Leaders dispute report on unspent Katrina aid

MISSISSIPPI GULF COAST — Mississippi officials said millions of dollars in federal aid still unspent years after Hurricane Katrina doesn’t spell trouble with the recovery effort, disputing a watchdog report that found among things that jobs’ creation was still lagging at the Port of Gulfport.

Reacting to an Associated Press examination of the $847 million remaining in the Katrina grant fund and troubles with the massive building project at the Port of Gulfport, Mississippi Development Authority officials said yesterday that most spending from the $5.5 billion set aside for Mississippi by Congress has been successful.

Manning McPhillips, MDA’s chief administrative officer, said most of the unspent money is allocated to specific projects, and is not a pool of free cash.

“They’re not in search of a use,” he said of the funds.

MDA officials have said they’ve gotten calls from local officials seeking additional Katrina money since The AP’s story last week reporting the state still hadn’t spent in excess of $800 million in federal money dedicated to recovery from the August 2005 storm. More than half of the unspent money is tied up in a hotly debated plan to expand the state-owned Port of Gulfport, and millions more are allocated for development projects that have yet to materialize, AP had reported.

Changes could be possible with approval from the U.S. Department of Housing and Urban Development, spokesman Brian Sullivan said. Mississippi plans to spend 26 percent of the $5.5 billion on economic development, while spending about 52 percent on housing, and state officials say they’re not going to reallocate.

“Those dollars are not going to be shuffled around in any other way,” spokeswoman Marlo Dorsey said.

McPhillips said the state signed contracts with local governments or other agencies that dispense the money. Port Director Jonathan Daniels said last week engineering and design work is still being done for hundreds of millions of the $581 million set aside for the Port of Gulfport. McPhillips said yesterday that spending plans are far advanced, though.

“They know what the plan is,” he said. “They’re specifically working out how much asphalt they need, how many pilings they need to drive.”

Some coast residents remain critical of the spending plan Though port officials say they’re committed to meeting a 2,600-job target by 2019, three years after construction is complete, the Joint Legislative Committee on Performance Evaluation and Expenditure Review concluded last week that many jobs may not be created until the late 2020s. MDA and port officials dispute the methodology of that report.

McPhillips said that of the other $384 million set aside for economic development projects statewide, it’s not alarming that $150 million remains to be spent.

“Those economic development projects were always going to lag the other projects because you can’t ask an industry to expand in an area with no running water or no roads or no workforce housing,” he said.

The state expects most spending besides the port to be wrapped up in the next two years.

Job creation could take longer though. As at the port, the state says other projects are supposed to get three years to hire after construction. The state counts only three projects that have defaulted on their job creation obligations, but the AP found a number of others where state aid is complete but private industry has created no jobs.

About $30 million is being held in a pot to court future aerospace projects in south Mississippi.

Officials also said it was important to note that more than 90 percent of all money, including for housing and infrastructure, was spent in the six southernmost counties. They said it was misleading to highlight $8 million planned for a parking garage for the city of Starkville, home of Mississippi State University’s main campus and more than 200 miles from where Katrina struck.

A private developer plans to build a hotel at the site and MSU plans to turn a former cotton mill into a conference center.

“It’s a parking garage to support a development that the locals really wanted and needed,” McPhillips said.

That’s part of roughly 20 percent of economic development money allocated outside the coastal counties. Mississippi had 49 counties declared public disaster areas.

 

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