Contractor Sues Parish Council in Louisiana over Hurricane Gustav Bills

A lawsuit seeks about $53 million from the Livingston Parish Council in Louisiana for Hurricane Gustav cleanup costs.

International Equipment Distributors Inc. is suing for bills that the parish has not paid and for which the Federal Emergency Management Agency has refused reimbursements, according to The Advocate.

FEMA has refused to provide reimbursement for most of the bills, saying sufficient documentation hasn’t been provided to show the eligibility of the work. The parish is appealing FEMA’s rulings. Meanwhile, Parish President Mike Grimmer says that the parish is responsible to the contractor only for work reimbursed by FEMA.

Grimmer said that was why he shut down the cleanup after finding that questionable work had been done.

He said it is also why he refused to deposit an initial check from FEMA for more than $42 million.

If the parish had accepted and disbursed that money, the parish would be liable for refunding the federal agency for all the ineligible costs, Grimmer said.

Because the parish didn’t accept the check and FEMA has since denied much of the reimbursement, the parish owes the contractor only the amount reimbursed by FEMA plus the parish’s 5 percent match, Grimmer said.

The suit, however, maintains the parish is responsible for paying for the work whether the work is reimbursed by FEMA or not.

It cites a disaster guide from the Louisiana legislative auditor that says agencies can’t tell a company that it will be paid only if a reimbursement is made by FEMA.

“IED has never before been placed in the position where it had to sue a client,” IED President Lawrence Green said in a news release.

“For two years, IED and its subcontractors have borne the financial burden of Livingston Parish’s recovery from Hurricane Gustav,” Green said.

The parish’s general fund budget is about $7 million, and the total of all of its funds is about $33 million.

Most of that money is mandated for specific costs, Grimmer said.

Information from: The Advocate