Nagin: Layoffs Cause 'Great Sadness'

NEW ORLEANS – His city in financial ruin from Hurricane Katrina (search), Mayor Ray Nagin is slashing about half the city's work force — a move he said caused him "great sadness."

Nagin said Tuesday he would lay off as many as 3,000 employees because he had been unable to find the money to keep the workers on the payroll.

The layoffs are "pretty permanent," Nagin said, and the city will work with the Federal Emergency Management Agency (search) to notify municipal employees who fled the city after the hurricane struck more than a month ago.

"I wish I didn't have to do this. I wish we had the money, the resources to keep these people," Nagin said. "The problem we have is we have no revenue streams."

He said only nonessential workers will be laid off and that no firefighters or police will be among those let go. The layoffs, which will take place over the next two weeks, will shave about $5 million to $8 million from the city's monthly payroll of $20 million.

"We talked to local banks and other financial institutions and we are just not able to put together the financing necessary to continue to maintain City Hall's staffing at its current levels," the mayor said.

Nagin's announcement came after former President Clinton (search) toured Louisiana on Tuesday, meeting with dozens of New Orleans-area evacuees staying at a shelter in Baton Rouge's convention center.

Clinton, working with former President Bush to raise money for victims, shook hands and chatted with the evacuees, some of whom have been sleeping on cots in the Rivercenter's vast concrete hall for more than a month. Many complained of lack of showers, clean clothes, privacy and medical care.

"My concern is to listen to you ... and learn the best way to spend this money we've got," Clinton said of the $100 million fund he and Bush are overseeing.

Robert Warner, 51, of New Orleans said he and others have struggled to get private housing set up through FEMA.

"We've been mired in the bureaucratic red tape since Day One," he said.

Clinton later toured New Orleans' heavily damaged lower Ninth Ward, where houses are caved in or pushed off their foundations.

"I saw things I'd never thought I'd see," he said later before a meeting with residents of the largely untouched Algiers neighborhood, which already has reopened to residents.

Clinton told residents at an Algiers high school that state officials are committed to creating a comprehensive plan to help Louisiana residents.

"We've got a much better chance of giving people a fair shake in the long-term than we did in the short-term," he said.

Meanwhile, the first publicly released survey of the nation's insurers found that Hurricane Katrina is likely to result in at least $34.4 billion in personal and commercial property loss claims, making it the most costly U.S. natural disaster ever.

ISO's Property Claim Services Unit said Tuesday that its preliminary estimate of damages to homes and businesses in six states from Katrina would surpass the inflation-adjusted $20.8 billion in losses from Hurricane Andrew in 1992.

Several risk assessment companies earlier released projections of insured losses from Katrina, with totals ranging from $14 billion to $60 billion.

ISO, an insurance risk and data firm based in Jersey City, N.J., said that policyholders in the six affected states — Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia — were expected to file more than 1.6 million claims for damage to personal and commercial property, automobiles, boats and yachts.

Louisiana, the hardest hit state, was expected to produce 900,000 claims for some $22.6 billion in losses, the report said.