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Bay eyes audit; tax hike may be near
By Dwayne Bremer
May 6, 2014, 20:02

Bay St. Louis city leaders on Tuesday discussed a myriad of issues at a budget workshop, including deficiencies in the city's upcoming audit; restructuring the city's debt; and dedicating a new millage to pay it off which could result in a tax increase.
The workshop began with Mayor Les Fillingame asking the council to consider his strategic plan, which he said will solve many of the city's financial problems.
"It is time for the city to restructure its debt," Fillingame said. "Money is tight and it will continue to be tight. Doing this would give us a lot of relief in the short-term and allow us to add capital for projects going forward."
In 2005, the city obtained a $4.2 million general obligation bond for sewer and infrastructure projects.
The city still owes about $1.4 million on the bond and a $397,000 payment is due in October, Fillingame said.
Fillingame suggested the council approve a plan to restructure the bond and add $2.4 million for a total of $3.8 million.
By doing that, Fillingame said, the city would be able to skip the current payment due in October and use the additional $2.4 million for projects.
Fillingame listed a number of projects which the city has planned, including improvements to Old Spanish Trail; the Safe Routes to School project; improvements to the Central Avenue Bridge; paving and improvement projects in Wards Five and Six; and more.
The bond would be paid back on a term of ten years, and Fillingame suggested the city dedicate three mils each year to pay the debt service.
Ward Five Councilman Joey Boudin asked if dedicating the three mils would result in a tax increase.
Fillingame said it would ultimately be up to the council to decide whether to create a new millage or take it out of the current 17.75 general fund mils.
Ward One Councilman Doug Seal said he believes it is time for the council to consider a millage increase.
"We have the lowest tax rates in the state for the services we provide," Seal said. "We have the lowest rates, therefore we have no money. We are running on 2004 revenue."
Ward Three Councilman Jeffrey Reed agreed, saying he cannot run his personal business the same as he did 10 years ago.
"I can't lay a brick for the same price I did in 2004," Reed said. "Well, I could, but the quality would not be the same. I do not see any way around it. I have raised my rates in my business. I stopped hiring and raised my rates a little and business is wonderful. If it works for my business, it can work for the city."
Ward Four Councilman Bobby Compretta said the 17.75 mil figure is actually high because the city dedicates 2.5 mils a year to the library.
"Actually, we only have 15 mils," he said.
Ward Two Councilman Wendy McDonald asked if the city could just refinance the existing $1.4 million on the bond instead of adding the extra $2.4 million.
Fillingame said it could and it would save the city money, but the projects would most likely not be completed.
"If we do not restructure, I do not think we can do these projects any time soon," he said.
Boudin said he feels the city should look at cutting before raising taxes and maybe refinancing the original bond amount without the extra cash is the way to go.
"Do we really need all of these projects?" he asked.
He agreed that the city has a low millage, but it also collects $2 million a year in gaming revenue.
Fillingame said the city's gaming revenue has declined from $3 million per year in 2004 to about $2 million today.
"I think it's a trend across America in the casino industry," he said.
The council was expected to vote on Fillingame's request to restructure the bond later in Tuesday's meeting. The results of the vote were not available by press time Tuesday.
Ward Six Councilman Lonnie Falgout and Councilman-at-Large Mike Favre quizzed Fillingame on revenue shortfalls in the first five months of the fiscal year.
Falgout said gaming and sales taxes are not meeting projected numbers and he is concerned about the impacts to the city.
"I am showing a $197,000 shortfall in the past five months," Falgout said.
Fillingame said the city has cut expenses to make up the shortfall and everything will balance out at the end of the year.
"There is a difference between a shortfall and a deficit," he said. "We have been adapting and adjusting."
Falgout then quizzed auditor Jennifer Bell about certain items in a draft of the city's 2013-2014 audit.
Falgout said that initial findings in the audit indicated the city was having trouble paying some of its bills. He also highlighted other issues with audit.
Falgout said the draft audit states that the city is experiencing a cash-flow problem and that bills were being paid in order of priority, rather than order received.
Fillingame said that he challenged the assertion and pointed to the fact that the audit is not yet complete.
Bell said that she is awaiting certain reports and other information from the city's management before she can complete the audit.
She said she hopes to have it complete within 60 days.
Fillingame asked Bell if she would brief the council again when her audit is complete, but no date for another workshop was set.


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