BATON ROUGE – Today, the Office of Facility Planning and Control formally submitted documents outlining their decision to enter arbitration in challenging the actions of FEMA in connection with the amount of damages to Charity Hospital in downtown New Orleans. Arbitration by a three-judge panel of administrative law judges was approved pursuant to recent congressional action to expedite the recovery process. The state’s prior administrative appeal through FEMA has been simultaneously withdrawn.

The Office of Facility and Planning and Control’s submission to the Civilian Board of Contract Appeals is the official indication that the state will enter arbitration to resolve the Charity Hospital repayment issue with FEMA. Additionally, under the Department of Homeland Security’s arbitration rules, the Governor’s Office of Homeland Security and Emergency Preparedness, as the state’s grantee for the Public Assistance program, will submit additional supportive documents to the arbitration panel deciding this matter in the coming days.

Commissioner of Administration Angele Davis released the following statement:

“We believe arbitration by an independent body is the best option for an expedited settlement of this long-standing dispute, which has stalled the state’s efforts to build a state-of-the-art medical facility that would provide world-class medical care and medical education and research to the entire Gulf region.

“Facility and Planning Control has consistently demonstrated that the hospital was more than 50 percent damaged by Hurricane Katrina, qualifying it for full replacement cost under the regulations of the FEMA Public Assistance program. FEMA has been unwilling to recognize this severe damage and also has denied our appeal for full replacement costs. Because the large sum of $492 million is at stake and we have challenged FEMA’s handling of the issue, we feel it is better for an arbitration panel from the Civilian Board of Contract Appeals, and not FEMA, to offer final judgment in this matter.

“Our office has clearly demonstrated through three independent and nationally-recognized consulting firms that the extreme damage Hurricane Katrina wrought on the Charity Hospital building that exceeded 50 percent of the replacement value that and that the replacement value is almost $492 million. In addition, several state agencies have coordinated their efforts to further justify our request for replacement costs.”