The gist: LUS Fiber’s business model is broken, outgoing Mayor-President Joel Robideaux argued in a presentation Tuesday that wrapped up his months-long investigation into the municipal telecom’s finances. Robideaux will self-report to state regulators millions, most of which is disputed, in overcharged or unwarranted payments he says were intended to prop up Fiber in violation of state law.
“It cannot continue the way that it’s structured,” Robideaux told the City-Parish Council in his final meeting as mayor-president this week. “To ignore the reality is not doing anyone a service.”
He alleged another $2 million in “questionable” payments. This time for “dark fiber” services that he will report to the Louisiana Public Service Commission, which has limited oversight over LUS Fiber. Robideaux claimed Fiber charged LUS more than three times what it billed private customers for the dark fiber connection, identifying the disparity as a theme in Fiber’s billing practices.
All told, so far this year Robideaux has flagged roughly $10 million in payments. That’s on top of the $1.5 million in erroneous charges for unconnected sewer pump communication lines that were self-reported by then-LUS Director Terry Huval in 2018; Fiber reimbursed LUS with interest. The erroneous sewer pump payments led to a PSC audit, which in turn prompted Robideaux’s internal review. Earlier this year, Robideaux self-reported $8 million in payments for a Power Outage Monitoring System he said was overpriced and unnecessary. Huval, the architect of Fiber, disputes Robideaux’s central claims about POMS and vigorously defended the service in a press conference last month. The administration has not yet reported the $2 million in dark fiber services revealed this week.
Robideaux went further and called into question Fiber’s business model. Robideaux’s narrative suggests that without LCG, Fiber’s biggest customer, the telecom would be insolvent. Fiber’s business model is hemmed in by the four corners of the Louisiana Fair Competition Act, which defines how Fiber can operate. Introducing his findings, Robideaux said he discovered a “pattern of revenue manipulation that is hard to ignore,” calling it “naive” to think the practices were intended as anything other than subsidies for Fiber, which if true would run afoul of the Fair Competition Act. The state law was enacted to prohibit a financial crutch for the telecom and protect the private companies that fought Fiber’s creation. Still, Robideaux insisted he wasn’t claiming that anyone connected had done anything illegal.
Huval continues to defend the transactions. “As to the recent presentations, it should be noted that all LUS and LUS Fiber activities were brought to the City Administration, the City-Parish Council, and the Lafayette Public Utilities Authority for budgetary and overall approval,” Huval says in a written statement. He goes on to say that every LUS and LUS Fiber transaction complied with the Fair Competition Act, and was annually reviewed by the PSC.
Robideaux pointedly pulled punches on his accusations. Despite falling short of accusing the former director of breaking the law, he nevertheless attempted to paint a damning picture of the business practices overseen by Huval, who publicly opposed Robideaux’s shadowy bid to privatize management of LUS in 2018. Robideaux said the transactions hurt LUS ratepayers by increasing costs, but didn’t offer evidence of where it impacted utility customers directly. The last rate increase LUS sought was approved in 2016 to pay for a massive capital improvement package, which included a $120 million power plant that was later scrapped. The rate increases have not been rolled back. In closing, however, the mayor-president argued that Fiber was a net benefit for Lafayette, saying it was the city’s “calling card.”
Fiber does hold tremendous debt. The system became cash positive a few years ago, but owes $105 million on bonded debt as of 2018 and another $27 million on loans from LUS. By law, LUS backstops Fiber’s debt to bondholders. Should Fiber default, which could come as a result of an illegal payment, LUS and its ratepayers would be on the hook.
Robideaux’s allegations are now the future administration’s problem. While no timeline has been set out, Robideaux told the council he would deliver the new charges to the PSC before leaving office in early January. It’s the PSC’s discretion to pursue the issue any further. The commission’s audit of the sewer pump charges took about a year.
The PSC has distanced itself from Robideaux’s investigation. Robideaux at one time said the PSC requested his review, which the PSC disputed in interviews with The Current. His story evolved to pin the origin of the inquiry on a conversation with a commissioner, who again disavowed any connection to the investigation. Public records indicate LCG was billed more than $35,500 for legal services related to the inquiry, conducted primarily by attorney Larry Marino.
“I would like to have seen what he imagined were the next steps,” Councilwoman Liz Hebert says. Hebert has called for a “forensic” audit of the system, one with “no ties” to LCG, LUS or the mayor-president, to ferret out the controversy at Fiber and LUS. Critics have questioned the mayor-president’s motivation, characterizing the conduct of his inquiry as one-sided. Hebert says incoming Mayor-President Josh Guillory intends to go forward with her suggestion.
