Fix the pumps

Wednesday, September 30, 2009

The fix was in

[Note to folks coming here: make sure you click on "Fix the pumps" at the top of the page to see all the most recent entries. If you can't click it, you're seeing everything.]

[Correction appended 10/1/09. See end of post]

So, we know the Corps is playing games with their taxpayer-financed reports on the permanent pump stations; they've been redacting all the vital information out of them, though not really fast enough in some cases.

We also know they are trying to scare citizens into supporting Option 1.

But what about their story that they are only authorized by Congress to put in Option 1? What's behind that? A lot.

Let's go back to late 2005 and early 2006. A lot of money for the Corps' post-Katrina efforts was moving through Congress, almost completely unopposed. In the 3rd Katrina Supplemental, they received about $2 billion to get stuff repaired and back to authorized levels. It was part of a much bigger Iraq War supplemental appropriations bill, P.L. 109-148 (H.R. 2863 in the 109th Congress).

Then came the next Iraq war supplemental in the spring of 2006. And with that bill there were more post-Katrina expenses meant to strengthen the levee system around New Orleans. On February 16, 2006, the White House submitted their funding request for an additional $19.8 billion in hurricane reconstruction funds. You can find that request here:

February 16, 2006 White House post-Katrina supplemental appropriation request

Included in there was language, drafted by the Corps, which survived all the way to the final bill signing in June, 2006 (see page 69):
"$530,000,000 shall be used to modify the 17th Street, Orleans Avenue and London Avenue drainage canals, and install pumps and closure structures at or near the lakefront;"

That final bill was P.L. 109-234 (H.R. 4939 in the 109th Congress), and would be known informally as the "4th Katrina Supplemental."

While there's been a lot of attention to the language of that provision, no one has really studied where the number came from or what it represented. Now we know.

Take a look at page 329 of the unredacted 2006 Black & Veatch report:

This information is also on Adobe pages 175 and 176 of the main report, which is subsection 6.1.2.

There's the $530 million, listed as the "Option 1" cost in something called the Post Change Authorization. That particular phrasing is a slight typo by the consultants. It should read "Post Authorization Change."

The Corps uses Post-Authorization Changes (PAC's) to bypass part of the normal two-stage authorization and appropriation process in Congress. Basically (feel free to correct me) by compiling a Post-Authorization Change report for an existing project (like the New Orleans levees after Katrina), they can skip authorization and go straight to appropriations. This is likely what happened with all the post-Katrina appropriations, due to the urgency.

What is notable is what is at the bottom of that page. It is an estimate, also from the same "Post Change Authorization" for Option 2! And at the time when that PAC information was being pulled together (somewhere between November, 2005 and when the White House sent the funding request to Congress in mid-February), the Corps believed that Option 2 would only cost $720 million.

Let me make this clear: at a time when one party controlled the White House and Congress, and at a time when there was no doubt the bill this was attached to (a massive Iraq supplemental) would pass, and at a time when goodwill toward fixing flood defenses around New Orleans was at an historic high, the Corps CHOSE to ask for the cheaper, less effective, less complete option for the outfall canals. A better option (Option 2), according to their own back-of-the-envelope estimates (note how rounded the numbers are, as opposed the very precise Black and Veatch/GEC numbers), would have only cost another $190 million in a bill that ended up costing - if memory serves - around $100 billion. They could have crafted the language around Option 2 and asked for the $720 million, and almost certainly gotten it. And if the costs went up later (as they did with the Option 1 stations), they could always ask for more money (as they did, twice, successfully), but at least the language would have been there. None of that happened.

Now, of course there is more to the story. That page also shows what Black and Veatch and GEC came up with for Options 1 and 2. The Corps probably let out a big sigh of relief when B and V/GEC came back with their estimate showing Option 1 as cheaper than what Congress had given them (at the Corps' behest, of course). But it's the Option 2 estimate that undoubtedly cast the decision to proceed with Option 1 in stone.

That B and V/GEC Option 2 estimate came in at double what the Corps had initialy projected (and what they could have asked for, if they wanted to). At that point, I believe the Corps decided there was no chance Option 2 would ever come to pass.

There's two questions that natually arise:

1) When the Corps passed along the funding request for the 4th Katrina supplemental to Congress, did they tell Congress that the $530 million was for Option 1, and that for an additional $190 million Congress could authorize and appropriate funds for Option 2?

2) When did the Corps get the B and V/GEC estimate of $1.4 billion for Option 2? If they got it during the negotiations over the 4th supplemental (between February and June, 2006), did they fully inform Congress that there was an option - albeit more expensive - that would fully protect New Orleans better than what they initially proposed?

With regards to (2), I believe it is likely the Corps received preliminary versions of those Black and Veatch estimates at some point during the 4th Katrina Supplemental negotiations. While the final date on the report is July 31, 2006 (over a month after the bill was signed), it would be standard practice that the Corps would be receiving draft versions and informal updates as information was compiled by the consultants. And if the consultants had discovered that their estimate for Option 2 was double the Corps', its a certainty they would not have waited until the report's final issuance to let the Corps know.

The amount of funding for the permanent pump stations was increased twice since 2006, first to $704 million, and then to the present amount of $804 million. In between, the Corps tried to raid the permanent pump stations fund twice. The first time, they wanted to defund it to pay for West Bank projects. Congress stepped up and simply gave the Corps what they needed without any shifting of money. The second time, they successfully transferred all but $100 million from the pump stations fund to pay for the IHNC surge barrier project now under construction. That depletion was restored and augmented in the final, 6th Katrina supplemental in 2008.

