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News + Notes

Special taxing districts for Downtown, Northside, Acadiana Mall and more move forward

The gist: Six new economic development districts passed introduction Tuesday by the City-Parish Council, in a rush of legislation on the council’s waning agenda for the year. The districts would levy new sales and hotel taxes to make improvements advocates say would spark economic activity in areas that need it. A vote on final adoption is set in December. 

5 min read

Here are the six districts: Downtown, University Gateway, Trappey Riverfront Development along the Vermilion River, Northway District anchored by Northgate Mall, Holy Rosary Institute and the Acadiana Mall.  

Taxes would be confined to district boundaries. The districts propose different tax rates and sunsets — varying between 1% and 2% sales and 1% and 2% hotel occupancy — but follow more or less the same structure. Council members — for the time being, from the City-Parish Council — will serve as each district’s governors, with the power to levy taxes, and will enter a cooperative endeavor agreement with private or public entities and the city of Lafayette. 

Half of the districts are on the northside. The area has long been in decline. Advocates argue consolidated government has not prioritized infrastructure and economic development needs on that side of town. Proponents view the districts as essential tools for bootstrapping prosperity. Rehabbing and redeveloping blighted property, streetscaping and land acquisition are on all three northside district lists. The Holy Rosary district prioritizes repairs of the historic school itself, construction of an African-American heritage museum and building a medical clinic. 

“We know we need economic development on the Northside,” said Ravis Martinez, part of a private development linked to the Northgate Mall district, in remarks Tuesday night. “When are we going to invest on the Northside of Lafayette? When are we going to take a hard look at ourselves, a hard look at the big box facilities and stores moving out? What are we going to do for the Northside of town?”  

Downtown advocates say they need the money. A lack of sewer capacity Downtown has choked the district’s ability to attract residential development. LUS rolled out a multimillion dollar sewer infrastructure upgrade intended to address the problem, but it won’t be complete for several years. Anita Begnaud, CEO of the Downtown Development Authority, tells The Current the district will give Downtown some independence in getting basic and necessary infrastructure in place.

“People want to develop here. The reality is nobody can get a bank to give them $1 million upfront to build a lift station,” Begnaud says. “Something’s got to be done to lift that hurdle.” 

The districts’ boundaries exclude registered voters. This is a common practice in drafting economic development districts. Without registered voters in the districts, the governing authority can levy taxes without a general election that would otherwise be required to be held for the voters within the districts. In Downtown’s case, drawing the district this way makes for a patchwork map that excludes addresses with registered voters associated. In some cases, people use commercial properties as their registered address, which then excludes those businesses from the district. 

“Almost every EDD is created on a greenfield site where there are not registered voters,” Begnaud says.

Critics take issue with the bundling of several districts at the tail end of an outgoing government. On top of the question of timing, there has been fierce ideological opposition to this financing approach, particularly among staunch conservatives who view the mechanism as a form of crony capitalism and a distortion of the free market. 

“This is all new in Lafayette, and it’s moving awfully fast,” said Councilman William Theriot, one of only two votes against establishing the districts, joined by fellow conservative council member Jared Bellard. Bellard and Theriot have both consistently opposed the financing strategy — often broadly referred to as tax increment financing districts or TIFs. Councilwoman Liz Hebert moved to defer the batch of ordinances carrying the districts until next year but was voted down by advocates urging immediate action. 

Lafayette has experimented with economic development districts before. The Target-anchored shopping center on Louisiana Avenue was built using a similar financing strategy. Proponents touted the development’s success as a proof of concept Tuesday night, arguing it should be put to good use within Lafayette’s urban core. 

What’s next? Should the districts pass final adoption in December, their governing boards — effectively the members of the City-Parish Council and, later, the City Council — would have to approve levying the proposed taxes. That means Dec. 17 isn’t necessarily the final stop. Council members could create the districts and approve the CEAs but punt levying the taxes to the City Council. Based on the conversation Tuesday, there was little appetite for waiting.

News + Notes

Outgoing council approves pay raises, digging a deeper hole for the next

The gist: The City-Parish Council approved pay raises for the fire department, public employees, and the marshal’s office Tuesday. In total, these raises increase annual expenses for the city general fund by $3.7 million and the parish general fund by another $60,000. Without offsetting revenue gains or cuts to expenses, both the city and parish general funds are projected to go broke in the next few years.

3 min read

Get caught up quickly: Earlier this month the council approved $3.8 million in raises for the Lafayette Police Department. Combined with funds approved Tuesday for city employees, the city general fund is projected to have to tap into more than $18 million of its $45 million fund balance over the next fiscal year. If nothing else changes, that puts the city general fund on track to go broke by 2023, according to numbers provided by LCG Chief Financial Officer Lorrie Toups. Parish general expenses will only increase $60,000, but that will reduce its projected fund balance by 60% and put it in the red by 2021.

No one questioned that these raises are warranted. While none of the votes to approve these raises were unanimous, not a single member of the public or council or the administration argued against the merits of giving them. Interim City Marshal C. Michael Hill went so far as to suggest that the pay increases for his deputies weren’t even raises. That’s because they hadn’t received pay increases in four years, yet their costs for expenses like health insurance premiums had gone up. So that means their take home pay has actually been decreasing over the last four years.

But there was no discussion about how to pay for these increased expenses. At the Nov. 5 meeting, Councilman Jared Bellard introduced a measure to eliminate all budgeted but vacant positions to free up money for raises for first responders, but the measure was deferred until the next meeting on Dec. 3. Approving these raises, the last consolidated council has set the next city and parish councils on a difficult path for their first term. 

