[StBernard] La. local govts can borrow cash while waiting for FEMA and state

[Westley Annis]

BATON ROUGE, La. (AP) - Cash-strapped parishes and local governments
struggling to rebuild after hurricanes Katrina and Rita will have access to
a $500 million pool of loans until they get reimbursed by FEMA for the work.
 
Local government officials, including New Orleans Mayor Ray Nagin, have
complained that reimbursement money from the Federal Emergency Management
Agency that flows through the governor's homeland security office is moving
too slowly. Local officials have blamed both federal and state government
red tape for the hold-up.
 
While cities and towns wait for their reimbursement money, they will be able
to borrow an estimated 75 percent to 80 percent of the anticipated FEMA
grant money from the Louisiana Public Facilities Authority. They then will
repay the loan with interest to the LPFA when they are reimbursed by FEMA.
 
The State Bond Commission on Thursday approved the LPFA's request to borrow
the $500 million - through bond sales to investors - to loan the local
governments the upfront cash. The commission also agreed to the LPFA's
request to borrow $250 million for a similar program for nonprofit local
government entities. 
 
The interest rate will be around 3.5 percent on the loans, but the public
facilities authority is looking for a pool of money that could reimburse the
interest costs to the local governments, according to a spokeswoman for
Treasurer John Kennedy, who is chairman of the Bond Commission.
 
The Louisiana Public Facilities Authority was created in 1974 to issue
taxable and tax-exempt bonds to finance education facilities, hospitals,
student loans, economic development projects and other state and local
government programs. It operates on self-generated dollars.