This time last year the Lafayette Parish government was borderline broke, carrying a general fund balance teetering on zero. Now the Parish Council has $47 million from the American Rescue Plan Act to spend. It’s an incredible opportunity to undertake transformative projects for our parish and to finally address maintenance issues that have been neglected for years.
In Mayor-President Josh Guillory’s proposed ARPA budget, he includes a number of projects that fit this bill, such as spending almost $5 million on drainage, buying new tanker trucks for volunteer fire departments and installing new fire hydrants in unincorporated Lafayette. But too many of his proposals deliver questionable returns, create unfunded maintenance liabilities and inexplicably use parish dollars to pay for city responsibilities.
It’s a bad deal for the parish, and not just because of how the overall budget is structured as a single, joint ordinance that ignores the original intent of this funding.
Take roads, for example. The parish has a backlog of road work that’s tens of millions of dollars long, totalling $60 million as recently as 2019. So it would make sense to use some of this money to fix that — if roads prove to be an eligible expense to use this funding for. That’s a big if.
ARPA’s interim rules make clear that general infrastructure projects are not eligible. But there’s a loophole: Local governments can use ARPA money to backfill any lost revenue and earmark those funds for any expense, including roads. The feds define “lost revenue” as the gap between local revenues and the 4.1% national average growth rate. By that calculation, Lafayette Parish could potentially use up to $4 million on roads, if it spent all of its lost revenue allowance. Guillory’s budget has $23 million in parish road projects.
But even if roads are an eligible expense, the road projects in this budget have a questionable return on investment.
For example, the proposal budgets $3.5 million to extend Frem Boustany Drive from Edinburgh Drive to Vincent Road and $2.75 million to extend Cue Road to Homewood Drive. The primary return on these investments is to enable a few hundred homes each to save a couple minutes on their drives to Ambassador Caffery and Kaliste Saloom, respectively. That’s $6.25 million building new infrastructure that could instead go to fixing existing roads. And that new infrastructure creates new unfunded maintenance liabilities. Because the cost to properly maintain this infrastructure is greater than the additional tax revenue that’s generated, even if the empty land around these projects gets developed.
Most baffling is suggesting $5.5 million go to road, bridge and sidewalk projects in the city of Lafayette. City taxpayers are responsible for their own roads, bridges and sidewalks, and can easily afford a few million dollars of additional capital spending. Why on earth should the parish government pay $1 million to add a right turn lane to Kaliste Saloom Road and Ambassador Caffery Parkway, for example, when that money could be better spent on parish roads or other more important areas — like drainage?
Guillory’s proposal suggests spending $4.95 million on drainage, only 10.5% of the parish’s $47 million ARPA allotment. The same proposal uses $17.2 million of the city’s $38 million ARPA allotment for drainage, which is more than 45%. I don’t understand why the parish wouldn’t be spending more money on drainage. It’s clearly an eligible expense. It’s supposedly everyone’s top priority. And the parish doesn’t have any other pots of money to draw from, other than, apparently, the city’s ARPA and capital improvement funding.
Done right, investing in drainage is valuable and can reduce unfunded maintenance liabilities. Plus, drainage is actually a responsibility of parish government. Yet there are other projects still in this proposal that seem to offer significantly worse returns.
Like spending $1.65 million on more improvements for the Buchanan Parking Garage in Downtown Lafayette. The Parish Council already appropriated $3.5 million to renovate the Buchanan Garage, which was the figure the administration proposed to get the job done. Now it seems the cost of this project is coming in over budget and the administration thinks the parish should spend additional money making this garage nicer. But what’s the ROI of having a nicer garage from a parish government perspective?
The biggest red flag here is Guillory saddles the Parish Council with 100% of the cost of staffing both the parish and the city’s portion of this spending. That cost is $3.9 million for “Rescue Plan Temporary Staffing Adjustments” and $360,000 for a contract with Cornerstone for consulting on ARPA project eligibility — a resource not made available to the council members, by the way, who are ultimately responsible for passing this budget.
Let’s set aside the fact that $4.2 million seems like a ton of money to burn on overhead. What I just don’t get is why the city shouldn’t pay its fair share of that overhead, which would be 45%, based on the total share of ARPA dollars delivered to LCG. That’s $2.4 million of parish money that could be spent on parish infrastructure instead of the city’s overhead costs. Combined with the $5.5 million of parish money being spent on city road, sidewalk, bridge projects I referenced earlier, that’s nearly $8 million of parish money not being spent on parish infrastructure or parish services.
It honestly feels surreal to be complaining about the parish subsidizing the city, but these are strange times we’re living in. This whole proposed budget just doesn’t make sense to me.
Why appropriate so much money to roads when they’re potentially an ineligible expense? Even if you think the final rules may expand to include roads, why not set aside the money and wait to appropriate it until we know for certain?
If roads do become eligible, why spend so much money on projects that serve so few homes when there are plenty of parish road projects that would improve the lives of more people? For that matter, why should the parish spend parish money improving city roads?
If drainage is a top priority, why should the Parish Council deploy so little of this funding to it? And why appropriate millions of dollars for lower priority projects?
And finally, why on earth should the parish have to pay for all of the overhead?
Parish Council members tell me they trust Guillory’s intentions — that they have little reason to believe he’s spending this money in ways that will come back around to bite them. But this isn’t about trust. It’s about making the most of a transformative opportunity and squeezing as much value out of this one-time windfall for the parish as possible. When you look at it that way, on paper, this proposal is a bad deal for parish taxpayers.