In the next couple of years, LUS has to make a series of huge decisions. But the issues that matter are getting drowned out by the political theater that’s been drummed up around potentially illegal payments from LUS to LUS Fiber. Lafayette can’t afford to get distracted.
The gist: Marcus Bruno, former Mayor-President Joel Robideaux’s embattled aide, has landed a job with the state’s division of Alcohol and Tobacco Control.
The gist: From the jump, the new mayor-president is moving on his campaign promises. He’s got big plans to streamline consolidated government in the face of mounting financial pressure on both the city and parish budgets. Now sworn in, along with two brand new councils, Josh Guillory promises he can do more with less.
“We face a host of challenging conversations, and we are ready,” Guillory said Monday in his inauguration remarks. He framed 2020 as a pivotal year for Lafayette Parish, saying its “future as a family-friendly, business-friendly place hangs in the balance.”
It all starts with restructuring the Public Works Department. He proposed splitting transportation and drainage off from the agency into two separate departments, each with appointed directors of their own. Guillory argues that siloing the divisions will force focus on common sore spots for the public: traffic and stormwater management. Exactly how the reorganization will work in practice remains unclear, particularly when it comes to areas where the departments would overlap. Still, the proposal moved ahead and will be up for final adoption later this month.
“I haven’t had time to study the details on how this might play out,” interim Public Works Director Chad Nepveaux, appointed this week, said in responding to questions from newly seated council members. The plan eliminates four currently vacant positions — two mechanic and two environmental inspectors — and would zero out the associate director position currently held by Terry Cordick, who will retire later this year. Guillory said the savings realized from removing those positions from the budget would free up, at minimum, $67,000 for other purposes despite the added expense of new directors. Here are the proposed new salaries:
- Transportation Director: $120,000
- Drainage Director: $108,000
- Public Works Director: $125,000
It does appear that Public Works could benefit from reorganization. Whether this particular proposal addresses the right problems within public works – including millions in infrastructure maintenance backlogs for drainage, roads and public buildings — is a separate question. One criticism of the proposal is that the most pressing issue facing the department is a lack of resources and manpower to address regular maintenance. Another is that the department is already top heavy and suffers from poor cooperation among its divisions.
“If the system was what it should be, there wouldn’t be much of an outcry,” Pam Granger, Youngsville’s city engineer, tells The Current. She sits on a transition committee convened to review Public Works and recommend changes. That committee did not produce or review the proposal introduced Tuesday night. Councilwoman Liz Hebert tells The Current she supports the administration’s proposal, but adds that she believes constituents would like to see more “boots on the ground” to shave delays on service requests; Guillory insists that the restructuring will not worsen service.
Work has also begun on reviewing the Unified Development Code. On Monday, Guillory doubled down on his campaign promise to “repeal and replace” the UDC — which centralizes a number of zoning and building regulations into one place — with something more business friendly, promising to loosen regulations and tinker with processes critics say have slowed down permitting and increased costs for development. A 40-person committee, which includes many vocal critics of the UDC alongside campaign supporters of former Planning Director Carlee Alm-LaBar, Guillory’s opponent during the election, met in late December to start work. Alm-LaBar played a key role in developing the UDC while serving under the administration of Joey Durel. How much of the existing regulations remain will determine whether the UDC is truly replaced or merely tweaked.
Guillory has also promised to pursue an independent audit of LUS. Linking the effort to the internal investigation carried out by Mayor-President Joel Robideaux in the latter half of 2019, Guillory committed to further vetting LUS’s financial practices. Robideaux’s inquiry surfaced accusations that LUS made millions in improper payments to LUS Fiber in an attempt to prop up the municipal telecom. Just before leaving office, Robideaux suggested Fiber’s business model isn’t working. The results of the inquiry are now in the hands of the Public Service Commission, which has limited regulatory oversight over Fiber.
