LA - Louisiana coastal projects allowed to offset cost of New Orleans post-Katrina levees
Louisiana has been allowed by the Army Corps of Engineers to count $110 million spent on two major coastal restoration projects in recent years as credits towards the state’s $1.12 billion share of the cost of the $14.6 billion post-Katrina New Orleans area hurricane levee system.
The deal was signed Sept. 27, just three days before the state was required to have repaid two-thirds of its share of the levee projects, or be forced to pay an estimated $1.5 billion in additional interest costs when the remainder of its share is due in 2031.
The agreement followed a six-week argument between the state Coastal Protection and Restoration Authority and the Corps over whether the state actually owed that additional money this year.
At issue were differing opinions between the state and Corps over slightly different provisions in 2020 and 2022 legislation that allowed the state to pay part of its share of the levee costs early to avoid the huge interest costs. The state had originally negotiated to pay for the levee system over 30 years, but its construction wasn't completed until last year, and the Corps was going to charge the state interest from the time its construction began.
The state paid $400 million in 2021 and another $400 million in 2022, thinking it was meeting the requirements of the 2020 legislation. But a 2022 change was interpreted by the Corps as meaning the state owed about $100 million more to meet a goal of paying 2/3 of the project's cost remaining after the first $400 million payment.
Fortunately for the state, Congress has provided it with the ability to count payments made for major coastal restoration projects as credits towards the levee costs, even in cases where construction is paid for with settlement money from the BP Deepwater Horizon oil spill. That option allowed the state to avoid more drastic options, including the calling of an emergency session of the Legislature to appropriate the funds the Corps required, state officials said.
The state would be able to count $69.8 million from the $120.7 million Whiskey Islandbarrier island restoration project and $40.5 million from the $212.9 million Caminada Headlands restoration project as payments towards the levee system.
