The Bayou la Batre City Council took several steps to save money and halt spending as the city prepares for what at least one councilor called “drastic times.”
The most notable change went into effect this week as Bayou la Batre City Hall changed its operating hours to Monday through Thursday from 7 a.m. to 6 p.m. Councilwoman Annette Johnson said closing the hall on Fridays would “reduce stress on the city’s facilities” and lower the cost of utilities.
At its June 11 meeting, the council also voted to put a hold on all city spending with the exception of recurring bills, grant funds and anything expressly approved by the council.
In addition to those changes, the council is exploring options to outsource payroll and accounts-payable services to a third party, refinance some of its debt and ban city employees from taking their city vehicles home — a decision that, if approved, would include fire department and public safety personnel.
However, in another example of the brewing political atmosphere in Bayou la Batre, Mayor Brett Dungan and a majority of the council don’t seem to be on the same page regarding the city’s financial situation.
Dungan voted against almost all of the actions the council took to reduce its spending and refinance its debt, but never explained his votes from the dais. Attempts to reach him and his personal attorney — who has spoken on Dungan’s behalf in recent weeks — were unsuccessful. The mayor’s camp has labeled the council’s financial concerns as “political grandstanding,” but Johnson disagrees.
“It’s not grandstanding — it is what it is,” she told Lagniappe on Friday. “We’re operating month to month currently, and we’re just trying to be proactive.”
All of the spending-related motions proposed at last Thursday’s meeting passed 4-2, with councilors Johnson, George Ramirez, Kimberlyn Barbour and Austin Collier voting in their favor. Dungan was joined in opposition by Councilwoman Ida Mae Coleman, who either voted against or abstained from each motion.
According to Johnson, who chairs the city’s finance committee, Bayou la Batre collects anywhere from $100,000 to $140,000 in revenue each month and has recurring expenses of around $125,000. Previously, Dungan and Johnson have both acknowledged a particularly slow year for business license revenue — a shortfall Dungan pointed to as the reason he obtained a $50,000 loan for the city without the council’s knowledge or approval last December.
With depleted reserves, Johnson said the city is essentially operating check-to-check on revenue distributed by the state every month.
A request by this newspaper to independently verify the financial realities of the city is pending.
“Drastic times call for drastic measures, but we should be able to hold our own,” Johnson said. “The biggest issues we’re facing right now are the final payments on the dredging bond, which is coming up in September.”
The “digging bond” is an old debt the city has maintained since 1996, when the Bayou’s industrial canal was dredged to allow deeper draft ships access to the city’s port. Since then, the city has paid roughly $185,000 per year to pay off that debt.
While the payment has been maintained for 16 years without change, now the council is considering refinancing to free up more money for operating expenses.
“Normally when business license revenue comes in, we put aside around $400,000 in a money market account for the fourth quarter — to handle the dredging payment and other expenses,” Johnson said. “For whatever reason, Mayor Dungan didn’t do that this year.”
With no money set aside for the payment, Johnson said the council is looking to refinance the debt despite having only two payments remaining. Johnson said they haven’t nailed down a plan yet, but are hoping to have the $400,000 remaining debt refinanced over six years with annual payments of $70,000.
“I hate we have to do that, but I don’t see any other way,” Johnson said. “We can’t wait until the week of the payment to figure this out.”
Since taking office, Dungan has publicly touted the growing amount of money the city has saved under his leadership, but Johnson — who dropped out of her own mayoral campaign to support Dungan’s candidacy — said since he had taken control of the city’s finances, it has been paying expenses with borrowed money and by shifting money between different accounts.
Just this past week, the council voted to move funds from a money-market savings account to cover its monthly bills and payroll. Johnson also said Dungan’s staff, including former City Clerk Jaime Abastoflor, had moved around $86,000 from various accounts in the city’s general fund — some of which were restricted grant accounts. The commingling of some of those funds was part of the explanation the council gave for Abastoflor’s termination two weeks ago. Brenda Andrade has since been appointed interim city clerk until a permanent replacement can be hired.
“If you’re moving money around and you’re borrowing from a bank to make all of these things come together throughout the month, eventually it catches up with you,” Johnson said.
Despite her concerns with the city’s finances, Johnson said she’s confident the council will find a way to operate without cutting essential services. She also praised the city’s employees for working within their own departments to reduce spending.
“As a public official, what I admired so much was the way our departments started coming together to say, ‘we can do this, and have you thought about this?’” Johnson said. “Hopefully we’ll continue with that process. We just need it done publicly so we can show the people of Bayou la Batre that it does cost for us to operate these activities and services throughout the year.”