Lowell Duhon and Kayla Miles will remain interim directors of LUS and LUS Fiber. Robideaux appointed Duhon, then his chief administrative officer, and Miles to those positions to carry out the inquiry, at one time inaccurately claiming the leadership shakeup was linked to requests by the PSC. Questions have been raised about Duhon’s and Miles’s qualifications, along with the pay increases that accompanied the appointments. Robideaux’s rebutted concerns of LUS’s consulting engineer, retained as a bond-holder requirement, about the appointments by arguing that they were temporary and meant only for the purposes of the review. The review wrapped with the release of his report in December.
What to watch for: How the new administration works with the new councils. Robideaux was widely criticized for poor communication of his initiatives, which ultimately soured his relationship with the council and other parish elected officials.
The gist: Nearly wrapped up after three months of biweekly meetings (the every other week kind), the committee charged with smoothing Lafayette’s transition to government by two councils wrestled with the essence of consolidation: cost allocation between city and parish funds for common services. Members lamented political tension to come.
Hold up. What’s cost allocation? Glad you asked. It’s basically how LCG splits the check between city and parish money. LCG has one public works department, one planning department, one finance department, etc. But the law requires that city funds go to city services and parish funds to parish services. About two dozen accounting methods are used to determine how much each general fund — a pool of unrestricted dollars — should pony up to run the government.
“People’s salaries are charged all over the place,” LCG Chief Financial Officer Lorrie Toups told the committee Tuesday. That about sums up the challenge. Cutting or adding cost from either budget — i.e. by either council — isn’t necessarily straightforward.
The big elephant. That’s what Tax Assessor Conrad Comeaux called cost allocation. Essentially, observers expect that unlocking allocation is a pandora’s box for dysfunction in consolidated government. Both city and parish funds are constrained now, and adjusting allocations between two bodies could be the theater of political conflict going forward.
City taxpayers bear most of the cost of consolidation. Around 80% of shared costs are paid for by the city general fund. Since Mayor-President Joel Robideaux took office, the city’s share has increased $20 million because of changes in allocation. The parish share fell $9 million.
“It was a noble gesture to create this new form of government,” District Attorney Keith Stutes said in closing remarks. Stutes probed whether the city and parish general funds could be mixed into one account but backed away from the recommendation, instead pleading for the incoming administration and councils to find common ground. “I have to say it’s disconcerting to see that it’s devolved into a combat,” he said of city-parish budget tension. In 2016, Stutes sued LCG for not adequately funding his office, a cost on parish government mandated by the state, but later dropped it.
The committee will produce a memo of questions and recommendations. The committee meetings have often been an education in existing problems in consolidation. The transition kicked off late in the year, convened in August by Robideaux after a protracted legal battle left the charter changes in limbo. It appears the new councils will likely need their own education on how to move forward, and will do so under intensifying financial pressure. The final committee meeting is Dec. 18.
The gist: After what his office called “repeated attempts to secure critical funding for daily operations,” Sheriff Mark Garber confirmed Tuesday that he is cutting 42 mostly corrections jobs from his workforce of 748. A press release announcing the reduction in personnel included more cuts to diversion programs started and expanded under his predecessor and long held up as successful models of prison reform and reintegration.
The gist: Challenged by the council to be more transparent, Mayor-President Joel Robideaux delivered to the Lafayette Public Utilities Authority potentially damaging comments gathered by the administration during its investigation of payments by LUS to LUS Fiber.
Get caught up, quickly. LUS and LUS Fiber have been under fire for a pair of potential violations of a state law that prohibits government dollars from propping up the municipal telecom. The most recent of the two, $8 million paid over eight years for a power outage monitoring system, was self-reported by Robideaux in July. In a press release distributed Oct. 11, Robideaux announced he was removing LUS and Fiber’s interim directors, claiming the swap was made to “facilitate an internal review on behalf of the Public Service Commission,” and connected the review to the power outage monitoring payments. The PSC denies any involvement and has distanced itself from Robideaux’s attempts to link his efforts to its limited oversight. Robideaux named his chief administrative officer, Lowell Duhon, to oversee LUS, and Kayla Miles Brooks, Fiber’s business administrator, as LUS Fiber’s interim director, replacing Jeff Stewart and Teles Fremin, respectively. LUS’s consulting engineer has deemed Duhon and Brooks unqualified for the posts.
