Bay St. Louis' $4M disaster loan forgiven - WLOX.com - The News for South Mississippi

Bay St. Louis' $4M disaster loan forgiven

BAY ST. LOUIS, MS (WLOX) -

By Al Showers - bio | email

BAY ST LOUIS, MS (WLOX) - The federal government will forgive more than $4 million in federal disaster loans Bay St. Louis borrowed after Hurricane Katrina. City leaders are calling it a financial blessing that couldn't have come at a better time.

"I think it's the best financial news that we've had in quite some time," said Bay St. Louis Mayor Les Fillingame.

The decision means the city won't have to pay back the money it borrowed from the federal government to keep the city running after Hurricane Katrina. City leaders said the storm-crippled city had very little money coming in, to stay financially afloat.

"Without the loans in 2005 and 2006, it would have been practically impossible to sustain operations under normal conditions. It allowed us to keep people employed, it allowed us to keep city services at what they were, and it allowed us to put the man-power that we needed to put toward recovery on our own," explained Fillingame.

The Mayor said with city revenue collections still way down, paying back the loans would have been tough.

"Those funds would have been a real burden had we had to pay it back over the coming years. It would have been a tremendous burden on a budget our size."

Being let off the hook didn't come easy; Mayor Fillingame said the city had to prove its operating budget was in the red at the time the city took out the disaster loans.

"Our revenue shortfall was much greater than the loans. We ended up calculating right at a $9 million revenue shortfall, and we were only asking for a $4.2 million forgiveness. This is just another one of those bullets that we dodged and it is a real blessing." 

The city of Pass Christian received a $3.2 million community disaster loan and Long Beach borrowed about $2 million after the storm. Loans for both of those cities have also been forgiven. However, neighboring Waveland is still awaiting word on whether the $3.4 million loan it took out will be forgiven.

 Copyright 2011 WLOX. All rights reserved.

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