Exclusive WWL Investigation uncovers how delayed FEMA advances, looming deadlines and poor communication helped send the city to the brink of missing payroll.
NEW ORLEANS — New Orleanians don’t need an explanation of the city’s massive street-repair effort to know what it feels like. They live with it daily — the mud, the detours, the sudden water shutoffs.
But few residents realize the program digging up their blocks this summer also blew a cavernous hole in the city budget.
“I mean, it’s taken a toll,” said Gentilly resident Leah Namer, whose neighborhood has been torn up for years. “It’s cost me money for wear and tear on my vehicles. They’ll just randomly turn off the water all day long. And there’s no reason that the money for this work shouldn’t go where it’s supposed to go.”
That money — $1.7 billion in FEMA funding to fix 10,000 blocks of streets and the pipes beneath them — is the backbone of the Joint Infrastructure Recovery Request, or JIRR. But detailed city and state financial records reviewed by WWL show the program ran up a $123 million deficit by June 13 before city officials realized they were draining the city’s already depleted general fund.
A few months later, the city was forced to get state legislators to approve a $125 million short-term loan to avoid missing payroll.
And neither the City Council nor the public heard a word about the difficulties with JIRR until WWL raised questions.
City tapped general fund to cover nine-figure JIRR shortfall
The city official overseeing JIRR, LaNitra Hasan, acknowledged in a June 13 letter to the Governor’s Office of Homeland Security and Emergency Preparedness — the state agency that administers FEMA aid — that JIRR had $96 million in unpaid bills and had “completely exhausted” its previous FEMA advance.
“This is currently causing a strain on the city’s financial resources,” Hasan wrote while asking GOHSEP for a new $120 million advance.
That request was actually her second one in a span of two months. Hasan had asked for the same amount in April, but without warning of any looming fiscal crisis.
“At that point it wasn’t apparent to us that there was any sort of constraints from a cash perspective, because the general fund did have cash,” she said in an interview with WWL. The crunch didn’t become obvious until June, when invoices piled up and payments slowed.
To keep money flowing to contractors, the city quietly tapped its general fund, then started backfilling it with proceeds from a capital bond sale in June. Capital Budget Director Kyle Homan said the strategy was temporary but necessary, noting the amount the city was fronting was “growing larger every week.”
City Council budget chairman: ‘We didn’t know about all this’
Even after the strain on the general fund became clear to them, the Cantrell administration did not brief the City Council. Not even Council Budget Committee Chair Joe Giarrusso — who would also have to wrestle with a broader general-fund deficit projected to hit $222 million this year — was told that JIRR was part of the problem.
“We didn’t know about all this,” Giarrusso said. “The question has always been, how did we get into this cash-flow situation? And one of the questions I had was, what could possibly have caused such a big hit on cash flow at one time?”
He said he didn’t get an answer until WWL showed him its findings from weeks of reviewing hundreds of pages of city and state financial ledgers.
Reimbursements stopped, advances stall, deadlines loom
The JIRR program is funded almost entirely with FEMA aid awarded to fix streets and subsurface infrastructure after Hurricane Katrina 20 years ago.
Under normal rules, FEMA reimburses cities only after they spend the money first. But since 2020, New Orleans has had a special agreement to receive advances for future JIRR expenses — essentially cash up front — to keep the work moving.
The city used those advances aggressively. But after more than 1,500 reimbursements and seven advances, the city shifted to relying solely on advances in late 2022. It had the option to ask the state to “turn on” Express Pay reimbursements to be paid within seven to 10 days of paying a contractor’s invoice, but it didn’t do that for more than three years, between August 2022 and October 2025.
By 2024, the city was requesting advances less frequently. Because FEMA and GOHSEP require every dollar of prior funding to be spent before sending more money, each delay pushed the city further behind on its bills.
After receiving a $120 million advance in May 2024, New Orleans waited 11 months before asking for another — by which time it had already spent far more than that amount and was over $100 million in the red.
Complicating matters further: FEMA’s rigid “period of performance” rules. New Orleans has blown past three federal deadlines to finish JIRR work – July 2023, February 2024 and March 2025 – and is now asking to be allowed to extend a fourth deadline of Dec. 31, 2025, out another three years, to Dec. 1, 2028.
Whenever one of those deadlines approaches, the city races to complete as much work as possible while seeking another extension. But by program rules, GOHSEP cannot advance money for any work that won’t be “substantially complete” before the deadline.
“GOHSEP will not expend any additional advances or reimburse us for anything that’s outside of the eligible period of performance for the grant,” Hasan said.
That bottleneck repeatedly left the city burning through its own cash faster than federal funds could arrive.
Hasan said it also took a while to start getting the Express Pay reimbursements again once the city realized the JIRR was draining the general fund’s cash.
“Sometimes, GOHSEP can’t turn around on a dime,” she said. “A large entity like GOHSEP, it is a challenge for them to switch between advances and Express Pay.”
Once the city collected an advance in July and resumed reimbursements in October, the program’s deficit dropped sharply, from over $100 million to $45 million by Nov. 5.
Last week, the state rejected the city’s latest request for another $120 million advance and instead sent the city $54 million, covering only the roadwork New Orleans could finish before the Dec. 31 “substantial completion” deadline.
That, at least, got the JIRR program back in the black.
Another extension sought and mayor-elect will inherit the mess
Now, if FEMA grants another deadline extension, the challenge begins anew.
New Orleans still has $300 million in JIRR work budgeted, to finish the remaining street work in seven project groups.
Group 1 covers Lakeview, Lake Terrace and the Fairgrounds area. Group 2 is Hollygrove and Gert Town. Group 3 is the Desire Area. Group 4 is the Lower Ninth Ward, Riverside and Plum Orchard. Group 5 is Gentilly. Group 6 is Gentilly Woods, Pontchartrain Park and Pines Village. Group 7 is Lakeshore and Lakewood.
Hasan said COVID-era supply chain issues, inflationary prices and labor shortages made the original schedule and budget for JIRR unrealistic. FEMA has already rejected the city’s request for an additional $1 billion to finish all originally planned repairs. It’s still reviewing the city’s request for more time.
Some projects in the original plan will have to be abandoned, Hasan acknowledged, although recent declines in construction prices could let the city restore some of that scope.
After nearly 20 years, three mayoral administrations and repeated bureaucratic logjams between the city and Sewerage & Water Board, JIRR has never escaped its own complexity. Former Mayor Ray Nagin never did get the program started during his second term. His successor, Mitch Landrieu, finally secured an agreement in December 2015 to release the FEMA money and coordinate projects with the Sewerage & Water Board but spent only $19 million in his last two years in office. Mayor LaToya Cantrell will have spent nearly $900 million by the time she leaves office in January — but still won’t finish the work.
Namer hopes Mayor-elect Helena Moreno can finally break the cycle when she takes over in six weeks.
“We can’t change things in our world if we don’t fully understand what the problem is,” she said.
Giarrusso, who leaves the Council in January, said he’s already working with Moreno’s transition team to confront the program’s fiscal tangle.
“Government is bad when it gets a lot of money that it isn’t expecting to get,” he said. “You’ve drastically increased the work, and trying to work through that is harder than it looks.”