The gist: If you read the tech blogs, there’s been a big crunch on the crypto market. After a bonkers 2017, the SEC has become a major buzzkill, signaling intent to sheriff the crypto wild west. That could actually make LCG’s crypteaux concept more attractive.
Crypteaux could weather the crypto winter
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I don’t understand anything you just said. That’s OK. The broad strokes are that Mayor-President Joel Robideaux announced this year that he wants Lafayette to launch a digital currency as an alternative means of public finance. Last year there was a gold rush on the stuff, particularly around Bitcoin, with cryptocurrencies netting billions in profits for investors. There’s been something of a correction in the sector this year, capped off by a ruling by the SEC that initial coin offerings – called ICOs — should register with the federal government and be regulated like any other type of security. Observers have suggested that the developments frosted over what was once the hottest place for investment.
Ok, I understand it marginally better. Good deal. So here’s the thing, lots of people tried to cash in on the cryptocraze. There are digital currencies that support journalism, others that pay cam girls. In Ohio, you can pay your taxes with Bitcoin. The sector attracted a lot of criminal actors and folks that plain didn’t know what they were doing. In a recent talk, Crypteaux architect Joe Castille — perhaps better known as a political consultant, and the ghostwriter of Brian Pope’s demise — characterized the world of crypto entrepreneurship as one lousy with naifs waving white-papers. There’s an argument to be made that the SEC’s ruling will clear out the riff raff like a brushfire, leaving only vetted concepts to thrive in a healthier crypto ecosystem.
Keep in mind that municipal securities are exempt from SEC registration. At least that’s what Investopedia tells me. So while it’s tempting to fear the SEC’s rules on ICOs as a valve closing, in theory a municipally backed ICO could squirt through the regulatory gaps. “Different laws apply,” Castille tells me.
What’s the latest on crypteaux? That’s unclear at this point. Robideaux set up a public innovation trust earlier this year — and put himself on it — but the board has yet to meet. The parishwide trust is a possible vehicle for funds raised in a municipal ICO. LCG recently paid IBM and mega-consultant KPMG $150,000 for developing a Smart City road map that suggests crypteaux and e-residency, concepts championed and researched by Castille, are worth exploring. Castille and his new company, Crypto Research LLC, studies the application of cryptocurrencies and blockchain — a whole other enchilada —in the public sector as a means of addressing budget problems in tax-averse communities. Sound familiar?
Is this crazy? Not necessarily. But it’s a thorny space and one likely to be a tough sell for your average voter. Just because the SEC’s recent crackdown doesn’t necessarily apply to crypteaux doesn’t make the path forward clear.
How do the voting odds stack up for the council split?
The gist: The charter amendment proposition is at the mercy of a low-turnout election that features a pair of taxes and a lackluster secretary of state race. Organized and adequately funded advocacy for the change could squeak out a win where full deconsolidation failed.
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Last time deconsolidation was on the ballot, it got clobbered. Before you pitchfork me, Charter Fixers, I understand this isn’t exactly deconsolidation. But it’s the best analog available to set a basis for comparison.
That was October 2011, a big state and local ballot year. Turnout was fine, by relative standards, with 34 percent of registered Lafayette Parish voters participating. The results were predictable. Bobby Jindal took home 71 percent of the local vote. State Rep. Joel Robideaux coasted to re-election with a 58-point margin in the parish. Voters rejected a $561 million bond proposition from the school board by a wide margin. And they said “nah,” 63 percent to 37 percent, to a full-stop dissolution of consolidated government following a one-sided race in favor of the status quo.
Turnout is expected to be low. And that could favor the charter amendment, says UL Lafayette political science prof Pearson Cross. “I think it would at least give them a chance,” he says. Cross says voters tend to resist change, and they didn’t go for the last major attempt at restructuring local government. Around 2,000 early ballots had been cast as of Wednesday afternoon, reflecting a slower rate than October's vote. Cross says he could see voter participation of less than 20 percent.
This is a different proposition with different dynamics. Deconsolidation faced an uphill battle. True PAC, a political action committee founded to fight the effort, raised around $30,000 and garnered support from big names in local politics. Don Bacqué, a former state rep and charter commission member, formed True PAC. He now backs the charter amendment and has lent his voice to Fix the Charter PAC, the campaign supporting the split. That’s a major dynamic flip. Fix the Charter has raised around $40,000 for this effort and will hit the streets this week with mailers and an upbeat ground game.
