Landrieu Announces Over $5.6 Million in Disaster Loans Forgiven for Lafourche, Washington Parishes

Press 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 in Lafourche and Washington Parishes. The Bogalusa School Board will receive $609,286 in disaster loan forgiveness, while the Lady of the Sea General Hospital will receive $5.08 million in loan forgiveness. Both totals include principal and 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.

"Nearly a decade after Hurricane Katrina wreaked havoc on Louisiana, communities across the state are beginning to breathe a bit easier thanks to these loans being cancelled," Sen. Landrieu said. "Parishes in South Louisiana have suffered enough and should not be saddled with unfair debt, especially when those funds can be reinvested into hospitals, schools and infrastructure. I'm confident we will see more cancellations as a result of our years of work to fix a flawed formula that left many communities wondering how they'd pay their bills. Our recovery efforts are not over in Louisiana, but these loan cancellations bring us a bit closer to putting this challenge behind us."

"We are excited that FEMA has forgiven this loan for our school system," said Adam Kemp, President of the Bogalusa School Board. "We are a very small system, and every dollar that we are spending on these loans is another dollar we're not putting into educating our children. We are grateful to everybody that worked so hard to get these loans canceled. Now, we can take this money and use it for the betterment of our children and school system"

"We appreciate FEMA's actions in forgiveness of our disaster loan," said Karen Collins, Chief Executive Officer of Lady of the Sea General Hospital. "Our community has been negatively impacted by a number of hurricanes. This debt relief is great news for our community and our ability to provide continued health care. We are grateful to Senator Mary Landrieu and her staff on behalf of Lady of the Sea General Hospital and her advocacy for the needs of South Louisiana."

To date, Sen. Landrieu's provision has canceled more than $233 million in loans for Southeast Louisiana communities, including $33 million in loans for St. Bernard and St. Tammany Parishes last month, $2.2 million for the City of Covington and $305,000 for the Town of Delcambre in January, $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.

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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