The only thing worse than a governing authority making an unpopular decision is subsequently butchering its implementation, as Bossier City discovered with its new $12 parking fee at the city-owned, money-losing Brookshire Grocery Arena. Which should teach it a lesson in intruding into matters better handled by the private sector it finally tentatively seems ready to learn after decades.
With little publicity, at the beginning of the month the city revealed the new fee, to be collected in a cashless form using smartphone applications. It went into effect for an Oct. 7 concert, and social media lit up afterwards with horror stories about how the system didn’t work. Complaints about incredible lag times if being able to connect at all, double charging some, or not charging others filled posts and comments, which also extended to general justifiable griping such as poor air conditioning performance and restrooms barren of supplies. No doubt a portion of these filtered to city councilors.
Citizens justifiably were outraged, as not only do they own the building awash in red ink, but now they have to pay for parking next to their own white elephant. Since 2010, a budget year which ended with the Arena Special Revenue Fund that tracks the profitability of the arena having a balance of -$261,284, through last year the facility has lost $6,413,517, requiring $6,953,663 in transfers from other city revenues to leave a balance of $278,863. And, this doesn’t count the tens of millions of dollars spent since then for maintenance.
Despite the dismal financial information, the city has sent no signal that it intends to shed itself of the building, even as one brave councilor recently wondered aloud – not even suggesting divestiture – about whether the city should own the Bossier Tennis Center which in operating terms only goes $36,000 annually into the red. Another councilor consistently defends ownership of the center and arena despite taxpayer losses as a “quality-of-life” offering, even as few and hardly any, respectively, of city residents access each.
Yet, in the case of parks and recreation, the city seems to pay close attention to the bottom line, to the point where it restricts citizen access to facilities in favor of letting outsiders and special interests use these because it makes more money that way, apparently disregarding the quality-of-life argument that affects a large portion of its citizenry in favor of making some coin. And neither turning a buck nor quality-of-life seems to be deterring the city from contemplating a sale of its two compressed natural gas and ethanol (E85) fuel stations.
Last week, when discussing the city 2023 operating budget the Council briefly heard from City Attorney Charles Jacobs, who said as soon as he sorted out some legal issues he would have drafted an ordinance to put these on the block. This would end a 15-year affair that apparently went from enthusiasm to indifference.
Bossier City got into the business of selling vehicle fuels because of the confluence of two developments. With advancements in the latter aughts in hydraulic fracking technology and ability to exploit the Haynesville Shale formation, extracting natural gas would become commonplace in the area. While the city didn’t have title to the magnitude of production that some other local governments saw – it didn’t start specifying royalties from that until 2011 financials, realizing then almost $60,000 that dwindled to under $3,000 last year – the plentitude of gas and that much of the population, even if only small landholders who would receive annual royalties that might cover a full tank at the regular pump, now had a personal stake in the sale of gas provided impetus for the city to launch a program to cater to that.
Especially as at the federal government level the Environmental Protection Agency headed towards lowering permissible ozone standards in air quality areas. Fear increased among the large governments in the corner of the state as the emissions levels weren’t decreasing and the standard soon would be moved lower that could cause the Shreveport metropolitan area to fall into the same restrictive regime imposed upon the Baton Rouge area, which would require spending on a number of ameliorative programs and increased government oversight of personal vehicles.
One strategy to avoid this deploys cleaner burning fuel like CNG for vehicles. The city figured it could convert its fleet to CNG as part of efforts by area governments to reduce ozone accumulation, but it would need a reliable source for this. Therefore, building stations with this available and also with ethanol blending in the E85 form not only would support an important local business sector through sales to the public but also encourage people and businesses to buy such vehicles and join in trying to reach air quality attainment.
The city would go all in on the idea, eventually crowing how fuel costs were cut in half and putting nearly 200 CNG vehicles in use (it’s unknown whether the mayor’s vehicle is one). Even today, CNG prices remain about half that of retail gasoline and E85 remains cheaper as well (although historically it sometimes prices higher than gasoline, and has a different and much smaller impact on air quality).
But the bloom seems to have worn off particularly as political fashion and climate alarmism has declared a pox on anything having to do with fossil fuels. CNG hasn’t taken off much with the public because those vehicles are more expensive and the number of stations remains limited with only 18 in all of the state, discouraging such vehicles unless used in the area. And if the city having a CNG fleet is designed to help reach emissions attainment, that collection is just a drop in the bucket of all vehicles out there.
So, by ditching the stations, the city does retreat, if in a small way, from an enhanced “quality-of-life” by deemphasizing efforts to continue attainment, even if it continues with the CNG fleet emphasis and a private operator keeps them open. And, it may also work against shoring up city finances as the stations have turned a profit. Since their inception, these have returned through 2021 $607,693 to the kitty, plus made another $41,248 in investment earnings with a reserve fund now up to $485,775 even with $184,000 in transfers out over the years to the general fund for other city operations. Of course, it’s not quite that simple as the city must cover capital costs as well, and recent trends have worked against their profitability: they have lost money or are projected to do so from 2018 through 2023 with the exception of the pandemic year 2020.
On balance, the financial picture doesn’t scream to retain the stations, and the city has an unfortunate history in hanging on too long when competing with the private sector. In the mid-1990s, Willis-Knighton Systems offered to buy Bossier Medical Center, allegedly for $42 million, which the city rebuffed. WKS then opened its own hospital and BMC profits plunged to steep losses, leading to a sale for two-thirds that price in 1999 and which led the city to sue unsuccessfully over anti-trust complaints.
But applying to parks the same logic in making a decision leading to station sales would argue for changes in how they are operated, and if applied to the center and especially the arena for their sales as well, none of which appears in the offing. Particularly as the arena hemorrhages more dollars leading to unpopular parking charges if not impractical implementation of collection of these, and given the nearly half-a-billion-dollar debt the city carries, getting many times for the arena what the station sales would realize seems the wise fiscal choice for a city whose history over the decades has seen those kinds of decisions in short supply.
No comments:
Post a Comment