The gist: The LPUA deferred indefinitely a pair of proposals to reduce utility rates and return money raised for a $240 million bond sale that never happened.
The gist: The LPUA deferred indefinitely a pair of proposals to reduce utility rates and return money raised for a $240 million bond sale that never happened.
Some background. Rates were raised 8 percent beginning in 2016 with a $240 million bond issuance in mind. That package included a controversial power plant, and after some pushback, the bond ask was reduced to $70 million in February 2018. At the last minute — literally the day of the bond commission meeting in April — Robideaux pulled the $70 million bond request, orphaning the rates. That was days before he signed a letter of intent with NextGEN Utility Systems to consider privatizing manage of LUS. Settling the issue was delayed during the ensuing controversy.
LUS says the money has been put to good use. In a bond scenario, the money raised would go to pay the interest on the bond. Since there’s no bond, LUS has essentially used the money on a pay-as-you-go basis, moving forward on projects included in the $70 million package. Some major projects include $48 million for electric system upgrades and $41 million in sewer treatment work. Interim LUS Director Jeff Stewart tells me about $15 million was diverted to those work orders.
“The last thing I want to do is scale back a rate and then come back to raise the rate to meet unexpected needs,” Councilman Bruce Conque says.
Word is bond. Councilman Kenneth Boudreaux, who authored the ordinances, argues that good use doesn’t matter. The money was raised for bonds, and the ratepayers should expect that the money be used for that purpose. “I personally believe we have misled the people, and we’re gaining from it,” he said at the council meeting Tuesday night.
LUS disconnects 1,900 customers each month for delinquent payment. Boudreaux brought that figure forward to warn that even a small rate increase can have dramatic effects on low-income families.
“We boast about how good our rates are, but we still have a large population that struggles to pay those rates each month,” Boudreaux tells me.
What to watch for: If and when a bond is ultimately issued. The administration intends to go forward with a $70 million bond sale, now that the NextGEN episode is over. With cash in hand, LUS can continue ongoing projects but can’t necessarily complete them without the added capital.
The gist: There’s a lot to do before 2020, when the City-Parish Council splits into separate bodies. The 15-20 person committee, featuring citizen and government reps, will tackle the thornier issues stemming from the change.
“The whole gamut of what was inside the charter changes” will be up for discussion, Councilman Jay Castille tells me. He singles out budgets, board appointments and commissions among the major issues on the committee’s docket. Next year’s budget will need to be drafted with an eye toward 2020, when separate city and parish council members take office. Budget issues figure to take up the most air, but the charter amendments also created separate zoning commissions, for instance, and this body will sort through how to get them seated in an orderly fashion.
Northside, Southside, Eastside, Westside: Castille says the majority of the committee will be private citizens with government knowledge appointed by the council and administration. The makeup of the citizen delegation will be a “cross section” of city and parish stakeholders, Castille tells me. The diversity is intended to build a spirit of inclusion in a process that will have major consequences on the way local government works. Robideaux and Castille will begin putting together a list of names and will start piecing the committee together in the new year. The four councilmen on the council’s transition team announced last week will be on the committee, along with the mayor-president and administration staff.
The most likely headache? Cost allocation. It’s the wonkiest of consolidated government issues and is at the heart of its dysfunction. City general fund dollars and parish general fund dollars, budgeted separately, are used to pay for shared services. How much each side pays is determined by 24 cost-allocation methods, a patchwork of formulas developed by budgeting consultants. For years, local pols have argued the city has taken on too much of the cost for shared services, in effect subsidizing government functions in the parish like the legal department, IT, building maintenance and more. Tackling cost is where the city gains its autonomy and the parish faces a stark financial reality. When you hear “the city props up the parish,” think about cost allocation.
“The new parish council will have challenges,” Castille tells me. “I’m curious to see how creative they can get.”
$18.4 million in shared services were budgeted by revenue in 2018. In other words, how much each entity can afford to pay. The city picks up more than 80 percent of that tab.
