Officials across south Louisiana are licking their chops at the prospect of a quick influx of cash that’s expected to flow into local coffers in coming months as a result of a settlement with BP over claims for lost revenue tied to the 2010 Deepwater Horizon disaster.
The British oil giant, the federal government and five Gulf Coast states announced the tentative $18.7 billion deal last week. The pact will direct $6.8 billion to Louisiana — the largest piece among the five states — that will go mostly toward coastal restoration and repairing the oil spill’s damage to wetlands and damaged wildlife habitats.
Apart from that, the deal calls for up to $1 billion to be spent resolving claims for economic damages that were filed by local governments across the Gulf Coast, including those in Louisiana.
More than 500 lawsuits for damages were filed by local governments, sheriffs, school boards and taxing districts across the region, seeking compensation for lost resources and tax revenue. The exact amounts many of those agencies will get are expected to be finalized and perhaps announced in coming days.
The deal, which is still awaiting a federal judge’s approval, largely ends the five-year legal battle that’s played out since the April 20, 2010, disaster, which killed 11 men and spilled millions of barrels of crude into the Gulf of Mexico.
For many cash-strapped local governments, the deal could lead to a multimillion-dollar lump-sum payment with no strings attached for how the money is spent. Many local officials are already dreaming about what they could accomplish with that kind of money: anything from fixing roads to paying for flood protection or simply holding on to it for the future.
Leaders in several local parishes are set to discuss individual settlement terms this week in closed-door sessions.
The Jefferson Parish Council is slated to meet Thursday in executive session to discuss the settlement. A source familiar with the negotiations said Jefferson’s share could fall between $40 million and $45 million, and that the council is discussing several options, one of which is to divide the money among the five council districts and the parish administration.
Officials in St. Tammany Parish are set to discuss the pact during a closed-door session Monday night. St. Bernard Parish officials plan to discuss it Tuesday. And Kenner officials will have their turn Thursday. Officials in each jurisdiction were mum on details of the settlement, citing nondisclosure terms.
Walter Leger Jr. is a New Orleans lawyer who represents more than 40 government claims against BP across south Louisiana, including in St. Bernard, Lafourche and Terrebonne parishes, as well as New Orleans.
If the deal is approved, he said, the money headed to the local governments could come in a lump sum within months. Local officials could then use the money at their discretion.
It’s a different situation for the state, some of whose money will be used to replenish its rainy day trust fund, which was depleted after the oil spill. How the rest of the state’s money, which will mostly be paid out over the next 15 to 18 years, can be used is largely directed by law.
“What a parish recovers, that will be in the parish’s general fund, and whatever plans they have already or budgetary needs, that’ll be their discretion,” Leger said.
Most local government bodies have agreed to the settlement so far, he said. One apparent holdout is Plaquemines Parish, where officials said last week that the tentative deal does not fairly compensate the parish “for the damage and destruction BP inflicted on its property and for the tremendous administrative and emergency resources the parish was forced to expend after the spill.”
Claims for losses were filed against BP across the state, even in some less obvious areas. In a March 2013 court filing, an attorney for Baton Rouge contended that the city, “like the vast majority of those injured by the spill, suffered economic losses due to a decline in leisure, commercial, domestic and international tourism, which further resulted in a decline in taxes collected.”
Meanwhile, some officials in the metro area already are considering what they’d like to do with the extra cash.
In New Orleans, City Councilwoman Stacy Head said she would like to use some of the proceeds to help fix the buckled and crumbled streets that plague the city, which in some areas have been repaired a half-block at a time.
“My highest priority is our infrastructure,” Head said.
In St. Tammany, District 7 Councilman Jake Groby argues that “every damn penny” should be put toward measures to prevent flooding during future storms. During Hurricane Isaac in 2012, water poured over Mandeville’s floodwall, flooding Old Mandeville and prompting a hard look at the parish’s flood protection needs.
“In a sense, it’s free money for us,” Groby said. “I don’t want it to be pissed away on projects that don’t mean anything for the greater good, and I will fight that. We have to do something to protect us. This is so much money that it will probably never happen to us again.”
It’s unclear whether St. Tammany Parish President Pat Brister feels the same way; a spokeswoman declined comment Monday, citing pending litigation.
In hard-hit St. Bernard, Parish President David Peralta would like to set some of the money aside and hold off on spending it right away.
“I want to beef up my fund balance with some of the money that we get, because we have a very, very small fund balance,” Peralta said. “I’m not looking to spend all of this right now. I’m looking to hold on to some of this.”
By now, Leger said, many officials’ worst fears about long-term damage from the oil spill haven’t been realized. Still, he said, the money from the settlement will come as a welcome relief.
“There was obviously an impact,” he said. “Now, could it get worse? It could. We still don’t have an answer for the long term, but I think people now, five years later, are more comfortable with the stabilization.”
Staff writer Chad Calder contributed to this report. Follow Richard Thompson on Twitter, @rthompsonMSY.