Financial Failures of 2013 still haunting A Place Apart: The Case for Outsourcing Code and Law Enforcement (Part 1)

Going back over 140 plus posts Slabbed has done on the financial operations of the City of Mayberry Bay St Louis serves as a reminder that we’ve been on that particular beat since the Spring of 2014 and had been paying attention for about a year before that. In hindsight 2013 was the watershed year and that year also happened to be the last election year for City officials. To understand what is happening now is to understand what was going on back then. Also key to understanding today’s events is to understand that “A Place Apart” truly is Apart from a Home Rule Charter standpoint and therein lies the root cause of the problem. First up is the City’s Charter which is colloquially known as “Strong Mayor-Weak Council”.

There are about 300 municipalities in Mississippi and the overwhelming majority (90% or so) use the “Weak Mayor” home rule option. Bay St Louis is one of ten municipalities that use Strong Mayor: Here is the skinny from the Stennis Institute at Mississippi State:

The mayor-council form of government is essentially a “strong mayor” form of government made available by the legislature in 1973 and approved by the Department of Justice in August 1976. It is used in 10 municipalities in Mississippi: Bay St. Louis, Biloxi, Columbus, Greenwood, Gulfport, Hattiesburg, Jackson, Laurel, Meridian and Tupelo.

The Bay is the runt municipality in the strong mayor world. The proverbial strong mayor has vast power including almost complete control over the City’s workforce. Larger Cities benefit from this kind of organization because keeping the bureaucracy on point is easier when there is a clear Chief Executive. In smaller Cities with smaller work forces like “A Place Apart” it has the drawback in allowing day to day municipal operations to be dominated by a single person, in this case Hizzoner.

The City Council (as opposed to Board of Aldermen in “Weak Mayor”) only controls two things directly and those would be the budget and the annual audit. City Councils also have investigative authority under the law.

With that set up we need to circle back to the previous City Council that was in place in 2013. Not long before the election that Council began to allow the Mayor to spend the remainder of the municipal reserve fund on capital projects such as decorative street lamps for Wards 2 and 3. By the time the party primary elections took place in May 2013 the City was effectively broke despite the Mayor’s very public denials in the media. We know the City was broke because less than a year later the City’s auditors disclosed they were considering issuing a “Going Concern” opinion on the City’s financial statements. But its worse than just being broke.

When a business’ spending outpaces its income it must “rightsize” its operations or go bankrupt. Government is unique in the power to tax. If expenses exceed tax revenues the government can raise your taxes if the elected officials can take the political fallout. And then there are what we call “stealth taxes”, where everyone’s costs goes up but there was no vote in advance of the “tax levy”. Now let’s take a trip down memory lane courtesy of the Sea Coast Echo:

Bay city clerk decries rumors, says finances in good shape ~ Cassandra Favre, August 9, 2013

At Tuesday’s Bay St. Louis City Council’s meeting, part-time municipal clerk David Kolf blamed one city councilman and the Sea Coast Echo for igniting a string of questions concerning the city’s funds.

“I would like to address some of the rumors that have been flying around here lately and I keep getting e-mails and numbers that are completely unsubstantiated,” Kolf said.

Kolf displayed the city’s audits from the years 2005 to 2012.

“There have been a lot of accusations recently and a lot of newspaper articles, particularly from one councilman,” said Kolf, “making allegations that the city’s broke, bankrupt and I believe one e-mail said we are going into liquidation.

“But I’m here to tell you that we are not bankrupt, cash is tight.”

And in that alternate reality when the City was using the Utility payments to fund general government cash was “tight”. The truth is if Kolf were an actual financial professional instead of Hizzoner’s straw man he would have advised Councilman Seal exactly why keeping a Municipal reserve fund is vital, mainly by its use funding City operations during the lean months when property tax collections are low. In Strong Mayor Bay St Louis Kolf owed his job to Hizzoner and it was that master and his accompanying political ambitions that Clerk Kolf served, not the citizenry. Lest I digress more links:

Bay Violated Open Meetings Law ~ Echo staff

Bay Vows to Pay Overdue Utility Bill – Dwayne Bremer, November 12, 2013

Bay St. Louis Mayor Les Fillingame, on Tuesday told the Hancock County Utility Authority that the city will get current on its back-payments by the end of the month.

