1 TOWN OF LOCKPORT FINANCIAL REVIEW Focus on the Sewer Plant and Sewer Collection Service

2 INTRODUCTION  Sewer Plant was built in the mid 1990’s  DEQ determined that the aging sewer plant must be replaced. New standards and new restrictions could not be met with the old sewer plant.

3 SEWER SERVICE RATE  Current sewer service rates have not changed since the existing sewer plant was put in service in the mid 1990’s. $5.00 minimum for first 2,000 gals of water used $5.00 minimum for first 2,000 gals of water used $1.93 for each 1,000 gals of water used above 2,000 gals $1.93 for each 1,000 gals of water used above 2,000 gals  Subsidizing the sewer maintenance and operating costs is causing a drain on Town revenues and reserves making other public works projects difficult to fund.  The Town auditor recommended a sewer rate increase or some other revenue source to reduce the financial drain on Town funds and reserves.

4 INFORMATION GATHERED FROM OTHER MUNICIPALITES (population from 2,000 to 5,000) AND FROM THE LOUISIANA LEGISLATIVE AUDITOR WEBSITE ( FOR SEWER SERVICE DISTRICTS The following information was gathered in an effort to arrive at an average sewer bill in municipalities similar in size to Lockport, or sewer districts in the proximity of Lockport.  Population  Number of sewer customers  Revenue generated by sewer service fees  Maintenance and Operations expenses

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6 COMPARISON TO OTHER SEWER DISTRICTS  Compare Lockport Statistics to other municipalities and sewer service districts Compare sewer revenue vs. number of sewer customers. (average monthly sewer bill) Compare sewer revenue vs. number of sewer customers. (average monthly sewer bill)  Source of information request for information from other municipalities with similar population request for information from other municipalities with similar population LA Legislative Auditor website – annual audit reports for sewer districts in proximity of Lockport LA Legislative Auditor website – annual audit reports for sewer districts in proximity of Lockport Combination of the above sources Combination of the above sources

7 LOCKPORT  Population of Lockport – 2,640  Approximate number of sewer bills – 1,135  Sewer Service Revenue - $155,000  Sewer Service Expenses - $294,264 Average monthly sewer bill - $11.38 Average monthly sewer bill - $11.38

LOCKPORT EXPENSES BOND PRIN + INTEREST UTILITIES + COLLECTIONS PAYROLL EXPENSES PLT / EQUIP MAINT + SLUDGE + CHEMICALS OTHER / MISC EXPENSES TOTAL EXPENSES LESS CAP EXP $121,516$54,581$49,385$39,573$19,933$284, $121,959$49,792$53,374$39,511$3,760$268, $121,333$50,703$49,997$27,183$20,335$269, $121,619$47,171$57,852$43,753$47,315$317, $122,740$53,325$60,904$43,752$13,543$294,264 5 year average $286,981 8

LOCKPORT EXPENSES & SUBSIDIES TOTAL EXPENSES LESS GRANT FUNDED EXP TOTAL SEWER FEE REVENUE SUBSIDIZED ANNUALLY FROM SALES TAX FUND FROM RESERVES $284,988$168,085$116,902$55,000$102, $268,395$163,173$105,221$55,000($26,000) $269,552$161,230$108,322$55,000$90, $317,710$152,797$164,913$75,000$68, $294,264$155,000$139,264$97,000$51,000 9

10 LAFOURCHE SEWER SERVICE DISTRICT NO 1  Number of sewer bills – 387  Total sewer revenue - $206,853 Average monthly sewer bill - $44.55 Information taken from the LA Legislative Auditor website, audit report of 12/31/2008.

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12 LAFOURCHE SEWER SERVICE DISTRICT NO 2  Number of sewer bills – 100  Total sewer revenue - $36,834 Average monthly sewer bill - $30.70 Information taken from the LA Legislative Auditor website, audit report of 12/31/2007.

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14 TOWN OF GOLDEN MEADOW  Population – 2,385  Number of sewer bills – 285  Total sewer revenue - $56,641  Total sewer operating expenses -$104,689 Average monthly sewer bill - $16.56 * Information taken from the LA Legislative Auditor website, audit report of 12/31/2008, and from Town of Golden Meadow

15 Town of Gramercy  Population – 3,300  Number of sewer bills – 1,420  Total sewer revenue - $350,000  Total sewer expenses - $312,000 Average monthly sewer bill - $20.54 * Information requested from the Town of Gramercy.

16 TOWN OF BLANCHARD  Population – 2,546  Number of sewer bills – 1,161  Total sewer revenue - $213,755  Total sewer expenses - $339,969 Average monthly sewer bill - $15.34 * Information requested from the Town of Blanchard.

17 TOWN OF WELSH  Population – 3,454  Number of sewer bills – 1,242  Total sewer revenue - $257,216  Total sewer expenses - $299,310 Average monthly sewer bill - $17.26 * Information requested from the Town of Welsh.

18 TOWN OF VIVIAN  Population – 2,040  Number of sewer bills – 1,499  Total sewer revenue - $234,565  Total sewer expenses - $261,541 Average monthly sewer bill - $13.04 * Information requested from the Town of Vivian.

19  TOWN OF OAK GROVE  Population – 2,163  Number of sewer bills – 866  Total sewer revenue - $126,206  Total sewer expenses - $110,923 Average monthly sewer bill - $12.15 * Information requested from the Town of Oak Grove.

