Mayor says decision far away on forgiveness of FEMA loans

Mayor A.J. Holloway said he welcomed Vice President Joe Biden’s comments today regarding the federal government’s position on forgiving emergency loans it made to local communities in the wake of Hurricane Katrina, but local leaders shouldn’t begin celebrating just yet.

”Congress gave FEMA the authority to forgive these loans back in 2007,” Holloway said, “but there’s still some question about which cities are eligible to have loans forgiven.”

Under the terms of the legislation, FEMA has the authority to cancel all or part of a Community Disaster Loan only if municipal revenues were insufficient to meet operating expenditures for three years after the storm.

In the case of Biloxi, which received $14 million in CDLs in the wake of the storm, Holloway says the city should not be penalized for any insurance payments or FEMA reimbursements, which were earmarked for rebuilding, not operating expenditures.

Said Holloway: “We’re very appreciative of every bit of federal assistance that we’ve received, and we’re confident that we’ll be treated fairly on this, too. What we want to avoid is being penalized for having good fiscal policies and good insurance.”