Once closely held and secretive, the review was center stage at a special joint meeting of the council and the LPUA. Lafayette Public Utilities Authority Chairman Bruce Conque requested the meeting after a pointedly challenging email to Robideaux from Councilman Jay Castille, a frequent critic. “I think everyone agrees that if there was a violation of the law, that would be a very serious allegation,” Castille wrote the mayor on Nov. 13. “I think all anyone wants is a ‘comprehensive, complete and honest analysis.’ But the way you have handled this entire matter makes many doubt your sincerity.”
Castille, who declined to comment for this story, had also called the mayor to task for being untruthful about the Public Service Commission’s role in the ongoing review; Robideaux has said, and repeated Tuesday, that Public Service Commissioner Craig Greene asked for a wider inquiry of the relationships between LUS, LCG and Fiber. Greene’s office denies it played any role. The Lafayette Public Utilities Authority, a subcommittee of the council, regulates LUS, and the PSC has limited oversight over LUS and Fiber, ensuring they comply with provisions of the Local Government Fair Competition Act.
Robideaux’s presentation came on the heels of a press conference called abruptly last week by former LUS/LUS Fiber Director Terry Huval, in which Huval defended the power outage monitoring system’s pricing and usefulness.
In his remarks, Robideaux responded to criticism with what may be the most damaging information to date. He released emails and anonymous comments gathered in interviews recorded under attorney-client privilege during the investigation into the power outage payments to LUS Fiber. The complete context of the comments isn’t clear, and Robideaux seemed to attempt to attribute the statements to eight people interviewed, including LUS’s and Fiber’s former interim directors, an LCG accountant, an auditor and two attorneys who work on LUS matters. (You can view his full presentation and comments here.)
“In my opinion, I’ve always thought it was kind of a stretch … as someone who works in the industry, that’s why we are eliminating it, to be honest with you,” said one interviewee. And another: “We need to let it fall off the books because we’re not seeing the justification.”
Huval continues to stand by the POMS decision. “Last week, I explained how we incorporated the beneficial use of technology on the LUS system that resulted in significantly reduced electric outage durations, while still maintaining the lowest rates in the state,” Huval wrote in response to a request for comment. “During the implementation of such technological upgrades, I did not receive any indication by LUS staff or consultants that any of these initiatives were not cost effective. LUS customers are receiving the best service ever because of initiatives such as these.” (View Huval’s presentation here.)
Why this matters: Robideaux presented what may be the most compelling evidence to date that some LUS insiders suspected the power outage monitoring payments were a way to prop the fiber division up at a time it desperately needed cash flow. Should a new PSC audit determine the service was mispriced or unnecessary, the money may have to be paid back to LUS with interest, delivering a financial blow that could jeopardize the future of LUS Fiber. Robideaux is expected to give the LPUA an update by mid-December and complete the review by the end of the year.
The gist: Outgoing officials want to go out with a bang. Tuesday’s council meeting, one of the last of the year, is chockablock with major initiatives. On the table: the LUS inquiry, more pay raises and six new taxing districts, one of which would finance developing a river walk on the Vermilion.
Robideaux opens the books on his LUS inquiry
At a special meeting of the Lafayette Public Utilities Authority, Mayor-President Joel Robideaux will unpack the findings of his ongoing inquiry into alleged improper payments at LUS Fiber. Robideaux intimated in an email last week that he would unseal interviews with LUS and Fiber staffers conducted by LCG lawyers. LPUA meetings are held at 4:30 p.m inside city hall.
