Lafayette’s real estate market is ice cold, and it may get worse before it gets better.
The gist: Dozens gathered at a private home in Lafayette’s Quail Hollow neighborhood to get answers from public officials on efforts to relieve flooding in what was one of the hardest hit areas in the floods of August 2016. Begging for projects that would make inches of difference, residents were told there was meaningfully little that could be done in the near term.
Work on a coulee lateral that drains part of the neighborhood has stalled. Two gas lines were discovered by work crews in the last few weeks, according to Public Works drainage coordinator Fred Trahan, pausing cleanup on the ditch that runs behind Cornelius Street, near Comeaux High School. Most of the homes on Cornelius flooded in 2016. Some have flooded again since.
LCG’s drainage project dashboard lists the project as under budget and on schedule to have been finished at the end of June. Residents have been clamoring for the work to be done on the lateral — designated Isaac Verot Coulee Lateral 7 — since 2016. Trahan said in an email to The Current that the project was at one time ahead of schedule, but weather delays and the discovery of the two gas lines interrupted work.
Quail Hollow and its sister neighborhoods aren’t designed to handle recent flooding events. Trahan noted the 40-year-old subdivisions were built long before developers were required to add detention facilities to capture stormwater and reduce runoff. Increasingly intensifying rains are overwhelming a system built for lighter rains. Public Works is considering a diversion project for the bowl-shaped basin, an intervention expected to be costly and long in the making.
“Can we do it? Yes. But it won’t solve the problem,” Trahan said, explaining that the backflows in 25-year storms would still topple into homes.
Cost could prohibit any real solution. Meanwhile, people are trapped in their homes. What interventions have been offered, many by frustrated residents, are unlikely to shave much more than an inch off of rising water levels during a big storm. Several homes have gone on the market since 2016, with no takers. Much of the neighborhood is now part of a 100-year flood zone, meaning at elevated risk, according to FEMA flood maps adopted in 2018. That wasn’t the case when many residents bought their homes years ago.
“One day, it may be cheaper to do buyouts,” Trahan told me.
The coulee behind Cornelius can’t handle the added volume of water shedding into it from widespread development and urbanization, UL geosciences professor Gary Kinsland told me last year. Kinsland’s mother-in-law lives in the neighborhood, and he surveyed the area following the 2016 floods. He’s studied the relationship between urbanization and increased flooding in Lafayette Parish. In Kinsland’s opinion, routine maintenance wouldn’t prevent flooding related to the collision of intensifying rains and proliferating pavement.
Officials promise that efforts are underway. Councilwoman Nanette Cook and State Rep. Stuart Bishop, who represent the neighborhoods at local and state levels, respectively, reiterated steps taken in their arenas of power. Cook reminded residents of a proposition on ballots this fall to divert $8 million in library funds to drainage and other capital projects, and noted she added a $5 million line item to LCG’s budget for spot dredging in the Vermilion River, a project generally believed to have limited, if any, impact on flooding in Quail Hollow. Bishop, for his part, promised to push the state department of transportation to clear out blockage under state bridges and pressure the U.S. Army Corps of Engineers to move on the Vermilion.
“Obviously, we don’t want to leave, because we’re here fighting for our homes,” said Melanie Roy, a Cornelius Drive resident. Roy demanded that nearby retention ponds, which she says maintain a high water level for aesthetic purposes, be lowered ahead of named storms. Trahan conceded it was feasible but cautioned that it may not do much good.
“Can we try it?” Roy replied, exasperated and drawing applause from her fellow residents.
Why this matters: Stormwater management is a quagmire in the parish and a political lightning rod. Simply put, no two drainage problems are alike, and in a time of limited resources, competing concerns are inevitable. In some cases, authorities are throwing pennies at $10 problems. Meanwhile, residents are emotionally drained by years of flood anxiety and what they see as inaction.
The gist: Councilwoman Liz Hebert gave trash contractor Republic Services three weeks to provide documentation about fleet size and routes, age and maintenance history on each of its vehicles and records of street damage and clean-ups from hydraulic fluid and “leaking trash juice.”