What to watch for: Whether the parties involved can play nice. There’s a visible strain between the council members on the committee and the mayor-president, who opposed the charter amendments. Castille and Robideaux have a notably frosty relationship. “The relationship is OK,” Castille tells me. “I’ll leave it at that.” But this isn’t just about personal conflict; there will be a natural tension on the budget, particularly around cost allocation, where Castille says the committee will spend most of its time.
The gist: State and federal lawsuits filed this week allege suspended Lafayette City Marshal Brian Pope, at the time facing seven felony counts of malfeasance in office and perjury, took the extraordinary step of targeting his perceived political enemies. The suits were filed by Steven Wilkerson, who co-chaired the failed effort to recall Pope.
Pope allegedly ordered employees to retaliate against Wilkerson and recall organizers. The suits claim he instructed office personnel to run criminal background and outstanding warrant checks on those seeking to remove him from office. In addition to Pope and interim City Marshal Mike Hill, defendants are Deputy Paul Toce, and an unidentified deputy, dispatcher and warrants supervisor. Wilkerson alleges Pope violated his constitutional rights when the marshal had him arrested Dec. 11, 2017 — less than 24 hours after the recall effort failed — on a defective warrant for issuing worthless checks 20 years ago. In February, District Attorney Keith Stutes dismissed the charges against Wilkerson.
Wilkerson, who says in the suits he has since moved out of state to escape the ongoing retaliation he feared, is seeking actual and punitive damages for public humiliation, embarrassment and invasion of privacy, along with attorneys’ fees.
Pope was convicted on four felony counts earlier this year. The suspended city marshal is awaiting a sentencing date and plans to appeal. Just last week, a 17-count superseding indictment accused him of pocketing approximately $85,000 from the marshal’s office this year after receiving an attorney general’s opinion that he could not legally do so. In April, Pope was also warned by the CPA firm auditing his office’s financial statements — it wasn’t the first warning — to “cease this practice and seek legal counsel regarding compensation taken prior to the January 29, 2018 AG opinion.” It does not appear that Pope will be charged for supplementing his salary to the tune of hundreds of thousands of dollars from 2015-2017 — the time period prior to the January AG opinion, which was merely a restating of an earlier opinion that the fees can only be used to support the operations of the marshal’s office.
— Read the full federal lawsuit here. —
Marshal Hill says he received a state grand jury subpoena to turn over financial records shortly after his October swearing in.
The Louisiana State Police and the FBI have looked into Pope. In early 2018, LSP performed an audit following Wilkerson’s arrest and the allegations around it, according to sources with knowledge of the examination. It’s not known what that audit turned up, but the FBI has been asking questions. Recall co-chair Aimee Robinson says she was interviewed for 2.5 hours by two FBI agents in February. Robinson says the agents asked a lot of basic questions — why she got involved in the recall, why Wilkerson was chosen as co-chair, whether she had a vendetta against Pope, had she known Pope prior to launching the recall — before getting to what she believes was the purpose of the meeting.
“To me the focus seemed to be around Pope’s efforts at retaliation,” she says. Robinson says she hasn’t heard anything from the feds since February.
The gist: Two separate councils will govern Lafayette Consolidated Government starting in 2020, following Saturday’s vote. A four-member council liaison team will convene to cut through the weedy details.
More councils, more problems. Or so the saying goes. The reality is the team could tackle a swath of issues on its way to untangling a complicated government contraption, not the least of which would be dealing with shared administrative functions. The team’s agenda isn’t yet defined, Councilman Bruce Conque tells me, but broadly speaking it’s tasked with paving an orderly path for transition. That begins with prepping the paperwork necessary to allow candidates to qualify and run for parish or city council seats in 2019. The new councils will get to governing in 2020.
The team is comprised of the charter amendments’ core proponents on the council. Council Chairman Kevin Naquin appointed himself, Conque, Jay Castille and Kenneth Boudreaux to the transition team. Castille and Conque authored and pushed the amendments through the council.
