Mayor wants $500K credit line
By Cassandra Favre
Oct 19, 2013, 01:16
Bay St. Louis Mayor Les Fillingame suggested at at Tuesday's RESTORE Act workshop that councilmen consider acquiring a $500,000 line of credit for the city's general fund.
Fillingame presented councilmen with a spreadsheet called “cash-flow” to illustrate the way the revenues come in during each month.
Fillingame said that the first three months of the fiscal year the city spends more than it takes in.
“We have operated with a short cash balance for about two years now,” Fillingame said. “I think that there are ways to accommodate the cash-flow even without the cash balances we would ultimately have in.
“The revenues we expect will come in and expenses we anticipate will still be paid, but there are a lot of times you need cash prior to revenue being received.
“That’s why I would like, even on the general fund side, for the council to consider authorizing a line of credit to carry those expense until the time that you have revenues to pay it back," Fillingame said. “It’s a bridge loan, it’s a gap loan, it’s a tax anticipation loan, it’s a line of credit. A line of credit that wouldn’t be used until it was necessary.”
Fillingame said that city administrators have been anticipating how they will operate within the guidelines of the budget, that it would be tough and “we’ve been doing it for a long time.”
“I really truly believe that the new utility rates we have in place and with the budget and the minimization of personnel costs, I think it’s going to be a non-subject after February of next year,” he said.
Fillingame suggested cutting personnel costs and reducing services in some areas.
Ward Five Councilman Joey Boudin asked Fillingame what type of reductions he had in mind.
"We will trim probably another five to ten percent off of our payroll," Fillingame said. "We've gone from seven- to six-man shifts in the fire department and we are going to go to no-reserve activity in the police department.
"We are going to minimum part-time use in public works, city hall and beautification and that alone is going to trim five to seven percent off the budget costs."
Ward Six Councilman Lonnie Falgout asked Fillingame if the cuts would affect public safety in any way – Fillingame responded that they would not.
"It's a very excruciating experience operating a city this size on a payday to payday basis," Fillingame said.
Ward Two Councilwoman Wendy McDonald suggested that a line of credit is not unusual for a business the size of the city.
"It's good to have it there when you need it to pay your bills," McDonald said.
Fillingame said his biggest concern is having the operating cash when you need it and he would rather have a line of credit to utilize when the city needs it.
"We would never use a line of credit for something that wasn't budget," Fillingame said. "The only time we would ask to use a line of credit would be to pay a budgeted expense.
"It would be committed to a known revenue."
"If we were to use a line of credit it would be drawn against the ad valorem taxes we received in February," Fillingame said. "January through March, cash is flush and that's just how our business works."
Fillingame said that he would like the opportunity to be able to come to councilmen when there is an occasion that the expenses exceed the revenues and to be able to ask to tap a line of credit.
"Honestly, I would like some relief," Fillingame said. "I don't think a line of credit would be out of line at all."
Ward Five Councilman Joey Boudin said he has been looking for sources of revenue.
"I've talked about charging for fire services," Boudin said. "I've talked about selling the name on the harbor, talked about collecting rent on a building we're not collecting rent on."
Bay St. Louis will hold its regular city council meeting on Tuesday, Oct. 22 at 5:30 p.m.