWH actually have left in its basket?”
    Why don’t we just call this Ray Algebra?