The article appears to describe events occurring after the storm.
If after the storm is the case, what the heck is Blanco's objection?
You are probably correct.
What surprises me is that later in that article it mentions that NO didn't want to federalize the project because if something went wrong, they'd be blamed.
That doesn't make sense, of course, because if something went wrong and the project was federalized, it's the feds who would take the brunt of criticism.