Good news: Town of Delcambre will get disaster loan cancelled

WASHINGTON – U.S. Senator Mary L. Landrieu, D-La., today announced that the City of Covington government’s $2.2 million Community Disaster Loan (CDL) and the Town of Delcambre government’s $305,000 loan have been completely cancelled under a provision that she authored as part of her Fiscal Year 2013 Homeland Security Appropriations bill.
The provision fixed a flawed formula that prevented the cancellation of $228 million in CDLs in many South Louisiana communities. Since August Sen. Landrieu has announced $195.2 million in CDL loan forgiveness for Louisiana communities, including: the $35.6 million in CDLs for nine Louisiana community entities in August, the $7.2 million canceled for Jefferson Parish Sheriff’s department in September, the $14.5 million for St. Tammany Parish government in November, the $64.7 million disaster loaner for Jefferson Parish and the St. Tammany Sheriff’s Office in November, the $67.8 million for St. Tammany School Board in December and the $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. Sen. Landrieu said that the current cancellations are based on three-year data, and that she is hopeful to see more cancellations once five- and seven-year data is taken into account.
“Today, Covington and Delcambre are free of $2.5 million in unfair debt. Now, these cities can focus on investing in their communities and can better protect families, educate children and operate their city,” said Sen. Landrieu. “While many communities are still waiting on cancellations for their disaster loans, I am hopeful that in the coming weeks and months more communities will be able to move forward without this unfair debt. I am committed to helping the coast recover and build a future all Louisianians can count on.”
As the Senate worked late last year on a disaster relief bill for communities and regions hard hit by disasters in 2012, Sen. Landrieu included and passed this same provision in the Senate bill that died as a result of House inaction in December 2012. When the House passed a smaller, revised version 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.