On April 6, a court order halted construction on the largest water detention pond project Lafayette Consolidated Government has ever built. That same day, the contractor working on it struck a deal to buy land across the river to keep digging.
While the legal decision scrubbed LCG’s timeline on the $81 million Bayou Vermilion Flood Control project, the industrial firm hired to complete it continued to collect on its lucrative contract, bringing in $54 million this fiscal year. But the scramble of changes set in motion by the judge’s injunction has state government withholding tens of millions in reimbursements, at LCG’s expense. To date, it remains unclear what has been completed on the Guillory administration’s landmark flood control project, and state officials say they’re no longer getting adequate answers.
The court order stopped work on a nearly 400-acre site off of Homewood Drive near Milton. Rigid Constructors’ contract was then amended so it could be paid $2.5 million to “demobilize” and move across the Vermilion River to a site along Coulee Ile des Cannes (90 acres of ponds), a portion of the project planned for a later phase and for which LCG had not yet acquired all the necessary parcels. Rigid’s profit on the demobilization fee alone likely more than covered its cost to strike a separate deal with a property owner to buy land to keep working.
That unusual property ownership situation is not sitting well with state officials.
After learning that Rigid Constructors still owns that property on the Coulee Ile des Cannes site, the state shut off the flow of capital dollars. In total, state officials say they are currently withholding more than $22 million.
A Sept. 1 email exchange between a state project manager and LCG Public Works Director Chad Nepveaux outlines the state’s reasons for not processing LCG’s payment requests, including missing information on forms, lingering questions over the status of the project and the “irregular practice of a contractor purchasing property he is working on.”
Spending money to make money
Rigid CEO Cody Fortier paid almost twice the appraised value of the Ile des Cannes-area property. On June 30, Fortier signed a cash sale agreement with members of the Breaux family for a 44-acre tract on the 800 block of Ridge Road, paying $453,000, court records show. The property was valued in late 2021 by an LCG-hired appraiser for $260,000. The Breaux family members previously declined to sell the property to LCG at that price.
The Breaux family was not the only property owners Fortier made overtures to after decamping to the Ile des Cannes site, where LCG had already purchased some acreage from other landowners. Leonard Guidry, who owns property along the newly excavated ponds, says Fortier asked him in a phone conversation if he was interested in selling and how much he would want (LCG also had his property appraised). “I said I wasn’t interested,” Guidry says. Unlike what it did for the Homewood side held up in court, LCG did not expropriate private property for this stormwater project.
Fortier did not return a call seeking comment.
“This is highly unusual,” says Jacques Berry, a spokesman for the state’s Division of Administration. “LCG’s not getting paid. [It] needs to demonstrate property ownership, in which case we will re-evaluate and try to pick up the process from there, if they can do that.”
LCG has argued the servitude agreement in place with Rigid is sufficient. (Read the full Sept. 1 email exchange.)
The Guillory administration, which continues to tout the speed of its drainage work, had in recent weeks become “non-communicative,” Berry says.
Since Rigid started work on Bayou Vermilion Flood Control in early February, LCG and state officials have gone back and forth on the project’s milestones, with LCG reps pushing the state to move ahead of its normal procedures. A March 23 memo from the Fenstermaker firm appears to indicate that the contractor was digging ponds on Homewood Drive before the contract with LCG was signed Feb. 3. The injunction on the Homewood site, ordered in a lawsuit challenging LCG’s seizure of the private property to construct the detention ponds, forced LCG to reshuffle the project’s sequence, pulling the Coulee Ile des Cannes ponds into the Phase 1 portion of the overarching Bayou Vermilion Flood Control project. The mixup confounded state officials, who have sought to pin down LCG’s plans.
“Did the [contractor] purchase some of the property he is working on?” the Office of Facility Planning and Control’s project manager, Lyle Savant, asked LCG engineer Fred Trahan on Aug. 16, explaining that the cooperative endeavor LCG signed with the state requires LCG to own the property. Trahan didn’t reply.
The Daily Advertiser reported Tuesday that LCG allowed Rigid to excavate more than 1 million cubic yards of dirt from the property — at least $10 million of work — under an agreement the contractor has had in place with the Breaux family since early April as they worked to finalize the sale. However, it wasn’t until two weeks after the June 30 cash sale was filed into the court record that LCG and Rigid signed a servitude agreement, with LCG engineer Fred Trahan signing on behalf of LCG.
The agreement, recorded in the Lafayette Parish Courthouse on July 14, includes a notation that it is not valid until signed by Mayor-President Josh Guillory and commits LCG to purchasing the property at an unspecified price and undetermined date. That appears to indicate that a new appraisal will be needed before LCG buys the property, which could create a host of new problems. By law, LCG cannot pay more than appraised value.
