Friday’s hearing on the appointment of a Fiscal Administrator for the Town of Richwood saw some familiar faces in Division G Judge Carl Sharp’s Fourth Judicial (Morehouse, Ouachita Parishes) District Court in Monroe.
There representing the State of Louisiana was Assistant Attorney General Michael Vallan, who we often saw during the Jonesboro civil and criminal trials. Another veteran of the Jonesboro cases was present, Alan Brown, from the Louisiana Legislative Auditor’s office (LLA).
Lafayette CPA Jonald Walker, who testified in the civil and criminal trials of former Jonesboro mayor Leslie Thompson, was there. Readers will recall that Walker attempted unsuccessfully to audit Jonesboro’s finances.
The 2 PM hearing began with a ten-minute conference among the attorneys: Vallan, his colleague Emily Andrews, and Richwood’s attorney Jay Nolen.
Vallan began his argument by noting that Richwood had failed to meet several monthly payments on about $1.3 million of bond debt owed by the town. Nolen stipulated (agreed) to those facts.
Vallan said that according to LA RS 39:1351
B.(1) The trial court shall appoint a fiscal administrator in the following instances:
(a) If the court finds from the facts and evidence deduced at the hearing of the rule that the political subdivision is reasonably certain to fail to make a debt service payment or reasonably certain to not have sufficient revenue to pay current expenditures, excluding civil judgments…
Sharp spoke up and said it looked like “That’s the ball game.”
Nolen, however, wasn’t ready to concede, so Vallan called Sandra Whitehead of the LLA to testify.
Whitehead noted that her review of Richwood’s finances showed unreconciled bank statements, missing records, and unpaid bills.
As of 9/30/13, the town’s accounts payable was over $1/2 million, including an Internal Revenue Service tax lien for $79 thousand, Whitehead said. For the past six months, monthly revenues exceeded expenditures by an average of over $20 thousand/month.
Testimony in last Thursday’s meeting of the Legislative Audit Advisory Council indicated that the IRS was about to levy the town’s bank accounts, as happened to the Town of Gibsland several days ago.
Several spreadsheets were introduced as evidence.
Nolen’s witness was Richwood Alderwoman Margie Davis. While Davis acknowledged the unpaid bills and missed debt payments, she said that the town lacked adequately trained personnel and was lax in collecting franchise fees owed to it.
She said a Fiscal Administrator wasn’t needed, and the town couldn’t afford one anyway.
Some plans to cut expenses have been proposed, including de-funding the police department, but those plans have never been able to get a majority of votes on the town’s council.
The judge admitted that several interested parties had contacted him prior to the hearing in a effort to present their views, but he said he rebuffed them and said that if they wanted their point of view heard, then “come to court.”
Walker took the stand to present his bona fides, and the conversation touched upon strategies to keep costs down, considering the town’s financial plight.
Also agreed upon was a periodic report from Walker to the judge and the interested parties, for their review.