Pearce Has Questions on new City Borrowing

Ruston’s Ward Four Alderman Jim Pearce last night had some perceptive questions regarding the city’s next bundle of money to be borrowed and spent on phase II of the sports complex on South Farmerville Street.

His questions came at Monday night’s meeting of the board.

City Treasurer Laura Hartt said that if the council approved the $20 million bond issue, half the money would be borrowed on April 1 of this near, just four weeks away.

Pearce wondered why the hurry to borrow the money when plans have yet to be drawn up, nor has a detailed budget for the project been figured.

“We’re going to borrow the $10 million on April 1. I know we’ve hired an architect, but I don’t know if we’ve had any bills yet. I don’t know when we’re projecting to actually have some bills, but yet we’re going to borrow $10 million,” said Pearce.

“I’d rather see we get plans, we get an estimate. We don’t really know, because we don’t have anything drawn,” he added.

Mayor Ronny Walker said that they were following the advice of the city’s financial team, bond attorney Wes Shafto and financial advisor Lucius McGehee.

Shafto’s law firm is handling the bond sale, and McGehee’s firm, Argent Financial, is the paying agent, according to Hartt. She noted the interest rate is 3.075%.

Pearce also inquired about repayment of the loan, and it was revealed that the first month’s take from the restaurant/hotel sales tax was about $126 thousand. That translates into $1.5 million/year in tax revenue.

Pearce asked would that be enough for the yearly bond payment, and Hartt said it would not, as the payment required would be $2.5 million to $2.8 million.

Said Pearce, “So the new restaurant/hotel tax is not sufficient to pay the bonds, the $20 million?”

Replied Hartt, “Not as of January 1. But the hope is when the sports complex is in full operation, the hotels are full, and we have lots of visitors to the restaurants, it will cover that bond payment.”

During the debate late last year, the administration claimed there was enough extra money in the 2016 3/4 cent sales tax to make up any shortfall. However, any money diverted from that tax to pay the shortfall is money that won’t be available for other Moving Ruston Forward projects.

The final vote on the bond ordinance was 3-1, with Pearce voting no. Seigman was absent.

The council also amended the restaurant/hotel sales tax district ordinance, to include several new establishments and deleting closed businesses.

See here the document.

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15 Responses to “Pearce Has Questions on new City Borrowing”

  1. Tech78 Says:

    Kudos to Jim Pearce. It’s been long in the waiting for the council to stand up to Walker. Thank you Jim. Reflects your character too. Keep doing it. Eventually hope the others will too.

  2. Anonymous Says:

    All the other council men and women are brain dead and will help the mayor bankrupt the city.

  3. Anonymous Says:

    Not “will help”, they are helping the mayor bankrupt the city. Smart questions from Jim Pearce, but it was too little too late.

  4. Anonymous Says:

    Borrowing the bond money six months before it is needed will cost our city approximately $150 K. Obviously, to the mayor, three city council members and our Financial team this waste of money is not important. Shafto’s firm and Argent work for a fee and have a vested interest in this transaction which gives the appearance of a conflict of interest. Just maybe, MRF (or Monster Moto lease payment) needs more CASH and the mayor need someone to join Lawyer Carter under the bus (remember Carter being blamed for the recent edict about no questions at council meetings). Now blame Shafto and Argent (McGehee) for this imprudent waste of taxpayer funds. At this rate Mayor Walker is going to have to get a larger bus.
    Mayor excuses are CHEAP, just tell the TRUTH. CUDOS to Jim Pearce for asking questions, at least, he doesn’t seem to be a babbling idiot.

    • Anonymous Says:

      Mayor must be powerful anxious to have $$ in a hurry. Are there funds that are running low?

  5. Anonymous Says:

    Will Ruston ever grow to love a state appointed fiscal administrator?

  6. Mamato4 Says:

    Yes many of us in Ruston are waiting for that. Can’t come fast enough to stop this Walker trainwreck. Our children deserve a different Ruston. Not a debt filled city.

  7. Anonymous Says:

    How long will it be before Walker asks for financial help from LPPJ.

  8. Anonymous Says:

    Somebody besides the “financial team” should be watching to see how the first millions are spent.

  9. Carl Says:

    If this wasn’t so sad it would be funny. Such a circus. But it’s real and real people live here and trusted this man. Ruston is going downhill quickly. No sports complex is going to save the city. It’s a behemoth curse.

  10. Anonymous Says:

    The smell of sterlington getting stronger

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