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PAR Says Embed Recovery Authority in Law

A top priority of the upcoming special legislative session should be to establish in law the Louisiana Recovery Authority (LRA). This will remove any doubt about the entity’s authority to plan the spending of the billions in recovery funding that has been granted by Congress so far. Reasonable and appropriate opportunity for legislative review of the LRA’s spending proposals and the highest level of accountability and transparency by the LRA should be required as part of the enabling legislation.

The LRA law should include:

  • Authority to plan and spend recovery funds with appropriate but limited legislative involvement
  • Fixed and staggered terms for board members appointed by the Governor and confirmed by the Senate
  • More restrictive prohibition on LRA board members and their immediate families with a 5% or greater stake in a company seeking recovery contracts
  • Financial oversight by state and outside auditing entities of all LRA transactions
  • Compliance with open meetings and public records laws, public bid laws and the ethics code

The LRA is currently developing proposals to the federal government to outline how the state will spend the $6.2 billion in federal block grants that Congress made available in December. Brewing controversy over the extent of legislative involvement in developing plans to spend this unprecedented amount of federal aid threatens to delay the state’s recovery. The sooner the powers of the LRA are set in law, with all the appropriate checks and balances, the sooner the state can move forward in a unified manner.

Broad spending outlines and the rules and regulations of the programs to be funded with the grants should require legislative review and approval, but micro-management by the Legislature should be avoided. It would be a mistake to subject the planning process for these funds to the type of horse-trading and backroom deal-making that normally accompanies, for example, the annual capital outlay process.

A reasonable and appropriate approach would require that the LRA get legislative approval for its partial action plans prior to submitting them to the federal level for approval. This would allow the Legislature to either accept or reject the plans, either by the full body when in session or through action by the budget committee and other relevant committees when out of session.

Originally established by an executive order in October, the LRA was granted wide authority to plan and implement the state’s short-term and long-term redevelopment goals. This authority includes the right to “receive, prioritize, create guidelines for and disburse to other agencies and organizations” all Katrina and Rita recovery-related funding that comes to the state from the federal government.

Created as a unit within the Louisiana Office of Homeland Security and Emergency Preparedness, the LRA is governed by a Board of Directors with 26 voting members appointed by the governor. Four members of the state Senate and House leadership serve as ex-officio, non-voting members. The members are assigned to task forces, which conduct research and make recommendations to the Board. Millions of private dollars are being raised to fund the research and planning efforts, which are being contracted out to consulting firms.

The LRA is modeled after the Lower Manhattan Development Corporation (LMDC), which was created as a state government unit responsible for post-9/11 development. The intent of the federal legislation that makes the block grants available to Louisiana is clearly that the funds should flow through an entity like the LMDC, which in Louisiana’s case is the LRA. The New York experience shows that this model for post-disaster research and planning can work, but that even with a single, coordinated authority redevelopment of destroyed communities takes years. Four years into redevelopment, the LMDC has yet to spend all the grant funding made available to it by Congress. Louisiana’s need for the LRA will likely extend beyond a decade.

Establishing the LRA in law should be a top priority of the upcoming special legislative session. This action cannot wait. The funds are flowing, and the battles over who gets to spend them have begun. Louisiana cannot afford to let politics slow its recovery.

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