Bay Council flushes mayor’s proposed utility rate increase
By Geoff Belcher
Jun 27, 2014, 20:28
After nearly three hours of discussion, debate, questions, explanations and recriminations, the Bay St. Louis City Council on Thursday ultimately shot down Mayor Les Fillingame's recommendation to increase utility rates, earning both cheers and jeers from spectators.
Currently, Bay St. Louis residents enjoy practically the lowest utility rates on the Coast, just a $35 fee based on a 3,000-gallon minimum usage; with a "step-up" fee of $3.80 per 1,000 gallons of additional usage. By comparison, Gulfport residents pay $43.70 for the 3,000 gallon-minimum, with a $10.45 step-up fee per 1,000 gallons of additional use.
The city's budget operates under two different ledgers. The general fund side of the ledger is funded through taxes, fees and services from the city, as well as state and federal funding.
The utility budget is funded primarily through fees paid by utility customers for water, wastewater, gas and solid waste disposal.
In a meeting earlier this month, Fillingame told council members that the utility department currently has 19 employees on its payroll, which costs the city about $900,000 annually.
Both Ward Five Councilman Joey Boudin and Ward Six Councilman Lonnie Falgout have suggested moving some of the personnel in the utility department to other department's so their salaries could be paid through the general fund, thus at least partially alleviating the shortfall in the utility budget.
Several of the employees being paid through the utility budget also provide services to the general fund side, but are only paid out of the utility ledger.
City Clerk David Kolf told the council Thursday that, even with last year's rate increase, the city isn't making enough money from utility fees to pay the debt service on the recently refinanced $1.6 million utility bond. An immediate rate increase is vital, he said, so that he city can begin putting aside the funds to pay the debt service on the refinanced bond.
"We want to have a separate fee built into our utility billing that is set aside on a monthly basis to make the debt service on that note for the next five years," Fillingame said.
Kolf said one of the reasons the city's mandated audit is being held up is because the auditor is concerned that the utility rates aren't high enough to pay everything and are a "going concern."
If the city fails to raise rates, he said, that could make the bank trustees in charge of the bond nervous and they could legally require the city to pay the funds back immediately.
Falgout countered that the auditor is concerned about far more than the city's utility budget.
Fillingame offered the council two options at Thursday's meeting. The first would simply add nine dollars to each customers total utility bill, with an enhanced step-up fee. The second option was a line-item fee added to the bill that could be removed completely in five years after the debt service on the bond was completely paid.
Council Chairwoman Wendy McDonald called for a motion on the vote twice before Ward 4 Councilman Bobby Compretta moved to approve the line-item option.
Compretta, McDonald and Ward Three Councilman Jeffery Reed voted for the increase, but Falgout, Boudin, Councilman-at-Large Mike Favre and Ward One Councilman Doug Seal voted against, killing the motion.
Both Falgout and Boudin said they wanted more time to go over the figures and explore other options.
"We just got the numbers right before the meeting," Boudin said. "We can't make a decision yet."
City attorney Donald Rafferty told the council he felt the proper thing to do would be to announce to the bank trustees that the city likely not be able to make the first payment on the refinanced bond.
In a public forum after the vote, Bay resident Libby Garcia blasted the council for failing to act.
"If the city is in such desperate need of extra income," she said, "why are we so afraid of sending a bill out?
"I told you five years ago ... that you are making a mistake by keeping your rates so low."
Ron Thorpe, a member of the Alliance for Good Government, praised the council for shooting down the rate increase and ridiculed the "going concern" comment.
"The mayor is trying to throw you guys under the bus," he said.
In other action:
• The council approved the sale and use of fireworks within city limits from June 26-July 6, as long as there are no fire hazard notices.
• Fillingame said the Bay St. Louis Municipal Harbor will be open starting today, Saturday, June 28.
"It's a soft opening," he said. – the official opening will still occur on July 25, along with Harbor Fest.
The council is next scheduled to meet on July 8, but Fillingame said Friday there may be a special meeting in the next few days to reconsider the rate increase.