FEMA ordered to pay $10 million to City of NO for Katrina expenses

New Orleans, La. - FEMA has been ordered to repay the City of New Orleans more than $10 million for salaries paid to first responders during Hurricane Katrina.  On Thursday, the city announced that a three-judge arbitration panel in Washington, DC unanimously ruled that FEMA must reinstate its original award of $10.8 million for salaries paid to police, fire, and emergency medical service personnel for emergency work performed following Hurricane Katrina in 2005.

FEMA originally granted the money to the City in 2006 and then reversed itself in 2009.  City officials say if they had not won today's ruling, they would have been forced to cut other vital services in order to pay FEMA back.

"As we mark the eighth anniversary of Hurricane Katrina and the failure of the federal levees, it is important to remember the service of the City of New Orleans' first responders who faced incredibly difficult circumstances in the wake of the devastation," Mayor Mitch Landrieu said. "This ruling affirms the hard work put in by so many to serve and protect those in need during our darkest hours."

"The City's filed action in June 2012 after FEMA retroactively determined that funding previously approved to cover the costs at issue would be taken away from the City pursuant to FEMA's general policy against reimbursement of regular time salaries of an applicant's permanent employees. The City maintained that FEMA previously approved the costs as eligible due to the extraordinary nature of this disaster and in recognition of the fiscal crisis that followed, which led the City to lay off nearly half of its non-public safety personnel immediately after Hurricane Katrina.

The arbitration panel agreed with the City's appeal, finding that "the record demonstrates that the regular pay at issue was an incremental cost incurred by the City in performing emergency work in response to the unprecedented devastation caused by Hurricane Katrina."

Deputy Mayor and Chief Administrative Officer Andy Kopplin said, "The arbitration panel's ruling is a big win for the City of New Orleans and restores the common sense decision FEMA made to help us during the deepest depths of our City's fiscal despair following Hurricane Katrina. It boggles the mind that some in the federal government forgot what it was like here on the ground in the months after the federal levees failed. We are grateful that the arbitration panel reviewed those facts and circumstances and recognized that FEMA had been correct in helping the City in the first place."