Whether to use a $972,000 settlement from the BP oil explosion to shore up Port Arthur’s reserve funds, or use the money to fix city streets was debated Wednesday during budget talks.

City Manager Brian McDougal has proposed using the new money to ensure the city has enough funding in its reserves to operate for 60 days, as is required by state law.

District 5 Councilman Willie “Bae” Lewis would like to see the city call for a bond election for city streets reconstruction and use the BP windfall to pay the debt service.

Lewis said he had checked with the city’s financial advisor, who calculated it would cost the city $330,000 for a $5 million, 20-year bond.

For a $10 million bond, it would cost the city $750,000, Lewis said.

“That is new money, money that will go a long way toward fixing streets,” Lewis said. “We could reconstruct a lot of streets in Port Arthur.”

McDougal agreed the city needs to fix its streets, but opted to approach the problem in a different manner.

Rather than use the BP funding on city streets, McDougal would like it to go toward shoring up the reserves.

To meet the 60-day rainy day fund balance, the city is about $1.5 million short going into the 2015-2016 budget cycle.

Currently, the fund balance is $7.9 million.

In addition to the BP funding, the city has another unexpected source of new money: $398,000 from gaming permits during the first year the city passed an ordinance requiring any business with eight-liners to permit them.

Money for streets could be generated debt free in the coming years by instituting better operational practices, McDougal said.

The city should “look at its low lying fruit,” to bring in additional revenue, he said.

In layman’s terms, that means cracking down on delinquent water and sewer and solid waste customers who collectively have amassed about $3 million in unpaid bills owed the city.

Or, positioning the city’s Transit Department to be able to draw down on about $4 million in federal grant funding that has not been released from Federal Transit Administration over a period of five years.

Just those two measures could go a long way toward fixing city streets in a meaningful way, McDougal said.

The proposed budget contains $500,000 in money to repair streets.

Lewis said he plans on introducing a resolution that would bring the bond issue up for a vote at the next May municipal election

Lewis said the state’s General Land Office also owes the city about $4 million in Hurricane Ike money, which has not yet been drawn down, and there is a possibility that the old Armory building could be sold in the near future, which would bring about $1.5 million to the city’s coffers.

“From what I can see, about 60 to 70 percent of streets in Port Arthur need reconstruction. There are potholes everywhere,” he said.

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