More than 13,000 complaints have been logged since 2016 about the company’s service, Hebert said at Tuesday’s City-Parish Council meeting. So far this year, records from LCG show, Republic has been fined $24,200 for missed collections. Fines, which LCG pockets by deducting what it pays Republic monthly, are $25 a day and start on the second day a collection is missed. The 2019 tally is down significantly from last year. For the first six months of 2018, Republic was fined $65,800, ending that year with a total fine of $73,475. Hebert told The Current last week that she gets complaints from residents about poor service every single day.
Hebert asked to restart monthly reporting to the Public Works Department on various metrics, a past practice that for unknown reasons ceased some time ago. Republic officials attended Tuesday’s meeting to address a host of problems, at her request. Republic General Manager Steve Sytsma appeared before the council along with Randy Dixon, who manages municipal relationships for the Arizona-based company’s Southeast market. Dixon flew in from out of state.
The extraordinary number of missed collections in the first quarter 2018 triggered a steeper penalty provision in the contract. According to LCG Environmental Codes Supervisor Russell Bourg, Republic was cited for falling below its average monthly service effectiveness rate of 99.75 percent, which is calculated quarterly per terms spelled out in the contract. Bourg says he prepared the paperwork for a $75,000 fine at that time.
LCG has not yet responded to a public records request about whether the fine was paid.
The contract may be renegotiated. Councilman Kenneth Boudreaux took Hebert’s proposal a step further, calling for contract renegotiation or an agreement with concessions, similar to what Baton Rouge got in recent months after experiencing its own problems with Republic. In response to dissatisfaction in the capital city, the company laid out a plan in May to hire more workers, update its fleet and continue twice-a-week trash collection, The Advocate reported.
“Right now the marriage is just not happy,” Boudreaux said of the contract with LCG, which is the company’s second-largest in the state and runs till 2023. “This second-largest contract needs some love,” the councilman added. Dixon assured Boudreaux the company was open to discussions.
High turnover at the company has left a void for council members and residents, who are often forced to use an out-of-state call center for answers. A number of council members repeated old requests for a local call center to field complaints, citing numerous instances in which information from the call center conflicted with what Republic officials were telling them Tuesday night.
One of the night’s more testy exchanges involved Hebert challenging the company on new cart delivery and replacements for damaged receptacles. Residents who have gone a month or more without a cart were told by Republic employees to use a neighbor’s trash container while they waited, Hebert said. Sytsma, however, insisted that Republic has purchased two truckloads of new carts per month (each with 550 carts) for the past several months at a cost of $60,000 a month.
“So you have carts in stock?” Hebert persisted.
“Ma’am, we run three cart routes every day,” Sytsma said. “I think last month we ran an additional three cart routes.”
When the Republic reps advised Hebert that the call center had given her bad information about cart availability, she shot back: “That information was given from your team to my Public Works team locally, not from a call center,” she said. Councilman Pat Lewis also contradicted Sytsma’s claims, saying he personally visited the company’s office Friday and was told it did not have replacement lids and carts in stock.
When Hebert told the company representative that several residents have sent her videos showing trash and recycling going into the same trucks, Dixon insisted mixing waste streams are not allowed and would result in repercussions for the employees. “If you see that this is happening, we definitely want the video,” Dixon said. A source with knowledge of the company’s operations tells me that multiple cameras on Republic’s trucks would be able to confirm whether this is a persistent or ongoing problem.
LCG Public Works Director Mark Dubroc was the lone LCG voice defending the company, saying it has been responsive to his department and believes it is well-intentioned. He says the company is not in default of the contract, is paying its fines and responding to complaints. “Every business endeavor has its ebbs and flows,” Dubroc said.
“The contract is the contract that we have,” Dubroc added. “If I wrote the contract again today, I might do it a little differently, but then they might not sign it.”
The gist: Recent employment numbers from the state workforce commission show an increase in jobs in the Lafayette area. But those same numbers show continued job losses in Lafayette’s oil and gas industry. It doesn’t appear to have bottomed out yet.
