There’s A Fiscal Time Bomb Ticking In Bossier Parish

It’s a race against time for Bossier Parish Police Jurors: find ways to obscure enough the inevitable negative fiscal impact from years of careless water and sewerage policy so as not to impair their reelection chances next year while actually doing something to solve the problem.

Raising impact fees, as the Jury initiated last week for commercial customers, is but a drop in the bucket compared to the massive funds injection necessary to pay for years of careless capital budgeting. Back in the mid-aughts, the parish created what today is termed the Consolidated Waterworks/Sewerage District No. 1 (which extends west from Princeton), adding a later spinoff No. 2 (serving around the Linton Road and Linton Cutoff area), to address state complaints about service quality from the patchwork of nongovernment operators serving outside of municipalities. Since then, the parish has built out infrastructure to tie together and extend services from operator after operator it has acquired, with the latest being Village Water System and potentially Benton’s in the future.

That has created a ticking time bomb. For years, the parish essentially subsidized system operation using tax dollars even of those not system users, by its own admission around $10 million through 2019, and financial records suggest subsidization of around $1.7 million in 2020 but a narrow gain in 2021 have occurred since. This may have stabilized operating deficits for now, but that’s not the whole picture.

As planned, the rates never were intended to cover the capital costs of system creation and buildout, which up 2020 were pegged at $55 million. Strictly as a bookkeeping metric, as of the end of last year the parish owed about $30 million identified as directly attached to the business-type activity of water and sewerage provision – about two-thirds from utility revenue bonds and the other from an advance from general government revenue bonds. Last year, all combined this added an extra nearly $1.8 million in costs not covered (this will increase substantially in the coming years as the payment for the 2020 bonds that comprise the advance from the Jury will balloon from around $100,000 to $1 million annually by the 20-year end of these).

Ideally, as an enterprise, customer rates would cover expenses. This, then, has become part of the parish’s strategy: to expand the customer base so that the incremental revenue each brings more than covers their extra cost, which then can go towards tackling future deficits. Thus, the rush to expand by the Jury (keep in mind the Jury also serves as the governing board of both districts), not just to capture more revenue but also broaden the customer base to absorb future rate increases, both initially upon merger and in the future.

Yet if a combined deficit of $2-3 million annually seems in the offing for at least a decade, there are limits to this maneuver as simply not enough cost-effective new customers exist to make it work. The impact fee – charged for a hooking a newly-built structure into the system – hike adds just a pittance to cover fixed costs, and little else is available to accomplish the same. Inevitably, it will mean a combination of tax increases and/or service reductions in other functional areas parish-wide – with the former seeming more likely as the terms of the two bond issues issued by the state’s Clean Water State Revolving Fund allow for any steady source of revenue to back repayment, which obviously includes dedicated taxes.

The political problem for jurors is to obfuscate this as they head into an election year. The rate increases lapse at the start of next year, and at that point they can defer for at least a year any more increases so as not to have that hanging over their heads while out on the hustings. And, they can keep silent on the continued and escalated draining of taxpayer resources to pay off the debt that goes towards services accessed by a relatively small portion of parish residents, hoping nobody will notice.

Bossier Parish taxpayers shouldn’t let themselves get fooled. Jurors present and candidates for those offices next year must be held accountable for their ideas to deal with covering this debt and any rising programmatic operating costs, especially if their plans involve raising taxes. And customers of systems the parish solicits to join them need to be wary of potentially escalated costs, through higher rates or taxes, they will pay if they accept the offer.

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