Landrieu: Feds forgive St. Tammany’s disaster loans

COVINGTON (AP) — St. Tammany Parish’s $14.5 million in disaster loans stemming from Hurricane Katrina have been canceled by the federal government, U.S. Sen. Mary Landrieu announced Wednesday.
In a statement, Landrieu said the parish will not be responsible for $12,231,219 in principal and another $2,274,226 in interest for a total forgiveness of $14,505,445.
“Now that St. Tammany is free of $14.5 million in unfair debt, the parish can continue to invest in the community and avoid laying off teachers, deputies, first responders and other essential personnel,” Landrieu said.
The loan forgiveness by the Federal Emergency Management Agency falls under a provision the senator inserted into the fiscal year 2013 Homeland Securities Appropriations bill. The provision fixes a flawed formula that prevented the cancellation of $286.7 million in loans in many southeast Louisiana communities, her office said.
The St. Tammany loan forgiveness is in addition to the $35.6 million in loans forgiven for nine Louisiana government jurisdictions, including Folsom, Slidell, Grand Isle and the Orleans Parish Sewerage and Water Board, that were announced in August, as well as the $7.2 million canceled for the Jefferson Parish Sheriff’s Office in September, Landrieu’s office said.
Several other governmental bodies are awaiting word on the loan repayments for which they are on the hook, including the St. Tammany Parish School Board, which owes $60 million.
“I am hopeful that in the coming weeks and months more of our communities will see the same relief from this unfair loan debt,” Landrieu said.
Parish President Pat Brister welcomed the news and thanked Landrieu and others for their efforts.
“The close-out of the disaster loan ends one of the last chapters of our Katrina recovery, and helps us get one giant step further away from that horrific event,” she said. “We will continue to push forward with economic revitalization and bounce back from that storm, and the subsequent disasters that have befallen our parish.”
St. Tammany officials have been seeking loan forgiveness for years, but were rejected by FEMA. Brister, along with former President Kevin Davis before her, tried to convince federal officials that it would be difficult, if not impossible, to repay the loans.
After Katrina, the federal government made $120 million in loans to various St. Tammany agencies to cover basic operating costs, with the largest sum going to the School Board. In total, local governments across Louisiana received nearly $1 billion in loans after hurricanes Katrina and Rita.