2,400 is the number of jobs added in June 2019. The biggest gainer was Leisure and Hospitality jobs — the service industry, essentially — which added 1,100 jobs. Education and Health Services added 500, the next biggest growth sector.
200 is the number of jobs lost in Mining and Logging, the segment that accounts for the oil industry. Construction took the most losses with a reduction of 300.
Roughly 12,000 mining jobs have been lost since 2014 — a 50% decline. That means Lafayette has lost more than 10,000 oil and gas jobs in the last five years. The oil and gas industry used to directly account for 10.6% of all jobs in Lafayette, but now that total is down to 6.6%.
The national oil and gas industry is growing while Lafayette’s is shrinking. While nationally the industry still hasn’t recovered all the jobs lost during the crash, oil and gas employment nationally has increased every year since 2016. Even though the losses have slowed, Lafayette’s oil and gas industry has shrunk every year since 2014.
Jobs are growing in Lafayette, but employees are making less money. High paying oil and gas jobs are often replaced by lower paying jobs in restaurants, hotels and schools — exactly where recent growth sectors are. Per capita personal income in Lafayette Parish has fallen from approximately $51,000 in 2014 to under $46,000 in 2017. During that same period, per capita personal income in the state rose from $41,811 to $43,660.
Why this matters: Clearly, Lafayette’s oil and gas industry hasn’t hit bottom. Just because the crash has slowed doesn’t mean it’s over. What we’re seeing is further evidence of the establishment of a new normal, not just a downturn based on temporary market conditions.
To dredge or not to dredge: Officials, engineers and advocates debate it while Lafayette residents demand it
The gist: Dredging the Vermilion is becoming a political movement in Lafayette, driven by the trauma of repeat flooding events since the catastrophic no-name floods of August 2016. Studies continue as engineers and public officials debate the efficacy of digging out the bayou.
“Unclogging the Vermilion River is the first step to solving this problem,” said Paul Baker, headmaster of Episcopal School of Acadiana in remarks to the City-Parish Council Tuesday night. Baker’s home along the St. John coulee flooded in 2016 and again during the June 2019 “rain bomb.” He exhorted the council to take action, worrying that officials may shrug off solutions given the magnitude of the problem. “My wife and I live in fear of the rain,” he said, “and that’s not a healthy way to live in South Louisiana.”
Many now credit Dredge the Vermilion activists Harold Schoeffler and Dave Dixon for driving the conversation. Dixon and Schoefller were behind the push to stop pumps north of Lafayette Parish ahead of Tropical Storm Barry, which in part lowered the base level of the bayou when joined by a favorable and powerful north wind. It’s not clear which intervention — man’s or nature’s — did most of the work lowering the river’s level. Regardless, the episode has given the pair a lot of credibility among residents.
Meanwhile, studies and stakeholder meetings continue. The Army Corps of Engineers is studying the Vermilion River before it will commit to dredging the entire bayou through Vermilion Parish. A hydrology and hydraulic study is expected to be completed by December 2019, according to Greg Ellison, an aide to U.S. Rep. Clay Higgins who presented to the council Tuesday.
There is dispute about what impact dredging would have. Some engineers push back against the narrative that lowering the Vermilion would have the impact clamored for by repeated flood victims. Not all flooding in the parish is related to river back flow. Youngsville City Engineer Pam Granger pointed out at a GOP town hall Tuesday night that flooding in the bedroom community is not connected to the Vermilion. Other neighborhoods in Lafayette itself, like Quail Hollow, reportedly would not benefit from river dredging. LCG Public Works Director Mark Dubroc, exasperated, openly questioned whether digging out decades of muddy bottom would do any good.
“All of this conversation is devoid of technical support,” Dubroc said, drawing derisive cackles from the audience. He noted the Corps of Engineers last dredged the river in the mid-90s to restore navigability, not address stormwater management. However, residents along the bayou, including Councilwoman Nanette Cook, claim that dredging effort stopped water from reaching their homes.
