Statement of the Mid-City Security District on the Increase in Parcel Fees

On September 15, 2016, the Commissioners of the Mid-City Security District voted to increase the security district fees by 10 percent. For most Mid-City residential property owners, this means an increase in the annual fee from $200 to $220. This is the first increase in the fee in the district’s eight-year history.

The increase was made necessary by an increase in operating costs, specifically the cost of hiring New Orleans Police Department officers on an overtime basis to patrol on behalf of the MCSD. Every time NOPD officers receive a well-deserved increase in pay, the costs to MCSD go up 150 percent due to the overtime pay structure.

An event which occurred at the beginning of June, however, greatly drove up the cost of MCSD patrols. The MCSD has long questioned whether or not the rate at which it was being billed by City of New Orleans for patrol officer salaries was too low. Despite assurances from the City that the billings were correct, when the City switched to a new payroll management system, the billing was corrected, and the bi-weekly patrol costs suddenly jumped from an average of $30,500 to $51,800, a 70 percent increase. Needless to say, this increase was not in the budget for the balance of 2016.

When the MCSD was first created, delays between when the parcel fees were first collected and when the patrols were actually started (delays caused by the need to purchase patrol vehicles, ratify a cooperation agreement with the city, and other issues) caused the buildup of a sizable cash reserve. Over the years, this reserve allowed an increase in expenditures on patrols and the purchase of additional patrol vehicles, and eliminated the need increase parcel fees despite increased costs.

With the sudden increase in the billings from the City, the remaining cash reserve is not sufficient to cover the cost of maintaining patrol levels at their current levels through 2017. The Commissioners of the MCSD, therefore, were left with two choices – curtail the patrol hours or increase the parcel fees on residents and businesses. The Board chose to combine the two approaches:

  • First, it approved a decrease in patrol hours, but managed in such a way as to minimize the negative impacts on the safety of Mid-City residents. The Board of the MCSD remains committed to having patrols on the streets 24-hours a day, but the number of those patrol officers at any one time may be reduced during certain periods.
  • Second, the Board voted to increase the parcel fees by 10 percent for 2017. This results in the fee for residential property owners increasing from $200 to $220, for business properties from $300 to $330, and for residential properties with an age freeze in place for property taxes from $100 to $110. These fees are still below the statutory maximums of $250 for residential properties and $350 for commercial properties.
  • In addition, the Board will continue to work with the Assessor and the City to maximize compliance and property classification of residential and commercial parcels.

The MCSD operates on a very lean budget. Of the roughly $1,050,000 budgetted for 2017, only about $50,000 is spent on accounting, audit, legal and insurance services required for a state governmental entity, along with the cost of street lights on certain high-risk areas, lights that have proven effective in reducing crime in those areas. The rest is spent on patrol officer salaries and vehicles. The patrol vehicles suffer significant wear and tear being driven thousands of miles on Mid-City’s streets. The MCSD Commissioners are all unpaid volunteers.

mlukeStatement of the Mid-City Security District on the Increase in Parcel Fees