Last month, it was revealed that the city was about $258,000 behind in its monthly payments to the utility authority.

The authority, which is made up of utility servicers from the cities of Bay St. Louis, Waveland, Diamondhead and several rural water and sewer districts, operates from revenues generated by its members and paid back to the authority.

Utility authority Chairman Bill Johnson of the Kiln Water and Sewer District said Tuesday that the city of Bay St. Louis’s recent lapse in payments is putting a crunch on the agency’s budget.

“We are concerned on the financial side,” Johnson said.

Utility authority Director David Pitalo said the authority only has enough funds available to make payroll for another month unless Bay St. Louis pays what it owes.

Not long after that the City borrowed $500,000 without statutory authority and caught up Hancock Wastewater. By that next May the Administration disclosed the City would default on its water and sewer bonds unless they were refinanced as the City’s water and sewer fund was unable to recover financially after being raided to pay for general government the year before. This is the reason you folks in the Bay are now paying a $13/month surcharge on your water bills. In essence you are paying for the water you used in 2013 again thus the term “stealth tax”. Refinancing the bonds also costs well over $300,000. To make things even better from a shamelessness standpoint was Mayor Fillingame pointing the finger at City’s Citizenry for his financial failings:

Mayor says residents’ failure to pay bills is keeping Bay behind ~ Geoff Belcher February 7, 2014

When you look at the financial carnage from a longer term standpoint the decision to spend the municipal reserve carried a cost of well over $300,000 a year later when the water and sewer bonds were refinanced. Voting yes back in 2013 were MacDonald, Seal, Compretta and Reed.

Ultimately it was the old council’s inability to clean up its financial house before the new council took office in July 2013 that would dominate the next four years of council business.

Here are a few archival links that describe how this disaster was made:

Financial Statement Drilldown: Is Bay St Louis budgeting revenues it will never collect?

Strategic Plan: To the last dime we spend…

In Part two we tackle the missing DoJ funds.

16 thoughts on “Financial Failures of 2013 still haunting A Place Apart: The Case for Outsourcing Code and Law Enforcement (Part 1)”

  1. So basically the new Council has done NOTHING to change the way the city is being run and shame on the old council members for continuing their bad habits.

    1. The watershed moment for the new council was in November 2013 when the Mayor got their permission to run late on the Utility Authority payments. That also marked the last time the council would allow itself to be Hizzoner’s willing dupes as a group.

      Seal and Compretta are just as clueless as to the proper discharge of their duties today as they were in 2013. MacDonald has been gone since she was in that accident. If it were up to them they would leave this mess to the next Council and Administration, just like they did in 2013 when they were reelected without opposition.

      Falgout and Favre were handed this dog upon taking office in July 2013. Boudin was a frequent lone “no vote” on the previous council.

      Councilman Reed has evolved over the course of the last four years and now frequently sides with the council faction trying to enforce fiscal accountability. His vote today on the short term future of the Bay PD will prove to be the decisive vote.

      Given the financial carnage of the past 4 years, in my mind this is a question of on what basis you could hand the reigns of the Bay PD back to the man who squandered over $300,000 in dedicated public safety funds that subsequently vetoed the council’s efforts to make the fund whole, especially when it is still under investigation for payroll fraud and with employees that evidently were pawning evidence (in the form of firearms).

      If it were me I’d give the next Mayor and Council a clean slate to work with instead of the heavy baggage to tote.

    2. The four council members who voted for this are still on the Council. Two others (who were trying to do the right thing) are no longer on the Council. Only one current Councilman voted for the citizens – Joey Boudin.