Divvying up the budget pie won’t always be straight-forward. That’s what Mayor-President Joel Robideaux didn’t like in the proposition, when he groused that the parallel councils could deadlock. The transition team won’t necessarily be tasked with sorting out who pays for what; that’s an issue to be tackled at budget time. But in preparing the budget in 2019, the last city-parish council ever will need to produce a document that separate councils can work from. Some functions are easy to figure out. The city council, for instance, has sole purview over the Lafayette Police Department. Easy peasy. But others, like the $5.6 million consolidated government spends on its IT department, will be stickier. The city pays 87 percent of that cost, the parish pays 13 percent; each share is determined by sales tax receipts. Public Works, the largest consolidated agency, could present the biggest challenge.
There are 25 different methods to determine who pays what. And you thought splitting restaurant checks was frustrating. The methods, called allocation formulas, are determined by a contractor, but the council (later councils) approve them in the budget process. Soon to come, the government equivalent of “I only ordered a salad.”
“It’s nothing that’s not solvable,” Conque says of the complications ahead. Given the holiday season, the team likely won’t meet until 2019.
What to watch for: Candidates. Four incumbent council members — Liz Hebert, Bruce Conque, Pat Lewis and Nanette Cook — can run for either council. Conque has already declared to run for city council. Naquin has one term left and can spend it on the parish council only, given his residence outside of city limits. With Boudreaux, Castille, Jared Bellard and William Theriot all termed out, there will be at least five open races, most of which will likely be for parish council seats.
Fix the Charter focused on shared values while acknowledging the appropriateness of having different priorities. And the voters responded to that.
The gist: Waitr announced this morning that it acquired Bite Squad, an online ordering and on-demand food delivery platform for restaurants, for $321.3 million.
Wasn’t Waitr just bought for $308 million? Yep, that was announced back in May and the deal was only finalized on Nov. 16. So less than a month into being a publicly traded company, Waitr has effectively doubled in size. Bite Squad has more than 11,000 active restaurants, compared with Waitr’s 7,700 restaurant partners as of Sept. 30 of this year.
Waitr gets swoll. With this deal, Waitr’s operations will expand to cover a total footprint of 500 cities in 22 states.
Where’d they get all that cash? Landcadia Holdings acquired Waitr for $308 million, but only $50 million of that was guaranteed cash. At that time, Landcadia Holdings was a special purpose acquisition company — a type of entity set for the sole purpose of buying another company — that had raised $300 million. So when Landcadia Holdings became Waitr Holdings, it still had about $250 million left to fund growth. While this deal for Bite Squad was for $328 million, only $202.1 million of that was in cash with the rest paid with 10.6 million shares of Waitr stock. Plus, to help finance a portion of this deal, Waitr has taken on $42.1 million in debt.
This may only be the beginning. Tilman Fertitta — the billionaire co-owner of Landcadia Holdings, the Houston Rockets and Landry’s Inc. — has a track record of growing his businesses through acquisitions. And Chris Meaux — the CEO and cofounder of Waitr — wants to build Waitr into a billion dollar business. So if I were a betting man, I’d say that this won’t be the last major acquisition they make. And that’s potentially great news for Lafayette.
Am I rich yet? Not unless you were one of the original shareholders. The news hasn’t had much of a net impact on the stock price yet, for those of us who have only been able to buy in more recently. (Disclosure, I own some stock in Waitr.) Yesterday, Waitr Holdings’ stock (listed as WTRH on the Nasdaq) ended the day at $11.44. While shares spiked to $12 first thing this morning, they settled back down to $11.48 as of 2 p.m. So I’d hold off on buying that ticket to the moon.
We’re witnessing a changing of the guard, and Waitr’s splash on the NYSE is the latest indicator in the trend.
To put it bluntly, to win, Fix the Charter needed the city to show up, and it did. City precincts edged the parish and saw bigger margins of victory.
Decode the fuzzy math with our fire district millage calculator. The Current’s first Civi tool for civic engagement.
Council is figuring out its new superpower on tax exemptions. That gives economic developers the jitters.
The gist: The City-Parish Council rejected two property tax exemptions Tuesday night, including one for Stuller Inc. That racks up four defeats since local agencies gained a say in a state tax incentive program that economic developers believe is an essential tool for business recruitment and retention.