Get caught up, quickly. LUS and LUS Fiber have been under fire for a pair of potential violations of a state law that prohibits government dollars from propping up the municipal telecom. The most recent of the two, $8 million paid over eight years for a power outage monitoring system, was self-reported by Robideaux in July. In October, Robideaux announced he was removing LUS and Fiber’s interim directors, claiming the swap was made to “facilitate an internal review on behalf of the Public Service Commission,” and connected the review to the power outage monitoring payments. The PSC denies any involvement and has distanced itself from Robideaux’s attempts to link his efforts to its limited oversight. The controversy spurred terse exchanges between Robideaux and Councilman Jay Castille.
$3.7 million in new pay raises up for final adoption
Earlier this month, the council approved $3.8 million in new raises for city police; now it’s got three more raises to consider:
- $2.6 million for Lafayette Fire Department
- $1.1 million for all other LCG employees
- $137,000 for the city marshal’s office
If all of these raises get approved and these increases aren’t offset elsewhere in the budget, the city’s formerly flush general fund will be depleted in very short order. A proposal to eliminate currently vacant positions from the budget, in a bid to free up dollars for the pay raises, is also up for final adoption.
Six new taxing districts proposed, including one for a riverwalk
Robideaux has proposed setting up six new economic development districts that would levy 1% sales and 2% hotel occupancy taxes in each tax increment financing district to pay for infrastructure meant to spur development. The ordinances include cooperative endeavor agreements with various public and private partners. One proposal would create a TIF district to finance the development of a riverwalk promenade along the Vermilion near the old Trappey’s canning plant. The measures are up for introduction and would not be up for final vote until December. Here’s the list:
- Downtown Lafayette Economic Development District
CEA with Downtown Development Authority
- University Gateway Economic Development District
CEA with Townfolk Inc., and Oasis Community Coterie
- Trappey Economic Development District
CEA with Trappey Riverfront Development LLC
- Northway Economic Development District
CEA with Pride Opportunity Development Developers
- Holy Rosary Institute Economic Development District
CEA with Holy Rosary Redevelopment
- Acadiana Mall Economic Development District
No partner identified
EDDs are special taxing districts where additional taxes or fees are collected, and that money is then dedicated to projects benefiting those districts.
Girard Park Drive rezoning for new apartments
The rezoning will allow for the construction of a 140-unit apartment and office complex by Lafayette General. The rezoning has already received significant pushback from nearby neighbors who say a development of this size will hurt the character of their neighborhood. The zoning commission voted against recommending the changes.
The gist: Long considered the goose that laid the golden egg, Lafayette Utilities System, along with its sister entity, LUS Fiber, is now mired in political controversy heading into Saturday’s mayoral runoff between Carlee Alm-LaBar and Josh Guillory. Mayor-President Joel Robideaux has floated accusations of unlawful transactions between the systems, initiated leadership changes and launched an internal investigation, all of which have drawn suspicions of political motives.
The City-Parish Council’s decision to authorize $3.8 million in pay raises for the Lafayette Police Department was unanimous but not without complication. While the move is a victory for police, who said the new money was needed to stop a crisis in officer turnover, the added costs have put a spotlight on a weakening of the city‘s finances. And there […]
The gist: The public innovation trust created by the mayor-president is targeting Downtown and the Oil Center as potential anchor points for a new innovation district. Trustees discussed options last week at the body’s fifth and final meeting of the year.
Get caught up, quickly. Mayor-President Joel Robideaux spearheaded the creation of the parishwide Lafayette Public Innovation Alliance last year. Its focus is growing Lafayette’s innovation economy. There is still no clear plan for how to fund these activities or execute upon these visions.
Uh. What’s an innovation district? Innovation districts are a national trend. The idea is to find the part of your city with the highest potential for nurturing startups, designate it an innovation district, and then try to stack as many economic incentives as you can to give companies that locate there the best opportunity to succeed. Examples include cities like Chattanooga, Tenn., and Cambridge, Mass.
