Proposed Bay St. Louis utility rate hike fails

Last night, the $9/month water and sewer rate increase proposed by Mayor Les Fillingame failed to gain the support of four of the City Councilmen. Councilmen Doug Seal, Lonnie Falgout, Mike Favre and Joey Boudin all voted no on the Mayor’s proposal.

City Clerk David Kolf addressed the outstanding FY 2013 audit, specifically the proposed going concern opinion on the City’s FY 2013 Financial Statements, which Kolf blamed solely on the Utility Fund as he attempted to use the proposed going concern opinion to justify the Mayor’s rate hike. Kolf was countered by Councilman Falgout, who indicated the Auditors’ proposed opinion, per his discussion that day with Auditor Jennifer Bell, was derived from the overall poor financial condition of the City.

Falgout, explaining his no vote on the rate hike, wants to undertake a comprehensive review of the City’s finances as he indicated the latest financial reports show that several revenue sources in the City’s general fund, including sales tax collections, continue to decline year over year.

Public input on the issue of the Utility rate hike was mixed.  In a particularly colorful symbolic display, local Realtor Avra O’Dwyer scolded the Council for considering raising utility rates indicating she and City Council President Wendy McDonald had engaged in a heated discussion on the issue earlier in the day.  Ms. O’Dwyer presented President McDonald with a bag of coffee at the conclusion of her presentation telling her it was time “to wake up and smell the coffee”.

Despite the no vote, it is clear the issue of Utility rates will not be going away as another special meeting has been scheduled for next week to deal with the topic of deteriorating City finances. Slabbed will have more on this topic in a follow up opinion post.

14 thoughts on “Proposed Bay St. Louis utility rate hike fails”

  1. Finally the Bay St. Louis City Council is going to adopt a format of VERIFY everything the Mayor and City Clerk present to them. This is long overdue.
    It was a show of disrespect on the part of the Mayor and Clerk to present figures during the meeting to the Council and expect them to adopt a proposal that same night. Can’t they have at least 48 hours or until early next week to determine which proposal to adopt? After all this the result of the Mayor and Clerk lying to them for 15 months now on the financial status of the City. It’s damn high time somebody challenged these two.
    The Mayor’s reaction was to act like a the child that he is and leave the meeting. Hope he doesn’t think he was missed.
    Before the new rate hike is adopted the Council needs to take care of one important piece of business that got them where they are right now and that is to get out of the so called “agreement” with the Solid Waste Authority which requires all of the Bay St. Louis Solid Waste payments to go through the Bay’s utility department instead of directly to Solid Waste.That is where all of this started and now has the citizens of Bay St. Louis strapped to a loan at First Bank for some $350,000 they had to borrow to pay Solid Waste when they had already sent their payments in and the money didn’t get to Solid Waste–it disappeared in city hall!! So, they are paying double for garbage pick-up–the payment they actually sent in, and now the loan to cover their payments not arriving at Solid Waste. Pardon the pun, but this stinks!!
    The only problem is they will have to deal with the Chairman of the Solid Waste Authority who is none other than the childish Mayor who left the meeting last night when he didn’t get his way. This is better than a reality show. But the Solid Waste elephant needs to be addressed and escorted out of the room.
    It will be less funds floating around for the Mayor to play with, but according to the Auditor it should never have been happening in the first place.
    Yes, these officials need some more time to consider what to do with not only the utility dept. but the city’s finances as a whole, and not have to listen to scare tactics presented to them by everyone from the Mayor, the Clerk, the attorney, and some in the audience who may have been well meaning, but need a little more reflection on what these people are up against–Having to discern financial advice from people who have a documented record of lying to them and the public about the state of the city’s finances.
    Take your time, guys, it will better serve your constituents in the end.

    1. There is a difference between acting with informed urgency and getting the bums rush. What I saw last night was the bums rush.

      It is not unreasonable for any Board of Directors to require that information required for informed decision making be furnished several days in advance of the meeting. Last night they were literally getting handouts hours into the meeting. Quite frankly, if it were me I’d not consider any business on less than 5 days notice unless it was an unforeseen emergency. I am personally aware of a couple of School Boards that require their “board packets” 7 days in advance of the meeting.

      1. Sounds like a reasonable idea to me. I’d want to do the reviewing ad have any questions on the packet ready in advance of any meeting. As a general rule, and particularly in the case of a situation like this.

        It is hard to execute your fiduciary duties when you are asked to vote on a chat en poche!

