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Council Preview 8/4: Another special meeting on parks, LUS investigations, flood modeling, new early voting sites and scooters

The gist: Other than filling 40 appointments to boards and commissions, these should be relatively light council meetings, though everyone could probably use a break after the 10-hour marathon meetings two weeks ago. The main hot-button topics are a report on the ongoing LUS investigation, the addition of early voting sites, and the potential establishment of new rules that could welcome shared services back to our streets. And in late-breaking news, the City Council is calling an emergency meeting to consider an ordinance splitting up city and parish funding for the parks department.

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The City Council has scheduled an Aug. 4 emergency meeting, immediately after tomorrow’s regular meeting, to split up funding of the parks department. An ordinance authored by City Councilwomen Liz Hebert and Nanette Cook would keep city and parish funding separate in the parks department. That means the City Council would have control over how city dollars are spent on city parks and the Parish Council would control how parish dollars are spent on parish parks. This would address a host of issues, like the one that occurred last week when the Parish Council failed to second the opening of discussion over an emergency ordinance to continue funding the rec centers the mayor-president wants to shut down. Both councils, however, would still have to approve the overall budget.

Lots to report on at LUS. While there are no votes happening with LUS, there will be two reports to the City Council, one giving update on the LUS investigations and the other on the status of LUS’s IRP. At the last council meeting, the administration dropped a bit of a bombshell that the missing emails aren’t actually missing, so there’s a possibility of more fireworks to come.

There will also be a report on AOC’s services. Acadiana Open Channel streams all council meetings as well as most LCG special meetings and events so the public can stay connected to the democratic process. It’s a service that has taken on extra importance in the midst of a pandemic when many can’t risk attending in person. AOC’s services are paid for by franchise fees paid by local cable TV and Internet providers.

Disclosure: AOC Community Media serves as The Current’s fiscal agent.

So many appointments. Between the City and Parish Councils there will be 40 board/committee seats filled with appointments, including a number of seats on entities like the Heymann Center, the Lafayette Science Museum, and the Cajundome, all of which are facing reductions in their subsidies from the city general fund.

New early voting sites moving forward. The Parish Council will vote on final adoption of an ordinance to partner with the cities of Broussard and Youngsville to have them cover the costs of setting up an early voting site at the East Regional Library. The City Council will vote to introduce an ordinance to partner with the parish to cover the costs of setting up an early voting side at the Martin Luther King Recreation Center. Setting up this second early voting site is projected to cost the city $66,000.

Scooters may be returning, but there will be rules, lots of rules. Up for final adoption by the joint councils is an extensive set of rules that could allow for the return of shared electric scooter services like Bird. These scooters were originally quite controversial; while some loved them, others hated how the scooters ended up littered everywhere. With these new rules in place, at least some of those bad behaviors should be curtailed. That’s because all shared scooter operators will have to pay application fees and a registration fee for each scooter and face penalties if they’re not maintained and operated properly. 

LCG may hire UL to study flooding and channel capacity in Lafayette Parish. UL researchers have already developed a model of how water flows through our parish. The joint councils will vote to introduce an ordinance authorizing the Mayor-President to enter into a cooperative endeavor agreement to pay those researchers $52,000 to study potential changes to Lafayette Parish’s drainage system.

The parish has a final vote on handing the keys to Arceneaux Park to the city of Broussard. The parish already set up a similar arrangement for Foster Park with the city of Youngsville. If this passes, the city of Broussard will become responsible for maintaining and improving Arceneaux Park. Deals like this are being pursued because other cities in the parish want to see these parks become quality of life assets and avoid disinvestment. And the parish simply doesn’t have the money to keep them up.

Said to be ‘deleted’ in a cover-up, former LUS director’s emails were never missing

The gist: Walking back an allegation central to the lingering scandal around LUS, Lafayette’s city-parish attorney admitted in the wee hours of Tuesday night’s council meeting that thousands of former LUS Director Terry Huval’s emails were never missing. The purportedly missing emails were a key factor in the Guillory administration’s request for a criminal investigation into LUS.

