In The News › Bureau of Governmental Research endorses St. Bernard’s levee tax increase on May 2 ballot

Apr 8, 2015

Source: | The Times-Picayune

Filed under: Levees, On the Ballot, Taxes

Bureau of Governmental Research endorses St. Bernard’s levee tax increase on May 2 ballot

By Mark Schleifstein | The Times-Picayune

April 8, 2015

The Bureau of Governmental Research on Wednesday announced its support for a 7.5-mill property tax increase for the Lake Borgne Basin Levee District that goes before St. Bernard Parish voters in a special May 2 election.

The levee district’s “flood protection responsibilities in operations and maintenance have increased significantly in recent years,” the non-partisan watchdog group concluded in a report addressing proposed property tax increases on ballots in St. Bernard and New Orleans.

“Should voters reject the millage, drainage needs in St. Bernard Parish will suffer, increasing the risk of flooding and possibly resulting in higher flood insurance rates,” BGR said.

The May 2 election was requested by the Southeast Louisiana Flood Protection Authority-East, which oversees operations of the Lake Borgne, Orleans and East Jefferson levee districts. Voters defeated the same tax increase in December, with 61 percent voting against the measure.

The levee tax increase was one of a dozen tax measures defeated by St. Bernard voters in that election, and authority members hope for better support on May 2, since it will be the only proposal on the St. Bernard ballot.

In its report, BGR reviewed the increased expenses faced by the Lake Borgne levee district in the aftermath of Hurricane Katrina, with the Army Corps of Engineers’ completion of $1.4 billion of hurricane levee improvements that must now be maintained and operated by the district.

The report points out that while St. Bernard property tax revenue has rebounded since Katrina, it’s not enough to match the district’s expenditures. The levee district now receives money from three property taxes — a permanent 3.83-mill tax, a 4.27-mill tax expiring in 2020, and a 3-mill tax expiring in 2044, resulting in a present tax rate of 11.1 mills.

Those tax rates combined produced $3.4 million of the district’s $3.8 million in revenue in 2014, but the district’s expenses were about $4.3 million. The district used reserve funds to make up the difference, the third year it has done so.

Based on levee district information, the BGR report said the new tax increase would add $2.6 million to the district’s budget each year. If approved, the millage would be levied on property in 2015 and the district would receive the new revenue beginning in 2016.

The report estimated the increase would add $38.25 a year to the bill of a homeowner with a homestead-exempt property worth $126,000, the average sales price of St. Bernard homes last year. That home’s total levee district bill would rise to $94.86 for the year. The tax increase adds $75 to the bill for each additional $100,000 of value.

Commercial property owners would see an additional $105 per $100,000, resulting in a $630 per year increase for a property valued at $600,000.

The levee district told the BGR it plans to use $500,000 of the new revenue to meet its existing annual budget deficit.

Another $855,000 would go to pump stations, allowing the district to add four pump operators and an operations manager that would oversee both pump station and levee functions. That money also would pay for deferred maintenance and future capital expenses at drainage pump stations.

“The levee district points out that replacing a single broken pump station engine would cost about $1 million, and it must put money aside for such eventualities,” the report said.

Another $830,000 of the tax increase would be used for levees, floodwalls, gates and interior drainage canals, the report said. That would include adding three positions to the existing nine employees working on those functions. Part of the money also will be banked each year to pay the cost of dewatering the new Bayou Dupre and Caernarvon Canal navigation gates once every 10 years. The dewatering expenses are about $1.5 million for each of the gates.

Another $161,000 of the new revenue would be used to replace old equipment. About $87,000 will go to expected increases in the district’s administrative costs, and $55,000 will go to the regional levee authority as its 12 percent share of operating costs.

Part of the money also will help repay a loan that the Orleans Levee District will make to the Lake Borgne district to assist in the construction of a $4 milliion floodwall near the Violet Canal to allow the combined Florida Avenue-40 Arpent levee system to be certified by the Federal Emergency Management Agency as withstanding flooding.

The report said the levee district expects to cover part of the cost of that improvement through FEMA’s Hazard Mitigation Assistance program, but the remainder would need to be funded from the money raised by the tax increase.

The report listed a number of consequences if voters reject the tax.

In the short term, the levee district would have to reduce its current staff from 30 to 21 or 22 employees, with the impact falling mostly on the parish draining system. Two pumps would no longer be staffed over 24 hours, and might have to be closed until needed. The pumping changes could result in increased insurance rates for residences and businesses.

There also would be less frequent mowing of canal banks and removal of debris from canals.

Longer term effects would include a reduction in maintenance, increased capital repair costs and deterioration of infrastructure, the report said. It also would be unable to conduct the required 10-year draining and maintenance of the two navigation gates and would be unable to maintain its pump stations.

Apr 8, 2015

Source: | The Times-Picayune

Filed under: Levees, On the Ballot, Taxes

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