Louisiana auditor’s office warns city

Published 4:13 am Friday, July 20, 2018

Officials from the State Legislative Auditor’s Office warned the Bogalusa City Council on Tuesday, that the city had an obligation to address its financial deficiencies. In addition, those officials stated that the state could step in to handle them, in a worst-case scenario.

Brad Cryer, assistant legal auditor and director of local government audit services for the Legislative Auditor’s Office, said Tuesday that Bogalusa is the “second-worst” city in Louisiana in terms of repeated audit findings that have not been addressed. Cryer cautioned that if those problems are not fixed, the city would be declared financially unstable and could be placed under the control of a state financial administrator.

Cryer specifically mentioned the unfunded liability of the city’s pension plan and expenditures related to the landfill.

In April, city director of administration Stacy Smith noted that the City of Bogalusa Employees’ Retirement System (COBERS) was under-funded by $13.7 million, according to the actuary report of June 30, 2016. She also stated that “there are more retirees withdrawing from the system than there are employees contributing to the system.”

Smith also noted that if the city does not increase contributions to the system, it would be bankrupt within five years.

Cryer said Tuesday that these problems have been ongoing for years, but even though the current administration did not cause them, it must address them.

“As elected officials, you have a responsibility to fund that liability,” Cryer said. “Either you raise money or you cut expenditures.”

Cryer noted that state financial administrators only have the authority to make spending cuts, and cannot execute any additional funding sources such as taxes. As a result, if the state was called in to temporarily govern Bogalusa, it would likely lead to extreme cuts to personnel and services.

“We’ve had five years of talk, and now it’s time for action,” Cryer said.

Cryer said that the State Legislative Auditor’s Office would soon send the city of Bogalusa a letter. In that letter, the office would ask for a concrete and detailed plan from the city on how it will address the financial liabilities. The city must give a response by Sept. 30.

A 12-mill property tax increase was placed on the ballot in April, in order to address the unfunded pension problem, but the measure failed with 78 percent of voters rejecting it.

Bogalusa Mayor Wendy Perrette thanked Cryer and other state officials for coming to the meeting to speak.

“They are here to help us, not to hurt us,” she said, while addressing the audience and council.

In other business, the city:

  • Adopted a resolution authorizing the mayor to execute an agreement with the Louisiana Dept. of Transportation and Development (DOTD) for improvements at the George R. Carr Memorial Airport. The resolution passed 6-0 — city council member Scott Ard was not present at Tuesday’s meeting.
  • Tabled a resolution to amend the city’s operating budget for the fiscal year beginning Jan. 1, 2017, for Senior Citizens Programs.
  • Introduced two ordinances — the first to approve a rezoning request from A-2 Residential to B-Business to put a snowball stand on the property located at 1010 Hickory Ave. for Curtis Allen; and the second to authorize the mayor to enter into a contract with Mele Printing. Both ordinances will be voted upon, and open for public discussion, at the council’s next meeting.
  • Heard from Jaime Bruins of Tobacco Free Living, Gail Brigham of Washington Parish Coalition on Human Services, and Taffy Morrison of Well-Ahead Louisiana. The three speakers discussed the one-year anniversary of the city’s no-smoking ban and the positive health impacts it has had on the community.
  • Heard from city council member Sherry Fortenberry, who announced that she will not be seeking re-election to the District E seat this year. Through tears, Fortenberry explained that her husband John has been having medical issues and she decided not to run again; however, she did not rule out running in 2022 or beyond.
  • Heard from Robert Neilson, who delivered the city’s annual audit report. Neilson said that the report was mostly positive, and noted that it was the third year in a row the city has finished in the black in its General Fund balance.