News Column

Landrieu: Over $33 Million in Disaster Loans Canceled for St. Bernard, St. Tammany Parishes

February 20, 2014

WASHINGTON, Feb. 20 -- The office of Sen. Mary L. Landrieu, D-La., issued the following news release:

U.S. Senator Mary L. Landrieu, D-La., today announced that the Federal Emergency Management Agency (FEMA) has canceled two Community Disaster Loans from Hurricane Katrina- $4.6 million for the St. Bernard Parish School District and $28.7 million for Slidell Memorial Hospital in St. Tammany Parish, including interest. The loan forgiveness was made possible by a provision that Sen. Landrieu wrote into the Fiscal Year 2013 Homeland Security Appropriations bill. The provision corrects the old formula that failed to recognize necessary expenses; penalized communities for revenues that are otherwise dedicated; and omitted budgetary circumstances beyond the three-year period following the disaster.

To date, Sen. Landrieu's provision has canceled $228 million in loans for Southeast Louisiana communities, including $2.2 million for the City of Covington and $305,000 for the Town of Delcambre last month, $35.6 million in CDLs for nine Louisiana community entities in August, $7.2 million canceled for Jefferson Parish Sheriff's department in September, $14.5 million for St. Tammany Parish government in November, $64.7 million disaster loan for Jefferson Parish and the St. Tammany Sheriff's Office in November, $67.8 million for St. Tammany School Board in December and $5.4 million for St. Bernard Parish Government in December.

"After more than eight years of persistence and with the support of local leaders in St. Tammany and St. Bernard, we changed the law to create a commonsense formula that rightly canceled over $33 million in loans today," Sen. Landrieu said. "These parishes can now invest in providing our children with an excellent education and residents with high quality health care. Today's loan cancellations join a long list of Louisiana disaster loans that have been forgiven in recent months, and I'm hopeful we will see more as our communities continue to rebuild."

"We appreciate this action by FEMA. The funds were used to continue important healthcare services to our community, to make significant repairs to our infrastructure and to replace vital equipment that was damaged or destroyed by Hurricane Katrina," said Bill Davis, Chief Executive Officer of Slidell Memorial Hospital. "Had this loan not been forgiven, it could have significantly harmed our financial health. We believed all along that our case was strong for loan forgiveness under the intent of the Stafford Act to provide relief for disaster related expenditures. We are deeply grateful to Sen. Mary Landrieu and her staff for their efforts on behalf of Slidell Memorial Hospital."

"We have been working with a broad coalition from Southeast Louisiana over the past several years to have these loans forgiven but faced an uphill battle under the previous calculations," said Doris Voitier, Superintendent of St. Bernard Parish Schools. "Now, thanks to the leadership of Senator Landrieu who continues to champion the recovery of our community and our school system, the burden of having to repay these loans has been lifted. This opens doors for us to make stronger investments in our educational system, benefitting our students and moving us forward."

The old formula failed to recognize necessary expenses, penalized communities for revenues that are otherwise dedicated and omitted budgetary circumstances beyond the three-year period following the disaster.

In December 2012, as the Senate worked on a disaster relief package for communities and regions hard hit, Sen. Landrieu included this language in a Senate bill that died as a result of House inaction. When the House passed a smaller disaster relief package, in January 2013, it stripped this provision from the bill.

Sen. Landrieu has time and time again sought legislative and other solutions to help affected communities with outstanding loans. In 2007, Sen. Landrieu authored a provision to restore the possibility of loan forgiveness and nullify Republican legislation in 2005 that made forgiveness outright impossible under any circumstances. Without this legislation, these communities would have had to repay every penny. As a result of Sen. Landrieu's 2007 provision, FEMA previously cancelled $602 million in debt that Louisiana communities (approximately 60 percent) would otherwise be required to repay under the Republican legislation that originally authorized the loans.

In 2010, Sen. Landrieu convened a three-hour meeting with FEMA Administrator Craig Fugate and representatives from eight Louisiana parishes in her office to explain to FEMA officials how the formula did not accurately calculate a parish's revenue and expenses for determining whether an applicant met the forgiveness requirements.

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Source: Targeted News Service

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