Stuller sought roughly $100,000 in property tax abatement over 10 years, through the state’s Industrial Tax Exemption Program. The jewelry manufacturer’s application claimed a $1.7 million investment in its manufacturing operations that would add six jobs to its existing local workforce of around 1,200. A council skeleton crew of five, exercising the relatively new power to approve ITEP applications, voted unanimously to reject Stuller’s application and that of Advanced Products and Systems, a Scott-based manufacturer in front of the council for the second time this year.
Hating incentive programs is all the rage. See what I did there? (I’ll show myself out.) Portions of the right and left seem to agree on this issue. Progressives say it’s corporate welfare. Free-market purists say it’s unfair. See the hubbub over Amazon’s HQ2. Or conservative Councilman William Theriot’s axiom, “We should take some from some and exempt others.”
Growing resentment on either flank could pressure politicians, locally and nationally, to halt or rein in incentive programs. Consider that the last four ITEP applications to come before the council were rejected.
“We need to come together on a better approach,” LEDA CEO Gregg Gothreaux tells me. “This situation is very difficult. It reflects my worst fears when the rules were changed.”
For decades, ITEP was a rubber stamp. Until 2016, that is, when Gov. John Bel Edwards reformed the program by executive order, requiring applicants to show some job growth and empowering local taxing bodies to approve the exemptions. Critics of ITEP argue the state was wheeling and dealing with local money. Together Louisiana, an advocacy group organized to fight ITEP, claims the program exempted $4.9 billion in property taxes for companies statewide in 2016.
$3.7 million. That’s the total amount of exemptions Stuller has claimed through the program over the last 10 years, according to The Advertiser. Tax Assessor Conrad Comeaux said Tuesday night that the actual amount is lower, given the program accounts for depreciation.
$17 million. That’s Stuller’s property tax bill over the last 10 years, according to Comeaux. Coming up short of an endorsement, the assessor defended the program in remarks to the council, noting that $33 million in parish tax revenue is “lost” to the homestead exemption each year, versus around $2.5 million annually to ITEP.
$89 million. That’s the local household income produced by Stuller’s payroll, according to Stuller CIO Michael DeHart.
The council’s vote sends a message. Depending on which side of the spectrum you’re on, it’s a good or bad one. Some fear the vote will have a chilling effect on business recruitment down the line. That problem, they say, is exacerbated so long as companies don’t know what the rules of the road are in Lafayette Parish. Others believe it’s high time the program was stopped.
“We have to provide a level of certainty to companies so they know the financial implications of their investments in our area,” says Jim Bourgeois, One Acadiana’s executive vice president for economic development.
Some parishes have adopted a uniform approach, according to Councilman Bruce Conque, who voted against the Stuller and APC exemptions. Conque says he believes ITEP should be used to recruit new businesses rather than expand existing ones.
Conque said Tuesday night that there lacks a “coordination of efforts” among the local taxing authorities that now have a seat at the ITEP table — LCG, the Lafayette Parish School Board and the Lafayette Parish Sheriff’s Office. Conque tells me Sheriff Mark Garber was unaware of his authority on ITEP as recently as early this year.
“None of the governing bodies have any specific guidelines by which people who want to apply for an exemption can know the rules,” Conque says. “It’s a gamble.”
Lagniappe. Should Saturday’s proposition to create separate city and parish councils succeed, ITEP applicants could be denied by either the city or the parish council.
The gist: The current mayor is against the proposal to create separate city and parish councils, in its current form. Former mayors support the effort. So does former LUS Director Terry Huval and even Youngsville Mayor Ken Ritter. The lines are drawn, but a lot of people still don’t know what to think about the proposition. Undecideds are in the driver’s seat ahead of Saturday’s election.
Twenty percent of voters are undecided. That’s according to a scientific poll conducted by pro-amendment Fix the Charter PAC. Organizer Kevin Blanchard says the group’s message plays well in the parish, but the swath of unswayed voters keeps the election up in the air. “I like our chances,” he tells me.
