St. Martinville City Council authorizes issuing of $250,000 bond to pay debts

Published 11:00 am Wednesday, September 22, 2021

The St. Martinville City Council voted unanimously to authorize a $250,000 bond to be issued, to be repaid by Sept. 30 of 2022, so the city could pay off existing debt and operating costs while it waits for its short-term cash flow to improve.

According to bonding attorney Grant Schlueter with Foley and Juddell, the bonds would be issued at a 5 percent interest rate. He said Farmer and Merchant Bank would be the issuing bank.

The funds from the bond could be ready as soon as Friday.

This $250,000 would be used to cover vendor payments and other costs that have been in arrears, some for more than six months, due to a shortfall in revenues over projections in the 2020-2021 budget. The budget projections included a rate hike in the coity’s electric and water utility operations which Mayor Melinda Mitchell refused to enact last year.

The council also discussed how to address more than $400,000 in American Rescue Plan Act money that is available to cover shortfalls and expenses due to the COVID-19 pandemic.

Chief Administrative Officer Avis Gutekunst gave an update on some of the outdated bills still owed, which was rosier than it had been in past months.

“Our billing with Republic is up to date,” Gutekunst said. “As far as Cleco, we are one payment behind, but we are on our payment schedule to get tht paid.”

According top Gutekunst, there is approximately $230,000 in past due bills owed to other various vendors, which will be paid in coming days using first the bonded funds, then the ARPA funds, where applicable.

“We have to pay the oldest and get them off the books,” said Mayor Pro Tem Craig Prosper. “This is short-term money. It is going to be offset by the rate increase money. We need to pay these people. That is a sense of urgency I do not see here.”

CIty Legal Counsel Allan Durand said that the city needs to make sure that the funds from the ARPA tranche are spent and documented properly.

“Right now we are operating under interim final rule from the Treasury,” Durand said. “They promised to have the final final rule by the end of the month. The $414,000 in lost revenue money is intended to go into your general fund for general fund expenses. Not for pension, not for debt service.”

Prosper also made an additional request of the CAO.

“I would like to see a letter go out apologizing and thanking these people for sticking with us through this,” Prosper said.

Tha council also approved spending $7,500 to have Cedric Floyd handle the redistricting and reapportionment planning for the city. According to Floyd, there were enough population shifts in the city over the past decade since the 2010 Census to make reapportionment necessary.

“The population in the 2020 Census is 5,379, which is down 735 from the last census,” Floyd said. “The ideal district size is 1,076.”

Prosper said that getting redistricting done is vital to St. Martinville and needed to be handled quickly.

“Qualifying for the spring election is in January,” Prosper said, taking a jab at Mitchell. “We can’t continue like this. We need to have an election.”