When a catastrophic weather event hits, local governments often find themselves overwhelmed with cleanup costs they never anticipated. The year 2005 saw Louisiana hit with two named storms, Hurricanes Katrina and Rita, which caused billions of dollars of damage around the state. Three years later, Hurricane Gustav damaged areas still recovering from them.

Matt Fannin, associate professor in the Department of Agricultural Economics and Agribusiness at the LSU AgCenter, designed a study to measure the economic impact of these three storms on Louisiana parish governments and devise a decision-making tool to help them allocate the right amount of financial reserves for future weather events.

The study revealed that after Hurricane Katrina, parishes that had better initial financial health did worse than poorer parishes. Governments with some capacity to pay were required to use their reserves to pay for costs, such as insurance deductibles and co-payments for reconstruction of public facilities, before the Federal Emergency Management Agency would help.

After Katrina and Rita, the federal government covered 100 percent of emergency operations and debris removal costs. After Gustav, parish governments were initially expected to pay 25 percent of these costs. This put a strain on smaller governments with limited financial reserves. Because they received full reimbursement in 2005, many had not anticipated how to cover these additional costs.

The information gleaned from researching 10 parishes and conducting a study of Tangipahoa Parish was used to create a Sea Grant extension manual to help municipalities plan for the worst.

“It’s not a manual that says your parish needs to exactly follow these steps to be financially healthy,” said Fannin. “It represents a way to facilitate an advisory panel of local stakeholders who can identify a level of financial reserves needed and identify ways of obtaining these funds.”

Each parish finds different ways to fund future clean-up efforts, and panels often suggest diverting monies from other funds instead of creating a dedicated fund or passing a new tax.