Robideaux wants LPIA to lead the process of establishing this innovation district. He worked with LEDA staff to conduct an initial analysis of where an innovation district should be located in the city of Lafayette. The results of this analysis, presented Wednesday, suggested the best locations would be Downtown or the Oil Center.
But designating an innovation district will require council approval. Today that means the City-Parish Council, but come January Robideaux believes it will mean the City Council. One added wrinkle is that LPIA was set up with the parish as its beneficiary, so the Parish Council has authority over nominating and removing LPIA’s trustees.
Details of what Lafayette’s innovation district will ultimately mean “still has to be determined,” according to Robideaux. Trustees Bruce Greenstein, Chris Meaux and Ramesh Kolluru discussed the need to conduct some comparative analysis and economic modeling and to garner feedback from companies that might move here to better understand what incentives should be offered in this innovation district.
Robideaux and his political consultant Joe Castille have been pitching major companies. The United Bank of Switzerland, KPMG, Deloitte and Medici Ventures were some of the companies that Castille, also a campaign consultant to mayor-president candidate Josh Guillory and the local Republican Party, mentioned in his remarks to trustees.
They’ve been pitching a vision for transforming Lafayette into a techno-utopia. That vision could involve everything from setting up an e-residency program so entrepreneurs can claim residency here and start businesses in Lafayette without actually moving here to making LCG a testbed for digital ledger technologies that are trying to improve the delivery of public services, to LPIA even issuing its own cryptocurrency.
Robideaux plans to start meeting with interested VC funds to better understand their needs. Castille believes there are hundreds of billions of dollars in investment capital available to be deployed into these types of technologies. He suggested that some of the companies he’s met with with have already indicated they want to establish a presence in Lafayette, if LPIA and LCG come together to make this vision a reality.
What to watch for: Where the innovation district ultimately lands and what role the trust will play under a new administration. Robideaux, who appointed himself chair, will stay on despite leaving office.
The gist: Changes to LUS and LUS Fiber leadership, announced suddenly the night before October’s primary, were said by the Robideaux administration to be tied to an ongoing internal review of transactions between the systems that was requested by the Louisiana Public Service Commission. PSC representatives, however, contradict that assertion — saying no such internal review was asked for, and the leadership change is not related to any request from the commission.
Get caught up, quickly. LUS and its sister company LUS Fiber have been under fire for a pair of potential violations of a state law that prohibits government dollars from propping up the municipal telecom. The most recent of the two, $8 million paid over eight years for a power outage monitoring system, was self-reported by Mayor-President Joel Robideaux in July. In a press release distributed Oct. 11, Robideaux announced he was removing LUS and Fiber’s interim directors, claiming the swap was made to “facilitate an internal review on behalf of the Public Service Commission” and linked the review to the power outage monitoring payments. Robideaux named his chief administrative officer, Lowell Duhon, to oversee LUS, and Kayla Miles, Fiber’s business administrator, as LUS Fiber’s interim director, replacing Jeff Stewart and Teles Fremin, respectively.
“Subsequent to the self-reports, the PSC requested that a more in-depth and internally unbiased review of all LUS Fiber inter-agency transactions be performed, necessitating the staff changes,” Robideaux wrote in his October press release, suggesting that the PSC itself had requested the leadership changes or supported the decision.
There is no written record of such requests from the PSC. Requests for management changes “would absolutely be in writing,” commission spokesman Colby Cook says. “We rarely make those kinds of recommendations. It’s a financial audit.”
PSC Executive Secretary Brandon Frey confirms the commission has not asked for an internal review of inter-agency transactions. “There is nothing pending on anything like that,” he says.
