‘Bad timing’: Bond issue request denied for FD 1

Published 10:33 pm Saturday, August 11, 2012

With the search for a solution to the Washington Parish government’s precarious financial situation taking top priority, Fire Protection District 1’s request to go to the voters to seek funding for the construction of a new fire station was denied Tuesday night by the Parish Council Finance Committee.

The proposal was that a $500,000 bond issue be put on the ballot, with the funds to be used for the construction of a fire house on the corner of E. Daniels Road and Louisiana Highway 25, outside of Franklinton, said Fire District 1 attorney Richard Watts. That location was selected “so that the fire district can adequately serve, with emergency services, the state park and the area out there,” he said.

Before the issue could make it to voters, it would first have to be approved by the committee and added to the Parish Council’s agenda for approval there.

Giving background on the issue, Watts said a $700,000 bond issue, used to purchase fire trucks and other equipment, was passed in 2006.

“Since that time, the district has been levying 12 mills to service that debt,” he said.

The debt on the $700,000 bond issue has been paid down to roughly $500,000, with about $137,000 built up in the bond sinking fund, Watts said. It is a 15-year bond issue, due to pay out in 2021. According to the district’s calculations, he said, the dollars in the sinking fund could be used “to continue to help pay the bond payments on the old issue as they accrue.” Therefore, taking into consideration “the increase in the millage values that we’ve experienced since 2006,” the old issue and the newly proposed one would both “be able to be serviced with the 12 mills that we’re currently collecting,” he said.

Those facts, said Watts, make the fire district’s situation different than that of Recreation District 1, which was recently denied in its request to go to the voters for a millage.

“We would submit to you in light of the peculiarities of our situation in Fire District 1 that we could move ahead with this needed project without jeopardizing whatever the council feels that it is going to need to do to correct its own financial situation,” he said.

As it would be a new tax, making it similar to what the recreation district had proposed, Finance Committee Chair Ken Wheat he said would not be able to support the request. He discussed the situation the parish is currently facing, saying, “Basically overnight, we found ourselves in noncompliance of the state balanced budget act.”

Wheat said the parish now has to fix the problem, meaning that its first priority is that it has to “stay within the law.”

“I hate to be a broken record, but one thing that we pointed out to the recreational district, at their request, was this: that this moratorium that we’ve, so to speak, imposed is not permanent,” he said. “We’re hoping it’s going to be short lived. It has been referred to time and time again as temporary, and we are making some sincere, earnest efforts right now — pretty much all hands on board in this matter — of trying to resolve this as quick as possible.”

Wheat said he wanted to make it clear that the actual request from the fire district was not the issue and that nobody on the committee “has a problem with what the fire district is asking and your goals.”

Committee member Michael Fussell repeated the verdict that Recreation District 1 had received: “It’s just bad timing.”

“At any other time, we feel like it probably wouldn’t have been a problem, but right now it is a problem because we have other issues,” he said, adding that Hospital Service District 1 had received permission to put a tax for Riverside Medical Center on the ballot, but that was before the general fund deficit was discovered.

Fire District 1 had originally hoped to get the bond issue on the November ballot, Watts said. The committee, however, would have to deny that request, Wheat said.

“We commend you for your stewardship of the funds,” he said. “We’ll look at the numbers, though, and do our homework on that and see if there’s something after the November deadline that maybe would fit into the picture.”

Committee member Greg Route suggested that the request be put on hold until after the first of the year, when there would be a better sense of “where our parish is at.” Tabling the proposal until that time, Watts said, would be his recommendation to his client.

In a motion unanimously approved by the committee, Wheat said that the financial information provided by the fire district would be reviewed.

“If we find the opportune time to entertain your request, we will do so, but until then, just understand that right now we have to deal with our number one priority, and that is to stay within the law,” he said.