Anonymous has left a new comment on your post "Oh boy":
What I want to know is... who agreed to allow the City to use the revolver fund for non-reimbursable projects? Did the State agree to this use of the revolver fund? Did the City Council agree to this?
What I find odd is there was no mentioning or out cry when the rules governing the use of the revolver was changed. Did the City act alone?
From what I understand the protocol pretty much gave the mayor autonomy over projects to apply towards the fund. The only stipulation enforced by FEMA is that almost all of the funding must be used to repair existing infrastructure back to the level of functionality that it was before the storm.
In other words, we couldn't build a new wing on the Zoo, then try to get reimbursed by FEMA via the revolver. Or....we can't try to create an 80 million dollar...whatever it is...in the municipal auditorium which was vacant before the storm and expect the revolver fund to compensate us for that new development.
Now there is a small amount which can be allocated towards new development, but only a small amount.
City Council didn't have discretionary control over what was assigned to the revolver...so we can't really blame them. To her credit, Stacy Head has been ringing the alarm since last summer that we need to get a handle on the revolver before...well....exactly what Chrisman is claiming has happened.
So the issue is that Nagin really has autonomous control over what is assigned to the fund. He is not breaking any laws by assigning funds to whatever he chooses...we are just in danger of not being compensated for projects which he chooses if he is not meeting the requirements set forth by FEMA.
The other real issue is that FEMA wipes their hands clean of the money once it is dispensed.
For example, Nagin spent down 38 million in city funds to restore the Mahalia Jackson Theater...he ascribed 28 million of that expenditure towards the revolver. I doubt FEMA will compensate that amount because there's no question it was new development, but for the sake of our scenario let's say they do.
FEMA cuts the check for 28 million and after that....they walk away, they wipe their hands clean of what happens to that money. So if Nagin chooses not to replenish the city coffers with that 28 million....he could turn around and spend that money down on whatever he chooses and there really isn't a lot we could do to stop it.
The danger here is that Nagin could spend down a whole lot of money...I estimate up to 250 million (but that's just my amateur assessment) on the city dime and leave us on the hook for millions, maybe hundreds of millions.
If I've made any mistakes in my assessment here...please correct me.
The other thing I'm really worried about is if he's tapping the operating budget. I can't believe that is the case but I'd really like to know for sure.
Two readers have confirmed that he has not spent any revolver money on the Municipal Aud. deal as of yet, other than to pay MWH for consulting fees. It sucks that MWH got paid for that considering there really wasn't anything to consult on an inside deal, but at least we haven't actually payed Juneau anything from what I can tell.