To date, the PSC has investigated only one self-reported violation from 2018. Robideaux’s July letter concerning the power outage monitoring system triggered no new review or request from the PSC, according to PSC staff. The last formal correspondence between the administration and the PSC was a June audit report concerning the 2018 discovery of payments from LUS to Fiber for services to sewer lift stations and some electric system components that were never connected. After a comprehensive review of inter-system transactions, the PSC found that besides the $1.7 million in sewer and electric payments paid out over several years, which Fiber reimbursed, the system was in compliance with state law and PSC rules, according to the report.
The June report raised concerns about having a single director run both Fiber and LUS. Longtime Director Terry Huval ran both LUS and LUS Fiber, an arrangement PSC staff wrote “may have weakened the strength of internal controls.” That concern was moot by the time the audit was concluded, as two different interim directors were already in place by the end of 2018.
Robideaux took widespread criticism for a bid to privatize management of LUS. The deal, first revealed by The Current in the spring of 2018, would have sold management rights to private equity firm Bernhard Capital Partners and at one time potentially included Fiber. Huval retired early from a previously announced decision to step down amid the controversy. The episode pitted Huval against his former boss, as the retired director publicly opposed the Bernhard deal. Later that fall, the City-Parish Council and the mayor-president agreed to divide LUS and Fiber into separate divisions. Robideaux appointed Stewart and Fremin to their interim posts, which they held without incident until October’s shakeup.
The self-reports have figured in political campaign materials. The Lafayette Parish Republican Executive Committee, whose Facebook page is run by Robideaux’s political consultant Joe Castille, used these transactions as a wedge issue against Councilman Bruce Conque, who lost his re-election bid to Andy Naquin, and mayor-president candidate Carlee Alm-LaBar.
(Disclosure: Alm-LaBar gave seed money to The Current in 2018; view our list of donors here.)
The administration has yet to officially respond to the June report from the PSC. Within a month of receiving the June audit, however, Robideaux claimed to have found the second potential violation of the act and said he hand-delivered a letter outlining those findings to the PSC, writing to the PSC that LUS may have made illegal payments totaling $8 million to LUS Fiber over an eight-year period. He actually hand-delivered the letter to Public Service Commissioner Craig Greene, when he visited the commissioner to discuss the June report.
“[Commissioner Greene] hasn’t had any more conversations other than when Mayor Robideaux had given us the letter, and we said we’ll get this to our staff. We gave no formal recommendation as to what they should do with [it],” says David Zito, Greene’s chief of staff. “None of the commissioners have approached us, and we have not approached any of the other commissioners about it.”
The legality of cross-subsidization between LUS and Fiber is regularly tested in annual attest audits, and interagency transactions are run through LCG’s finance department. In his letter, Robideaux, an accountant, took issue with the accounting method used to price the cost of power outage monitoring system, saying the approach likely violated state law. An audit conducted by LUS Fiber’s independent auditors in 2012 and a PSC audit for 2011 and 2012 did not take issue with the payment computations, which were based on the annual estimated savings from power outages. That means numerous oversight mechanisms, including Robideaux’s own administration, would have failed to detect any problems.
Robideaux has not asked the PSC to audit that issue, yet he references it as one of two self-reported findings to justify the leadership changes.
“We are committed to providing the most complete and unbiased report possible to the PSC, and the need for fresh sets of eyes is what prompted the naming of new interim directors at LUS and LUS Fiber,” LCG spokeswoman Cydra Wingerter writes in an emailed response to questions about the management changes sent this week. “The outcome of this in-depth, internal review will be formally provided to the PSC, and it is expected that a decision will be made as to whether the findings will be included in the initial self-report or taken up separately.”
Robideaux told commissioners in the July letter that Fiber’s annual attest audit began in May 2019 and would be filed with the commission by August. As of Tuesday, the attest audit had not been turned over to the PSC, its records show.
“There’s nothing pending at the commission involving the July letter,” says the PSC’s Frey. “I don’t think there’s been any request from them to open up an audit.”