This week former mayors Dud Lastrapes and Joey Durel penned a letter supporting the amendments. Read it here. Durel has been an active supporter of the campaign for some time. Lastrapes is one of the last mayors of Lafayette before consolidation. The campaign has gained institutional support where previous attempts at substantial changes to local government had not. Fix the Charter has raised about $60,000 to date, with TV and radio ad buys airing this week. In 2011, an effort to end consolidation failed miserably, with virtually all spending activated in support of the status quo.
Opponents say the proposal smacks of corruption, will raise taxes and will cede too much of the city to liberals. That’s the mixed bag of complaints circulated by Facebook page Lafayette Citizens Against Taxes and its fellow travelers. The page says the amendments were drafted too swiftly and in the dark, giving rise to suspicion of ulterior motives.
LCAT posts have stoked suspicion that the amendment campaign is really for the benefit of development company Southern Lifestyle Development, given the company employs several figures in Fix the Charter PAC. Most recently, the group has claimed split councils would pave the way for Drag Queen Story Time, a tangent to the debate aimed at the heart LCAT’s base. The page and its companion organization Citizens for a New Louisiana are the only public opposition to materialize, outside the mayor-president.
After months of silence, Robideaux has begun fighting the amendments. The mayor-president penned an op-ed on Friday to make his case against the proposition. Robideaux had yet to weigh in on the topic, even as he was probed for his opinion by council members back in August. Recently, he had privately told amendment supporters that he would withhold public comment. The flip irritated some of his erstwhile allies.
“I was disappointed and surprised that the mayor took a stance after he told me he wasn’t [going to take a public position],” says Herb Schilling, owner of Schilling Distributing Company. Schilling was one of Robideaux’s biggest supporters in his 2015 campaign. The Northside businessman has backed the charter amendments, circulating a letter to Upper Lafayette addresses.
Robideaux’s op-ed argues the configuration of proposed council districts strips too much power from the city over parish money for drainage and roads, and that the parallel councils are headed for deadlock without a “mechanism” for resolving conflict. Robideaux has since taken to Facebook to sound alarms that the parish council makeup — only two of the seats would come from majority city of Lafayette districts — will make future charter amendments difficult to achieve.
“Any future efforts to change or improve the charter to help the City of Lafayette would be much more difficult, if not impossible,” Robideaux writes. He also created a hashtag. #LetsGetItRight. Because that’s what you do now.
It’s unclear if Robideaux, badly damaged in reputation from the LUS/Bernhard affair, has much clout. There’s even some anecdotal evidence that Robideaux’s opposition has driven some undecideds to support the proposition.
Fix the Charter rebutted Robideaux’s op-ed on Friday, calling the mayor-president’s concerns “penny-wise but pound-foolish.” The way supporters see it, gaining sole control of the city’s substantially larger resources is more important than control over the parish budget. To wit, in the current budget, the city has financed $72 million in capital improvements, including $42 million in roads, all by its lonesome.
Meanwhile, the parish is selling garages to make ends meet. As to the mechanism for resolving conflict, Fix the Charter President Carlee Alm-LaBar says that’s the mayor-president’s job.
“Citizens outside the city of Lafayette are equally as frustrated,” says Youngsville Mayor Ken Ritter, chalking up dysfunction in parish government to bad leadership. Ritter fundamentally supports the idea that the city of Lafayette should have its own council, like Youngsville. “In looking at it from the vantage point of someone in a city that has a five person council and mayor, I know how effective we’ve been,” he tells my colleague Leslie Turk.
What we’re watching on Saturday: The geographic breakdown, win or lose. Conventional wisdom has it that parish voters hold all the cards, although the 2011 deconsolidation vote got clocked in city districts too. This time around, city voters could be moved by the inclusion of an amendment to shield LUS from management contracts like what Bernhard Capital Partners proposed to public uproar. Retired LUS Director Terry Huval has supported the effort with a “protect LUS” message. On the parish side, Fix the Charter’s Blanchard says parish voters are receptive to the message that a dedicated council would improve accountability on parishwide issues. We’ll tag this election #TooCloseToCall.