Marksville could face state take-over

   Marksville city officials will have to make the hard decisions to avoid a significant operating budget deficit or the state will, the City Council was told at a special meeting on Oct. 17.

   Aloysia Ducote, the city’s “financial advisor” and auditor, told the council that state law prohibits a local government from operating at a deficit. If that happens, the state will appoint a “fiscal administrator” to take over the city’s operations until the problem is resolved.

  “You will still have a mayor and City Council, but you will only be figureheads,” Ducote said, noting that the state-appointed administrator would make all the decisions -- including whether employees will be laid off and, if so, who and how many.

  The mayor and council reviewed  several ways to raise revenue and cut expenses. No action was taken at that special meeting, but another special session was scheduled for 5:30 p.m. Tuesday (Oct. 25), when a course of action was expected to be more defined. The results of that meeting have not yet been written.

   Ducote said the city “still has money in the bank” to cover mandatory costs, such as bonded debt and utility deposits. 

   “Those are funds you cannot touch,” she continued. “The problem is in what is called ‘general operating funds.’”

   Approximately 75 percent of the operating budget is personnel costs, salaries and benefits, council members were told.

  One reason cited for the financial downturn is the decision to give raises in some city departments. Those raises added over $200,000 in cost to the budget.

  The city also had to start paying a portion of employees’ health insurance costs.

  On the revenue side of the budget, sales tax collections have been dropping over the past several months with no projections for improvement in the near future.

$60,000 per month

   The most recent projection based on current spending and revenue receipts predicts the city will be spending $60,000 more than it collects after the Nov. 30 payroll. That would total $720,000 over a full year, or about $360,000 for the remainder of the budget year.

    Those projections also indicate the city will be unable to fully cover the Nov. 30 payroll.

    The city should be able to cover the October payrolls and the first payroll in November, the council was told.

    Ducote said she went over a list submitted by city officials of jobs deemed “non-essential.” Those salaries totaled $350,000. 

   Ducote said the Legislative Auditor’s Office can send an auditor to meet with the elected officials and department heads to assist in addressing the problem.

    “We have to find something to get us through the fiscal year and future fiscal years,” Ducote said.

  She said the first step should be department-level meetings involving Secretary/Treasurer Heather Bordelon, Mayor John Lemoine, the council member with responsibility over the department and the department head. That meeting should start with a “zero budget,” and then add only those expenses necessary for the department’s operation.

  “If you cannot come to an agreement on what to cut to avoid a deficit, the state will appoint a fiscal administrator to make those decisions,” Ducote said.

   “If you get to Nov. 30 and are unable to meet payroll, the state will find a fiscal administrator for you very quickly,” she continued. “Two things that trigger a quick response are not meeting payroll or debt obligations.”

   Lemoine and council members all said they want to avoid layoffs if at all possible. 

 

  At the Oct. 17 special meeting, the council focused on ways to recover and/or increase revenues in the Water Department.

  There is almost $250,000 in uncollected past due water bills, dating back to 2008. Council members said the city may have to contract a collection agency to get those bills paid.

  Another option discussed, but not acted on, was a possible ordinance to make landlords liable for unpaid water and sewer bills when their tenants leave town without paying them.

   Lemoine said Moreauville currently has such an ordinance and it is legally enforceable.

   Businessman Brent Scallan, who owns several rental homes in the city, argued that the ordinance is not fair and that landlords should not be responsible for their tenants’ unpaid bills.

   Lemoine countered that if the water bills were too high because of leaks in the house, then it would be the owner’s responsibility for not properly maintaining the residence’s plumbing.

   He said it is not fair to the city if someone leaves town owing $500 on past due water bills and the city has only a $140 utility deposit to apply to that cost. The mayor said he believes the property owner should be responsible when the amount owed exceeds the deposit.

   Council members discussed possibly raising utility deposits by $100 -- either only for renters or for all utility customers.

  Ducote quickly pointed out that raising the deposits would help to address the past due bill issue, but would not be a revenue-raising measure because “you are not able to touch that money paid for deposits.”

   Council members briefly talked about raising water rates and beginning the process of getting approval to raise rates.

   The city was also encouraged to take a more “businesslike” approach to its water system operations.

   One suggestion was to cut people off if they do not pay their water bill when it is due. Currently, the city does not turn off the water until it is about 60 days past due.

   City Manager Tommy Garrot estimated about 60 percent of Marksville’s water customers are 30 days overdue. They pay the past due bill but not the current month’s bill, so they are constantly one month behind.

   Those possible options will be reviewed and discussed at future meetings.