Original charter framers support the change. Five members of the nine-person charter commission that proposed consolidation in the early 1990s have signed on in support of split council amendment, arguing in a statement that the charter, as LCG's constitution, was always intended to be honed.
"The proposed amendments to the charter improve on our original vision," the statement reads. "While there is no perfect proposal, these amendments are a step in the right direction."
Ed Abell, James Jackson, Jean Kreamer, Paul Colomb and Alan D. Hebert are signatories to the endorsement.
Opposition is scattered. That doesn’t mean it won’t be effective. Activist conservatives aligned with Citizens for a New Louisiana/Lafayette Citizens Against Taxes oppose the proposition. Michael Lunsford, executive director of Citizens for a New Louisiana, says the groups will be sending mailers, targeting issues on the Dec. 8 ballot — “That’s what we do,” he tells me — but didn’t specify whether the campaign would single the charter amendment out. LCAT, the Facebook portal for Citizens founded by Lunsford and others, has hammered the proposition as a “non-fix” cooked up to raise taxes.
LCAT's opposition has taken a wide berth. At one time, the page posted speculation that the proposition could be a Trojan Horse built to sell LUS. Former LUS Director Terry Huval has since endorsed the charter split as a way of protecting LUS. Most recently, LCAT suggested that several key figures in the Fix the Charter movement — former LCG Public Works Director Kevin Blanchard, former Planning Director Carlee Alm-LaBar, former city-parish attorney Stuart Breaux and Councilman Jay Castille — are pushing the split for the benefit of their employer, Southern Lifestyle Development. Voiced as a question, the innuendo falls short of a direct, baseless claim (none of the parties are named).
Regardless of truth or variety, the scattershot opposition could nevertheless be effective. It does fall short of a concerted, well-financed campaign, however.
“I haven’t seen real mobilization against it,” says Cross of the charter amendment opposition in general. “It could be that they’re banking on people not going for the last one.”
A city fix that’s up to the parish? That’s how I’ve generally read it. It’s part of the perversion of consolidation: city residents will have their government determined by people who don’t live there.
But consider this: The 2011 deconsolidation vote, which would have delivered full autonomy to the city of Lafayette, arguably died in the city. While parish voters overwhelmingly opposed it, the deconsolidation campaign failed to deliver large portions of the city.
Fix the Charter's success may depend on winning the debate within city limits.
Disclosure: Southern Lifestyle Development has advertised in The Current.
The sheriff’s tax shoots the moon. His ambition could cost him.
How Sheriff Mark Garber’s sales tax attempts to solve all his financial troubles in one fell swoop, at the risk of failure.
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7 min read
Big Laughs, Little Lafs
In three years, Lafayette’s comedy scene has blown up and shows no signs of slowing
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16 min read
In Thanksgiving: chicken pies for the soul
As Thanksgiving approaches, my aunts and cousins have lovingly resurrected my grandmother’s recipes as best they can, creating a meal that represents gratitude and honors her legacy.
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3 min read
After major revisions to old federal courthouse contract, council coming around ahead of final vote
The gist: The old federal courthouse renovation project appeared doomed last month after council members pounced on purchase provisions that placed the risk of cost overruns on Lafayette Consolidated Government. But new changes to the contract now make the deal an outright $1.4 million sale that requires the development team to pay for sewer upgrades and removing asbestos.
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A game changer: That’s how Councilman Bruce Conque describes the revision. The original deal put the $1.4 million purchase price in escrow, with excessive expenses for the project to be paid from that pool of money. In October, Conque and other council members shredded the contract at introduction, fuming that the deal put too much power in the developer’s hands and gave approval of overages to the mayor-president rather than the council. In particular, the deal would take the unusual step of saddling city-parish government with the cost of sewer upgrades needed to accommodate the 68-unit, 25,000-square-foot complex. Developers, in most cases, pay some of the upfront costs for utilities. Downtown and the city’s urban core more broadly are virtually out of sewer capacity.
Kenneth Boudreaux, a perennial no vote on previous attempts to put the city-owned Downtown property back into commerce after years of blight and vacancy, complained that all proceeds from the sale should be “profit.”
The revised purchase agreement appears to hit all major concerns levied thus far: The sale is a lump sum transaction that requires the development team to pay for peripheral infrastructure needs.
“I’m thrilled,” says Conque. “This benefits everyone, and this project can now move forward.
It’s not quite over. Conque and Jay Castille, another staunch opponent of previous redevelopment attempts, will propose two other amendments to the contract, one to prevent the developer from sitting on the project by eating penalty fees against rising costs, and another to require that the facility’s appearance conform to the city’s Unified Development Code. The previous version gave the mayor-president approval of the complex’s facade.
