The state will soon be pushing the locally elected officials of Powhatan out of the way to administer the finances of the northwest Louisiana village that in mid-July had only $105 in its general fund and is hiring a cop to drum up some money from writing traffic tickets.
Near Natchitoches, Powhatan is the latest local jurisdiction to be taken over by the state because shrinking populations have drained tax revenues leaving drinking water as about the only source of the income necessary to pay bills. But those leaky systems, often a half-century or so old, are falling apart as maintenance money has been diverted to pay other expenses.
“So, you’re using monies raised from utilities to pay for operations,” State Treasurer John Schroder summed up for Powhatan Mayor Hardrick Rivers during the Fiscal Review Committee hearing Thursday.
“That’s one of the biggest problems we face in this state. If you look at the list on our agenda today, most of these towns are on this list for that very reason. Their water and sewer are putting them under,” he added.
Schroder is one of the three members of the panel charged with deciding when local finances become shaky enough to replace elected officials with an appointed administrator.
“That’s the concern. It just keeps coming up over and over again,” said Chief Deputy Attorney General Wilbur Stiles III, another member of the committee. “It appears to me that we have a government agency perpetuating itself at the expense of quality water.”
Louisiana has nearly 1,300 water systems statewide. The state Division of Administration estimates it’ll take about $4 billion to fix neglected systems.
The lists of failing water systems and towns at the edge of the fiscal precipice are very similar, said Louisiana Legislative Auditor Mike Waguespack, who chairs the panel. Auditors keep a constant eye on those towns with burgeoning problems. Powhatan, for instance, first caught the state’s attention when the vendor selling chlorine, to keep the drinking water clean, cut the village off for lack of payment.
In the past, those watch lists have floated between a half dozen and a couple dozen municipalities.
Waguespack said he wants to wait before releasing the names of the most financially troubled towns until after seeing the impact of The Coronavirus State Fiscal Recovery Fund of the American Rescue Plan Act of 2021. The program became law in May to provide $350 billion to help state and local governments respond to the pandemic.
Every municipality in America will receive something – how much is determined by a formula. Powhatan is expecting to receive $47,000 in federal funds.
But the town, which has lost a third of its population since 1990, now has 185 customers on a water system that needs 32 repairs and could cost up to $700,000 to fix. The town owes $40,119, according to the mayor, and has $105 in the bank, $2,500 in the water account.
“We were told that they were trying to get a police chief to generate some ticket revenue,” said Mike Battle, the auditor who went over the town’s finances.
The American Rescue Plan also is providing $300 million to help shore up failing drinking water systems.
Under legislation passed into law earlier this year, Louisiana water systems can apply between Aug. 1 and Sept. 24. Engineers at the Louisiana Department of Health, which oversees drinking water, and the Department of Environmental Quality, which oversees sewer systems, will review the applications. Then the Division of Administration will make recommendations by Nov. 8 to the newly formed Water Sector Commission, which is made up of five representatives and five senators. The Commission vets the requests and makes its recommendations for a final decision by the Joint Legislative Committee on the Budget.
Commissioner of Administration Jay Dardenne said Monday they are grading the projects on severity of the problem, willingness to consider consolidating small systems with larger ones along with several other criteria.
So far, 182 water systems have applied, eight are under final review, and 14 more are pending, Dardenne said. But about 70 entities – including Powhatan – haven’t applied.
“The aim of the game from our standpoint is to find the most needy projects and those entities that are most willing to consolidate in order to save money and to improve efficiency and monitor the systems and charge an adequate amount to the constituency to make certain they can take care of them appropriately,” Dardenne said.
“One of the problems is that these local government boards don’t want to raise rates on their people,” he added. Consolidation also is a hard sell to local municipalities struggling with the costs of a water system that is dragging them down but is their key source of revenues.
“Nobody wants to give up their power. But it makes so much sense. Small systems could connect to a large parish system then more economically,” Dardenne said.