As you can see, none of the extra amounts the Corps ever asked for after the 4th Katrina supplemental even approached the $1.4 billion number the Corps possessed internally for Option 2. It was always for Option 1, because that was what they CHOSE to do in the harried months after the storm. And God knows, the Corps could never, ever change their mind once they've made a decision. After all, they just do what Congress tells them.

So, to summarize:

1) The language and funding amount for the permanent pump stations initially came from the Corps, and were likely compiled in the latter part of 2005 or very early 2006.

2) That funding amount - $530 million - was the result of a CHOICE by the Corps not to proceed with Option 2. The Corps was not forced into Option 1 by Congress - a ridiculous notion since the Corps drafted the very language and set the funding level that gave birth to the permanent pump station project.

3) After the Corps received internal reports from a consultant that Option 2 would break the bank and that Option 1 would not, they proceeded merrily down the Option 1 road, undoubtedly relieved their hurredly composed estimates had at least been partially right. Later, when citizens and government officials began demanding Option 2, they would construct a narrative that they were somehow backed into a legislative box. But that "box" was of their own making at a time when they likely could have asked for the moon, the sky, and stars and gotten them. Instead they said, "I'd rather stay in the planetarium."

4) Two subsequent chances to remedy the permanent pump station situation over the next two years - the 5th and 6th Katrina supplementals, which included billions more in dollars for the Corps' post-Katrina activities - were allowed to pass without action by the Corps. They had cemented the Option 1 decision, and would not budge.

This certainly puts a different spin on all the lip service that has been paid to Option 2 over the past three years. The Corps conducted a bunch of public meetings, a partnering process, produced two Congressionally mandated reports, all indicating that Option 2 was on the table. The fact was they had decided in late 2005 or early 2006 that Option 2 would never happen (unless someone had gotten the courage to go to Congress for extra funding, which never happened), and everything since then has pretty much been window dressing.

Is it any wonder they attempted to redact all the numbers out of this report after they posted it? But apparently that's how the government works for its citizens - by playing them for chumps. Fortunately, there are people actually affected by these decisions that will not take them laying down.

[Correction, 10/1/09 appended after publication: The numbers that form the basis of this particular post, which are top-level cost numbers, actually remain in the redacted version of the 2006 on Adobe pages 175 and 176:
Redacted version of 2006 Black and Veatch/GEC permanent pump station report
Of course, they are gone from the redacted Appendix H. The redactions leave the reader in the dark as to what is included in those numbers. For example, with the redactions, one does not know there are millions of dollars of work on bridges over the canals included in the 2006 estimates. One also does not know the amounts included for contingencies and such. The redactions take the heart out of the report.
It is also noteworthy that even the equivalent top-level cost numbers have been excised from the main text of the Black and Veatch 2009 report, where there is absolutely no justification for doing so.]


  • Glad you're back :-)

    By Blogger E.J., at October 01, 2009 2:23 PM  

  • thanks Matt


    By Anonymous Anonymous, at October 01, 2009 2:27 PM  


    "Plug Pulled on Pump to the River"

    4 Times the cost of Option 1? Not according to the documents you have.

    By Blogger Clay, at October 01, 2009 10:05 PM  

  • Yes, it is. According to the Congressional Cost Report, the Corps says Option 2 is over $3 billion, while Option 1 is around $700 million.

    Remember that the numbers you may be referring to are from 2006. I'm going to try to document the changes between the 2006 report, for which we have almost all the details, and the 2008 Congressional Cost Report, for which we have no details. Those are the details that have been completely redacted out of the 2009 B&V report, and those are teh details the Corps does not want the public questioning.

    By Blogger mcbrid35, at October 02, 2009 5:58 AM  

  • Correction:

    According to the Cost Report, Option 2 is $3.4 billion, Option 2a (adding in the Hoey's Basin diversion) brings it up to about $3.5 billion.

    That same report calls out Option 1 as $797 billion, or less than 1/4th the Option 2 estimate. However, I firmly believe - and have some evidence - that certain Option 1 costs have been shoved over to Option 2 to make the Corps' case for Option 1 look better.

    By Blogger mcbrid35, at October 02, 2009 6:01 AM  

  • I think they also said 12 years to build Option 2, which is ridiculously high. That's comparable to the Big Dig in Boston. I know they've got right of way and space issues, but that's just not right.

    By Blogger Clay, at October 02, 2009 8:46 AM  

  • ... One final thing to point out: once again, the dates are slipping. Now the Corps is saying 100-year storm protection won't be until 2014 at the absolute earliest.

    By Blogger Clay, at October 02, 2009 8:58 AM  

  • You must be referring to this at the end of the story:

    "For now, the Corps can't move forward with Option 1 because the state has yet to give its okay.

    Initially the Corps had hoped to have the 100-year protection project completed by 2013, but with approval still pending, they've pushed it back to 2014."

    I believe they were referring solely to the permanent pumps, not all the 100 year projects.

    By Blogger mcbrid35, at October 02, 2009 1:04 PM  

  • True, but those pumping stations and associated improvements are an important part of the 100-year protection.

    By Blogger Clay, at October 03, 2009 9:23 AM  

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