Earlier this year, Mayor-President Joel Robideaux unilaterally selected the team behind the project, led by developer Jim Poche, architect David Weinstein and Ed Krampe, a personal friend of Robideaux's.
Counting chickens: No vote is final before it’s cast, but early indications place the support count at eight. One of the assumed no votes, Boudreaux, will not be at Tuesday’s meeting after announcing health complications associated with a cancer diagnosis earlier this week. With a majority reportedly on board, approval of the contract would be a significant win for Mayor-President Joel Robideaux after months in the doghouse over his pursuit of a deal to privatize management of LUS.
The Band is back
Two dozen Lafayette musicians revive their detailed reenactment of The Band’s farewell concert doc, The Last Waltz
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5 min read
LPUA will take up lowering LUS rates
The gist: Utility rates were hiked in the last two years to pay for rising operating costs and a $240 million bond package that never came to be. On Tuesday, Councilman Kenneth Boudreaux will present a pair of ordinances, one to reduce electric, water and wastewater rates and another to reclaim the revenues for a bond sale.
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NextGEN Utility Systems put a spotlight on the rates by promising to lower them for three years. In council discussions over the course of the affair, council members Kenneth Boudreaux and Bruce Conque questioned whether the rates could be lowered, given the bonds were never issued. The idea is that the rates were raised unnecessarily, and thus some value ought to be returned to LUS customers.
Conque says he would support reductions on electric rates only.
Why were rates raised in the first place? In 2016, LUS sought — and received — approval to apply for $240 million in bonds to build a new power generating plant and other pricey capital improvements. Rates were raised 8 percent to finance the debt, but the LPUA, hearing pushback on plans for the new power plant, decided on a phase-in compromise and reduced the authorized amount to $70 million in February 2018. Mayor-President Joel Robideaux has said that event prompted him to reignite talks with Bernhard Capital Partners/NextGEN Utility Systems, despite that discussions had begun in 2016 and never stopped. In April, Robideaux pulled the bond request from the state bond commission agenda the day it was set to be heard, effectively orphaning the rate increase.
Boudreaux says the money ought to finance bonds, given that was the principle justification for raising it.
“We’re in essence taxing ratepayers,” Boudreaux tells me.
OK. Give me my money back. Hold on to your receipt, ratepayer. It’s more complicated than that. LUS interim Director Jeff Stewart says that while plans for the generating plant were shelved, the system needed the funds to rightsize revenue for the water and wastewater systems, and to finance about $100 million in other capital improvements:
- $48 million in electric system upgrades, including LED streetlights ($7M) and a new substation ($14M)
- $41 million in wastewater, including expansion of a sewer plant ($26M)
- $6.5 million in water system projects
These projects were included in the February resolution authorizing LUS to sell bonds. LUS faces flatlining electric revenue growth as customers use less energy and will spend millions to upgrade sewer capacity in Lafayette’s urban core and on an EPA mandated,10-year review and repair of the rest of its wastewater system. Stewart tells me reducing the rates is possible but requires a thorough review.
“The opportunity may exist, but we haven’t fully evaluated those options yet,” he says.
What to watch for: How else the NextGEN affair impacts decision-making around LUS. If there’s a silver lining in the acrimony that erupted over the privatization scheme, it’s that LUS has taken center stage in civic conversation. Major changes are already in play. LUS is set to cleave off Fiber, and both systems will need new directors. NextGEN’s proposal introduced into the public lexicon plenty of new concepts around energy and raised awareness about the disruptions LUS faces going forward.
IBM and top government consultant draft smart city roadmap for Lafayette
The gist: Big Blue and mega-consultant firm KPMG outlined a comprehensive smart city action plan for LCG over the past year, developing concepts like digital payments for public services and smart traffic sensors for more efficient traffic control.
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Smart cities are what again? It’s a catchall term for the use of innovation to make government more efficient and transparent. More often than not, it’s associated with advances in automation, data and the internet of things (IoT). Concepts can be as cutting edge as AV transit and as boring as fiber-connected traffic counters.
Around 70 initiatives were identified, according to LCG spokeswoman Cydra Wingerter, over the course of the past year. Wingerter shared a sampling of the results, which were discussed in part at a soft reveal during LCG’s PlanLafayette week in October:
- Smart Fire Alarms deployed parishwide and connected via LUS Fiber to improve Lafayette Fire Department response times.
- Digital Payment Network to accept remote credit card payments and platforms like Venmo and PayPal for public services.
