Follow the Dollars – Corps Depleting Pump Station Funds?
17th Street Canal Pipes by John McQuaid.
The Corps announced its fiscal year 2009 budget request a couple of weeks back. In the main document linked off its press release, all of the Southeast Louisiana work was lumped into a single $5.7 billion line item. I was curious about the details behind that line item.
If one digs through the Corps’ website, one can find the dollar breakdown for those numbers. The Corps’ Program Integration Division develops the budget among other things. Its webpage is here:
http://www.usace.army.mil/cw/cecwb/
And the detailed breakdown on the FY2009 budget request is here:
http://www.usace.army.mil/cw/cecwb/just_states/just_states.html
To find the section on the SE Louisiana stuff, go to pages 220 through 233. For those of you receiving this directly on email, I’ve attached just those pages.
Finding this information is hardly obvious to the normal citizen, who one would think would be interested in how 5.7 billion taxpayer dollars were to be spent.
I was particularly interested in the budgeting for the permanent pump stations. There’s been various hints in presentations the Corps has given over the last year that the cost would be somewhere between half a billion and a billion dollars. To find the particular numbers on the pump stations, go to pages 224 and 225. You’ll see that the Corps is asking for $704 million for the pump stations. You’ll also see a double asterisk after that number.
The double asterisk refers to a note which says that $704 million reflects “pending” reallocation of $430 million from existing permanent pump station dollars (which is most of the $530 million Congress set aside for the stations in the 4th Katrina supplemental in 2006). They are also reallocating about $370 million from a $1.6 billion pot for floodwall work, and they are hoping Congress puts $412 million back into that bucket.
That $800 million ($430 million + $370 million) reallocation is going to pay for the Industrial Canal protection project.
But what happens to puts those dollars are being pulled from? It means that the Corps will in actuality only have $100 million in their pocket for the permanent pump stations, depending on whether Congress gives the remaining $704 million. This might/probably is why the permanent pump stations have a completion date of 2012, while the rest of the work has a 2011 completion date. Simply put, it’s the dollars. They are raiding the permanent pump stations dollars to pay for the Industrial Canal project, with no guarantee that those dollars will be replaced.
Here’s one other data point to think about… based on these numbers, the Corps is budgeting $804 million to pay for the permanent pump stations. To date, they have spent over $374 million (that number is taken from publicly available sources) on far smaller and less robust temporary closures and pumps. It is very unclear if they have tapped into the permanent pump station dollars for any of the temporary closure work; but considering the expense in procuring and installing the direct drive pumps (over $170 million), it seems unlikely they would not have. So there might be even less money in the bank now.
Consider that these permanent pump stations aren’t expected to break ground for another 2 years. Oil and steel are going up in cost astronomically, as anyone in industry can tell you. There’s a lot of steel planned for these stations (all the reinforced concrete and sheet pile, along with the pumps and the buildings). Based on the amount of dollars they spent on much smaller structures ($374 million), and the outrageous cost increases everyone in construction will see for the next 2 to 5 years, I find it highly unlikely that $804 million will cover the project. I believe (and this is merely my belief) the Corps will not have enough money to finish those stations on time, and will have to find some way to move dollars around or get more from Congress, despite the language that says their request is enough to complete the stations.
If they’ve got detailed numbers that can rebut this, they should show them. Those pump stations are front line defenses, and the Corps plans currently call for them to have nearly nothing in the bank to build them.
What did I tell you?
Corps wants to move money around; topic may be aired at Jefferson Council meeting today
“The question of fund swapping was broached not by the corps, but by a community activist from Old Metairie, and there were no follow-up questions from the audience.
“Council chairman John Young, who attended Tuesday’s public hearing, said he knew nothing about the latest request to shift funds until told about it by the Old Metairie group.”
Why can’t the Corps just level with the American people, rather than burying this information on page 225 of a nearly 1000 page document that’s very far from public view?
Here’s a bit of perspective on the last time the Corps tried to reallocate funds.
That time, in early 2007, they tried to shift $1.3 billion from the east bank to the west bank.
What is not generally remembered is the breakdown of the funds they tried to shift back then.
Attached you’ll find the slide from a presentation the Corps gave a year ago at a conference in Baton Rouge. It is page 28 from the complete presentation, which is here:
New Orleans Hurricane Protection System Repair & Restoration
Two of the pots of money they are “reallocating” dollars out of this time around are the same ones they went after the last time.
At that time, they wanted to pull $420 million out of the permanent pump stations and $313 million out of the floodwall replacements and reinforcements. Now they want $430 million and $370 million out of the same spots.
What is interesting is their reasoning a year ago for doing so. Back then, they gave the following justification for the reallocation of the pump station funds:
“Funds cannot be utilized at this time. Appropriated funds insufficient to initiate work.”
Now they’re basically saying the same thing. And one has to wonder, what have they been doing for the last year, and when exactly will the time be ripe to initiate work?
Just a reminder… when this came out the last time, Congress actually stepped up and appropriated the extra $1.3 billion. It’s amazing what you get if you just ask, instead of assuming you won’t get it.
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