GONZALES — Ascension Parish government took a combined $5.1 million in losses for its sewer, water and Lamar-Dixon Expo Center operations in 2018 before past savings, grants, transfers from other government funds and other sources covered the shortfall, a new annual audit says.
Yet, even with the operational losses in those parish enterprise funds, overall parish government saw increasing revenues, increasing operational expenses, more hard assets and still added to its overall savings by more than $13 million.
The 2018 audit offers a snapshot of the parish's current utility and Lamar-Dixon operations in the early stages of what could be major changes to the water and sewer programs through proposed influxes of hundreds of millions of dollars in new water and sewer capital and thousands of new rate-paying sewer customers.
Last fall, the parish was awarded a combined $17.5 million loan and grant from the U.S. Department of Agriculture to upgrade a private west bank water system the parish bought in 2016. The improvements will include new water lines, repairs to the water plant and new household and commercial meters to better track water use and collect from customers.
The parish is also considering a public-private partnership to pump $200 million to $225 million into eastern Ascension to build a regional sewer system that, in its first phase, could eventually serve 35,000 customers, dwarfing the parish's current scattered collection of customers totaling a few thousand.
The utility losses also come as Parish Council members learned this past week that for about a year and a half in 2017 and 2018, Ascension Wastewater Treatment, a partner in the sewer deal, was improperly billing monthly sewer fees to residents in new subdivisions who should have been paying the parish.
Instead, AWT, which has been the primary private sewer provider in the parish for years, began charging the new residents, even though a parish ordinance had required the parish to take control of the sewer systems and collect the fees.
William Daniel, the parish infrastructure director, told the council July 18 that the parish checked recorded subdivision plats and found the neighborhoods that should have been paying the parish. The parish is now trying to recoup the money from AWT and the billing company, which is Baton Rouge Water Co., Daniel said.
"We've pursued everybody that was in the chain of getting it," he said.
While the officials did not disclose a value for the misdirected fees last week, the billing oversight resulted in an audit finding and the finding shows the fees total an estimated $134,100.
In 2018, Ascension Consolidated Utilities District No. 2, which includes the parish-run sewer systems, took a $2.2 million operational loss, the audit says, before fund transfers and grants covered the loss and ended the year well to the positive.
In government parlance, revenues that aren't spent and are saved are called the fund balance. In Ascension, those dollars in reserve rose from $257.4 million in 2017 to $270.9 million in 2018.
However, the vast majority of the money wasn't free to spend anywhere.
They were tied up in an array of voter- or council-dedicated funds like drainage, mental health, the Council on Aging, libraries, roads and firefighters or were already set aside and waiting for long-running capital projects to be ready for construction.
In fact, half of the combined fund balances in parish government, about $136.6 million, were for capital projects waiting to be completed, a parish summary table shows.
Those capital plans include road projects in the Move Ascension program that won't likely start construction until late 2019 or early 2020 to the new $29.6 million parish courthouse in Gonzales. About $25 million of that project's cost shows up on the parish's books due to debts being paid off with court filing fees. Other local agencies are covering the rest of the cost.
"I mean we can't go take that ($25) million on the courthouse and go spend it on roads," Councilman Bill Dawson quipped to parish auditors last week during a presentation on the audit. "We would like to. Don't tell the judges I said that."
Jacob Waguespack, a partner with Faulk and Winkler, the parish's hired auditor, told the Parish Council during the July 18 presentation that only about $36 million of the fund balance was available to spend on any use.
Yet, Tommy LeJeune, who is managing partner with Faulk and Winkler, indicated the parish had more than enough set aside and available for discretionary spending in the general fund and its primary sales tax fund — about $36 million combined — to ensure the parish had a recommended six-month emergency reserve for monthly expenses.
He said based on spending in 2018, the parish would need $15 million to $20 million for that emergency reserve.
Overall, total revenues rose from $122.8 million in 2017 to $138.1 million in 2018 across all sources, even though total sales tax collections dropped by $3.7 million from 2017 to $53.8 million.
Total expenses, which includes not only all government operations, including those on dedicated tax sources like fire departments, but also business activities like the parish's operation of sewer and water systems, rose from $92.7 million to $109.4 million. That's an 18 percent increase from 2017.
During the council meeting, members were provided simplified summaries of the parish's finances that showed the parish's basic operational expenses rose from slightly more than $60 million to slightly less than $70 between 2017 and 2018.
Councilman Daniel "Doc" Satterlee noted that the year-to-year increase was part of trend since 2016 of increasing operational expenses even as capital expenditures have decreased.
But Waguespack noted that about half of the operational increase in 2018 was due to a pass-through state and federal grant worth $4.4 million. The grant is financing the steamboat museum project at the Houmas House plantation on the Mississippi River.
He said overall, general fund operations, which make up part of the operational expenses shown in the simplified tables given to council members, actually fell by about $1.5 million, though another $2 million in increases were found in recreation and public works spending.
"It was just in a number of different items, between salaries and projects and things of that nature," Waguespack said.