City of Lake Charles considering garbage fee to help offset defi - KPLC 7 News, Lake Charles, Louisiana

City of Lake Charles considering garbage fee to help offset deficit

LAKE CHARLES, LA (KPLC) -
The City of Lake Charles presented their Operating & Capital Budget for the 2011-2012 fiscal year. Within the next couple of weeks the City Council will vote to adopt the budget, which includes a $61,478,000 general fund and $20,000,000 capital budget.
 
Since 2010 the City of Lake Charles has been operating with a deficit. City Finance Director Karen Harrell said despite each department making the necessary cuts they project the city will be operating with a $3.5-million deficit.
 
"Sales taxes continue to be our biggest revenue source at about 60%. Our sales tax this year is up by 3% over last year, which of course last year we were down 8%. So we are still not back to where we were, but we are slowly regaining some of that," said Harrell.
 
Harrell explains the biggest increases continue to be retirement expenses and benefits. According to the numbers during the next fiscal year they'll incur $1,500,000 more in retirement fees than last year. Another major contributing factor to the shortfall is a 33% increase in gasoline and automotive costs.
 
Lake Charles City Council Vice President Mark Eckard said after looking over the numbers he can't support the budget as is.
 
"I think we need to take action now as opposed to later as far as running a budget with a deficit," Eckard.
 
The City of Lake Charles agrees action needs to be taken to help offset the deficit. They expect after the upcoming property assessment to either roll up or roll back to maintain the current 15.35 mills property rate. Another possible revenue source up for consideration: a garbage and trash collection fee. While the City of Lake Charles currently does not charge for this service, other municipalities in the parish do. The following are what area cities are charging households per month:
 
Sulphur: $15.66
Vinton: $20.55
Westlake: $19.00
DeQuincy: $17.00
Iowa: $18.24
Moss Bluff area: $17.50
Unincorporated Areas: 1/2 cent sales tax 
 
 
They City of Lake Charles said if they were to charge a garbage fee they would generate $300,000 for every $1 collected. If they were to charge $5 they would pay for the $1.5-million it takes to dispose of the city's trash.
 
"So with that thought in mind I think that if we are going to do anything to help balance our budget or to increase revenues to our general fund... we are going to have to ask the people of Lake Charles to help out," said Rodney Geyen, Lake Charles City Councilman.
 
"There's some areas I believe we can cut. And someone needs to sharpen the pencil and get busy cutting. Because if you start increasing fees and taxes in the city to balance the budget - I think if you would have announced it before this meeting there would be a lot more people here," said Jim Huff, Lake Charles resident.
 
Mayor Randy Roach said they're only considering this as an option and still looking into the legal issues.
 
"Back in 1964 Lake Charles voters approved a 1 cent sales tax and it said we won't charge for garbage and trash collection. It's been renewed several times, but I don't believe that condition was included in the renewal," said Mayor Roach. "We would be remiss and we wouldn't be fulfilling our responsibility to the Council and to the community if we didn't point to this as a possible way that we can generate some revenue. We're not talking about solving our deficit problem by charging a garbage collection fee, but we need to start looking somewhere." 
 
City officials also pointed out even though we are operating in a deficit they still have a reserve fund within the general fund. They like to keep the reserve fund at 30% of the general fund - so roughly $20,000,000. It's used only in emergency situations. Most cities only set up their reserve fund at 15%. Mayor Roach said during Hurricane Rita the City of Lake Charles was able to operate without having to borrow money before being reimbursed.
 
The budget for the 2011 - 2012 fiscal year has to be approved by September 15th.
   
 
Copyright 2011 KPLC. All rights reserved.
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