Dubious Value: Underassessments save politicians bundles (NOLA Corruption Part 1)

Logic might dictate that the politicians who spend money generated by New Orleans property taxes would be among those pushing the city's seven assessors to be more aggressive in keeping appraisals in stride with rising property values.

But rarely is a peep about lax valuation practices heard from members of the School Board or City Council.

Although there's no evidence that politicians have sought special treatment, a review commissioned by The Times-Picayune suggests they're getting it anyway. While the average New Orleanian's home was worth 70 percent more than the appraisal reflected on the 2003 tax rolls, the average politician's home was worth almost twice its appraised value last year.

Interestingly, the survey's most undervalued home -- expressed in dollars as opposed to percentages -- belongs to a politician who has not hesitated to condemn the city's erratic appraisal practices: Mayor Ray Nagin.

Nagin's Park Island home is valued on the tax rolls at $355,100, $10,100 more than he paid for it in 1998. The brokers who conducted The Times-Picayune's survey think the house could now fetch $692,500, nearly double the sales price. Were Nagin's house revalued for that amount, his annual tax bill would rise from $4,876 to $10,656. ...Nagin isn't the only mayor whose house has been undervalued. The Mid-City home of former Mayor Marc Morial, who moved to New York last year to head the National Urban League, has not been substantially revalued since Morial bought it in 1993, even though Morial tacked on an 1,800-square-foot addition several years ago.

In December 1999, homeowners received tax bills reflecting the latest quadrennial reassessment. A story published at the time noted that 2nd District Assessor Claude Mauberret had not revalued Morial's Bienville Street home, which was still on the tax roll at $157,000, the price he paid for it.

From Risk & Insurance; 12/1/2000; WIDMER, LORI
Note: See last sentence of article ritten during the Clinton administration

Louisiana's marshlands, the only buffer for hurricanes that come out of the Gulf, are slipping into the ocean at an alarming rate. New search indicates that just one major hurricane could put New Orleans under water.

The Big Easy is in big trouble. New Orleans is sinking. And fast. But what's the big deal? Local businesses and residents have heard it all before. They've built levees to control the raging Mississippi. They've developed pumping systems to deal with rain and flooding. They've dug canals to move the water out of the city. And still they survive, wearing the battle scars earned from each hurricane and each flood as badges of honor.

New research by the U.S. Geological Survey, however, indicates that New Orleans is sinking faster than many realize and could be under water within 50 years. The city is facing a series of issues--disappearing wetlands that protect from hurricanes, levees that are too low to hold back flood waters, rising water tables, to name a few--that if not addressed soon could have New Orleans suffering the same fate as Atlantis.

Dramatic, yes. But not unlikely, according to Shea Penland, geologist and professor at the University of New Orleans. "When we get the big hurricane and there are 10,000 people dead, the city government's been relocated to the north shore of Lake Ponchartrain, refugee camps have been set up and there $10 billion plus in losses, what then?" he asks.

Penland has been studying hurricanes and the Louisiana coastline for decades, and he sees disaster coming. "Along the south shore of Lake Ponchartrain, there was a restaurant built in 1859 and some 200 homes that were built on pilings out on the lake around the 1930s. They had all been through the hurricane of 1948, Betsy in 1965, Camille in 1969. Hurricane Georges destroyed every one of them. Georges had a particular track that had the wind blowing directly across the longest distance that build the biggest waves."

And it is a hurricane on a particular track with a particular force that could submerge New Orleans. According to data supplied by Risk Management Solutions, a leading catastrophe modeling firm in Menlo Park, Calif., hurricanes of Category 4 or stronger make landfall within 100 miles of New Orleans about once every 35 years. There have been four storms of Category 4 strength or greater since 1899. Hurricane Camille made landfall as a Category 5 hurricane and was one of only two Category 5 hurricanes to hit the U.S. in the last century. Hurricane Betsy, a Category 4 hurricane, struck about 80 miles to the west of New Orleans, subjecting the populated areas to the stronger winds and surge on the right side of the storm path.

Another factor in how the city survives a hurricane is the natural buffer between the city and the sea. Louisiana's marshes are depleting at a rate of 25 miles to 30 miles per year, or the equivalent of a football field every 15 minutes. Since 1930, the state has lost well over 1,500 square miles of wetlands. Each year, New Orleans inches closer and closer to the Gulf of Mexico. The shrinking wetlands that bring the city closer to the coast are the same ones that have protected the city from catastrophic disaster in the past. Wetlands and barrier islands are a natural protection against hurricanes.

New Orleans sits on a bed of silt, sand and clay, which historically has been rebuilt with each flooding; new silt and sand are deposited when the river floods. But the levees that protect the city from flooding also prevent the rebuilding of the silt. As a result, New Orleans is sinking at a rate of one-third of an inch per year, which is not good for a city that is already eight feet below sea level. To make matters worse, global warming is causing the sea level to rise.

Because of these factors, Louisiana is a hot bed for claims, says Diana Herrera, regional marketing manager for the National Flood Insurance Program (NFIP) that operates through the Federal Emergency Management Agency. Flood claims for just the Orleans parish region since 1978 have totaled well over $309 million. Nonresidential property claims in that same area total more than $36 million, paid on 2,177 claims.

"Historically, we see more damage (from flooding) in the Jefferson, Orleans, and St. Tammany parishes. The May 1995 flood was the number one single largest event in the history of NFIP, and we paid more than $500 million in losses in that area," says Herrera.

The stakes are high, and not just for businesses in the region. Louisiana's contributions to the national economy are substantial, according to a report from the Louisiana Coastal Restoration Association. The infrastructure of the coastal area could experience a loss of more than $150 billion. That infrastructure supports several industries, including the $18.6 billion offshore oil and gas industries. Crude oil production and natural gas extraction in Louisiana contribute 89 percent and 83 percent of the country's oil and gas production. Thirty percent of the nation's fisheries are in and around the Louisiana coastline, and oyster production makes up 25 percent of the national market.

Water Everywhere

Draining the water from the New Orleans region has been a constant, centuries-old problem.

"Back in the 1800s and early 1900s, New Orleans had a very unique system of drainage that the Dutch copied," says Ken McManis, professor at the Department of Civil & Environmental Engineering, University of New Orleans. "What we had was a system to collect the water and pump it over the levee system. But if the water accumulates more rapidly than the pumps can handle, we get flooding in certain areas."

The turn of the century brought development to the lakefront. Flooding problems plagued the area. In 1920, the New Orleans Levee Board began a massive effort to hold back the lake. The city built a 200-acre, six-foot wall along the south shore of Lake Ponchartrain. By the mid-30s, the project was completed.

At the time, New Orleans was the economic center of the south. But a 1927 flood caused the banks to fear that the location was a threat to their economic stability, according to Charles Demas, head of the U.S. Geological Survey in New Orleans. The banks left for higher ground.

Another hurricane in 1940 overtopped the levee and flooded the city once more. Again, another levee was built that raised the existing levee a bit higher. In 1965, Hurricane Betsy overtopped that levee, and the city flooded again.

Today, water is still a problem. After several different levee systems and drainage canals, New Orleans is still wet. Twenty one pumping stations still pump the water back over the levees into Lake Ponchartrain. The water tables are still rising.

And hurricanes are still a concern. Scientists say that a hurricane of category 4 or higher would devastate the city, and the current levees and drainage measures would be rendered useless. "The biggest fear is a hurricane coming through Lake Ponchartrain with New Orleans being on the northeast quadrant of the storm's center," says Demas. "That's where all the rain's going to be."

Experts conclude that it would take about 72 hours to evacuate the city should such a hurricane hit New Orleans.

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