Winnsboro was again named to Louisiana Legislative Auditor’s (LLA) list of Fiscally Distressed Municipalities.
This is the second year for Winnsboro to be named to the list, which included Newellton, Waterproof, Tallulah, Clayton and Lake Providence.
The list claims the towns may not be able to continue providing basic services such as law enforcement or water and sewer to residents in the future, said Thomas H. Cole, legislative auditor.
LLA indicated Winnsboro made improvements in operations but “still has a negative fund balance and negative change in fund balance in the general fund.”
2020 assets were down $778,025 while total liabilities were up $1.94 million compared to 2019, according to Winnsboro’s current audit report.
Winnsboro Mayor John Dumas said his administration was staying in contact with auditors to “make sure we’re doing everything right.”
Dumas has repeatedly warned constituents that 2021’s budget would be “narrow” and officials were relying on property and sales taxes to pay town debt.
Much of past administration’s debt was paid off by draining Winnsboro’s saving.
In 2019 Winnsboro exhausted nearly $1 million from certificates of deposits at Progressive Bank to pay back taxes, unpaid bills, employee insurance and retirement funds dating back to former Mayor Jackie Johnson’s administration.
“We still have a way to go, but we are learning how to maneuver with the revenue we have,” Dumas said. “We’re not running from any of our creditors or the auditors, and most of them are working with us.”
Dumas sees light at the end of Winnsboro’s tunnel.
“Hopefully by the end of this term, we will be in a much better position,” Dumas said. “I feel comfortable that even if another mayor comes in, things like the water and revenue system will be changed for the better.”
In Newellton’s case, LLA reported, “The town’s 2018 audit report notes a growing concern relating to operating deficits. The 2019 and 2020 audit reports have not been completed, limiting our ability to assess the town’s finances.”
Waterproof exhibited signs of fiscal distress, “as indicted by recurring and significant unreconciled utility receivables.”
Waterproof residents not paying their water and sewer bills were an ongoing problem for the village.
The amount balance owed to Waterproof by the customers totaled $151,617, according to its latest audit.
“The cash collections in the subsequent month were $17,885,” the audit noted. “At the same time, the general ledger indicated the accounts receivable were $380,235 before an adjustment recommended by the auditor was made … No corrective action has been taken as of June 30, 2019.”
Lake Providence has similar utility concerns with “significant deficits and corresponding transfers from utility funds,” according to LLA.
Additionally, 2019 and 2020 audit reports have not been completed, limiting LLA’s ability to assess the town’s finances.
Tallulah has resolved its prior year concern but still have not resolved all issues relating to its water system and debt convenient.
Clayton was placed under fiscal administration by LLA’s fiscal review committee based on a large outstanding loan and utility system problems. A fiscal administrator has not been appointed.
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 provided by officials were complete or accurate and whether the CPA auditing was concerned if 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.