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December 31, 2012

City renews loan, anticipates FEMA reimbursement

HANCEVILLE — The city council authorized mayor Kenneth Nail to renew a short-term loan with a local bank in the hope that all of the borrowed money will eventually be reimbursed by the Federal Emergency Management Agency (FEMA) for cleanup expenses incurred following the April 2011 tornadoes.

In June, the city had borrowed $550,000 on a six-month term to fulfill a FEMA stipulation requiring that the city pay all cleanup expenses up front before receiving any federal reimbursement funds. At the time, the council believed that the reimbursement money would be forthcoming within 90 days.

Some money did come through, and the city used the funds to pay down the balance on the loan. Six months later, however, the city still owes $330,000 as it awaits more reimbursement money to arrive.

Nail said he’s frustrated by the slow process, and feels the chain of communication between state and federal agencies isn’t effective enough to stake the city’s financial plans upon.

“The loan was going to come due on the 28th [of December], so the council just authorized me to go ahead and refinance what we still owe,” he said.

“We’ve got to pay around $7,000 in interest, while we sit here and wait for money that we were told we’d receive within 90 days of taking out the original loan. We’ve done everything that the state EMA has asked us to do, and I really don’t understand how it can take this long. The only thing we can do is renew the loan and wait.”

FEMA had advised the city it would have to pay off all outstanding balances related to the cleanup before it could recoup promised federal reimbursement funds, so the council authorized Nail in June to borrow the $550,000 to pay off balances due to North Carolina-based Byrd Brothers Emergency Services, as well as Cullman-based Minuteman Construction. After tornadoes and storms ravaged much of the city in early 2011, Byrd Brothers swept the city clean of debris on public rights of way. Minuteman offered a similar service for approved swaths of private property.

* Benjamin Bullard can be reached by e-mail at bbullard@cullmantimes.com or by telephone at 734-2131 ext. 270.

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