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Friday, August 22, 2014
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Officials look to use of cash reserves

Last Modified: Wednesday, February 05, 2014 2:42 PM

Doris Maricle / American Pressdmaricle@americanpress.com

WELSH — Officials here are looking to amend their cash reserve ordinance to allow the town to use rainy-day funds for emergencies.

The money is set aside for unforeseen emergencies such as natural disasters, but has been used in the past to help the town meet shortfalls in its operating budget to cover liabilities, insurance and payroll expenses. Some of it was also used to buy a transformer, Mayor Carolyn Louviere said.

The $1 million cash reserve funds were established in 1999 from the sale of Welsh General Hospital and Nursing Home as rainy-day funds for natural disasters. Interest earned from the money was dedicated to operation expenses and equipment purchases, said Town Clerk Linda LeBlanc.

The funds have since dwindled to $450,000 — which concerns Alderman Bob Owens.

“That is less than half of what it is supposed to be,” Owens said. “If something happens, I don’t think we can be as effective. If we make it for non-natural disasters and use them for something else, then we have a natural disaster, we will fall short.”

Owens said a check-and-balance system needs to be put in place to monitor the funds.

“If we needed the money to help get the town out of the red, that was what was done,” Alderman Charles Drake said, defending past use of the funds.

The use of the money for non-disaster expenses as approved by the town’s auditor, according to both Louviere and LeBlanc.

Town attorney Rick Arceneaux said it is up to the town council to define where and what type of emergency the funds can be used for.

Drake said the town needs to change how it handles the funds “in case something does come up.”

“A natural disaster is not the only thing we need funding for,” he said. “If we fall on hard times, like we are now, we may need those funds. Things are not always going to be in balance.”

Alderman Hugh Fruge introduced a measure to allow the town to use the cash reserve funds for emergencies instead of natural disasters with approval of a majority of the council. A public hearing on the measure will be March 4.

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