New Orleans Faces $1 Billion Shortfall for FEMA-Funded Roadwork

As part of a 2015 deal to settle outstanding Hurricane Katrina Claims, the U.S. Federal Emergency Management Service granted the city of New Orleans $1.7 billion to complete nearly 300 street projects by August 2023. But as of May 2018, only $10 million of the funding was under construction and the city was under federal scrutiny. In 2022, that deadline was pushed to March 2025. Today, with less than a year to go, according to an article from Nola.com, not only are city officials planning to request another extension, but they are also facing a budget shortfall of as much as $1 billion.

“According to Joe Threat, the city's Deputy Chief Administrative Officer for Infrastructure, estimates from the construction firms involved in the work have skyrocketed due to higher costs for labor and materials that have impacted all sorts of projects since the start of the pandemic,” reports Nola staff writer Sophie Kasakove. Costs also rose as workers began tearing up streets and identifying additional repair needs. But some local elected officials say the program has been handled badly from the start.

In an effort to get a handle on delays and cost overruns, which Kasakove writes have plagued the effort over the past six years, the city recently contracted consulting firm CDM Smith, which identified the $1 billion estimated shortfall as part of a draft “gap analysis.” She reports “68 out of 273 projects set to be completed through what's known as the Joint Infrastructure Recovery Request, or JIRR, are currently on hold awaiting additional funding,” and 100 projects are in the planning process but not yet started, according to the city’s roadwork website. The city has expressed its commitment to completing all the projects, but local leaders and residents are frustrated and quickly running out of patience.