Lafayette Parish government owes the City of Lafayette $17 million for money spent digging pits on Homewood Drive, according to Lafayette Consolidated Government’s annual audit.
The question is: Why hasn’t the parish paid the city back?
Believe it or not, Lafayette Parish has the money to do it. Normally the parish is broke, but right now it’s flush with funds from the American Rescue Plan, the federal government’s Covid aid package passed in 2021. The previous Parish Council appropriated all $46.5 million of its share of ARPA, but at least half of those funds haven’t been spent yet.
To be clear, the parish didn’t intentionally become a deadbeat roommate. State money was supposed to help pay for Homewood. But when the project went off the rails, the state withheld its funding. The parish, however, had already spent that money on moving Superdomes worth of dirt.
As a result, the parish effectively gave itself a zero interest $17 million loan with city money — without the city’s explicit permission. And without even letting taxpayers know it was happening.
This is the result of a feature of consolidated government finance. City government’s general fund is used as the checking account for all LCG expenses. That’s because historically the city has sufficient cash reserves available on hand.
Read more opinion from Geoff Daily
Adventurous eaters rejoice! Lafayette’s buffet of restaurants has more choices than ever.
Gov. Landry’s decision to veto $1 million for Catholic Charities of Acadiana to run its homeless shelter — if left unchecked — could literally kill people.
Louisiana’s relative distress may actually help Lafayette. If you live in a poor performing parish, Lafayette offers one of the best places to relocate to.
It’s been normal operating procedure for the parish to use city money to front the cash to pay for expenses that would ultimately be reimbursed by state capital outlay funds or other revenues. But not typically for anywhere near this much money, or for projects that were as large and mismanaged as Homewood.
This isn’t just a philosophical problem. This is costing city taxpayers real money by way of lost interest.
And that’s not nothing. Assuming at least a 3% rate of return on $17 million, that’s roughly $500,000 a year. And this has been going on for at least two years and counting. We’re probably nearing a loss of $1 million of accrued interest the city could have otherwise used for direct expenses like funding for the police and fire departments.
This laissez faire attitude toward the stewardship of city funds can’t be tolerated any longer. The City of Lafayette can’t afford to let millions of dollars disappear without any accountability or sense of urgency.
If parish government is going to borrow this much money, it needs to pay its bills. And not just the $17 million. The parish should also pay for at least some portion of the interest it saved by not having to secure a loan to float its spending on state capital outlay projects.
The City and Parish councils will enter the first budget cycle of this term in just a few weeks. It’s unacceptable to let a $17 million (or $18 million, $19 million, or $20 million) elephant linger unaddressed in the corner of LCG’s finances.
The City Council needs to step up and defend the city’s financial health — and do everything in its power to ensure that city money is spent for the betterment of our city.
One Comment
I agree.