BAY ST. LOUIS -- The lack of money in Bay St. Louis' general and utilities fund may have the city operating on a month-to-month basis by September.
CPA Mike Guel of Wright, Ward, Hatten & Guel in Gulfport said the city projects it will have only $30,000 in its general fund in September.
"You get in situations where you're operating month to month," Gruel told the City Council.
The 2013-14 audit report, prepared by Guel's firm, was going to be discussed at Tuesday's meeting, but he told the council the report will be released in the next two or three days. The discussion of the audit report wasn't on the agenda.
A financial workshop to discuss the audit report was scheduled for 5:30 p.m. July 21.
Guel said there is a concern Bay St. Louis doesn't have a reserve fund in case of unexpected expenses or emergencies. "There's been a downward trend in the total cash, especially the water and sewer fund and general fund, so we'd like to see a reserve built so operations can continue over unexpected expenditures," Guel said.
With money so low in the general fund, Guel said, the
city could run into a crunch come November when it has to pay $368,925.85 toward a $500,000 revolving line of credit issued in November. The city also will have to pay a third payroll cycle that month, as well as a payment on the new ladder truck it bought in November.
"Here, it's gonna get tight. It's tight as it is," he said. "And when you run into a month like that, it's even harder to get through."
Guel said the city has been running low in the general accounts for the last couple of years.
Mayor Les Fillingame said he doesn't think Guel's findings are troubling. He said the issues the auditor presented are obvious.
"The expense side of our budget has been cut to the point where we are teetering on lessening services," he said.
Fillingame said the biggest issue the city has is with the utilities department, but staffing is as streamlined as possible.
"We have to adjust rates to maintain operational services," he said.
The City Council voted down a utilities hike at its last meeting.
The Sun Herald reported May 31 the city had $34,296.39 in the bank, according to the pooled cash report. On Tuesday, the general fund had $143,547.35 pooled.
"When the budget's tight and if you don't have a cash reserve to make up the difference, you can put the city in jeopardy."
When the council asked if the main problem was with the general fund or utilities fund, Guel said both are concerns.
"It would be a combination of the two," he said. "We looked at the total picture."
Ward 6 Councilman Lonnie Falgout confirmed with Guel the state recommends cities have at least three months' reserve in a fund or account.
"Do we have that?" Falgout asked.
"Oh, no," Guel said.
Falgout said during discussions with Guel declining sales-tax revenue was a concern for the city.
Ward 3 Councilman Jeffrey Reed said the city's sales-tax revenue is embarrassing.
Reed said he researched towns in the Delta with populations similar to the Bay's, and many of those cities were collecting three or four times more sales tax.
"They're blowing us out of the water," Reed said. "I'm wondering what's wrong with the coolest city in the nation."
The City Council approved a resolution June 4 to restructure a utility bond of up to $1.7 million.
Ward 5 Councilman Joey Boudin said the city couldn't pay the $426,715 payment that would have been due July 1 if the bond had not been restructured. With the restructure, the first payment of $365,390 won't be due until July 1, 2015.
Falgout suggested budget workshops be held to discuss concerns about the budget before it is adopted in September. Workshops will begin at 5:30 p.m. Tuesday, and will continue July 21, Aug. 4 and Aug. 18.
Correspondent Jennifer Lenain, contributed to this report.