It all started in mid January when Shreveport Mayor Perkins introduced a proposed $18 monthly Clean City User fee. Not surprisingly, the idea of charging a garbage pickup fee was viewed as virtual heresy.
Since then the council has been briefed on the realities of the city’s finances.
The sanitation department is subsidized $8.5 million from the city’s general fund.
Sanitation workers are underpaid . Vacancies cause delays in garbage pickups. And the payment of overtime wages and/or expensive temporary worker pay.
The city’s reserves are extremely low, like approximately $1.1 million. Budget estimates are for this amount to be $3.1 million at year end.
Best practices dictate a 30 day reserve of operating expenditures. This would be $15 million. The projected $3.1 million reserve is approximately 5 days of operating expenses.
The council has also been briefed on the estimated completion cost of the mandated Environmental Protection Agency consent decree. Rather than $350 million, the cost will probably be $1.1 billion.
Additional revenue bonds will be needed for at least $500 million.
The city’s low reserves will most likely negatively affect the city’s bond ratings. This will increase the cost of any revenue bonds. Additionally, a planned general obligation bond proposal for later this year could be more expensive.
As expected, the council has struggled with a vote to increase any fees for their constituents. This despite the fact that all similar size cities charge a garbage fee.
Much of the resistance deals with adding a fee to Shreveport water bills. These have been increased on a scheduled basis since 2014. The last increase will be in 2020.
To address the wage and reserve issues, the council has limited choices.
One is to add a garbage fee. A second option is to propose a sales tax increase. Another is to cut department budgets. Or a combination of some or all of these alternatives.
The city's fiscal year is the calendar year. This means that, in theory, one-third of the budget has been expended by the end of March. Put another way, there are only 9 months to address these concerns.
Bad news does not get better with time. And the longer the wait, the more money is being spent by the City for daily operational costs.
Such is the case with a garbage fee, the city’s reserves and the consent decree. Nonetheless, its time for the council to "fish or cut bait" on the garbage fee.