  2. Fact:
    During the last election Les , his groupies & some council members bragged on how great everything is in the Bay.
    Everyone else is lying & playing bad politics about being broke. We know les lied & did certain council members lie or were they too stupid to realize they were his puppets being stung along. He don’t give a damn about them or no one else. Just his ego. NOW they blaming everything on the Chief.
    Fact:
    $13.00 payment.
    Talking about misspending utility money , just look at his utility payroll since he took over. Went from around $700.000 in 2009 to over $1,000,000 and hung around $900,000 till Farve fought with him with him during 2014 budget about budgeting people in the right dept. His headlines in the echo read something like mayor takes around $200,000 out of utility payroll budget & puts them where they are suppose to be.
    NOW wonder why this payment couldn’t be made.
    NOW add that up over 5 years & les misspent over $1,200,000 of utility funds.
    Fact:
    They have to raise rates & add $13.00 fee to our bill.
    In his first 5 years in office he misspent enough utility money that the loan could have been paid off in full !!
    Interesting??????

  3. Outraged
    Fact:
    Some members shed light on this in their first month of office.
    Individual accounts are now in place.
    They now see bank statements, invoices & received information as needed from Sissy.
    Change is slow & I believe the other members may have finally seen the light.
    Think how many times the so called 3 stooges couldn’t get that 4th vote in the first few years.
    Hopefully the new administration will walk into a balanced budget.
    They are trying but this short man syndrome mayor’s ego & silver tongue is second to none.

  4. I hope you are correct. Change does take time, and at times it appears certain members are doing the right thing, but at other times I just wonder. You have to be consistent but they are not.
    When in public office you either have to be on one side all of the time and not waiver. For those of you from New Orleans remember the Council there. Peggy Wilson was always outspoken, but for the right reasons. She was for the People. It has been almost 4 years now and I know Rome was not built in a day, but lets get some action and see if the council does the right thing and call in Les bond to repay the money and not use our Reserve fund and or make us taxpayers pay it back.

    1. BSL TAXPAYER,
      I asked Council last night at Public Forum for the latest figures on your Reserve Fund.
      Seal and Boudin gave them to me:
      As of Jan. 3, 2017:
      When they received the Cash Balances from the City Clerk last night,
      Municipal Reserve:
      $560,901.96
      Withdrawals last night:
      $166,000.00+$48,000=
      $214,000- don’t know what this paid
      New Balance:
      $346,901.96
      If Council is going to use your Reserve to pay DOJ $320,000, let’s hope DOJ report comes in soon, or there will be no Reserve to use!!!
      Then what?

  5. I thank you for your investigative journalism and your presentation of the facts. It is obvious to many of your readers how thoroughly researched your work is. We all have freedom of speech, but I would hope your folks who are into name calling would cool it or ,at least, sign their name to it. In my opinion, rants, yelled out from behind the bushes, turns away some potential followers and detracts from the seriousness of your work. Just a thought.

    1. Well said Tim. Miss Libby is a target right now because of her ability to calmly communicate facts.

      As a general rule the commenting community here self-polices itself remarkably well. The message being conveyed on the City’s Facebook page with all the invective is terrible.

      1. Reading the Facebook comments help to explain how we got into this mess. Some people don’t just tolerate corruption, they demand it!