Let’s talk detention. Some use of detention/retention — mechanisms of holding stormwater and slowly releasing it into coulees and the river — is expected to be part of whatever strategy is implemented long term. Dubroc said older developments, built before retention was required by local government, are in part responsible for the extra runoff. He said 4,000 to 7,000 acres of retention could be needed to do any good. That’s roughly the size of a square bound by Johnston and Ambassador Caffery, Kaliste Saloom and Pinhook.
Right now, spot dredging is on the table. Pushback from Vermilion Parish and continued studying will delay full dredging. Vermilion Parish officials, also represented in Congress by Higgins’ office, say the move could worsen flooding in the area and cause saltwater to invade the low-lying parish, imperilling seafood commerce. That leaves dredging “hot spots” to be the remaining option within Lafayette Parish. Again, there’s some question whether that approach would deliver the solution desperately wanted by many who live along the bayou.
Ellison said the council could spot dredge now. He relayed conversations with the corps in which officials offered to help LCG get a permit to spot dredge the river. Council members committed to finding the money in the upcoming budget process. Ellison guesstimated that spot dredging could cost $5 million and that LCG could draw the money down out of $1.2 billion in HUD dollars Congressman Higgins helped secure.
Congress has authorized dredging the Vermilion. We reported that last year. That essentially means the money has been allocated but not delivered.
What to watch for: Whether LCG moves forward with an intermediate dredging plan. It’s election season, and political pressure from flooded-over constituents could prevail on local officials to take the step. To be sure, it’s not a sure thing that even spot dredging would make an impact. That would take study. Many residents are tired of studies.
The gist: Councilwoman Liz Hebert wants representatives from Republic Services to answer publicly for what she views as widespread problems plaguing garbage collection throughout the city and unincorporated parts of the parish. She’s requested an update from the garbage contractor at Tuesday’s council meeting and is looking into whether the contract can be canceled.
“They are not delivering what they promised,” Hebert tells me, noting that some of her District 8 constituents have gone two to three weeks without garbage pickups. The councilwoman says she gets complaints from residents “every single day. I can’t tell you the last day I didn’t get a call or email.”
Hebert says a bigger issue for her district is that roughly half of the 26,000 residents she represents are scheduled for Friday pickups, and delays often mean they wait an entire weekend with garbage sitting outside. “It’s ridiculous,” she says.
District 6 Councilman Bruce Conque suggests missed Monday routes in his district could create problems throughout the week when Republic has to double up. “We have had nothing but complaints,” says Conque, who estimates he fields an average of one to two complaints a week but says LCG’s staff sometimes handles issues without involving him, noting that the pace of grumblings did accelerate after Tropical Storm Barry due to late storm debris collections.
It’s not just missed collections. Both council members say hydraulic fluid from Republic trucks and “leaking trash juice” are also ongoing issues (the contract allows LCG to inspect the trucks, but it’s not clear whether that’s happening), and Hebert says she’s been sent videos showing the company mixing recycling with regular trash.
The chemicals the trucks deposit on streets can damage the asphalt, and Hebert notes at least one recent instance where Republic was forced to pay for a private street it damaged. While it’s LCG itself that collects money when the company is delinquent, charging Republic $25 a day for missed pickups (fines start on the second day), the trash contractor has even begun reimbursing residents, according to Hebert. “I have been making such a big deal about it, and the neighbors have been making such a big deal that they have gotten reimbursement,” she says.
Lafayette isn’t alone in its ongoing complaints about Republic, as Baton Rouge is also struggling with spotty service. In response to that dissatisfaction, the company last month laid out a plan to hire more workers, update its fleet and continue twice-a-week trash collection, The Advocate reported.
Buyer’s remorse. Councilwoman Hebert has it. As a new councilwoman in 2016, she supported an amendment to the no-bid contract with Republic, a five-year extension to 2023 that at the time was worth $73.5 million. As part of those negotiations on a contract originally signed in 2008, Republic offered to take over curbside recycling for the current price the Recycling Foundation was charging — $2.40 per resident — on a different contract that was about to expire. The lowest bid for curbside recycling collected under the Durel administration was $5.17 a month. It was a big selling point, both council members recall.