        1. Spot on. These folks have personal liability attached to their votes.

          The Mayor can’t play shell games cost shifting between the funds if everything is being examined at one time. This IMHO is why the Administration only want to talk about the Utility Fund right now.

          1. OPINION
            Here are the two likely options are as I see it.

            The smoke has been noticed, it’s time to fight the fire or evacuate. Either the council pierces the veil of obfuscation and breaks the information embargo, or the responsible council members will be forced to resign rather than risk personal exposure for their decisions.

            Last I checked (last week iirc) there have been no recent (since the proposed going concern opinion) continuing disclosure statements on the various BSL municipal bond issues outstanding. The exemptions for this type of disclosure are rather narrow, possibly only the small number of sophisticated holders clause applying to the BSL bonds. Based on the description of the recent meetings, Occam’s razor should be used.

            On one hand, in the bond world these bonds and the money involved are deminimis. On the other hand, Auditor Pickering’s net seems to be good at vigorously pursuing and punishing the small fry.

            1. Here is the worst part. The Mayor lead the City into violating its existing debt covenants if the preliminary audit findings are to be believed. It’s disingenuous for City Clerk and Attorney to scold the Council regarding the Bond covenants on the Utility debt they just agreed to refinance given that fact but that is exactly what David Kolf and Donald Rafferty did last night.

              The analysis/opinion post that is coming will examine that in detail.

              1. Heard today councilman seal is considering changing his vote and wants another meeting prior to next months regular meeting to do this ?
                Is there any truths to this? Wonder if it had anything to do with his wife’s comments to him after the meeting was over? Hmmm…. Who really represents Ward 2 ?

                Such a shame for the good people of the bay to have representation run by puppet strings.

                I am proud of the councilman who voted to deny and review the budget. This is the most responsible action and best way to proceed .

  2. Is councilman of Ward 1’s wife a loan officer for the loan? I understand that is the case. Please advise.

    1. Something tells me we’ll all find out soon if that is the case. Normally this kind of loan would be handled outta the main branch where the Trust Departments are located.

  3. Doug, although the issue involving the councilman and his wife are a detail in the cesspool, this fact pattern is reflective on the whole mess. Indeed, put on your thinking cap, there’s a clear indication that your councilman may have been led down the primrose path and indeed, shame on the attorney who didn’t in private session tell him to consider any appearance of conflict.

    You make a good point:
    “It’s disingenuous for City Clerk and Attorney to scold the Council regarding the Bond covenants on the Utility debt they just agreed to refinance given that fact but that is exactly what David Kolf and Donald Rafferty did last night. – See more at: http://slabbed.org/2014/06/27/proposed-bay-st-louis-utility-rate-hike-fails/comment-page-1/#comment-42941

    Indeed, think over the issue, you have clear cut fraud and under the old tripartite notion of malfeasance, both nonfeasance and malfeasance (I don’t see any misfeasance so far). The delicious part is the Mayor to avoid a charge of malfeasance/nonfeasance particularly with respect to the Bond covenants would, as the cheief executive officer, refrain from any act consummating the fraud.

    1. The Board’s own attorney tried throwing them under the bus. The implications are profound. I wonder how many of the 7 actually recognize that fact.

  4. I am hearing today that Councilman Seal’s wife is in Risk Management at Hancock Bank, which explains her pain, but not her chosen course of action to relieve it.
    It would, I feel sure, be an embarrassing situation to have to discuss accounts that have become a risk to the bank, and know that the City of Bay St. Louis is one of them, and your husband is a Councilman who has contributed to the bank being left holding the bag for almost $400,000 in bond debts.
    We can all speculate, but who among us know how long she, with her background in finance, has been trying to advise the hub herself, and been met with deaf ears. Maybe she reached her boiling point, but Facebook was not the place to relieve herself.
    The city administration reminds me of the rabbit in Alice in Wonderland looking at a calendar marked July 1, and singing “I’m late, I’m late, for a very important date!!” Alas we have arrived in the land of Topsy Turvy.

    1. I would hope Hancock Bank would have some type of Policy for employees and Social Media….

      Is this a common practice for employees to publicly announce their frustration on a customer of the Bank and making Financial Decisions ..

      Her threat at the council meeting last week to her husband must have been pretty serious. The next day he wanted to change his vote. Would it make a difference he probably was not legally voting anyway. There definitely should be a conflict of interest here.

      Mr. Rafferty better check this out before the next meeting. The council has already been censored once.

      Or maybe just look for alternative ways to reduce the budget.

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