City reviews FEMA funding

The City of Holly Springs recently held a special session to review the Federal Emergency Management Agency’s reimbursements from the December 23, 2015, tornado. The storm did about $2.4 million in damage to the utility department infrastructure.

Outlays in several categories were reviewed and any reimbursements by FEMA reported to the community and the board of aldermen.

In Category A (debris removal), $312,216 in expenditures were reported to the state and federal agencies. FEMA said it would pay $96,016, according to mayor Kelvin Buck. He said the city will appeal to try to recover more of the outlay.

“It is not uncommon for FEMA to try to not pay more than they have to,” Buck said.

Category F consists of work that is to be completed. That expense can be filed after it is completed, he said.

Buck said $1,730,043 has been submitted to FEMA for possible reimbursement.

About $500,000 additional expenditures are anticipated, he said.

Category E concerns damage to equipment.

A bucket truck, equipped with tracks, fell off a truck causing $34,000 in damage. FEMA paid nothing on this accidental damage to equipment. The bucket truck was not insured.

Buck added that FEMA pays a percentage of the eligible amount that is submitted. So far, the city has received only about one-third of what it spent on tornado recovery, he said.

FEMA has reimbursed expenses to a tune of just over $800,000.

Actions city has taken

The city obtained lines of credit from three banks but activated the line of credit only with the Bank of Holly Springs. The city will pay the first FEMA reimbursement check to the Bank of Holly Springs to help pay down that loan.

Alderman Tim Liddy asked if the city (or utility) will pay itself back for $400,000 it spent of its own money on recovery efforts.

He asked how Holly Springs Utility Department was operating.

D. Miller with HSUD said the actual loan was for $2,000,050. The utility operated on revenue during the wake of the disaster.

“So, we still have $1.2 million to figure out how to pay back,” Miller said. “It affected our cash flow. At one time we had trouble paying our bills.”

She said HSUD went into its reserves for operating cash. The utility has CDs it has saved over the last 30 years and had to go into them to pay the day-to-day costs of operations.

“That is why we have them (cash reserves),” Miller said. “We had a shortfall that the city calls a contingency fund.”

The storm hit the utility in the pocketbook in January when customers usually have higher utility bills due to cold weather.

Liddy asked whether it would be wise to use CDs to pay off the balance of its line of credit.

Miller said HSUD has to hang on to its reserves in case there is another disaster. Once savings are gone, the money is not there that it took decades to save. And the Tennessee Valley Authority requires HSUD to keep certain reserves.

Buck said the city has a couple of options to retire the debt incurred by the tornado, but first he wants to use the FEMA check to pay back the bank.