The Louisiana Legislative Auditor says 18 municipalities in the state are “fiscally distressed” and may not be able to provide basic services in the near future.
Legislative Auditor Daryl Purpera said the list, released Wednesday, is meant to give the public and state and local officials earlier notice of a municipality's financial difficulties and start the fiscal rebuilding process as quickly as possible.
"Our goal is to work with each municipality's elected officials and to provide recommendations to place the municipality on a path to fiscal stability," he said.
The list does not include four towns and cities (Bogalusa, Jeanerette, Sterlington and St. Joseph) that already have court-appointed fiscal administrators and two villages (Clarence and Clayton) a state committee has voted to put under fiscal administration but do not have administrators in place yet. It also does not include local government entities that have failed to submit legally required financial reports or for which a CPA was unable to issue an audit opinion.
In determining which municipalities would be placed on the list of fiscally distressed municipalities, the LLA says it analyzed each entity's most recent financial information, as well as its financial trends compared to other municipalities. Other factors the LLA says it considered include:
• Whether the CPA auditing the municipality was able to determine if financial information provided by officials was complete or accurate.
• Whether the CPA auditing the municipality was concerned that the municipality would be able to continue operating.
• Whether the municipality had more liabilities than assets and was able to pay its bills.
• Whether the Rural Water Infrastructure Committee identified the municipality as one with significant problems with its water system that could increase the risk of a public health emergency or the need for expensive repair and/or replacement of equipment.
Purpera chairs the state’s Fiscal Review Committee, which examines the financial health of local government bodies and sometimes asks a court to appoint an administrator to get the entity’s finances in order. In the case of a municipality, the administrator basically assumes the combined power of a mayor and city council.
“While we can't say for certain that any of the municipalities on the list will ultimately be voted under fiscal administration, these are the municipalities that we will be assisting to try to prevent such an outcome,” said Bradley Crier, director of local government services for the LLA.
Poor management, shrinking populations, undercharging for services, and possible outright theft are among the reasons Louisiana towns have gotten themselves into fiscal trouble.
The 18 municipalities are: