Monday, May 27, 2024

Almost 100 more Louisiana government entities could be in financial trouble

by BIZ Magazine

By David Jacobs | The Center Square

While the 20 villages, towns and cities on the Louisiana legislative auditor’s list of financially distressed municipalities are in fairly stable condition, almost 100 agencies across the state might be close to getting themselves in financial trouble, an LLA official said Monday.

“They haven’t climbed back out of that hole yet, but they’re not declining any further,” Bradley Cryer, who directs local government audit services for the LLA, said about the list of 20 towns.

However, 97 local agencies statewide – including towns, sheriff’s departments, school boards and others – potentially are in distress according to a model the auditor’s office developed, Cryer told a legislative oversight committee.

While the model can indicate an agency is not bringing in enough revenue to pay its bills, for example, sometimes the information is out of date or incomplete. Entities on that list are subject to additional scrutiny.

Poorly maintained water infrastructure is one of the most common liabilities for communities across the state. Cryer called it a “multibillion-dollar problem.” The Louisiana Department of Health is pushing systems to merge and create economies of scale “so the rates don’t go from $30 a month to $70 a month just because you had to build a tower for 300 people when you can build it for 3,000 people,” he said.

“That long-term effort will certainly help,” Cryer said. “It takes time for that to happen.”

Sen. Jay Luneau, D-Alexandria, said he hoped “things are going to happen in Washington this week” to provide funding to fix some of those infrastructure issues.

Cryer said five towns had been added to the list of distressed municipalities since last fall. He said he expected more will be added once the full effect of the COVID-19-related economic slowdown, last year’s record-setting hurricane season and recent severe winter weather become apparent.

“I think as we go forward the next few months, we’re going to see even more problems pop up that we just don’t know about at this point,” Cryer said.

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