20 AVERAGE MONTHLY SEWER BILL Lockport$11.38 Laf Sewer Dist No 1 $44.55 Laf Sewer Dist No 2 $30.70 Golden Meadow $16.33 Gramercy$20.54 Blanchard$15.34 Welsh$17.26 Vivian$13.04 Oak Grove $12.15 Average Monthly Bill $20.15

21 SOLUTION OPTIONS The following three options were researched and reviewed to determine the least financial effect on all of the Town residents as well as the elderly and those on fixed income or lower income.  Increase in monthly sewer bills  Increase in annual property tax (alimony)  Sales Tax Proposal.7%

22 Solution Option 1 Increase in Monthly Sewer Bill Total Sewer Revenue $155,000 Total Sewer Expense $294,264 Subsidized by Sales Tax & Reserves $139,264 Number of sewer bills 1,135 Annual increase in bill $ Monthly increase in bill $ $10.23 = $21.61

HoumaToday.com Published: Sunday, March 21, 2010 at 6:01 a.m. HOUMA – Terrebonne Parish residents would pay about $4 more a month for sewerage service under a fee increase set for final approval this week. For those on the public sewer system, the average monthly bill would rise from $17.17 to $21.61, according to parish officials. That’s based on the average household, which uses 5,600 gallons of water per month. 23

24 Solution Option 2 Increase in Property Tax Total Property Tax Revenue $65,500 Number of Property Tax bills 1,159 Sewer amount subsidized $139,264 Annual increase in Property Tax if sewer is subsidized by Property Tax $ $ = $ = $ Monthly increase in Property Tax cost if sewer is subsidized by Property Tax $10.02

25 Solution Option 3.7% Sales Tax Source: Sales Tax Calculator IRS.gov Income Range $30,000 to $40,000 Lockport, Lafourche, Louisiana TOTAL TAX RATE TOTAL TAX RATE ANNUAL STATE TAX AMOUNT AMOUNT ANNUAL LOCAL TAX AMOUNT AMOUNT ANNUAL TOTAL TAX AMOUNT AMOUNT TAX AMOUNT PER MONTH Current Sales Tax 8.00%$358.00$480.00$838.00$69.83 Proposed Tax at.7% 8.70%$358.00$564.00$922.00$76.83 Increase in Sales Tax.7%0.00$84.00$84.00$7.00

26 SOLUTION COMPARISON Annual Increase Monthly Increase Option 1 Sewer Bill $122.70$10.23 Option 2 Option 2 Property Tax Bill $122.16$10.02 Option 3 Option 3 Sales Tax Increase $84.00$7.00 Option 3 is the least cost

27 RECOMMENDATION SALES TAX After reviewing the 3 options very carefully:  The Town has placed a.7% Sales Tax Proposal on the ballot of May 1,  If approved, the proceeds will be used to fund the subsidy to the sewer plant operations as well as street and drainage improvements.  If approved, the sales tax revenue can be bonded to provide funds for significant improvement projects.

28 SOME RECENT PROJECTS Several financially significant projects have been undertaken in the last few years. Some are complete, others are in progress. Some financed by State or Federal Grants, others financed by Town revenues. How does the Town decide which projects are to be funded through grant applications or by Town revenues?  Some grants are designated for a specific purpose such as sidewalks.  Some grant applications are more likely to be approved for projects involving the arts, or infrastructure, or water treatment, etc.  Grant eligibility is sometimes determined by average household income.  Town revenues can be used to fund any project, provided sufficient funds are available.

29 Recent Public Works Projects FUNDED BY AMOUNT FUNDED TOWN FUNDING TOTAL PROJECT COST COST DATE DATECOMPLETE Safe Routes to School Sidewalks – Church St, Seventh St., School St. LA DOTD $281,681.76$281, /2008 Street Improvements Town of Lockport $188,386.57$188, /2008 Lower Catherine Street Sewer Pump Station Generator LGAP LA Dept of Treasury $48,300.00$50,000.00$65,420.00$163, /2008 Upper Catherine Street Pump Station Pump Replacement Town of Lockport $90,300.00$90, /2009 Upper Catherine Street Sewer Pump Station Generator LGAP$35,000.00$9,782.61$44, /2010

30 More Recent Public Works Projects FUNDED BY AMOUNT FUNDED TOWN FUNDING TOWN FUNDING TOTAL PROJECT COST COST DATE DATECOMPLETE Town Hall Generator Lafourche Parish Govt DHS Grant $75, estimated $5, estimated $80, estimated 03/2010 Sewer Plant Generator LA Capital Outlay $100, $79, estimated $179, /2010 Safe Routes to School Sidewalks & Drainage School Street Louisiana DOTD $270,974.00$270, /2010 Catherine Street / Comeaux Drive Drainage LGAP$35,000.00$35, /2010 Comeaux Drive Sewer & Street Improvements FY09 LCDBG $669, $132, estimated $802, estimated 12/2011 estimate

31 Other Recent Projects Center for Traditional Louisiana Boatbuilding  Purchase “Old Ford Building” Town of Lockport Funds $57, /2005 Improvements $39, Improvements LA Capital Outlay $100, /2008 Improvements $100, /2009 Improvements LA Dept of Treasury – ACT 122 $25, /2009

32 A DECISION WILL BE MADE FOLLOWING THE MAY 1 ST ELECTION  If the Sales Tax Proposal is approved by the voters, there will be no need to increase the sewer fees or property tax in the foreseeable future. The Town’s revenues will be sufficient to fund maintenance and operations as well as some improvement projects.  If the Sales Tax Proposal fails, the Town Council will need to consider the alternatives to generate the needed revenue.