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Enraged over what they say amounts to blackmail, New Orleans City Council members refused to take action Thursday on the controversial higher elevation standards that federal and state officials are demanding in exchange for millions of dollars in rebuilding aid.

But the council appears to be locked in a battle it cannot win.

Whether or not it adopts the guidelines, members learned Thursday that effective Sept. 1, homeowners who have not yet secured building permits for post-Katrina rebuilding will be forced to abide by the advisory base flood elevations proposed by FEMA or be shut out of a share of billions in federal assistance earmarked to the state's Road Home program, designed to cover uninsured losses.

Those rules will require that new structures and those being substantially rebuilt sit at least 3 feet off the ground.

A failure by the council to act also could put at risk $58 million in federal money available to help homeowners raise houses that have flooded repeatedly, and millions more for infrastructure.

That was the blunt assessment of the situation offered by Paul Rainwater, director of intergovernmental relations and hazard mitigation for the Louisiana Recovery Authority, the state agency in charge of dispensing the federal dollars.

As they have many times before, council members ridiculed the proposed regulations, labeling them arbitrary and illogical. The law under consideration would exclude locally protected historic districts, meaning a large swath of New Orleans will be exempt from the new requirements. But it does not exempt properties on high ground outside those districts.

All told, 12 neighborhoods are under the jurisdiction of the Historic Districts Landmark Commission, four of which are in the Central Business District. The French Quarter, which is protected by the Vieux Carre Commission, would likewise be exempted.

"I feel like a gun is being held to our heads," Council Vice President Arnie Fielkow told Rainwater. "They (elevation standards) don't make much sense."

"It is insane," Councilwoman Cynthia Hedge-Morrell told Rainwater, summing up the feelings of most of her colleagues.

Noting that the recommendations were prepared by bureaucrats from the Federal Emergency Management Agency, Hedge-Morrell said she objected to being forced to take orders "on how to build" from appointees not answerable to voters.

"You're blackmailing us," she said.

The most galling aspect of the proposal, council members said, is that damaged homes in areas of the city that had never flooded before Katrina will be saddled with onerous elevation requirements.

What's worse, they said, was that once the Army Corps of Engineers completes its upgrade of the levee protection system several years from now, the elevation standards probably will be lowered.

"People will be walking up ten steps when they need just three steps," Morrell told Rainwater said. "And you'll say, 'Oops!' "

Councilwoman Cynthia Willard-Lewis said she felt it was unfair for the LRA to set the Sept. 1 deadline with so little warning.

"Every step of the way, we've been pushed and prodded," she said, adding that a year after the storm, the obstacles facing Katrina evacuees struggling to return home far outnumber the incentives.

In the past, Rainwater has said that the LRA is not attempting to strong-arm local governments but to retain the faith of federal officials who helped steer some $10.6 billion into the Road Home program by offering evidence that the city will build higher and safer in the future.

On Thursday, he reminded council members that the LRA had earlier agreed to bestow "pioneer status" on tens of thousands of New Orleans homeowners who have already secured building permits, grandfathering them into the existing regulations. That grandfather status ends Aug. 31.

Councilwoman Stacy Head said she hopes the delay in voting will provide the council time to persuade FEMA and the LRA to expand the exemptions to include all structures in "B" flood zones, which are areas generally less prone to flooding.

Rainwater said he doesn't believe there is much chance of that happening.

Shelley Midura was the lone council member who supported acting Thursday on the flood elevation standards, arguing that some insurance companies are holding back on settlements until the city adopts an ordinance.

"We have to do this," she said. "There's no reason for us to hold this up."

In the end, the council agreed to schedule a meeting of its Housing Committee for next week to consider the matter again, and kept the door open to holding a special meeting of the full council before month's end to take a vote on the regulations.

The new advisories, which FEMA issued in June, essentially mirror the 1984 base flood elevations set by the agency. Those elevations dictate how high off the ground the floors of new structures must be in various neighborhoods, depending on their vulnerability to flooding.

The advisories differ from the 1984 standards only in that they suggest that new structures meet base flood elevation or be situated at least 3 feet above what FEMA calls "highest adjacent grade," whichever is higher. The city typically calculates adjacent grade as either the height of the curb or the crown of the street.

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Frank Donze can be reached at fdonze@timespicayune.com or (504) 826-3328.