After More Than 6 Years, The City of New Orleans’ National Disaster Resilience Project Activities Had Made Little Impact on Resilience

In January 2017, HUD awarded the City $141.2 million in Community Development Block Grant National Disaster Resilience grant funding for disaster resilience. HUD designed the grant to give states flexibility in planning program activities and help state and local communities recover from past disasters, while also improving their infrastructure to withstand future extreme events through strategic community investments. The City initially reported to HUD that it would complete its National Disaster Resilience program activities by September 2022. Using the flexibility provided by the block grant, the City opted to focus its National Disaster Resilience program activities on improving its ability to withstand future extreme events. All 11 of the City’s major infrastructure projects that were planned in 2017 and designed to combat flooding, had been significantly delayed. Only 1 project made progress but had been underway for 5 years, 2 projects were slated for cancellation and the remaining 8 still in the design or planning phase. Thus, after more than 6 years, the City had made little progress toward achieving its goals for the National Disaster Resilience program. In addition, the City had disproportionately spent more of its National Disaster Resilience funds on planning and administration than on the design and construction of its planned projects and program activities. Further, the City’s Retrofit program did not reduce the flood risk in many cases and left some homeowners with more flooding and physical and financial burdens. These problems occurred because the City (1) did not properly plan the implementation of its projects, (2) lacked adequate staff and a staffing plan, (3) did not properly charge costs, and (4) failed to adequately monitor its projects and programs. As a result, (1) the City has been left vulnerable to damage from future rain and flood events, (2) homeowners are more exposed to property damage, and (3) the City may run out of funds needed for program oversight. If the City runs out of funds, it will need to allocate non-Federal funds, which may be limited, to complete monitoring and oversight of the National Disaster Resilience program. We recommend that HUD require the City to (1) reassess the eight infrastructure projects still in the design or planning phase to determine whether the City can complete the projects or how the remaining funds could be best used within the 6 years remaining for the grant period, (2) support or repay $104,425 for inadequate supporting documentation, (3) work with HUD to amend its action plan to ensure that $14,683,335 in project funds are put to better use, (4) ensure appropriate staff levels, (5) ensure adequate and timely monitoring of its projects and programs, (6) implement a HUD-approved planning and administration budget and staffing plan, (7) identify and correct misallocated costs, (8) develop a plan on how it will fulfill its required program oversight if it runs out of planning and administration funds, (9) determine how the Retrofit program can better serve homeowners, and (10) develop a plan to review the condition of the property updates and determine where repairs are needed. We believe that implementation of the recommendations in this report will improve the effectiveness of the City of New Orleans’ (the City) National Disaster Resilience grant activities in recovering from past disaster events as well as improved the City’s its ability to withstand future extreme events.