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COLUMN: Don’t let political theater distract you from LUS’s bigger problems

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.

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Lowell Duhon

Maligned LUS consultant accuses Guillory of playing politics

The gist: NewGen Strategies & Solutions, LUS’s consulting engineer, fired back at Mayor-President Josh Guillory, saying in a July 2 letter obtained by The Current that his decision to publicly lay out a case for firing the longtime consultant was malicious and politically motivated. 

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Consultant again waves warning flag about lack of permanent leadership at LUS

Going on two years without permanent directors and headed for uncertainty, LUS and LUS Fiber could risk their financial health without permanent and steady leadership, the systems’ consulting engineer warns in an annual report issued last month. The engineer has raised flags about vacancies atop the city-owned enterprises since late last year with no movement by the previous administration or Mayor-President Josh Guillory. 

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Two key LUS, Fiber employees back on the job as uncertainty lingers

The gist: Two familiar faces, Jeff Stewart and Teles Fremin, returned to work this week at LUS and LUS Fiber, respectively, after being cleared of wrongdoing in connection with the Guillory administration’s allegations of a criminal coverup at the entities. Questions remain about the status of any criminal investigation and the agencies’ leadership.

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Get caught up, quickly: Mayor-President Josh Guillory dropped a bombshell on local radio just a month into his administration, claiming that Lafayette City Police had “raided” LUS last year under Joel Robideaux’s administration. Guillory told the station he had put four unnamed employees on paid leave and would ask Louisiana State Police to initiate a criminal probe. The “raid” was apparently linked to Robideaux’s ongoing internal investigation into questionable payments from LUS and LCG to Fiber; the Public Service Commission, which has limited oversight of Fiber, confirms it is reviewing what Robideaux turned over late last year for possible violations of the Fair Competition Act

There was no raid. “I saw no findings of a raid,” Cpl. Bridgette Dugas, public information officer with Lafayette Police, told The Acadiana Advocate a week after Guillory made those comments.

Based on information from a “whistle blower complaint,” LCG accused the four employees, whose names were redacted, of having information about the destruction of records and an “attempt to cover up a crime,” according to the letter to state police. The Current has not named Stewart and Fremin until now, only after multiple sources confirmed they had returned from leave and were cleared of suspicion — before any criminal probe by an outside agency has even commenced. 

A void in experience at both LUS and Fiber. Stewart and Fremin were replaced as interim directors of their respective entities late last year when Robideaux named his CAO, Lowell Duhon, to the interim post at LUS and moved Kayla Miles Brooks into the top position at Fiber. Public records obtained by The Current confirm that NewGen, LUS’s consulting engineer who last year deemed Duhon and Brooks unqualified for the interim jobs, is scheduled to be in Lafayette this week for a site visit as part of its annual review of the public utility.

Both Stewart and Fremin have been with LUS for nearly two decades. NewGen met with Guillory in January, reminding the mayor-president in a follow-up email on Feb. 1 that LUS has been without a permanent director for 18 months, suggesting ongoing discomfort with the lack of permanent leadership. 

Teles Fremin

The Feb. 6 letter to state police, written by City-Parish Attorney Greg Logan and widely released to local media, specifically names only one person, former LUS Director Terry Huval, while redacting the names of the current employees. The central allegation stems from 2011 emails alleged to be missing from an eight-year count of Huval’s email records, suggesting the destruction of computer files and email archives (along with “possible manipulation of accounting or public finance records.”)

“It appears that there was somewhere between 15,000 and 20,000 of Terry Huval’s e-mails deleted for the 2011 time period,” Logan writes. 

He goes on to say, “We believe certain individuals at LUS & LUS Fiber are guilty of injuring public records … theft … malfeasance … and/or criminal mischief.”

In confirming Monday that two of the four employees had returned to their jobs, LCG spokesman Jamie Angelle declined to comment on what he described as an “ongoing investigation.”

State police confirms it is not looking into the matter. “Everything is in the hands of the DA at this point, so we are on hold,” says PIO Thomas Gossen.

