SADOW: Bossier City Councilmen Right To Face Constituent Music

The toughest thing for an elected official to do is pick himself up off the ground after making a blunder. So it’s encouraging that even if they made the wrong choice on hanging a huge future liability around Bossier City’s neck, Republican City Councilors Chris Smith and Brian Hammons made the right choice to face constituents publicly on this issue, as well as take questions on other matters.

The pair will appear Apr. 12 from noon to 1 PM at the Bellaire South Complex at 4330 Panther Drive Bossier City for the monthly meeting of the South Bossier Lunch Group. Smith is an at-large councilor but who lives in south Bossier City, while Hammons represents the southern-most constituency in the city, District 1.

Last week, both voted for a proposal that would reimburse the Port of Caddo-Bossier for costs related to the Port’s construction of a water distribution and treatment facility on its property. The city would operate and maintain this but would not own it. Using figures stated by the Port Commission’s executive director Eric England and reviewing similar bond issue costs, the total liability the city signed onto is $62 million over 40 years beginning payouts as soon as it draws one drop of water at any time during those four decades.

That $62 million down gives the city the right to sell and bill the Port’s clients as well as any city customer connected to pipes from that facility. Past expenses, the Port has the right to capture cumulatively half the remaining revenue until the $62 million is paid off. Thus, over the years the city would have do at least $124 million in new business above and beyond costs – because it has to give half away – to pay off its portion. That means from day one and for the next 40 years without interruption it has to generate $3.1 million more per year past costs (if it starts later in the time span, that figure increases proportionally).

The most recent financial numbers from the city indicate the city has about an 11 percent margin on water, or for every $10 in revenues it has to spend $9 to get it. That means to generate $3.1 million more per year past costs, it must have business that will cost $27.9 million a year, or to meet its obligation it must sell at least $31 million more a year in water.

Problematically, that’s a heavy lift. The city only billed $33.7 million according to its latest annual figure, so from day one of use of the new facility the city would have sell an additional amount of water worth 92 percent of what it does presently. For the city not to lose money on the deal, between the Port clients’ demands and new city customers use nearly would have to double. (This uses the current blended rate; if the city can charge industrial customers a higher rate, that number would come down.)

The Port has given no assurances it can drum up this amount of business and sustain it over 40 years. Further, city population growth in the 2-3 percent range (as recorded over the last census period) every decade implies an increase of only about 10 percent in usage over four decades.

And it’s not like the city itself needs the increased capacity the facility would bring. Media reports late last year had the city revealing an average consumption of 12 million gallons a day, while it reports on its website that it has current capacity of 50 MGD. Even the largest spike of usage in the city’s history only brushed 30 MGD. (The blended rate numbers above thus imply an 11 MGD increase in order to service the long-term liability, every day for 40 days.)

Conceivably, this increase would only have to happen by half, or a 46 percent increase in business representing an extra 5.5 MGD. Since the deal is a 50/50 arrangement, if the city only hit 50 percent of the Port’s debt service in order to stay current it could turn over voluntarily its entire half of revenues beyond costs. However, typically utilities bank a portion of their margins to pay for capital costs down the road.

Yet none of these numbers were discussed publicly in about three hours over several weeks of workshops and council meetings, with the exception of a few references to the long-term liability that England never addressed except for stating several times that the Port had to be “made whole” on the amount. Councilors never asked him for details about realistic projected water usage from Port tenants, in order to be able to assess whether the 5.5 to 11 MGD or 46 to 92 percent business increase was feasible.

City Engineer Ben Rauschenbach – whose firm worked with the Port in shaping the deal and which likely will benefit monetarily from it coming to fruition – never was asked about existing, maximum, and projected city water capacity. Worst of all, the Port’s counsel Dannye Malone never appeared at any public discussion to be asked (England refused to answer in his place) about the agreement’s wording that “the total payments by Bossier City to the Commission shall not be less than the principal and interest payments made or to be made by the Commission on the Bonds ….” and what that would mean in dollars and cents obligations the city would incur under the arrangement.

Councilors, Smith and Hammons included, simply fell down on the job by failing to ask these basic questions, which were a matter of public record well before the second workshop, to the appropriate people. Nor did Smith in particular address these in an Apr. 5 social media post he made defending his vote for the agreement.

