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May 23, 2019

City of Bogalusa Landfill Debt Continues to Grow

In an audit report of the Choctaw Road Landfill, the firm of Kushner LaGraize, LLC reported that the
City of Bogalusa's millage dedicated to funding their share of the Choctaw Road Landfill operations is not adequate. The outstanding balances owed by the City of Bogalusa consists of $401,482, $578,169, $799,974 and $356,321 from the years 2018, 2017, 2016 and 2015, respectively. As of December 31, 2018, the balance due from the City of Bogalusa was $2,135,946.

Click here for the full audit report

The Washington Parish Government and the City of Bogalusa are partners in the Choctaw Road Landfill that was opened in July of 1989. The agreed upon percentages for sharing of costs were 58.1% for the Parish Government and 41.9% for the City. Washington Parish Government is the "managing partner" and is responsible for the day to day operations.

Washington Parish Government gets its funding for the landfill from a 0.67% sales tax imposed parish wide, excluding the City of Bogalusa. The sales tax is for an indefinite period, and generates annual revenue of approximately $ 1,850,000. Bogalusa gets its funding from a 5-mill ad valorem tax. The tax expires in October of 2021 and generates annual revenue of approximately $366,000.

The City of Bogaiusa has experienced financial and economic challenges in managing the City's operations. Two major consequences have been (1) under-funding of the City of Bogalusa Employee’s Retirement System (with a net pension liability of more than $22 million) and (2) under-funding of the City of Bogalusa's share of the Choctaw Road Landfill (with a net liability of over $2.1 million).

On February 18, 2019, the Fiscal Review Committee of the Louisiana Legislative Auditor recommended the City for management by a court appointed administrator but it has not happened yet. On May 16, 2019, the State Bond Commission was advised that steps are being taken to complete the process but that no fiscal administrator had been appointed.

With regard to the landfill issue, several meetings were held during 2018 between parish and city officials and outside interested parties. However, a formal resolution has not been reached. It was reported that discussions of a debt for equity exchange for the City of Bogalusa and a corresponding operating agreement are being considered.

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