Tight finances in Harahan expected to continue in ’13

Unexpected costs and unforeseen dips in revenue created a financial crunch in Harahan in 2012, and Mayor Provino Mosca doesn’t expect the city’s financial situation to improve next year.

Mosca presented his 2013 budget to the Harahan City Council in a special hearing last week, and the board is expected to introduce the document for consideration Thursday. A final vote won’t occur until next year.

Mosca’s budget projects roughly $5.4 million in revenues and expenditures for Harahan next year, which is about a 3.7 percent decrease from the final figures from 2012. But that doesn’t even present the city’s true financial situation, Mosca said, since Harahan had to dip into its reserves just to make it through 2012. Comparing the 2013 budget to the initial 2012 numbers, the projected decrease in revenue is even more severe.

“We had to use surplus to balance our budget for 2012,” Mosca said.

Harahan’s finances took a hit this past year due to a roughly $287,000 dip in total sales tax revenues and a $75,000 decrease in franchise fees. Mosca attributed those drops to the slumping national economy and decreased energy usage among residents looking to conserve money.

In addition to those decreases, Harahan had an extra $375,000 in expenditures related to debris collection and overtime due to Hurricane Isaac. The city expects to get reimbursed for about 75 percent of those costs from the federal government. While those financial shifts might not mean seem catastrophic to outsiders, in a city where politicians joke that their budget is smaller than some high schools’, it’s a big deal, Mosca said.

Mosca said the city’s financial situation drives home the point that Harahan has to do a better job of attracting new businesses to increase its sales tax revenues. City officials are planning to increase sewer rates by about $30 annually to help eliminate subsidizes at the city’s wastewater treatment plant, but that doesn’t do anything but help the city break even.

The mayor is hopeful that the redevelopment of the Colonial Country Club will occur soon, and he said the city should explore the possibility of creating a tax increment financing district to attract business. Mosca also said he’s filed a $5.2 million claim against BP because of the oil leak’s impact on Harahan’s economy.

“I’m optimistic we’re going to get a settlement out of that,” said Mosca, although he said the city must do more. “We need to find new revenue sources for the city.”

Councilman Eric Chatelain agreed with Mosca that the city desperately needs to find new revenue if wants to maintain the quality of life residents expect. Harahan has its own police and fire department, but those services cost money. Chatelain noted that the city still has not claimed roughly $4 million in loans from the state to make improvements at the wastewater treatment plant because it can’t identify a way to pay the money back.

Harahan residents have long been opposed to any sort of tax or fee increases, but they’ve also often opposed the encroachment of commercial businesses on residential neighborhoods. Chatelain noted that it’s almost impossible to have things both ways; you either raise taxes, or you find new businesses.

“Nobody wants new businesses next to their property,” Chatelain noted. “They want all the extra services that we provide, but they don’t want to pay for it.”