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Mayor Arsenault urges council to fund Fire Station 20 from 2024 bond premium, not operating reserve
Summary
At a Shreveport City Council meeting, Mayor Arsenault asked council members to amend an ordinance so $733,000 for Fire Station 20 comes from 2024 bond premium funds rather than the city's operating reserve, arguing using reserves could drop the city below an 8% target and risk a credit downgrade.
Mayor Arsenault asked the Shreveport City Council to withdraw or amend proposed ordinances that would use operating-reserve money to fund reconstruction of Fire Station 20, saying the city should instead tap the premium received from the 2024 bond sale.
Arseneault said ordinances 20 and 21 on the council’s agenda would move $733,000 from the city’s operating reserve toward a $1.6 million reconstruction of Fire Station 20. He said that drawing the funds from the reserve would reduce the reserve below the 8% target the city set for bond-rating agencies and could lead to a credit downgrade and higher borrowing costs.
The mayor told the council the city received an approximate $2.9 million premium when it sold $88 million of 2024 proposition bonds in November, and that premium is not pledged to the projects listed for the bond proceeds. “Using part of the $2,900,000 to complete Fire Station 20, a capital project, not an operating budget project, is an appropriate and legal use of the premium funds for proposition 3 of the 2024 bonds,” Arseneault said, and he asked the council to amend ordinance 21 to designate the premium as the funding source.
Arseneault said the lowest bid previously received for the project was about $1.4 million and that the city should avoid dipping into operating reserves unless absolutely necessary. He noted the administration and council had worked to keep an 8% operating-reserve minimum in the 2025 budget because rating agencies had identified low reserves as a factor reducing the city’s credit rating.
No formal vote on amending ordinances 20 or 21 was recorded during the portion of the meeting included in the transcript. The mayor said the administration had prepared an amendment that would change the source of funds and asked a council member to sponsor it.
If the council adopts the amendment Arseneault described, the city would treat the bond premium as an unassigned capital-source fund for the Fire Station 20 project rather than drawing down the operating reserve, the mayor said.
The council’s review of ordinances 20 and 21 and any amendment is expected during the council’s next legislative action; the transcript recorded the mayor’s statement and request but did not record a final council decision on the amendment.
Why it matters: Drawing operating reserves below the city’s stated 8% minimum could affect Shreveport’s borrowing costs, the mayor said, and the alternative he proposed would complete a capital project without reducing the operating cushion the city pledged to bond raters.
The council agenda included other capital and budget items; the mayor said the recommendation was not because the fire station project lacked merit but because the funding source chosen matters for the city’s fiscal profile.
