BC must reject graybeard legacy of higher taxes

Just like herpes, the mismanagement of Bossier City by several former city councilors and mayors over the past three decades flares yet again to inflict pain on its citizenry, this time with the specter of higher property taxes.

In last year’s budget workshop, Chief Administrative Officer Amanda Nottingham noted that the city had to make two major revenue upcharges to keep the budget balanced. The first shoe to fall was fee hikes on sanitation and related activities that started early this year, but which also included excising a break multiple occupancy owners were getting by not charging them by the occupied residence (typically, apartment complexes have just one or a handful of meters where renters pay a fixed water rate in their rent and the complex does its own sanitation) the public works fee that covered roads upkeep and pest/animal control on public thoroughfares.

That controversy flared up earlier this summer when many of the few apartment complex owners, apparently inattentive to their own businesses, found their bills skyrocketing and complained to the city. After some negotiation, this week the Council  adjusted the enabling ordinance by charging for 80 percent of residences (assuming a fifth at any given time were unoccupied) and suspending its implementation until next year in order to give owners a chance to adjust rental contracts and rates.

At a workshop on the larger issue on rates, a number of citizens complained about continuing the break temporarily, and at some discount, echoed by Republican Mayor Tommy Chandler at the meeting. Regardless, the Council unanimously passed the item, a reasonable compromise to facilitate both owners’ and renters’ abilities to pay.

But that did exacerbate the continuing deterioration in the associated enterprise fund, which is designed to be self-sustaining related to a business-type activity a local government operates. The problem is, the rate the city was charging was supposed to cover the ancillary activities, but the contract has an escalator clause tied to inflation that wiped out the excess of one-third built in when the initial contract with the provider, Live Oak Environmental (since bought up by Kinderhook Industries), was signed starting in 2019. And, until now, that public works fee in essence wasn’t being collected on several thousand apartment units, aggravating the problem further. It’s little wonder from 2019 on the Public Services and Sanitation Fee Fund balance fell by half to about $3 million and without the increase, the first since 2013, would have gone into the red next year.

Yet part of the problem also comes from the bad habit the city has had for decades of striking deals and then sticking with the cozy relationship with the provider making no attempt to find better deals, encapsulated by the quote of the most prominent councilor of the old regime that prized insider relations and deals, Republican former councilor David Montgomery, that “We don’t shop this.” That, GOP current Councilor Brian Hammons said at this last meeting, had to end, and it is possible that a better contract with a new provider could appear if Chandler would take the trouble to do it.

Now the other shoe is about to drop with the property tax hike, which last year was argued necessary because of escalating costs to shore up pensions and for liability insurance as well as targeted increases in employee salaries. The public notice that went out figured the hike, to be debated Sep. 9, would add just over a million bucks a year to coffers. This implies that the request would roll forward taxes to their maximum authorized millages, or an increase from 22.58 to 23.77 mills, the highest levy since 2003.

Maybe some relief could be had by applying Hammons’ freshly-proposed rule of regular bidding out services, or maybe not. And things have gotten worse since last year, since Montgomery and the old Council’s other graybeards, plus current Republican Councilors Vince Maggio and Chris Smith (Smith did voice some concern but threw in with the old regime on this), rammed through a budget with even higher pay raises not recommended by a compensation study the city had performed.

The pay issue was one that Montgomery and the other graybeards had failed to address for years that led to, among other things, chronic understaffing in the police department that, ironically, saved money even as it failed to reduce crime. (Since then, presumably the higher pay has caused the police staffing shortage to shrink to the lowest level in a decade.) But their solution – a swan song to try to deflect criticism of their past performance so severe that all but one of them didn’t attempt reelection (and the one that did lost badly) that even the raise couldn’t offset – only increased budgetary woes.

The basis of support for the raise on steroids was a well-funded General Fund, which only became flush in the past few years with no guarantee that flush economic conditions would continue to keep revenues high enough to support the extra millions in dollars of additional commitments without its rapid draining. The current year budget in fact forecasts a nearly $6 million deficit, the highest since hitting nearly $10 million in 2009, but with the cushion of around $47 million, four times higher than in 2017, a crisis isn’t brewing.

Yet. Because if the rosy assumptions don’t hold, this would return the city to a decade ago when it regularly ran deficits but money could be siphoned from other places. The problem now is those other reserve funds, such as from gaming revenues or proceeds from the sale of Bossier Medical Center, have to go to paying off the city’s enormous debt and attached interest, which at the end of 2023 stood at a lifetime cost of $513 million and this year and next combined will cost about $66 million. To put it another way, given the minimum required by ordinance to have in the general fund (about $11 million), in six years the reserve cushion will have disappeared – and much quicker if those assumptions don’t hold.

Once again, the graybeards’ debt profligacy is coming back to haunt Bossier City. Subtract about $200 million in useless spending on a money-losing arena, a parking garage for a private developer, a high-tech office building that didn’t attract its preferred customer, and a duplicative road at $50 million a mile, and that would have saved $17 million this year.

But they blew money like drunken sailors and now citizens have to live with that. However, that doesn’t mean carving an extra million bucks a year out of taxpayers’ hides is necessary. One of the aforementioned funds, the Riverboat Gaming Trust Fund, that by ordinance must keep at least $30 million on hand, is budgeted to make hardly and investment earnings and besides investment advisement expenses has no planned expenses, including transfers out, and sits with a balance nearly $2.5 million above the minimum. Why not invest it all in risk-free investments, earning $1.3 million, which would more than offset any tax proposed increase?

The graybeards’ sickening attitude was they could go out and build all sorts of monuments, both physical and pecuniary in perpetuity, to their egos on credit and wishful thinking and leave the consequences to future generations. That day of reckoning is nearing, but let’s hope current councilors think more creatively than hitting up citizens for the mistakes of their predecessors. And they should, for any tax increase at this juncture is premature, unneeded, and simply bad governance.