In it, he said he voted for it because (1) Port expansion would bring economic growth to the area, (2) the water line part of it would improve water quality in the city’s southern part, and (3) “possible additional revenue” could result that might buffer water operations fiscally. He also asserted that even if it didn’t work out “the cost to the [c]ity is very low.”

Little of this has to do with the fiscal facts. Port expansion isn’t dependent upon Bossier City giving it a free water facility; a far better deal for the city would have been to contract with the Port only to run the facility without any subsidization. If the Port truly felt the facility made it better off, it would have footed its own bill.


Neither does improving water quality have anything to do with the gift. Certainly, for far less than $62 million the city could perform whatever improvements it needed. And, as the data show, for the deal not to cost the city money and provide it with any extra revenue it would have to experience immediately such a huge increase in business as to make this scenario extremely unlikely to happen – meaning that the cost to the city is not very low, but likely in the tens of millions of dollars over the decades.

Smith asserted that the deal would “ensure that the City doesn’t have to raise water rates anytime soon, if at all.” In fact, the numbers show the deal makes it more likely that ratepayers will have to suffer increases in the future just to provide for the subsidization of something the city won’t own.

(In his post, Smith also complained that a motion he made to continue the matter that died whereupon he voted for the deal was misconstrued as caving into pressure from deal backer Republican Councilor David Montgomery, who since 2008 has received over $600,000 in taxpayer money from the Port for writing its insurance. Smith wrote he had his mind made up to support prior to the meeting. If so, he chose his words poorly when broaching the motion to continue, saying that “there are still a few of us that have concerns” about it, with the first-person plural usage implying he was part of the skeptics that included, as it was when the vote was taken, only no party Councilor Jeff Darby and Democrat Bubba Williams, who typically vote with Montgomery.)

Hammons hasn’t said anything publicly about the matter, but he appeared to be on board with the deal prior to the meeting as he made the motion to call the question and did vote for it. So did Montgomery and two other of his frequent allies, Republican Councilors Jeff Free and Vince Maggio.

But unlike Hammons and Smith, those others have shown little appetite for fiscal discipline about or good use of taxpayer dollars. Nor has GOP Mayor Tommy Chandler, whose sole apparent excursion into any kind of budget scrubbing, in the wake of a tight budget that doled out small pay raises in the face of rampant inflation that neglected a good chunk of city employees, consisted of a half-baked attempt to cut bus services.

Although newcomers to the Council, significantly more than any others, of whom there would be a greater expectation they would make a bad choice (Darby and Williams aside, who perhaps raise hopes of better future performance), the pair had shown a willingness to critically appraise spending and suggest better uses of resources. Which is why their decision to back such an obviously flawed deal – when it would have been killed if both had opposed – is so baffling. Maybe they didn’t do their homework thoroughly enough and/or placed too much credence assurances from in those who stood to gain disproportionately from it – or maybe they just don’t have enough good judgment to avoid costly mistakes like this from time to time.

Regardless, the road to recovery in reassuring constituents that they can and will make better decisions in the future begins with honesty. Politicians, even when they know they have committed these, rarely admit mistakes, but they need to confront evidence that they blew it head on and not deflect from or ignore it

So, if at the meeting a citizen asks something like, “You voted for a deal that puts the city on the hook for a forecasted $62 million for something it won’t own and will cost it money unless an outside government agency can almost double the city’s water business overnight for 40 years, even though the city without spending anywhere close to that already has the capacity to handle that business. Explain that vote,” hopefully they won’t mumble along with unrelated general buzzwords like “more economic development” and “better water quality.” Rather, let’s hope they reply along the lines of, “Here’s why I think why that business is out there, and why we need that increased capacity at that cost, and how we can make more than $62 million off it, and it’s the most cost-efficient solution, and here are the numbers to prove all of it.” Even a “I have faith that the Port will find enough business and the city will grow enough for us to pay off the liability without passing it on to ratepayers” is better than nothing because it’s honest if that’s all you’ve got.

That’s the kind of rebound Hammons and Smith need. That would reduce citizen doubts, although not erase the impact of their agreement vote as everything ultimately counts on their records, about their capacities to bring beneficial change reversing Bossier City’s habitual squandering of taxpayer resources.



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