Proposed FY 2015 Bay St Louis Utility Fund budget contains personnel cost reductions: An Editorial

Last night the Bay St Louis Mayor and City Council conducted another budget workshop. A full draft of the proposed budget was presented to the City Council and that draft proposed budget contained approximately $180,000 in direct personnel cost reductions in the Utility Fund, Mayor Fillingame told Slabbed after the meeting that the City is committed to removing all but direct Water and Sewer labor from the Enterprise Fund to the General Fund budget. This is an important step forward.

The overall City personnel budget has not been changed but last night’s actions set up a vital and long neglected public discussion. A few weeks ago at the Ward One Town Hall meeting I told the both Mayor Fillingame and Councilman Seal after the meeting that charging General fund salaries directly to the Water and Sewer Fund cheated the public of the very valid discussion regarding the level of City services which the citizenry should be properly paying taxes to support. It is without question both the Council and the Administration now understand the value in having this discussion as people across this town are making their feelings known to their elected officials.

Bay St Louis has the lowest millage rate of any City on the coast but that only tells a part of the story.  One mil is worth over $100,000 to the City and the value of a mil varies across the Coast. That said having lived and pay taxes in three of the six coastal counties I can also say it is undeniable that Hancock County in general and Bay St Louis in particular are the lowest cost locales of the three counties that I am personally familiar.

None of this is to say raising taxes is a foregone conclusion here in the Bay.  That said a discussion about property tax rates to support vital City services is one that the City has long avoided and frankly is long overdue for consideration.  How the Mayor and Council tackle these issues will depend in large part upon what they hear from the public in the Bay.  The Mayor was clear last night that he as well as the City Council are listening to the concerns of the people and that is a very encouraging sign.

Tomorrow night is another budget workshop that is scheduled to begin at 5:30 PM in the City Council Chambers.  I urge the public to attend and make their views known.

Chapter 9 Bankruptcy: A primer for the Citizens of Bay St Louis

The notion that the City of Bay St Louis was experiencing financial problems is not by any means new. Just over a year ago the citizenry heard lots on the topic during the municipal election with Mayor Fillingame unequivocally proclaiming the City was in good shape financially. The irony is by that time, the City was already using its trade vendors as its financier. You see folks, when the bills don’t get paid the trade vendors become an unofficial bank. Even worse, it is the kind of unofficial bank that must make forced loans that bear no interest. It was a sign of things to come in a fools game where the passage of time is the ultimate enemy.

The warning signs were literally everywhere and yet for month after precious month the City Council did nothing. Worse, it appears certain members of the Council were simply going along with the Mayor because it was easy. Last October the City Council, at the request of the administration, finally took action on utility rates to fix the problems the administration identified in the Water and Sewer operations. The increase was targeted at high volume water users which it turns out was the very segment of the City’s customer base that was in decline. Now the Administration claims the rate increase was insufficient.

Last January Slabbed published a detailed analysis of the irresponsible budget practices that lay at the heart of the City’s financial decline. Since then the City has spent money it was legally required to set aside for debt service on municipal operations. Broke, the city made a loan with a local bank that it lacked statutory authority to make.  The proceeds of that loan, mistakenly called “a line of credit” by the Mayor and Council, was split between the water and sewer fund and the general fund. Despite being at every meeting the City Attorney was evidently checked out MIA allowing the Mayor and City Council to step out making what Councilman Lonnie Falgout now terms an illegal loan. I fear it’s gonna take the elected officials here to have to pay big dollars out of their own pockets before they’ll learn the value of operating within the law.

Unable to make the scheduled debt payment on Water and Sewer debt due in July 2014, the City Council again kicked the can, refinancing debt dating from the 1990s that had already previously been refinanced.  The City, caught in a downward financial spiral incurred hundreds of thousands of dollars of debt issuance costs that could have been used to pay for City operations.  From a financial management standpoint, the performance of the City’s elected officials really can’t be much worse. Continue reading “Chapter 9 Bankruptcy: A primer for the Citizens of Bay St Louis”

City of Bay St Louis at financial cross roads: Budgeting hope versus reality

What I witnessed yesterday evening at the City of Bay St Louis budget workshop gave both reason for hope and horror. Let’s start with the hope and not as a budgeting tool.

The City Council, at least 4 of ’em anyway, are providing the kind of financial oversight the taxpayers deserve in this time of fiscal crisis. A Water & Sewer bond payment the City can’t afford is due in less than a month, as is the City’s audit to the Single Audit Clearinghouse. Part time City Clerk David Kolf is officially missing in action, out on medical leave according to the Mayor and certainly une victime de la guerre. The City Council’s oversight is vital and that is where we get to the horror part.