And there still might be one more raise to come. The only dissenting voice on the matter of giving raises to LCG’s civil service employees was City Judge Doug Saloom. While he didn’t speak out against giving these raises, he instead argued that his 36 employees shouldn’t be left out just because they work under the judicial system. He was encouraged to submit an introductory resolution by today’s noon deadline to get onto the agenda for the next council meeting and indicated he planned to do so. Given the number of employees, though, any additional expenses incurred by giving these raises should be modest relative to the size of the financial challenges now facing the city’s budget.

What to watch for: Just how bloody next year’s budget cycle looks like for both the city and the parish. The parish has already cut budgets year after year, struggling to maintain even a $100,000 balance in its general fund. Now there will be even less room to maneuver with these increased expenses. The city was projected to tap into its general fund to maintain baseline operations for the next few years before the pay raises were added. Now the city general fund will be projected to fall below the 20% minimum fund balance set by LCG’s fiscal policy by 2021 and be completely zeroed out by 2023. Given that neither the parish nor city general fund balance can legally go below zero, more cuts are likely coming.

News + Notes

Council Preview: six new taxing districts, a riverwalk, LUS controversy and more

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.

4 min read

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.

Election 2019

Closing Argument: Steven Hebert for Carlee Alm-LaBar

This op-ed is a one of two letters written in support of candidates for mayor-president and does not reflect the editorial opinion of The Current or its staff. You can read Youngsville City Councilman Ken Stansbury’s closing argument supporting Josh Guillory here. When I vote to send someone to Baton Rouge or Washington, D.C., to represent me, I want a […]

5 min read
Election 2019

Closing Argument: Ken Stansbury for Josh Guillory

This op-ed is a one of two letters written in support of candidates for mayor-president and does not reflect the editorial opinion of The Current or its staff. You can read Billeaud Companies’ CEO Steven Hebert’s closing argument supporting Carlee Alm-LaBar here. Josh Guillory is the right leader to guide Lafayette Parish into our Third Century.  He has the vision, […]

3 min read
News + Notes

Costly upgrades could spell retirement or conversion of LUS’s coal plant

The gist: For the first time in its history, Lafayette’s publicly owned utility opened its doors to public involvement in how it plans for the city’s power needs, a process called an integrated resource plan, or IRP. A big decision before LUS and its customer-owners: what to do with its coal-fired power plant. 

4 min read

We own a coal plant? Yes, you do. Well, technically you co-own it with CLECO. The plant, called Rodemacher 2, is located in central Louisiana and accounts for 265 megawatts of the LUS power portfolio. The plant was built in the 1980s and has taken on millions in upgrades to keep pace with regulatory changes. 

“I think the unit will be converted to natural gas or retired,” LUS Power Manager Jeff Stewart said at a Tuesday public hearing to a crowd of two dozen attendees, including several renewable energy and environmental advocates who have criticized the system’s lack of public involvement and continued investment in its coal plan. 

Consultants estimate $43 million in new upgrades are needed. The investment would update the aging coal plant to comply with federal environmental regulations governing water discharges and emissions. Michael Borgstadt of Burns and McDonnell, the consulting engineer guiding the IRP process, said new revisions to those rules were released in early November, which could affect the price tag. How much, exactly, is unknown, though he said costs shouldn’t vary greatly from those currently anticipated. 

LUS still owes $50 million on compliance investments made in 2012. The system issued bonds to pay for upgrades on Rodemacher needed to comply with emission standards issued by the Obama administration. At the time, critics called for the system to be retired or converted to cleaner-burning natural gas. LUS opted to stick with coal, but natural gas prices bottomed out in the fracking boom. The system now faces more costs to keep the unit in compliance while natural gas prices remain historically cheap.

“We have an opportunity to make decisions that have a positive impact,” said Laura McColm, a Lafayette resident and LUS customer, at the Tuesday hearing. McColm, like other attendees, urged LUS and its consultants to consider the costs associated with pollution and be wary of making big, risky investments that cost ratepayers for years. By and large, participants were upbeat about the chance to give feedback and engaged in a lively discussion with Stewart and the consultants on hand. 

A 2016 IRP resulted in plans to build new power generation that was later scuttled. LUS then took criticism for a lack of transparency in conducting the power plan — also led by Burns and McDonnell — which ultimately resulted in a $120 million plan to build new power supply powered by natural gas. Rates were raised 9% to pay for a $250 million bond sale that included the new power plants, but the City-Parish Council voted not to go forward with the plan. 

With power planning, LUS is shooting at a moving target. Market conditions in the power industry are in turmoil because of constant regulatory changes, new technologies and shifting fuel costs. The Obama- era Clean Power Plan likely would have forced the retirement of the coal plant, Stewart tells me, but current rules have eased the pressure on coal plants broadly. Still, coal is on its way out. 

“We’ve known for years that coal would be a target,” Stewart says. “[Rodemacher] could be a good retirement in terms of economics.” 

What to watch for: More opportunities for public input. Stewart expects another hearing by spring of next year. LUS has made available other channels to give feedback on the IRP. The plan is set to wrap up by summer of next year. It will be up to LUS and the City Council — which is replacing the Lafayette Public Utilities Authority as LUS’s regulator — to decide what to do with the results. Ratepayers can submit feedback by email to [email protected] The deadline for public comment on this phase is December 15, 2019.

News + Notes
Line chart increasing until arrow breaks

Analysis: Lafayette will have its hands full paying for pay raises

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 […]

9 min read
Business + Innovation

Innovation trust eyes Downtown, Oil Center for ‘innovation district’

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. 

3 min read

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.