“Yes, I supported it back then,” Hebert says, “but knowing what I know now, that’s why I’m fighting to get the contract canceled.”
It still isn’t crystal clear the extension was legal. After the AG’s office opined in March 2018 that the extension violated state law, citing a 10-year limit on such non-exclusive franchise contracts, LCG’s attorneys in May 2018 filed a petition for declaratory judgment, asking the 15th Judicial Court to weigh in on the legality of the extension. In January, without ever scheduling a hearing, District Judge Ed Broussard signed off on a joint motion for consent judgment filed by LCG and Republic — in essence agreeing with the two parties’ own assertion that the contract was not subject to the time limitations the AG cited, court records show.
Hebert tells me she plans to ask LCG’s legal department to research whether Republic is in violation of the terms of its contract. According to LCG Environmental Codes Supervisor Russell Bourg, the Arizona-based company has only once been cited for falling below its average monthly service effectiveness rate of 99.75 percent, which is calculated quarterly per terms spelled out in the contract. Republic was fined $75,000 during last year’s first quarter, in addition to other fines it racked up — blaming problems in part on employees calling in with the “Super Bowl flu.”
“I prepared the paperwork for [the $75,000 fine]; I don’t know if it’s been collected,” Bourg tells me, noting he turned the paperwork over to the city-parish attorney’s office. Bourg referred questions about daily fines assessed to Republic in 2018 and 2019 to Ariel Fischer in the mayor’s office. Fischer did not immediately respond to a request for those tallies.
It’s not hard to make the case that Lafayette is paying too much and getting too little. Should Hebert get her way, there are some indications LCG could get a better price by putting the contract out for bid.
Residents in the city and unincorporated areas are paying $30.94 a month, a price that includes once-a-week trash and yard pickup ($24.37), curbside recycling ($2.63) and environmental services ($3.94). The cost of track pickup has doubled since 2000, when the city had a twice-a-week pickups and the parish once a week.
Residents in the city of Carencro, which put its curbside garbage and recycling contract out for bid last year, pay Houma-based Pelican Waste & Debris $19.30, almost $7 less than they were paying before.
Sources with knowledge of Republic’s Lafayette office say the company has been plagued by an extraordinary number of turnovers in recent months, and they believe that is at least partially to blame for the inconsistent service.
Republic Services General Manager Steve Sytsma, who runs the local operations, did not respond to an email and text message seeking comment for this story.
The gist: On Thursday, the Federal Communications Commission voted to change the way franchise fees work, threatening to eliminate up to two-thirds of AOC Community Media’s annual funding.
Franchise fees are what cable companies pay to use the public’s rights of way. Typically cable companies pay 5% of their gross cable revenue to local franchising authorities.
Franchise fees account for about two-thirds of the public access media organization’s annual budget, which is a hair under $900,000. The other third comes primarily from contracts it has with LCG to record and webcast council meetings and other events.
Changes would threaten that revenue for AOC. The changes will allow cable companies to count a variety of in-kind contributions against that 5% franchise fee, rather than pay the entire fee in cash. Contributions could include courtesy equipment, network capacity, channels, grants, sponsorships, specially created programming, local retail facilities, and free advertising, according to the The Internet and Television Association, a trade organization that represents cable companies and supports the new rules.
Full disclosure: AOC Community serves as The Current’s fiscal sponsor for tax-exempt contributions.
The budgets of the city and parish of Lafayette could also take a haircut. Only one-third of the franchise fee revenue goes to AOC, with the rest split between the city and parish general funds. In other words, LCG could lose $1.8 million in general fund revenues.
Th next step will likely be the courts. Local public access channels and city officials have already started to band together in opposition, with more than 200 mayors voting in opposition of these new rules. Assuming it passes, it will almost certainly be challenged in court.
If this rule survives legal challenge, AOC could be significantly diminished. According to AOC Executive Director Ed Bowie, some version of his organization should be able to continue operations, but it will obviously have to be at a reduced scale if it loses two-thirds of its revenue.