It appears Mayor Fillingame’s financial plan to deal with the crisis is hope – hope that the rains stops so people will water their yards more and use more water, hope that unrealistically budgeted revenues will be realized, hope that no one notices the almost $1MM in salaries the Mayor is expending in the Water and Sewer fund, which fund City Council sources are indicating to Slabbed the Mayor has pushed salaries the general fund could no longer afford to pay. Even worse is he contradicts himself with his financial explanations. Frankly folks, I’m not sure if Hizzoner is that slick or that financially clueless but either way the results are proving disastrous.

Lest people think I am gratuitously bashing Les what we need is a real life example and it is encapsulated in one exchange between Hizzoner and Jennifer Lenain, a free lance writer for the Sun Herald. Jennifer was looking at the latest budget actual report and she evidently did some homework and nabbed the 2013-2014 approved budget from the City’s website. Slabbed covered the financial concepts behind Lenain’s question to the Mayor back in January such question as salient today as it was then. Continue reading “City of Bay St Louis at financial cross roads: Budgeting hope versus reality”

My Professional Opinion: Horrifying

Yesterday’s Bay City Council finance workshop was horrifying on two levels in fact folks. I put the workshop out on Twitter yesterday via my smartphone while Dwayne and Jennifer took pages of copious notes old school style. The long and short of it is the City is broke and has been broke for several months. Now the Mayor is pitching a new plan to refinance the City’s debt just weeks after telling Dwayne that City finances were groovy. The plan hizzoner is pushing will plunge the City deeper into debt to paper over the accumulated deficit the City has been financing off the back of its trade vendors and claims docket.

Accounting, legal compliance and related financial concepts are arcane, sometimes mind numbingly so thus I get a charge when audit presentations are recounted by the print media. I’ll be back with a detailed post on this exact topic but first here are the takeaways from the other two media organizations in attendance on this issue of vital public interest:

Bay eyes audit; tax hike may be near ~ Dwayne Bremer

Bay St. Louis council passes measure supporting LGBT residents ~ Jennifer Lenain

No word in either story on whether the City Council authorized the Mayor to begin discussion with Butler Snow to begin the bond refinancing process as proposed by Mayor Fillingame. In fairness to the Echo, Dwayne was fighting deadline issues.  The Sun Herald is not in the game.

Meantime at last night’s City Council meeting

There were two items I thought newsworthy from yesterday’s Bay St Louis City Council meeting. From the Slabbed New Media twitter account:

No action was taken. The bigger news:

Councilman Falgout laid out a compelling case that convinced the others that a more detailed look at the City’s finances was needed: Continue reading “Meantime at last night’s City Council meeting”

Sunday Links: The dangerous people of the internet strike again!

I start this morning with a three pack from the Sea Coast Echo:

Fillingame wants loan to cover Bay’s bills ~ Cassandra Favre

“I’m still not certain that we are okay on collecting people’s waste water and garbage fees and using them for something else,” Ward Five Councilman Joey Boudin said. “We go out and borrow money after we collect their money.”

Now for the “dangerous people of the internet” link:

Bay Council eyes delinquent accounts ~ Cassandra Favre

Lana Noonan of the Hancock County Alliance for Good Government should take a well deserved victory lap:

A majority of the bills are more than four months behind.

“One prompt for me to look into this,” Noonan said, “was that the council just voted for a utility increase.

“If they’re not paying now, how are they going to pay when the rates increase?”

Noonan said the delinquent amounts add up to $265,955 and the utility list was posted online on Sept. 26.

Slabbed was not credited in the story and I’m fine with that. To the extent a couple of the City council members got phone calls after Slabbed published the City’s Utility Aging well tells the tale here.  The days of the Sea Coast Echo being the gatekeeper of public information for all things Hancock County are over and that happened years ago with the ascent of this critter called the internet.  People are hungry for good information. To the extent what I do here at Slabbed New Media forces the other “dangerous people of the internet” to bring their A games to local journalism is a good thing for the public IMHO.  It shows in Cassandra Favre’s story.

There should be a lesson here for Mayor Fillingame and the Bay City Council and I absolutely think at least one member of the City Council gets it in spades.  I was not at the last City Council meeting but from what I was told it is also clear there are a few that are woefully misinformed when it comes to this internet thingy and that despite the fact at least one of the councilmen has his own internet website affiliation. Continue reading “Sunday Links: The dangerous people of the internet strike again!”