BATON ROUGE -- Three years after sustaining heavy wind and flood damage from Hurricane Katrina, Charity Hospital remains shuttered as state and federal authorities continue to disagree about the scope and cost of the damage to the historic building.

Numerous studies have failed to produce consensus on how much the state should be reimbursed under the Stafford Act, which governs the federal response to disasters. Instead, the two sides remain more than $400 million apart.

The state's case is complicated by the fact that the Charity Hospital building was in poor condition before the storm, to the point where a national accrediting body had recommended that a new hospital be built.

Paul Rainwater, the executive director of the Louisiana Recovery Authority, said the state had hoped to have the matter resolved in time for President Bush's Aug. 20 visit to Louisiana. But the two sides could not agree on a figure, and instead have decided to convene a "technical working group" that will try reach a settlement in the weeks ahead.

The group held its first meeting Wednesday.

As the stalemate enters its fourth year, it is threatening to derail Louisiana's efforts to build a replacement teaching hospital. State officials have been hoping for a large federal reimbursement to help finance the $1.2 billion project.

"Nobody thought we would be arguing with FEMA for three years over the damage to that hospital," state facilities manager Jerry Jones said.

The state cites three studies it has commissioned, each of which showed that the hospital was more than 50 percent damaged by the storm and subsequent flooding from Katrina. That would require the federal government to pay the "replacement cost" of a new hospital, which the state puts at $492 million.

A fourth study, conducted by the architectural firm RMJM Hillier on behalf of a preservation group, estimates that it would cost $484 million to rehabilitate the Art Deco building on Tulane Avenue into a state-of-the-art teaching hospital.

"We're going to push for a resolution on this, but we feel strongly about this number," Rainwater said, referring to the state's $492 million estimate of the replacement cost.

FEMA counters with its own engineering studies, completed in December 2005, that says the hospital only sustained $23 million in damage.

Jim Stark, the head of FEMA's Louisiana recovery office, said the federal government is only obligated to pay for damage resulting from the storm, and that much of the repair work identified by the state's engineering reports either pre-dated the hurricane or occurred in the aftermath of the storm.

"It's clear that Charity was hurting prior to the storm," Stark said. "But FEMA is not in a position, consistent with the Stafford Act, to repair those kinds of decrepit conditions that existed prior to the storm."

Stark said he doesn't expect FEMA to agree with the state's contention that the building was more than 50 percent damaged by the storm. He said much of the damage to the building identified in the state's engineering reports is the result of deterioration that's occurred since the storm, which he blames on the state's failure to make basic repairs to the roof and windows.

"If the state had initiated repair work immediately, or a month or two after the storm, I think it's safe to say the repairs would have been effective," Stark said.

But Jones said the vast majority of the post-Katrina damage was due to mold that occurred in the storm's early aftermath. Moreover, he said the federal government did not produce a "project worksheet" -- which is necessary for reimbursement -- to fix the building's roof until earlier this summer.

Rainwater said the Charity reimbursement was one of the "top priorities" that Gov. Bobby Jindal asked him to address when he consolidated authority over the state's hurricane recovery in the Recovery Authority shortly after taking office in January.

He said communication between the state and federal government has improved in recent months after becoming strained in the final months of Gov. Kathleen Blanco's administration. "It was obvious that the relationships with FEMA had broken down to a point where it was very unproductive," Rainwater said.

But Jones said his three years of dealing with federal officials has created an atmosphere of mistrust that still persists. "It's like they don't trust us, that we're trying to beat the system and we' really aren't," Jones said. "Pretty much throughout this disaster that's how FEMA's treated us."

Copyright 2008 The Times-Picayune Publishing Company