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On Thursday, August 29, The Bogalusa City Finance Committee met to discuss budget concerns, upcoming changes, and to update the status of closeouts from previous years.

According the city comptroller Jerry Bailey, the closeout of fiscal year 2022 is moving forward but still in progress. Although no hard numbers were given, the consensus was that the finalized audit could take several months to be delivered. Council members and Bailey noted that these numbers will have a waterfall effect on the 2023 closeout, 2024 and 2025 budgets.

The Committee discussed the possible contract with Retail Strategies that will be voted on Tuesday, September 3^rd by the City Council. Councilwoman Gloria Kates questioned whether or not funds from the American Rescue Plan Act that were given to the city could be used to pay for this contract, which is $25,000. Retail Strategies is a real estate company that partners with local governments and municipalities to broker deals with nationwide retail chains, potentially bringing new business to the communities they serve.

ARPA funds were given out by the federal government following the coronavirus pandemic to stimulate local economies. The city of Bogalusa received $4.25 million, of which Bailey said $840,000 remains.

The Committee discussed whether or not the funds from the increased rental contract with Northshore Charter School would be applied to fiscal year 2023 or 2024. Airport Manager John Sanders clarified that the back pay included in the contract would be included in this year’s budget, not last.

Councilwoman Shelby Temples asked Bailey if the emergency ordinance spending bills passed in recent months to repair lift stations had been paid, and for invoices. Bailey confirmed that they had been paid today. Council president Mark Irvin asked Bailey if any progress had been made in repairing the screw pumps at the treatment plant, which are currently running on rented backup pumps. Bailey said, “I don’t want to suggest where ARPA funds should go, that’s between you guys and the Mayor. We’re getting now where we’re putting people in hotels because the sewer is backing up.”

The Committee clarified that in next Tuesday’s meeting, they will be splitting an ordinance that contains both parade and parks and recreation fee schedules to address the issues separately. The separate ordinances will be voted on in the Council meeting scheduled for September 17.

During the Public Discussion portion of the meeting, a representative from the fire department questioned why another meeting had been scheduled between them and the mayor, saying that he thought they had worked everything out before the budget was passed. Kates questioned why Fireman’s paychecks had not yet reflected the increased pay that had been negotiated prior to passing this year’s budget. “You need to hold up your obligations the same as we held up ours,” he said.

Temples asked Bailey about the current state of the budget, to which Bailey replied, “Not real good. That’s why I’ve suggested based on the numbers I’m seeing from 2022 that we may have to take some action now. Revenues are not coming in like they should. They haven’t been making their entries correctly. If I’d shown you a financial statement two months ago, you’d probably have seen about a $4 million deficit.”

“We operate with expenditures that come out daily, but revenues that come in monthly, quarterly, semi-annually, and the big one that is property taxes that come in at the end of the year. In the past, before we were on non-compliance, we used to go before the bond commission every year and get a budget loan of $2 million, borrow against the property taxes,” Bailey said.

The city is currently ineligible for bonds from the state due to its non-compliant status with the Louisiana Legislative Auditors Board. The city will remain non-compliant until closeouts from 2022 and 2023 are finalized, and a 2025 budget is due before the end of this year. According to the rough timelines discussed, the 2022 closeout will not be finished before next year’s budget is due.

The City Council is set to vote Tuesday to begin receiving monthly financial statements from the mayor’s office, tallying the revenues and expenditures as they occur. Councilman Michael O’Ree questioned the 2024 budget deficit months ago, pointing out the revenue shortfall and stating, “I guess it’s gonna be a good Christmas this year.”

At this point, it is unclear what the city’s true deficit is, and how they plan to address the shortcoming. During the Finance Committee Meeting, it was stated that the mayor has scheduled budget hearings with heads of departments for Tuesday and Thursday of next week.