Members of the Harahan City Council are looking into whether the city’s $450,000 share of the BP oil spill settlement can be taken out of the 2015 general fund and put toward capital projects.
That move, should it come to pass, would set up a showdown with Mayor Tina Miceli’s administration, which says the city is legally required to put the money toward eliminating the negative balance in the general fund.
Council members Carrie Wheeler and Craig Johnston indicated at a special budget hearing last week that they expected the money to be put toward capital projects.
Wheeler said Friday that she has reached out to the city’s auditors, Postlethwaite & Netterville, to affirm or refute what she and Johnston say has been their understanding since the beginning.
Miceli and Linda Hite Lulue, the administration’s certified public accountant, recently told the council that the city had no choice but to apply the BP money to the general fund because it started the year $1.2 million in the red. The city has been using money from a bond repayment fund to make up the difference.
Wheeler said Friday that the city’s CPA could very well be right, but she said the finance official on staff at the time the BP settlement was finalized raised no objections to talk of using the money for capital projects.
“That’s not what we were told,” she said. “All of a sudden, now I’m being told no, so I just want to get clarification.”
Johnston said the 2015 budget ordinance passed in June included language saying any further changes to the budget needed council approval. He said he is waiting on the response Wheeler gets from the auditor before he decides whether to propose moving the money.
Miceli, however, remains adamant that the BP money — which represented more than half of the $861,000 in revenue she announced last week had been put toward filling the hole in the general fund — should stay where it is.
Miceli and her only council ally, Sue Benton, have said pulling the money from the general fund would run afoul of the law at a time Harahan is under scrutiny from the state Legislative Auditor’s Office while also worsening the city’s financial health and raising the cost of borrowing money.
Meanwhile, the city’s yet-to-be-passed 2016 budget is set for consideration at a special meeting March 31, though even that’s subject to dispute. Johnston has said he would rather have the budget voted on at the next regular council meeting in April, though Miceli has been adamant about putting it to a vote sooner.
Follow Chad Calder on Twitter, @Chad_Calder.