If anyone thinks that Detroit is the only city going broke, then they need to look closely at Shreveport’s pending financial crisis. Getting a straight answer on the City’s finances from the Glover administration, and for that matter on anything that Big G considers controversial, is like looking for buried bones in the Shreveport’s Dog Park. (Oops, Shreveport does not have a dog park!!)
Rod Richardson, the City’s Director of Communications, advises the City’s reserve fund is $6.1 million dollars. The Clerk of the City Council’s office advises that the 2013 unassigned reserve has funds of $4.89 million. Two Councilmen believe the true number to be less than $2 million, after deducting funds to be transferred by year end.
Hmm… why the confusion? Part of the answers is probably budgetary semantics, like asking three people at the same time what the temperature is without the aid of a weather app on a smart phone. Or it maybe like trying to get three people to guess the amount of available funds in their checking accounts without checking online to see if all checks and bank drafts had cleared.
What is known, presumably without dispute, is that the Glover Administration is on the fast track to leave Shreveport’s finances in shambles at the end of 2014. The unassigned reserves in 2010 were $8 million and in 2011 $9.3 million. No matter what the spin is generated by City Hall, the reserve fund is drastically down, and may continue to decline.
And few, if any, elected officials see any big up ticks in sales tax revenues, or for that matter property taxes, in the next few years to build up this fund. The reserve fund has been drastically reduced by combination of factors: (a) additional funding of non-profit organizations; (b) funding of new initiatives such as the Minority Supplier Institute; (c) increased funding to North Louisiana Economic Partnership (d) Glover’s summer jobs program, etc. In addition, the Riverfront Development Fund came in short of revenues estimates in 2012; the budged funds had been expended and the reserve fund was used to cover the short fall.
The declining city reserves will have a negative impact on the City’s bond for the upcoming General Obligation Bond sale # 2, water and sewer revenue bonds needed for consent decree compliance and anticipated bond swaps in 2014. And even through General Obligation Bonds are based by property values and assessments, bond agencies also look to financial statements and particularly operating reserves when setting bond interest rates.
Earlier this year, Glover attempted to address concerns over the dwindling reserve fund by moving the entire balance of the Street Special Revenue fund into the reserve. The Council, to its credit, refused to allow such an obvious cosmetic attempt to improve the City’s balance sheet. One should not be surprised of the Glover administration attempts to camouflage the reserve’s black hole by other financial “wizardry“ as it goes into the budgetary process in the upcoming weeks; the 2014 budget must the approved by year end.
Politics will definitely be a major, albeit not openly identified, factor in the upcoming budget negotiations between Big G and the Council. Glover’s last budget as mayor may determine whatever legacy he hopes to establish for its eight years as mayor. Four council members are running for re-election next year (Rose Wilson-McCulloch, Jeff Everson, Oliver Jenkins and Mike Corbin) and one will be running for Mayor (Sam Jenkins). Hopefully maintaining the City’s reserve (whatever the real dollar amount is) and increasing this important fund will be a top priority, even more than funding non- profit organizations and city employee pay raises.