What to watch for: What 2020 holds. There’s some indication that Guillory will continue to look into the issue, but it remains unclear to what extent that will be a priority. Guillory will need to install new directors for both LUS and Fiber, now distinct departments, and make his own determination about the agency’s solvency and business plan. Robideaux has spent the better part of a year prosecuting LUS and Fiber, finding the sister utilities to be in disrepair, but has not offered up a way to fix them.
The gist: Republic Services’ local general manager is no longer running Lafayette operations, after the garbage contractor came under fire this summer for shoddy service and leaky trucks. For more than a decade, the Arizona-based company has been consolidated government’s trash collector, the beneficiary of a lucrative contract that’s been under intense scrutiny in recent months.
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: 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: In its first year, the public-private partnership program Adopt-A-Stop has accelerated the pace of covering Lafayette’s 618 bus stops. A Lafayette’s McDonald’s franchisee cut the ribbon on the second of its three pledged stops Tuesday.
“The generosity has been overwhelming,” Councilwoman Liz Hebert tells me. Hebert launched the program a little over a year ago. LCG’s budget has paced new shelters at 11 each year. Funding 30 in a single year takes a big chunk out of a still massive problem, tripling the number LCG can fund on its own. Only 10 percent of the city’s shelters are covered, leaving many of its riders, who make about 5,000 trips each day, without shelter in the summer’s sweltering heat and/or pouring rain.
“It’s great for the community, it’s great for our employees and we’re glad to be a part of it,” McLaff Inc. CEO EJ Krampe said at a ribbon cutting on the site of Lafayette’s very first McDonald’s, originally constructed in 1972 at the corner of Willow Street and the Evangeline Thruway. Around 15 of the store’s employees use the shelter each day, he said. McDonald’s has joined a growing list of community partners on the program, including UL Lafayette, CGI and the Islamic Center of Lafayette and more.
Hebert says she’s pursuing grants through LCG for more funding. Finding public dollars for the program is tricky, she says, a fact echoed by Councilman Kenneth Boudreaux who remarked at the ceremony that he’s struggled for nine years to get more funding for bus shelters.
Boudreaux recalled his family’s front porch once served as an improvised shelter. The Northside councilman praised Hebert’s program, applauding the work for the dignity it provides citizens who rely on the bus system to get around. “Until you experience it, you don’t know,” he said.
Why this matters: Transportation access remains a challenge for many who live in economically distressed neighborhoods northeast of the Evangeline Thruway. More and more businesses are vacating those areas, putting additional strain on residents who don’t own cars but need to travel farther for work.
Former Community Development head says Bruno’s loan warrants an investigation. The council is mulling one.
Former Community Development Director Phil Lank says a HUD-backed small business loan to mayoral assistant Marcus Bruno represents a conflict of interest.
In drafting the non-binding resolution on Drag Queen Story Time, William Theriot and Jared Bellard’s apparent intent was nakedly cynical: trap councilmen on a wedge issue as fodder for future politicking.
▸ The gist: Councilwoman Liz Hebert launched an effort earlier this year to raise money to cover some of the city’s 600 uncovered bus stops. The council approved a budget line item to receive donations going forward, officially activating the effort.
▸ 21 bus stops. That’s the number of stops Hebert’s initiative can cover with sponsor money already committed, stacking on top of the LCG dollars budgeted to cover 11 stops each year. The adopt-a-stop effort targets low-hanging fruit, for the most part, stops that can be covered at a cost of $6,000. Individual donors, companies and nonprofits can contribute to a fund housed at the Community Foundation of Acadiana. That money is used to reimburse LCG’s costs to build a shelter on an as-raised basis.
▸ Eight major donors have come forward so far. Islamic Center of Lafayette (the first group to sign up), Unitech Training Academy, CGI, the Pinhook Foundation and the Lafayette Public School System have each sponsored single stops. McDonald’s of Lafayette sponsored three, UL sponsored five and Lafayette General sponsored eight.
▸ 60 top stops are on Hebert’s target list. Again, that’s the number of stops that can be covered for $6,000, still a small portion of the 600 uncovered stops along Lafayette Transit System bus routes.
“So many of our team members come from all areas of the city and had to wait in the rain or the sun,” said Lourdes Foundation Executive Director Jeigh Stipe, addressing the council in support of Hebert’s initiative. Lourdes is not yet participating directly in the program, but it connected with a manufacturer through Hebert to cover a stop on Lourdes’ campus.