The legal process could take a year or two to work through the courts. So even if this rule passes the FCC, it should be a while before its impacts are felt.
The general assumption has been that the parish is broke but the city is doing fine. When you dig into the latest budget, a more troubling reality emerges.
The gist: Flattening energy demand has taken a toll on LUS sales. While electric revenues are growing, they are falling short of budgeted projections each year. For the upcoming fiscal year, LUS cut $10 million from last year’s projected revenue, a belt-tightening figure when compared to historic estimates.
Electrical demand has been sluggish. And that accounts for most of the diminished outlook. In the proposed 2019/2020 budget, LUS projects $101 million in base rate revenue — retail sales, excluding fuel — on $253 million in revenues for the entire utilities system, including wastewater and water services. This year’s adopted budget, reflecting fiscal year 2019, projected $108 million in electric sales on $241 million in total utilities operating revenue.
LUS revenues missed on budget projections each of the last three years. While electric sales have increased year-over-year, they’ve fallen as much as $10 million short of estimated revenues in each of the last three budgets. To an extent, next year’s diminished projections hew closer to the system’s actual performance but still reflect an expectation of growth, albeit slower:
|Year||Total Projected||Total Actual||Elec. Sales Proj.||Elec. Sales Act.|
|2016||$240 million||$220 million||$92 million||$84 million|
|2017||$244 million||$225 million||$97 million||$87 million|
|2018||$246 million||$232 million||$107 million||$95 million|
|2019*||$253 million||n/a||$108 million||n/a|
|2020*||$241 million||n/a||$101 million||n/a|
*Only projected revenues are available.
Interim LUS Director Jeff Stewart says the trend is concerning, but notes the system is still adding customers. But these new customers, he says, are using less energy per person. That means diminishing returns as LUS grows its customer base through city annexations, franchise agreements with Broussard and Youngsville, and an acquisition deal with Slemco.
“We’re adding customers, but they’re more efficient customers,” Stewart tells me.
LUS raised electric rates in 2016. A 9% total increase was phased in over the last few years to pay for a $240 million bond package that included $120 million for a new natural gas power generator. The plan was scuttled after public pushback, and LUS reduced its bond request to $70 million, throwing out plans for the new generator. The rate increases have remained in place. LUS moved forward with work on new wastewater treatment facilities, sewer line upgrades in the urban core, and has submitted work orders to outfit 18,000 city lights with LEDs, a $7 million project.
Energy efficient appliances and consumer habits have taken a bite out of power company revenues nationwide. The U.S. Energy Information Agency forecasts that trend to continue, projecting flattened electricity demand decades into the foreseeable future
If you can’t sell more of it, what do you do? Stewart tells me LUS is exploring EV charging as a potential revenue stream. Air conditioners, he says, were the 20th century innovation that drove electric revenues. Some 10 million electric vehicles are expected to hit American streets by 2025, offering one consumer sector that could increase electric demand and, in turn, drive sales for power companies.
Why this matters: LUS has major upgrades in the not-so-distant future. Remember that whole business with Jim Bernhard? Paying for those upgrades was a big part of his sales pitch. Most of Lafayette’s power capacity comes from a coal plant, which is routinely on the cusp of regulatory shutdown, depending on who occupies the White House. (Most of the time, LUS buys the power you use in your house from a grid market.) Outside of the looming need for investing in power generation, the system is a capital-intensive enterprise. Historically, the electric system has subsidized water and wastewater operation. A budget crunch on the electric side presents a major challenge for the system’s long-term financial health and could even put its contribution to the city’s budget, roughly $23 million every year, at risk.
The gist: In his outgoing budget, Mayor-President Joel Robideaux proposes moving $7.5 million in current bond dollars to pay for drainage.
The AG was never asked to look into the council’s discussions and won’t take legal action, thus the impact of the potential violation remains thoroughly political.
LUS Fiber has recently been accused of receiving millions in illegal subsidies from LUS. This is a complex issue with a lot at stake. An explainer is in order.