“Does the property have just unusable areas now because it’s drainage ponds, it’s destroyed for a particular use, right?” asks a local real estate appraiser. “It just seems peculiar, it’s just unusual, the whole process, to me. What is [LCG] going to end up paying?”
Holding the bag
How much LCG will end up paying is the crucial question raised by the state’s decision to cut off funds. LCG is holding the bag on costs it expected the state to cover.
Thanks to two capital outlay requests shepherded by state Sen. Page Cortez, LCG was poised to get almost $50 million in state funding but so far only about $19 million has been reimbursed. Cortez owns a home near the Homewood site.
Cortez secured that funding despite an April memo produced at his request by UL Lafayette engineers suggesting negligible, if any, benefits of the Homewood portion of the project during major weather events. Homewood accounts for 60 percent of the project’s price tag, but the Coulee Ile des Cannes site does most of the heavy-lifting beyond the banks of the Vermilion River, according to charts filed by LCG into the court record.
The Homewood ruling leaned heavily on findings in an earlier UL study of the project, commissioned by LCG, which found the massive facility would have at best marginal impact on river flooding during major storms. LCG has not produced any study documenting the number of structures likely to be spared from floodwaters, and the vaunted cumulative impact is unclear. In their memo to Cortez, UL engineers speculate that the combination of Bayou Vermilion Flood Control and the spoil banks removal project may have no added benefit.
“That’s not what I got from the report,” Cortez tells The Current. “What I deduced is there is a value. I was told that they absolutely would have an impact on flooding and would have an impact on the river, to what extent [Homewood or Coulee Ile des Cannes] would have been better was the question that I didn’t get a real answer to. … It also is a Vermilion Parish issue, so if it’s going to reduce the level of the Vermilion River that would save properties ultimately up and down stream.”
In the last legislative session, Cortez earmarked $22 million in non-recurring revenues for Bayou Vermilion Flood Control, a one-time pot of money separate from the state’s bond program. While a faster line of financing, non-recurring revenues are paid as reimbursements. That means LCG is on the hook for its payments made to date, much of the funding coming from federal coronavirus relief awarded to Lafayette Parish. The Parish Council shifted $15.5 million in American Rescue Plan Act dollars to the project after the court order earlier this year.
LCG Chief Financial Officer Lorrie Toups confirmed this week that ARPA funds may not be able to pay for Bayou Vermilion Flood Control, citing issues with “federal procurement standards.” It’s unclear how that impacts the project’s financing and parish government’s obligation, despite earlier assurances to council members that the project would be eligible.
“The parish for sure is not in a position to have to repay or find millions of dollars,” says Parish Councilman Kevin Naquin. Naquin learned that federal money could not be spent on these drainage projects from Toups’ comment in a story published Tuesday by The Daily Advertiser. Naquin says the questions came up again during budget hearings.
“I wasn’t told during the process that [LCG ARPA consultant] Deloitte found something and maybe we have a potential problem. I was caught off guard. We still haven’t been briefed as far as what’s the plan,” he says. “If something comes out that we can’t get it back, I’d like to know how the administration plans to pay it back.”
LCG is still trying to gather information about the state’s rejection of its reimbursement requests, spokeswoman Tonya Trcalek told The Daily Advertiser. Cortez says he’s been trying to help both entities work through these outstanding questions since last week and has been assured a response from LCG is forthcoming this week.
Heightened scrutiny
For months the City Council has been trying to get answers from the Guillory administration about these drainage projects and Tuesday night voted unanimously to launch an investigation. The Current reported last month that the FBI is also probing any potential relationship between Josh Guillory and Cody Fortier, likely in light of a heavy equipment company Guillory and his wife started last year.
Bayou Vermilion Flood Control isn’t the only project the state has withheld funding for. For months officials have tried without success to get LCG to respond to questions about the Cypress Island Swamp spoil banks removal project in St. Martin Parish, now the subject of state and federal lawsuits and multiple federal investigations. In February LCG amended a $390,000 as-needed excavation contract, awarded to Rigid through a public bid process in December, into a nearly $4 million contract for Rigid to complete the St. Martin Parish project in the dark of night, potentially violating the state’s public bid laws.
Again, LCG did not follow the requirements of the agreement on that project, failing to turn over to the state any of the necessary documentation, like final construction documents and proof of adherence to public bid laws. Without that information — LCG told The Current there were no construction plans for the work — the state isn’t releasing the $1.5 million the Guillory administration told the City Council it was getting when the council signed off on an ordinance accepting the money and agreeing to a $500,000 match.
“I think they may have given up on Cypress Island [funding],” Berry says.