The New Orleans City Council will decide Thursday whether to distribute $5 million in grants to 20 businesses and nonprofits without two analyses that are required by law.

A vote will be made Tuesday at the council’s Special Projects and Economic Development Committee, which Fielkow chairs. The full council could then vote on it Thursday.

Grant applications must by law go to the Economic Development Advisory Committee for approval before they are sent to the mayor and city council for their approval. A full cost-benefit and return-on-investment analysis of each application must be made. That should happen before Dec. 15 each year.

However, after New Orleans Mayor Ray Nagin used an emergency order during Hurricane Gustav to bypass the committee’s review and then sent it directly to the council, New Orleans City Council Vice-President Arnie Fielkow said the grant proposals didn’t even reach the committee. That means the city council must decide whether to vote for the passage of the grants, something that Fielkow says is illegal.

Fielkow added that the council didn’t receive any of the grant applications until September – 10 months past the December 2007 deadline.

New Orleans Recovery Chief Ed Blakely said that delay was due to a two year build up of applications following the committee’s postponement during Hurricane Katrina. He said the end of the terms of committee members shortly thereafter exasperated the problem.

“We did the best job we could, considering the circumstances,” Blakely said.

Blakely said despite the fact that a final vote was not made by the committee, the process should still be able to move on. He says the city had an economist review the proposals who then briefed the committee, but because the spouse of a committee member became sick, a final vote was not able to be made before Hurricane Gustav hit – which Blakely said further encumbered the process.

Blakely doesn’t deny that the cost-benefit analysis, which is required by law, never took place.

“No one could [do an analysis] post-Katrina, because we didn’t even know how many businesses we had in the city,” Blakely said, adding that a fully-blown analysis wasn’t possible.

He said that instead an advisor looked into the benefits and potential economic output of each individual company. He said the Nagin administration is happy with the extensiveness of the advisor’s report.

Fielkow said he will suggest putting the grants on hold for roughly a month so they can legally follow through with the process, which was establish in 1991 as The Economic Development Fund. Through property taxes it doles out around $2.3 million in grants annually. Because there are some reserves this year, there is an unusually large amount ready to be given.

“The grants serve a purpose,” Fielkow said. “But we’re using taxpayers dollars. There needs to be a return on investment. That’s the key language that’s in the ordinance right now. And you have to demonstrate that, just like if you go into a bank.”

Fielkow said that he wasn’t against any of the businesses that applied for the grants and that he just wants to complete the process correctly.

“I’m very pro-business,” Fielkow said. “But I also have to be a good financial steward of over $5,000,000 in this case, and I don’t think we’re doing this.”

But Blakely feels that delay on the vote of the applications could be costly.

“That will delay many other things the council is interested in, like [public private partnerships] and other things,” Blakely said. “We can put this behind us. We have a fully blown process next year that we have installed.”

There were 20 total applications delivered, down from 32 initial applicants. Seven of those dropped out, while Nagin brought the list down to its current number. Right now, he said, there are public meetings, hearings and advertisements that are required by the initial ordinance. But Fielkow says that it’s not enough: the availability of the grants needs to be more visible.

“I think they need to do a better job of advertising this. You know, the grants themselves are very helpful. And they’ve been given to companies that have been using them in a good way, I just don’t think the 20 put forward. I think we ought to have an equitable process,” Fielkow said.

The grants, Fielkow says, have served many useful purposes that are intended to aid the economy through helping local businesses. He says that the money given to the Idea Village, for example, helped to bring a lot of business to the community while improving technology for the area.

Fielkow says that even though the whole process is so backed up, it’s important to carefully follow the necessary steps.

“We have the 2008 grant process right behind us,” Fielkow said. “It’s important we do this one right.”

Jill Hezeau contributed to this report