Sterlington Mayor Caesar Velasquez announced the town’s plans Tuesday to delay voting on a measure to levy a 1.5-percent sales tax within a proposed economic development district.
Velasquez said the decision to delay consideration of the controversial sales tax was made in light of the state’s request earlier this week to appoint a fiscal administrator.
The state asked the court to install a fiscal administrator immediately because Velasquez and other town officials have been unable to steer the town out of its financial crisis.
“What I’m going to recommend is that, since the fiscal administrator is responsible for making financial decisions for the town, that we table the adoption of these ordinances,” said Velasquez, at the Sterlington Town Council’s regular meeting.
The state Attorney General’s office filed a petition to appoint a fiscal administrator at Fourth Judicial District Court on Monday.
The Attorney General’s office and state Legislative Auditor’s office had recommended a fiscal administrator for the town earlier this year, but state authorities allowed Sterlington officials to continue managing the town’s finances.
Sterlington missed a debt service payment of some $226,000 on June 1.
“There is reason to believe that in the event a fiscal administrator is not appointed to assist the Town, that the citizens of the Town and State will be deprived of essential services all to the detriment of their health, safety, and welfare and to the continued operations of the Town in general,” stated the AG’s petition.
Velasquez acknowledged the missed debt service payment led to the state’s action in district court.
“They’re pushing this because we missed the debt service payments in June,” Velasquez said. “This is not what we want but it’s what we need to take care of the town.”
Velasquez said the town would not oppose the appointment of a fiscal administrator, referring to a resolution approved recently by the Sterlington Town Council.
“The more we work with him and remain open-minded, the easier it will be for us,” Velasquez said. “We’re going to continue to work with him and do what it takes to make the town solvent.”
In its petition, the Attorney General’s office recommended that I.M. “Junior” Shelton Jr., of Greenwell Springs, serve as the town’s fiscal administrator. Shelton is a realtor and served one term as mayor of Central, the second largest city in East Baton Rouge Parish. He was defeated in his bid for re-election.
The state Fiscal Review Committee voted in February to place a fiscal administrator in Sterlington to take full control of the town’s finances and operations. The Fiscal Review Committee’s members include Legislative Auditor Daryl Purpera, First Assistant State Treasurer Ron Henson and Chief Deputy Attorney General Bill Stiles.
Since then, Velasquez and the Town Council have curbed spending and made cuts to personnel to stem the town’s financial woes.
That was not enough, according to the Attorney General’s petition. The petition outlined a handful of missed debt service payments.
Sterlington was required to make a debt service payment of some $95,000 to Homeland Federal Savings Bank on June 1, but the town failed to make the full payment.
The failure to make the payment was the second strike provoking the appointment of a fiscal administrator.
Sterlington also failed to make a debt service payment of $31,000 on June 1 to Louisiana Public Facilities Authority.
The town was only able to pay $6,000 of the $31,000 total.
In addition, Sterlington failed to make a full debt service interest payment of some $39,000 to BancorpSouth bank on June 1 and two debt service interest payments of some $16,000 and some $45,000 to Cross Keys Bank on June 1.
According to the Attorney General’s petition, Sterlington was reasonably certain it could not make additional debt service payments.
“There currently exists a state of fiscal emergency in the Town,” stated the Attorney General’s petition.
The Attorney General’s office asked the court to appoint Shelton as well as to require Sterlington to pay Shelton for his work as fiscal administrator.
Assistant Attorney General Justin Lester signed the Attorney General’s petition.
Velasquez said it was unknown how long the fiscal administrator might have to stay in Sterlington.
“It’s an indefinite thing and depends on what it takes to make the town solvent,” Velasquez said. “Sometimes it takes 12 months to 36 months, with 36 months being the worst case scenario.”