While it looks as if the move to issue $30 million in debt to fund a recreation center in north Bossier City has withered, that shouldn’t bring debate over city borrowing to a halt.
In early December, the Council witnessed a two-front offensive to bring about this project. At that meeting, members unknown asked for the Northwest Louisiana YMCA to pitch for the building that the Y would run – despite uncertain demand and that city residents not only would end up footing the bill for the building but also would have to pay hundreds of dollars a year to use it except by participating in a select few city programs.
Following that, members unknown also asked for representatives of agencies the city works with for bond issuance (the ones for work “we don’t bid”) to give their opinions about the city’s debt load. The latest authorization of $75 million combined with scheduled paying down outstanding debt in 2021 puts the available debt load at around $535 million, or over $8,500 per resident, by far the highest of any medium or large city in Louisiana.
(Yes, you read that right, $8,532.56 to be exact. Previous estimates of around $6,900 per capita were based upon 2019 estimates of population, which in retrospect turned out to be well above the actual 2020 census numbers that came out recently at 62,701.)
Soothing sounds emanated from this group, whose livelihoods depend upon selling as many bonds as possible. They said running up so much liabilities was “prudent” as it enabled the city “to stay ahead of the game, keep ahead of your infrastructure, keep up with your growth….. It’s why economic development comes to Bossier. And you’ve been able to manage to do all that without raising taxes.”
If only that part were true, besides the fact the city has grown a bare 10 percent in population over the past two decades. In fact, after the city’s debt more tripled from just over $100 million to over $350 million from 2005-10 while not rolling forward millage rates, by 2015 property taxes had to return to previous levels to compensate as well as to support the additional debt surge since. During this five-year binge, population rose an estimated 4 percent.
And what does building a money-losing arena, giving away a parking garage to an outdoor mall that went into receivership, and footing a third of the bill for a high-tech office building that failed to attract its intended client and has produced far fewer jobs than promised have to do with “infrastructure” and “growth?” The more than $100 million wasted on baubles that should be the province of the private sector has nothing to do with genuine necessities of a municipality, such as roads, public safety infrastructure, and water and sewerage systems.
These hucksters also tried to explain away exorbitant debt by claiming if to keep up with the Joneses meant going into hock like mad, the Smiths should follow as well. When the only councilor who has questioned debt levels, Republican newcomer Chris Smith, asked about comparing city finances to that of the New Orleans suburb Kenner, they admitted that Bossier City had somewhat more debt, but argued that Kenner should spend more alleging that it was falling behind in infrastructure requirements.
Yet in fact Kenner has hardly any debt compared to Bossier City, about a fifth in raw and sixth in per capita numbers. Even if buying the unsubstantiated assertion that Kenner had infrastructure deficiencies, it could triple its debt and still be at about half of Bossier City’s.
Perhaps Smith asked about Kenner because, like Bossier City, it is a suburb to a central city and of roughly the same population. But had he asked about the other city in Louisiana in the same population range, Lake Charles, the answers he would have gotten might have been more embarrassing or subject to greater obfuscation.
While since 2010 Bossier City’s debt shot up nearly 50 percent with a population increase of around 2.3 percent, Lake Charles that grew in population around 17.8 percent saw its debt decrease 59 percent to a level that is now just about one-tenth of Bossier City’s. Oh, and by the way, Lake Charles’ sales tax rate is half of Bossier City’s and its property tax rate is about two-thirds. This comparison calls into severe question whether Bossier City needed to borrow so much to do so much, and if it hadn’t whether it could have provided greater tax relief to its citizens.
Finally, the carnival barkers crowed about Bossier City’s Standard and Poor’s bond rating, describing it as “kind of in the AA category.” For the record, it’s latest is AA-, which means it’s a bit below “strong capacity” to meet commitments, the last rung above the A category that indicates susceptibility to economic winds. Lake Charles is AA and Kenner is A.
Seeking more robust explanations of the debt impact on the city, the website BossierNow contacted the group Truth In Accounting. This organization calls a focus on debt ratings misplaced, attuned to the desires of bondholders rather than taxpayers. It says its methodology corrects for this, and its analyses prove useful not just in explaining governmental financial statements, but also in that it includes future obligations such as debt, pensions, and post-employment benefits, summing it all into a scale describing fiscal health.
The group responded by giving Bossier City a B rating, just barely, using 2020 numbers, meaning the city has just enough in assets available for ready liquidation to pay off all expected bills current and long-term. Its director described the city’s situation as “not horribly in debt,” but the workup didn’t include the $75 million in new debt authority, nor answers the normative question of whether all that debt went to genuine city needs in the first place.
And from election results earlier this month, it appears at least the total won’t increase by that $30 million. With Republican Brian Hammons winning the District 1 special Council election, he will join Smith as outspoken opponents of the giveaway on the Council and backed by GOP Mayor Tommy Chandler who pledged a veto of that appropriation. That means just one more opposing councilor necessary to uphold a veto would scuttle the measure. Tellingly, the upcoming Council agenda doesn’t have the item on it.
Drowning in debt run up by a cabal of councilors still in office, its servicing kept taxes artificially high that culminated in the city’s nearly no growth over the past decade (by contrast, surrounding Bossier Parish grew by 19 percent). Rather than continue on this path, Bossier City needs to break its spending addiction and act to ensure it can stay living within its means.
No comments:
Post a Comment