This year the state took the first step towards taking over the administration of more financially troubled towns than ever before.
But Louisiana’s own money troubles kept state government from taking the second step – asking the courts to appoint a fiscal administrator – leaving those towns in financial crisis for months without a fixer.
The state moved Monday evening to take over two more fiscally strapped municipalities, bringing to seven – the most ever – the number of towns…
This is happening at time when Legislative Auditor Daryl Purpera doesn’t know many more towns – his office recently counted 15 – are also on the brink of needing to replace elected local officials with a single administrator who has the power to unilaterally raise fees, fire workers and otherwise make the tough decisions that stave off financial ruin.
In January, the Louisiana Fiscal Review Committee decided Clayton, in Concordia Parish, and Clarence, in Natchitoches Parish, needed fiscal administrators. In February, the committee voted to take over Bogalusa, near the toe of the boot, and Sterlington, in northeast Louisiana. Clinton, in suburban Baton Rouge, will soon be on tap.
Of that number, only Bogalusa had an administrator appointed and that took months of complaining to get the state to act.
“If the state of Louisiana is going to continue to have fiscal administrators, they need to get their stuff together because they messed us all up,” Bogalusa Mayor Wendy Perrette told The Advocate Monday in an interview.
Almost a third of the town’s police department – nine of 29 officials – quit between Feb. 18 when the committee announced the state would send in an administrator and May 31, when they actually did. Four fire fighters also resigned.
Knowing that fiscal administrators in other towns had fired cops, firemen and other personnel, morale plummeted, Perrette said. Law enforcement had been trained – at the town’s expense – and they knew that their certification would get them more secure jobs in nearby Slidell and Covington. So, policemen left, Perrette said.
“And now we have a public safety issue. Even the chief of police is taking a shift patrolling the streets,” she added.
Bogalusa needs help because the retirement system set up years ago when the town of 25,000 residents funded its pensions with a portion tax revenue. The benefit was never fully funded and the amount collected went down as the population decreased. Now, with population at about 12,000, town leaders must come up with about $400,000 each year. Perrette said she cut expenses by about $320,000 but now faces the same debt in the next fiscal year. Actuaries predict that the fund from which Bogalusa pays its pensions could empty out as early as 2021.
A lot of fingers were pointed when a special state committee convened last week to decide whether to take over the Natchitoches Parish village…
Purpera, who chairs the Fiscal Review Committee, told the Press Club of Baton Rouge Monday that he had trouble finding qualified auditors willing to take up the unpopular job. “I tell them, ‘You’re walking into a hostile environment from day one and you’ll leave with everyone hating you’,” Purpera said.
Until recently he couldn’t find the money to pay them.
A revolving fund had been set up five years ago to initially pay administrators for the work. When the municipalities got back on their feet, they would pay back the fund so money would be available for the next town that needed help getting its finances in order. Except legislators never appropriated money. The fund has remained empty since 2014 and will until July 1. Lawmakers sent about $450,000 to the fund during the legislative session that ended earlier this month.
The money will jump start the process, but it will take weeks more before administrators are in place in Sterlington, Clayton and Clarence, Purpera said.
The state’s own fiscal troubles have gotten in the way of hiring specialists to swoop into financially troubled towns, push aside local electe…
The committee is changing its procedures to pick up the pace between voting to send in a fiscal administrator and petitioning the court to appoint one. Routinely, a town was given 30 days to see if it could right its financial house and start paying bills. Then, if nothing happens, the committee votes to start the process.
The delays worked for Melville. The St. Landry Parish town of 1,000 was able to raise the fees and cut the spending on its own, thus appears on the road to avoiding having an administrator take over, Purpera said.
But those examples are rare. From now on, Purpera said, the panel will start the court petition during the 30-day period and be ready to file almost immediately after taking the vote.
The Town of Clinton, which has 1,653 residents, is probably next on the committee radar, he said. Clinton seems to have enough to pay its bills, but the town’s water system doesn’t comply with Louisiana Department of Health’s minimum standards. The committee gave the town time to hire an engineer to determine how much rebuilding the water system is going to cost so that the drinking water no longer violates state regulations.
“My anticipation is that when you have those costs put together, they’re not going to able fund it. Then they’re mostly likely are going to meet” the legal criteria requiring the appointment of a fiscal administrator, Purpera said.
In a state where we have seen wealth drawn from the earth, from timberlands to cotton fields to oil wells, the collapse of finances in many sm…