Mayor Buz Craft says Vidalia’s finances are “very healthy” despite the town being listed as fiscally distressed by the Louisiana Legislative Auditor’s (LLA).
The fiscally distressed list, which included Newellton, Tallulah, Waterproof and Winnsboro, was released last week on the LLA’s website. LLA said the towns on the list might not be able to continue providing basic services such as law enforcement or water and sewer to residents in the future, according Daryl Purpera, Louisiana Legislative Auditor.
Craft said this week he disagrees with LLA’s assessment of the town’s finances.
“We are as financial sound as any town in the state,” Craft said.
After talking with Purpera in 2016, Craft said the legislative auditor’s office performed a week-long Advisory Services Report whose numbers where not finalized until June 2018.
Vidalia’s general fund showed a negative balance upon completion of the report, but Craft said the issue was rectified by legally transferring money to the general fund.
“We are $4 million over operation expenses,” Craft said. “We have $13 million in CD’s and deposits accounts, some are restricted like the hydroelectric fund and utility deposits, but our town is in great shape.”
Craft said Vidalia has ownership of its utility operations and that generates funding for the town and helps bankroll town departments such as police, fire and administration.
“We have the lowest ad valorem taxes in Louisiana because of the utility funds,” Craft said. “Vidalia’s ad valorem taxes only generate $120,000 to $130,000 (annually).”
Bradley Cryer, assistant legislative auditor and director of local government audit services for LLA, says an update on Vidalia’s finances is forthcoming.
"I will have another report in a couple of months, and I expect to see some improvement,” said
Tensas Parish towns are not faring as well as Vidalia.
In Newellton’s case, auditors issued a concern regarding ongoing operations. In recent years, a pattern of expenses exceeding the budget has befouled Newellton’s financial records, according to Cryer.
Waterproof was listed because of its utility collection practices, said Cryer.
The Sentinel reported in September, 78 residents, two churches and one business owe the village some $200,000 in back utility payments.
Individual amounts on the extensive list ranged from $12,255.60 to $638.88 while the majority of customers owe in the neighborhood of $1,000 to $4,000.
Similar to Vidalia, Winnsboro was listed due to past numbers collected from previous Mayor Jackie Johnson’s administration, Cryer said.
In the last year, under current Mayor Sunny Dumas’ administration, Winnsboro officials have exhausted $1 million worth of certificates of deposits paying back-payroll taxes, penalties, bills and back-retirement funds originating from Johnson’s administration.
“When the new mayor came in office, it is our understanding things have turned around,” Cryer said. “We will have another report soon, and we are expecting to see a lot of improvements.”
Dumas seconded Cryer’s statement.
“Everything that was said in the report can be traced back to the previous administration, but we don’t want to continue to cry wolf,” Dumas said. “We’re not passing the buck.”
Dumas assured Winnsboro residents his office continues to work to improve finances.
“We are asking the people to be patient,” Dumas said. “The next audit will be this administration’s, and you will see all of the hard work that has been done. In this next audit, you are going to see the ‘Real McCoy.’
You just wait and see. We are not over the hill yet, but we are finding ourselves climbing the hill. We are gonna get there.”
The purpose of the “Fiscally Distressed Municipalities” list is to give the public, state and local officials earlier notice of a municipality’s financial difficulties and state the fiscal rebuilding process as quickly as possible, Purpera said.
“Our goal is to work with each municipality’s elected officials and to provide recommendations to place the municipality on a path to fiscal stability,” Purpera said.
In determining which municipalities would be placed on the list, LLA analyzed each entity’s financial information, as well as its financial trends compared to other municipalities.
Other factors were considered as well, including whether the CPA auditing the municipality was able to determine if financial information provide by officials was complete or accurate and whether the CPA auditing was concerned the municipality would be able to continue operating.
Additional factors included whether the municipality had more liabilities than assets and was able to pay its bills and whether the Rural Water Infrastructure Committee identified the municipality as one with significant problems with its water system that could increase risk of a public health emergency.
Eighteen municipalities were included in the list and four general reasons were given on how they arrived at their status. Reasons were poor management, shrinking populations, undercharging for services and possible theft.