Financing the Operation and Maintenance Costs of Hurricane Protection Infrastructure

Financing the Operation and Maintenance Costs of Hurricane Protection Infrastructure: Options for the State of Louisiana

Trey Miller
Copyright Date: 2012
Published by: RAND Corporation
Pages: 58
https://www.jstor.org/stable/10.7249/j.ctt5hhsvx
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  • Book Info
    Financing the Operation and Maintenance Costs of Hurricane Protection Infrastructure
    Book Description:

    This report analyzes the fiscal capacity of eight local levee districts in southern Louisiana to shoulder the burden of operating and maintaining the Hurricane and Storm Damage Risk Reduction System and other key hurricane protection infrastructure currently under construction by the U.S. Army Corps of Engineers, specifically focusing on operation and maintenance costs.

    eISBN: 978-0-8330-8274-9
    Subjects: History, Environmental Science, Sociology

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-x)
  6. Executive Summary
    (pp. xi-xiv)
  7. Acknowledgments
    (pp. xv-xvi)
  8. Abbreviations
    (pp. xvii-xviii)
  9. 1. Introduction
    (pp. 1-2)

    In the wake of Hurricanes Katrina and Rita, Congress authorized the U.S. Army Corps of Engineers (USACE) to take on the task of rebuilding and substantially improving the hurricane protection system in southern Louisiana. The USACE’s Hurricane and Storm Damage Risk Reduction System (HSDRRS) has been designed to eventually provide flood protection capable of withstanding a storm with a 1-percent or greater chance of occurrence in any given year to a portion of southern Louisiana, including the Greater New Orleans Metropolitan Area.

    The federal government is paying the bulk of the construction cost of the HSDRRS. However, when the system...

  10. 2. Projecting Operation and Maintenance Costs of Hurricane Protection Infrastructure
    (pp. 3-12)

    In this section, we discuss our methodology for projecting the O&M costs of new hurricane protection infrastructure associated with the HSDRRS and provide estimates of O&M costs by new piece of infrastructure and by levee district. We begin by discussing the data we employ to make projections. Next, we discuss our methodology for projecting O&M costs. We then provide estimates of O&M costs by piece of infrastructure and by levee district.

    Our analysis employs data on the hurricane and flood protection infrastructure that was in place before Hurricane Katrina and historical O&M expenditures by levee district. It also employs detailed...

  11. 3. Projections of Budget Balances, by Levee District
    (pp. 13-22)

    In this section, we present our projections of budget balances, by levee district. To project budget balances, we first build on our estimates from Section 2 to provide estimates of future O&M costs. Next, we analyze past trends in ad valorem revenue to make informed projections of future growth in ad valorem revenue. We use these projections of costs and revenues to project budget balances through 2016 under two scenarios for the evolution of property values.

    Our cost projection model described in Section 2 provides the backbone for projecting the O&M costs of the HSDRRS. However, to make long-term cost...

  12. 4. Approaches That Other States Have Tried for Financing O&M Costs of Levee and Hurricane Protection Infrastructure
    (pp. 23-28)

    In this section, we discuss approaches that other states and local government agencies have used to finance the O&M costs of levees and hurricane protection infrastructure. We used several sources of information to collect data on these other states’ approaches. In our interviews with levee district leaders from Louisiana, we discussed revenue sources and probed for revenue sources currently used by levee districts other than ad valorem taxes. We examined the websites of a number of state and local sponsors of federal flood control projects, as well as general state flood control and water management agencies. We also interviewed individuals...

  13. 5. Findings
    (pp. 29-32)

    In the wake of Hurricanes Katrina and Rita, the USACE is in the process of rebuilding and improving the hurricane protection system in southern Louisiana. The HSDRRS has been designed such that, when it is complete, it will provide protection capable of withstanding a storm with a 1-percent or greater chance of occurrence in any given year.

    This report provides data-driven estimates of O&M costs associated with the new HSDRRS that will be borne by Louisiana’s levee districts:

    For the large and unprecedented pieces of infrastructure being built by the USACE, we used cost-plus engineering estimates of O&M costs provided...

  14. Appendix
    (pp. 33-38)
  15. References
    (pp. 39-39)