        1. Observer,
          I was there last night, and do hereby declare that your comment today wins the 1st Prize for “Understanding Not Only What Went on Last Night”, but what is going on today, and will go on for how long no one knows.
          We don’t just tolerate corrupt public officials in our society today, some actually enable them.
          The Sheriff and his staff who came to assist the Bay in a time of real trial, were actually called names as Camille Tate took the mike and said if she fell at her home, she would not want to dial 911, and have some ” country bumpkin from the Kiln” picking her up off the floor. Let’s see, she should know about country bumpkins coming from Ville Platt, La. with a population of a little over 7,300 now. Wonder what it was 80 years ago when she was born?
          Then School Board Trustee, Maurice Singleton took the podium to charge racism in the Bay PD some years ago,” when he was stopped on Easterbrook St. because “of the way he looked.”
          But he wants to keep them. Okay!!!???
          When the fact that Diamondhead contracts out to the County for Police protection from the Sheriff’s Office was mentioned, the crowd screamed back, “we don’t want to be Diamondhead.”
          45 minutes later when it was reported by Councilman Seal that there is a major sewer break on Dunbar Ave. in his ward, he asked the Mayor to contact Diamondhead to see if the Bay could “borrow” their probe to locate the problem. Wait, “we don’t want to be like Diamondhead.” At least Diamondhead seems to know how to not only locate their s**t, but get rid of it. Their Solid Waste customers pay directly to the agency, not to the Diamondhead City Hall like the users do in the Bay!!!
          It was the Jerry Springer show on steroids!!! At least we don’t have to do a demographic study to determine the brain matter of the Les supporters.
          At NO TIME did ANYONE take the time to thank Sheriff Adam, Glen Grannan, Don Bass, and the Sheriff’s Investigative Unit for not only assisting during a crisis, but for uncovering a payroll fraud that has been passed on to the FBI, and that was apparently happening right under the Mayor, Chief DeNardo, and Captain Mayley’s noses. Remember, the Police Department is an administrative branch of the city government, and the Council is not allowed to interfere with day to day operations of administrative duties. But that’s okay, it’s just the public’s money being absconded with again. Add it to the DOJ money, and the First Bank Loan for the “missing utility payments” in 2013.
          THROW ME SOMETHING, MISTER, AND LET THE GOOD TIMES ROLL!!!!!

          1. Ville Platt? Just made the news for the long standing policy of its law enforcement arresting witnesses to crimes without a warrant that should land them in major trouble:

            In Evangeline Parish arrest scandal, civil liberties took back seat to decades of tradition

            Once many years ago coming home from USM on a Friday evening I had a flat tire and as a starving college student was without a spare tire. The local Killbillies that helped me out of that bind could not be finer people in my book. Far better to be rescued by a Killbilly than to be a black man in Ville Platt whose only “crime” was witnessing a crime.

            The precise term that describes sizable segments of the populations of both Ville Platt and A Place Apart would be parochial. It would probably kill Camille if she knew how many people in Waveland were making fun of the blue bloods in the Bay for putting up with such nonsense out of their Mayor.

            Can anyone tell me why there is a Bay PD car constantly hanging around in Waveland’s Ward 4? Should Ms. Tate slip and fall it would quite a way to get to her from there. Hopefully there are no killbillies working at the Hospital.

          2. The new Chief is certainly going to have his work cut out for him.

            First, he has to figure out which employees knew about the gun thefts and payroll fraud but looked the other way, and which ones were just too dumb to know what was going on. The sad thing is, the too dumb to know ones will be his “good employees”.

            Second, will be Les telling him to do something illegal in five, four, three, two …. seconds. I will pray for him.

  6. Why hasn’t the council voted to have the Homeowners pay their water and garbage directly to the property authority and not let the city continue to collect. Cut them off, pay off the old debt and move forward. If not the debt will continue to escalate and the City will never get out of the rabbit hole. Quit allowing Les to use that money. Make him fiscally responsible and only use the funds that they city collects directly for their budget. Let’s move on people and eliminate sources for Les to shuffle around.. Other cities work like this. How long will the $13.00 be added to our bill. Forever !!!! Cut the Cord NOW>

    1. Spot on, BSL TAXPAYER,
      Diamondhead residents ,and I believe Wards 5&6 in the Bay
      pay direct to Utility Authorities. If the direct pay arrangement is working for some, why not for all? Waveland could join in too.
      Excellent guest editorial in the Sun Herald this morning by State Senator, Michael Watson on the appropriate uses of BP money. Hope the Bay St. Louis City Council reads it considering the “plan” afloat
      to use the city’s Reserve Fund as a so called remedy for the missing DOJ money. There are some BP funds in the Reserve, and it seems using them to remedy the misappropriation of a Federal Grant by the Mayor and his Clerks would be a bit off base to say the least.
      The fishing community needs to get wise to this and the sooner the better.

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