New Orleans Endangers Funds by Not Using Them

Senator Mary Landrieu has threatened to take away some of New Orleans' unused federal dollars if they remain so. Of the unspent $34 million allocated for low-income housing, $11 million will be lost if there are no projects by May 31.

"With Nagin visiting Capitol Hill on Wednesday, Landrieu had her chief of staff, former Cleveland Mayor Jane Campbell, hand the mayor the letter.

'I would like to work with the city of New Orleans to secure an extension of the deadline by which the HOME funds must be expended,' Landrieu wrote. 'However, unless the city of New Orleans can commit to working with my office to ensure that these funds are going to be spent effectively, I will be compelled to appeal to HUD to identify an alternative recipient for this funding.'

In deference to Hurricane Katrina's toll, HUD already has given the city three extensions for spending HOME money.

Landrieu, who sits on the powerful Senate Appropriations Committee, went on to say that the city would have to make "significant administrative changes" for her to endorse another extension. Her spokeswoman, Stephanie Allen, said Landrieu specifically wants to see improvements at the city's Affordable Housing Bureau, which is rebuilding its staff."

Full Story: Landrieu to Nagin: Use cash or lose it

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