[StBernard] St. Bernard will tap feds for loan

[Westley Annis]

Council agrees to a strict oversight plan 
 
Thursday, August 17, 2006 
 
By Karen Turni Bazile
 
Reversing itself, the St. Bernard Parish Council has decided to move forward
with a plan for the parish to borrow up to $10 million from the federal
government to rebuild flood-damaged public buildings. 
 
The council had deadlocked 3-3 on the measure in July. But Council Vice
Chairman Joey DiFatta, who was out of town for the first vote, offered a
compromise measure late Tuesday night that the council accepted. Under
DiFatta's proposal, parish government will set aside up to $10 million for
building repairs, and the council would have strict oversight of how that
money is spent. 
 
Then the parish would be able to use the loan from a low-interest federal
program for day-to-day operations because government is restricted from
using the borrowed money for anything but operations. William Beck, a bond
attorney from Foley & Judell, told the council it could shift the funds
around as DiFatta suggested. 
 
DiFatta said his measure to set up a special account will provide an
important check and balance. 
 
"Those operating funds would be directed to capital projects, and any
reimbursement from FEMA for that work will go to pay back any loans," he
said. "This is one safeguard measure we can put in place so the residents
can feel better about what we are doing." 
 
The state Bond Commission is to decide Thursday how much of the $10 million
will be made available to St. Bernard, Beck said. Beck said the federal
government has a history of forgiving such loans and forgave those issued
after the Sept. 11 terrorist attacks. However, the federal government has
not said it would forgive the Katrina-based loans. 
 
Although Council Chairman Lynn Dean and Councilman Mark Madary reiterated
their opposition to borrowing the money instead of cutting spending, Parish
President Henry "Junior" Rodriguez said the parish would "look foolish" if
it didn't take the opportunity to get low-interest money from the federal
government that it may never have to pay back. Besides, he said the parish
has no money to pay for extensive renovations to the government complex and
other damaged buildings. The Federal Emergency Management Agency will only
reimburse the parish after projects are completed. 
 
The council borrowed $8.9 million for operations from the federal government
in a Community Disaster Loan shortly after Katrina. 
 
Although council member Judy Hoffmeister voted against the borrowing in
July, she voted in favor of the loan Tuesday. Councilmen Kenny Henderson,
Craig Taffaro, Tony "Ricky" Melerine and DiFatta also voted in favor of the
loan. The measure passed 5-2, with Dean and Madary opposing it. 
. . . . . . . 
Karen Turni Bazile can be reached at kturni at timespicayune.com or (504)
826-3335.