Washington Parish could be facing a significant cash crunch by the end of the year that could eventually lead to a hiring freeze, parish officials said.

Auditor Wilson A. LaGraize Jr., of Kushner LaGraize, L.L.C. in Metairie informed the parish council Monday that the general fund had shrunk  to $124,000 as of Dec. 31, roughly one-half the expenses of a normal month.

No updated balance was available.

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“The general fund over the past several years has gone from around $1 million to as low as $124,000 which it was Dec. 31,” LaGraize said. “Already, six months of 2010 has  gone by and we are not quite sure where we stand at this point.

“What that means is the parish faces challenges and either is able to obtain additional revenue that is entitled to or not getting or possibly mitigating expenditures. The general fund is approaching a negative balance and you can’t have that. It will be a real challenge.”

For the fiscal year ended Dec. 31, the parish generated $1.550,409 in revenue, through its predominant revenue sources of ad valorem taxes, licenses and permits.

However, expenses totaled $3,704,793, leaving a deficit of $2,154,384, which was  covered by transferring the difference from the eligible sales tax fund split.

That fund, which is funded by .67 percent of the parish sales tax, is designed to first cover the expenses for the Washington Parish Landfill, with the remainder eligible to be transferred to the general fund, parish officials said.  

“This transfer has been able to save us the past few years,” LaGraize said. “Expenses have skyrocketed, health care is going up. The general fund has been able to subsidize these expenditures in the past it’s getting to the point where it no longer can. The cushion is shrinking.”

Parish President Richard Thomas said the council has been aware of the declining general fund for the past several years and has been taking steps to address the problem.

“It’s a very big concern, no doubt,” he said.   “I don’t see any layoffs. We’re looking at a freeze on hiring.

“We’ve tried for every grant possibly that we knew about that would help the general fund. There’s not very many out there.

“It’s costing us less money with the new software (recently installed) in the long run with the audit,” he added. “Automobiles we use has been cut back drastically. That’s one of the things we’re going to do. We will be getting rid of a lot of automobiles.

“The little things add up.”

However, not all of the financial news was discouraging. Balances in the other funds are healthy, according to LaGraize.

The Road Improvement Fund, which pays the majority of the salaries for road workers and other expenses, ended the fiscal year with a balance of $5.9 million, although that is down $2.5 million from fiscal year ending 2008.

The Parish Transportation Fund has a balance of $1.9 million, despite absorbing a $1 million hit in 2008.

However, those funds, generated predominantly through sales tax revenue, are designated for specific purposes and cannot be transferred to the general fund, which pays the day-to-day expenses of operating the parish., officials said.

LaGraize and others said a major challenge is state-mandated expenses, which appear at times to be ambiguous but include such areas as law enforcement, the clerk of court’s office, the jail,  judges, etc.

No one was able to give an accurate percentage the mandated expenses impose on the budget, but Councilman Dr. Charles Nassauer speculated it could be as high as 90 percent.

“The big lobbying groups and other entities go to Baton Rogue saying they need more money and mandate the expenses,” said Councilman Dr. Charles Nassauer, who expressed his frustration with the increased mandates. “They do and the state sends a letter to do it and we’re flat broke. We must pay them by law.

“That’s where most of these funds are going. Some of these entities are already working with us on these mandates.”

LaGraize said he does not foresee the parish running a negative balance in the general fund, something that is prohibited by state law.

“That’s a situation I’ve never faced,” he said. I don’t know how it would work but I’ve never seen it happen before.”

Thomas vows not to let it get to that point, saying the council will be going through a series of meetings to address the issue. He quickly pointed out, however, that new taxes are not on the table.

“People are under siege with the recession, 10-percent unemployment rates,” he said. “What we want to do is create jobs. We want businesses to come in here and not be taxed to death.

“We’re going to make it,” he added. “A lot of things need to be straightened out and we’re going to work on that.

“Sources of funding are dying up. But we make it work. That’s what we do day to day.”