New Orleans will not spend all of the $2 billion that the federal government allocated for post-Hurricane Katrina road and pipe repairs before the federal August 2023 deadline, the city’s Deputy Chief Administrative Officer of Infrastructure Joe Threat told the City Council on Thursday.
Threat said that the administration is now relying on the federal government to approve a deadline extension, or else the city will lose whatever’s unspent when the deadline hits. As The Lens reported earlier this month, the city has only spent between 25 and 50 percent of the Federal Emergency Management Agency funds, meaning there is well over $1 billion left.
The city and its contractors have expressed concerns about the deadline in the past, but officials told the council earlier this year that the plan was still to try to finish before the August deadline. But now, Threat said, the city is turning its focus to completing the multitude of open and stagnant roadwork projects that have caused resident headaches throughout the city, rather than rushing to spend all the money before the expiration date.
“The first priority is to close the work we have out on the streets right now,” Threat said.
It wasn’t all gloom at the Thursday’s public works committee meeting. Threat said he believed the city had a good case to convince the federal government that it deserves an extension.
“I think we will have enough with our pandemic, everything we’ve been through here in the city, Hurricane Ida, Zeta, Barry, Laura. You name it. I think we have a good case to get an extension.”
And council members expressed optimism about the changes Threat has planned to make the roadwork program more efficient and less burdensome on residents. The new approach coincides with Threat’s recent promotion to deputy CAO after the position was vacated by Ramsey Green.
“This is my city too,” Threat said. “My car is in the shop from running over potholes. And it’s something we’ve got to fix and we owe it to the residents to fix it. So I’ve taken on the challenge when the mayor asked me to step up.”
“I’m excited to hear about the progress,” Councilwoman Lesli Harris said. “I’m excited to work with you.”
The Katrina dollars — the majority of which were awarded to the city in 2015 — are the central funding source for the city’s roughly $2 billion Joint Infrastructure Recovery Request (JIRR) program, which aims to fix underground Sewerage and Water Board pipes and replace the pothole-ridden streets above them.
Although Threat is new to the deputy CAO position, he has been working on the JIRR program since Mayor LaToya Cantrell took office in 2018. He said the Cantrell administration was immediately put in a tough position due to the slow pace of progress under the previous mayor, Mitch Landrieu. Cantrell has claimed that when she took office, the city only had $10 million worth of JIRR projects underway.
“When I first got here and came in with the administration, we were already behind the power curve by two years,” Threat said. “The JIRR is a difficult, complex problem. I don’t think there’s many cities in the United States that have had $2 billion of street and road construction at one time.”
Faced with the August 2023 deadline, Threat said the administration’s original goal was to get as much work going as possible. However, that inadvertently caused a new problem — the proliferation of partially completed, open worksites that sit for months without any noticeable progress.
“Really it was my job and Ramsey’s job to put money on the street and try to spend those funds,” Threat said. “Now we see the problem of putting all the money out on the street at the same time. We pushed the contractors to capacity.”
He said that the current projects were part of “waves one and two” of the JIRR program.
“The only remedy at this point is time out, let’s not do that anymore, let’s complete waves one and two and close up these neighborhoods, then have a strategy … moving forward with the next third and fourth and fifth waves we have scheduled right now.”
One reason for the stagnant worksites that’s been repeatedly cited by the city and contractors is that once construction crews dig up a street, they often find additional problems that weren’t part of the original project scope. Contractors have complained it can take months to get the city to review and approve change orders.
Threat said the Department of Public Works was putting together a team specifically to process change orders. And he said he was putting a two week pause on putting new construction contracts out for advertisement while the city finalizes all the existing change orders. Additionally, he said DPW would put out a public bid to hire a program manager to oversee the entire JIRR program.
The Lens recently reported on concerns from former employees regarding how the program is being managed. The Office of the New Orleans inspector general confirmed it will soon release a report on the program. And emails obtained by The Lens show that a former city employee involved in the JIRR program was interviewed by an investigator from FEMA’s Fraud Prevention & Investigations Branch and a special agent from the U.S. Department of Homeland Security Office of Inspector General.
But Threat now hopes to turn the program around.
“We know what the issues are, and I think I have the right people in place to fix them,” he said
Threat said the goal was to get all the money spent and all the projects completed by the time the next administration takes over in 2026.
“I’m hopeful we can get there, I’m dedicated to getting there.”
But since the city now plans to miss the 2023 deadline, getting there will require more than reforms at the local level. It will require a federal extension. Threat said that the goal is to have “notices to proceed,” or NTPs, for all JIRR projects by the end of 2023. That’s a change from earlier this year, when Threat said the goal was to issue all NTPs by the end of 2022.
“That doesn’t mean we’ll start construction, but we will notify to proceed with construction,” Threat said.
Threat hopes that showing the federal government that the city is making improvements, has a plan to spend all the funds and has faced serious obstacles over the past several years will be enough to secure the extension. He also said that he was in constant communication with FEMA, and that the administration has been working with the city’s federal congressional delegation to help secure the extension.
If the extension is granted, and the program is made more efficient, Threat and council members said that the projects will ultimately make the city a much better place to live, even if all the construction did cause problems for residents in the process.
“What we’re seeing right now is that it’s being dealt with,” Councilman Oliver Thomas said. “We didn’t do a good job of explaining to the public the magnitude of the work. … Had that been explained, I think that folks would have a greater appreciation for it now.”
The city’s Chief Administrative Officer, Gilbert Montaño, told the council that the administration would follow up with another presentation to the council on June 7 that would more fully explain the city’s new approach to JIRR and other construction projects.
*Clarification: After this story was published, a city spokesperson informed The Lens that the two week pause will only apply to new construction contracts. (May 27, 2022)