Settlement leaves much unsettled on Homewood drainage project

Aerial of Homewood detention pond
LCG has spent millions of dollars on drainage projects since 2016, but local rules don't require it to determine how much that work is really worth. Photo by Robin May

Work on Lafayette’s largest-ever flood prevention project has not yet resumed, roughly a week after Lafayette Consolidated Government announced a resolution in the suit that stopped it. And it’s unclear when it will. 

The $11.5 million “settlement agreement” LCG reached with the Bendel Partnership did not remove all of the hurdles before the project, which has likely already cost taxpayers tens of millions — the total cost of Phase 1 is projected at more than $40 million — and has not been shown to meaningfully impact flood risk. 

LCG’s proposal to pay the settlement with coronavirus relief money received by the American Rescue Plan Act may run afoul of federal restrictions for the money, state prohibitions against paying above appraised land values and local requirements that settlements be approved by the councils. Beyond the settlement, the project itself is under investigation by the U.S. Army Corps of Engineers. 

By ordinance and by practice, any settlement over $100,000 would require approval by the Parish Council (and because some city funds were used for the project, the City Council may also have to approve it). 

What may be crucial here is whether the agreement announced March 9 constitutes a settlement of damages or a property purchase or — most likely — a combination of both. The parties have not disclosed what portion is allocated to damages, and attorneys and expert consultant fees and what amount is being paid for the property itself or if such a determination has been made. 

LCG declined to turn the agreement over to The Current, saying it remains exempt from disclosure because the litigation is not, as the mayor-president claimed in the press release announcing the settlement, resolved. 

“These claims continue to be pending because there has not been a final judgment dismissing them,” Assistant City-Parish Attorney Mike Hebert wrote in response to our request for an in-person viewing of the documents. 

The project has a history of getting ahead of itself. 

In December 2021, LCG filed an expropriation lawsuit against the Bendel Partnership, paying $2.6 million to seize the long-held family land to build the Homewood Regional Detention Pond project, the largest in the parish’s history. 

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LCG soon began work on the property and continued to dig ponds as it battled the Bendel family in court, completing 85 percent of the work on two of the four ponds before the project was shut down by court order in May. After surviving LCG’s appeal of the district court decision, the Bendel Partnership sued for damages in January

Fifteenth Judicial District Court Judge Valerie Gotch Garrett, who ruled against LCG in May, will need to sign off on dismissal of the expropriation lawsuit; it’s unclear whether she will scrutinize the settlement. 

LCG says it will “purchase” the Homewood property using American Rescue Plan Act funds that were budgeted by the Parish Council in May 2022, noting the Parish General Fund will not be affected. LCG cannot use ARPA (Covid relief funds) to settle the litigation, as the interim final rule on state and local recovery funds is clear: Payouts for settlements are not an eligible use of funds. LCG has already been told by its ARPA consultant, Deloitte, that it can’t pay for the contracted work on Homewood because the project was not competitively bid. 

LCG has yet to produce any documentation confirming Deloitte signed off on the use of ARPA for the settlement agreement, and it’s questionable whether a Deloitte nod would be sufficient for the U.S. Treasury. 

City Councilwoman Nanette Cook, who like other council members The Current talked to for this story was unaware of the plan to use ARPA funds, says Public Works employees told her this week that the agreement is being treated as a land acquisition. 

To the extent that ARPA funds are used that way, the settlement runs into a second legal hurdle: State law prohibits governments from paying more than appraised value, according to an attorney general’s opinion long viewed as the prevailing word on the matter. (AG opinions do not have the force of law.) 

Local real estate appraisers tell The Current that no appraisal of the land would value it anywhere near what LCG has agreed to pay to settle this litigation. The last known LCG-commissioned appraisal from September 2021 valued the land at $2.6 million, the amount LCG deposited in the expropriation. 

The Current’s request for other appraisals on the Bendel property is pending. 

An even bigger looming problem for LCG may be the U.S. Army Corps of Engineers, which has confirmed an investigation into LCG’s work at Homewood. The Corps has already identified a violation in the placement of certain culverts, according to Corps spokesman Ricky Boyett. 

Boyett tells The Current his office is still in the process of making a jurisdictional determination for the project as a whole, meaning whether areas of the property are regulated under federal law. “We did have the understanding that part of this was getting the property and then they can remove the culverts that were put in and kind of resolve a violation by returning [that area] to pre-project conditions,” Boyett says. 

Any other work LCG does before getting a permit from the Corps risks a violation if the Corps later finds a permit was necessary, according to Boyett. “If one portion of what they’re proposing is wetlands, they have to have a permit for it. But if there are other areas that are not, that’s not under jurisdiction, they can proceed. I guess I’d even say proceed at their own risk, and start working the parts that don’t need it, provided they’re fully aware that they may get to the permit decision, and it could be we can’t issue this permit.” 

What this ultimately means is if the Corps determines that LCG’s work on the Homewood property impacted wetlands or navigable waters, it could order LCG to return those areas to their pre-project conditions and then come back for a permit, Boyett says. 

These issues compound with complications on a second massive detention pond project across the river from Homewood. 

Last month, LCG bought land where its contractor, Rigid Constructors, built a detention pond on its behalf, completing an unusual arrangement that’s been holding up millions in state capital outlay dollars.

The state has also been withholding money on Homewood since the court shut it down in May; in total, $30 million in state reimbursements is in limbo for the $81 million Bayou Vermilion Flood Control project, the umbrella title for work on Homewood and on Coulee Ile des Cannes in Scott. Roughly $65 million in state capital outlay funding is slated for the program. 

Moreover, state officials have been hesitant to release any funding while the Louisiana legislative auditor’s office probes the administration’s drainage program. 

Meanwhile, Bayou Vermilion Flood Control, the Guillory administration’s signature flood project, remains unfinished. LCG’s contractors might finish digging at Homewood, but until the Corps lets them connect the ponds to the Vermilion, they’re little more than a series of big holes in the ground.