Finance panel sends part of budget back

Published 12:00 am Friday, November 9, 2018

The Iberia Parish Council’s Finance Committee has sent a portion of its proposed 2019 budget back to the parish administration, asking the $475,000 moved from the parish’s royalty fund to cover road maintenance be put back after Tuesday’s road maintenance tax defeat.

The proposed ¾-cent sales tax was meant to be a way for the parish to address more than $30 million in repairs needed to get roads in unincorporated areas of the parish up to par. Historically, the parish has used income from its mineral and oil royalty fund to do that work, but the slowdown in oil production has depleted that resource.

The royalty fund is the source for payments on existing bonds to the tune of about $1.4 million per year. At the beginning of 2018, the fund had a balance of $5.5 million. It is projected to be at $3.5 million at the end of this year. If the $475,000 were taken out, it would be on track to end 2019 at $1.3 million, shy of the amount needed to pay the parish’s bonded debt.

“With bond payments and things, I am really struggling,” District 7 Councilman Paul G. Landry said as he made the motion to leave the money in the royalty fund instead of moving it to the parish’s road district fund.

The decision means that the administration will now have to find a commensurate amount in cuts across the budget to balance it. The parish charter requires the council pass a balanced budget before Dec. 12.

Before voting, council members also discussed the option of taking the funds from the Texaco royalty fund, which currently has a balance of around $5 million. Opponents, however, said the solution to the fiscal issues needs to come from cuts, not moving fund balances.

“For three years, we have been pushing the can down the road,” District 6 Councilwoman Natalie Broussard said. 

“We cannot let our fund balance go from $5 million to $3 million to $1 million. We have to make corresponding cuts to offset the negative fund balance.”

In 2015, the parish had around $9 million in the royalty fund, with revenues from oil and gas exploration replenishing it to the tune of millions of dollars a year. When the Gulf Coast saw a drop in energy production in 2015, that replenishing flow dwindled to either side of a million, leaving the fund overburdened.

Iberia Parish President Larry Richard said the decision to move or not move the funds was the council’s prerogative.

“It’s whatever you want to do,” Richard said. 

“If you want to take out a million, that’s what we are going to do.”

Landry reiterated the thought process behind his motion, making clear that he thought the decision was one that had to be made.

“I am worried about the road program, but what are we more worried about — this road program or bond payments that we are committed to pay?” Landry asked. “I know this is troubling. It’s not going to be easy.”

The committee voted 9-2 in favor of leaving the money in the royalty fund.

Richard said he was confident that the required budget cuts could be worked out.

“At the end of the day, the legislative branch tells us how much money we have to spend, and we work with that,” he said.