- Digital 311 to improve public service requests and provide real time data and collect public feedback.
- Smart Traffic Improvements like predictive analytics, adaptive traffic controls to carve paths for emergency response vehicles and updated sensors for traffic volume. The I-49 Connector got a mention, too.
- Disaster Preparedness Plan includes a companion mobile app for notification and e-learning modules for flood and hurricane prep education. This piggybacks on the city’s Bloomberg Challenge application. Lafayette was a finalist for the challenge but came up short.
I’ve asked for the full list of projects and a copy of the contract with IBM/KPMG, but have received no response from the administration.
Where do Cryptocurrency and Blockchain fit in? You probably aren’t asking this question, but you should. At the Opportunity Machine’s innovation conference in October, Crypteaux architect and Robideaux adviser Joe Castille mentioned that IBM/KPMG validated his public innovation ecosystem concept. There’s a lot to unpack here, but the broad strokes include funding public projects through yields from a cryptocurrency launch — Castille used the I-49 Connector as an example — and establishing an e-residency program to attract blockchain entrepreneurs, an idea that’s worked well in Estonia. Yes, Estonia.
Innovation is a key priority for the Robideaux administration. A Lafayette-based team pitched a freight hyperloop corridor among other transportation concepts at a major conference in Columbus, Ohio, and placed in the competition. Robideaux and mayoral assistant Kate Durio took part.
What to watch for: Whether Robideaux has the political capital after the LUS controversy to get anywhere with his ideas, particularly those that require the council to sign off. Robideaux recognized the challenge in remarks at that conference in Ohio:
So you can have this vision of all these really great things, but when you sit down with your council members and say, "We need to spend money on a smart city initiative," and let's just say it's $1 million. They're going to come back and say, "How about you spend it digging out that ditch that's in this neighborhood that's flooded three times?" That's the reality that we face.
Joel Robideaux,
via Smart Cities Dive
Waitr goes public Friday. Technically, you can get in on that stock now.
The gist - If you want to buy stock in Waitr before it goes public, today is your last chance. Waitr is scheduled to complete its agreement for a business combination with Landcadia Holdings tomorrow and go public Nov. 16 on the NASDAQ stock exchange under the ticker WTRH.
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What’s Landcadia Holdings? Landcadia Holdings is a special purpose acquisition company formed two years ago by American billionaire Tilman Fertitta to raise $300 million through an IPO to invest in acquiring companies. Over the summer the company announced its intent to acquire Waitr for $308 million ($50 million in cash and $258 million in stock) and rebrand itself as Waitr Holdings.
How can I buy Waitr stock before it goes public? Simple: by buying stock in Landcadia Holdings, which is listed under the ticker LCA on the NASDAQ. While you’ll be buying stock in Landcadia Holdings this week, once the vote is approved by its stockholders at a special meeting tomorrow, Landcadia Holdings will become Waitr Holdings with Waitr as its subsidiary.
But should I want to buy stock in Waitr? We don’t provide investment tips at The Current, (you wouldn't want us to) but it's worth noting that Waitr is experiencing incredible growth. In the 3rd quarter alone of this year, it grossed $77.7 million in food sales, which represents a 230 percent year-over-year increase. It now serves 235 cities and 7,700 restaurant partners. Also, once this deal is finalized, Waitr will have about $200 million on its balance sheet to invest in additional growth. This growth could come in existing markets, expansion into new markets, or in considering acquiring competitors or complementary companies.
How big of a deal is this to Lafayette? Regardless of whether you decide to invest in Waitr, there’s no denying this is a potentially huge deal for Lafayette. Our market isn’t home to very many publicly traded companies of any sort, let alone those with the growth potential of Waitr. Ideally what will happen next is that there will be incredible demand for Waitr stock, which will increase the price of shares and thereby increase the wealth Waitr’s creating in our community. From there Waitr could leverage its capital infusion to continue its exceptional growth, so that it evolves from a company worth hundreds of millions to one worth billions. These kind of wins are crucial for a still sluggish local economy. — Geoff Daily
LUS/NextGEN affair could haunt Robideaux in his 2019 re-election bid
Challengers are already mulling 2019. LUS could be the platform they need.
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9 min read
Chief Aguillard opposes Sheriff Garber’s tax. Lafayette law enforcement is at odds.
Aguillard’s decision caps off an anguished and twisting run-up to Saturday’s vote on the controversial tax. Where once the chief appeared to disagree with his rank and file, he now finds their interests aligned against the sheriff.