District Attorney Keith Stutes notified the administration on Feb. 7 that he considered Logan’s letter a complaint and requested a wide range of documentation, including audits and internal investigations into former or current employees

“I have received, preliminarily, some of the information I requested,” Stutes says. “At this point, it’s a review process; it’s still under examination.”

LUS reorg could be bigger than Guillory let on; all of Fiber is on the table

The gist: The Guillory administration’s push to consolidate IT groups under one roof may move all of LUS Fiber, not just its IT personnel, under the authority of a new Department of Innovation. This would be a bigger shakeup of the telecom and its former sister department LUS than previously suggested by the administration in meetings and in the press. 

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The Department of Innovation is proposed to “streamline” technology operations within city-parish government. In interviews, Mayor-President Josh Guillory has hinted at a major shakeup of LUS and LUS Fiber, taking the view that costs can be cut and operations made more seamless if reorganized. The Department of Innovation would house all of the administration’s technology initiatives, including the Digital 311 project launched by former M-P Joel Robideaux’s administration and a broader slate of Smart City programs imagined in a 2018 consultant-guided strategic plan. 

An LCG spokesman confirms in an interview the possibility that all of Fiber is subject to reorganization but says it is “not set in stone.” 

A wholesale move of Fiber has not been previously discussed publicly. The administration met with council members in late January to brief them on the planned reorganization — then putatively limited to just IT groups at LUS and Fiber — but council members Nanette Cook and Liz Hebert say they did not walk away with the understanding that moving all of Fiber into the Department of Innovation was on the table. A slide deck produced for those meetings hints at the need for LUS and Fiber to adopt “business focused” leadership, as opposed to “engineering focused” leadership, but doesn’t make clear to what extent Fiber’s chain of command or organization will change. 

“Let’s wait till they get their director[s] before we start pulling it apart,” Cook says of the reorganization in general, which she warmed up to after her briefing last month. She says the administration’s view is that the departments need to be set up before new directors are recruited. Fiber and LUS are both headed by interim appointees deemed unqualified by LUS’s consulting engineer of record, NewGen Strategies and Solutions. LUS has been without a permanent director for more than 18 months; NewGen reminded the administration of the long absence of steady leadership at the beginning of Guillory’s term, according to emails obtained by The Current in a public records request. NewGen is in town this week to make a site visit as part of its annual engineering report.

If Fiber were to become part of the Department of Innovation, it would no longer have an independent director and would instead report to current LCG Chief Information Officer Randy Gray. This would balloon the operations under Gray’s control from an Information Systems & Technology budget of $6 million to a combined budget of more than $50 million. Most of that budget, $42 million, would come from Fiber. CAO Cydra Wingerter has previously said combining just the IT staff for LUS, Fiber and IS&T would save approximately $500,000 annually. LCG has contracts worth more than $1 million with private consultant KPMG to build out its Digital 311 system — a website where residents can report non-emergency problems to the police, Public Works and other departments — and develop other Smart Cities projects. 

While the reorg plan was called “preliminary,” internal emails reveal that it was set on a fast track. Interim LUS Director Lowell Duhon referred to a “tight timeline” for the reorganization in email threads with LUS Fiber interim Director Kayla Miles Brooks, LCG CIO Gray, CAO Wingerter and others. Wingerter, Gray and Brooks have spearheaded the effort — pointedly, no long-serving or more senior LUS or Fiber staff have been involved — with Duhon promising his support in seeing the shakeup through and noting some resistance among longtime LUS staff, who bristled at being left out of the plans. 

I spoke with [Former Interim LUS Director] Jeff [Stewart] tonight about me asking you to consider including someone from IS&T @ LUS in on the planning, but that you were concerned about it delaying the already tight schedule.

— Interim LUS Director Lowell Duhon’s Jan. 14 email to Gray, Wingerter and Brooks

Stewart was among four top-level LUS and Fiber staffers placed on administrative leave in early February after the administration claimed it had uncovered evidence of an attempt to hide email records connected to a pattern of “questionable” payments made by LUS to LUS Fiber, in possible violation of state law. This week, Stewart and former LUS Fiber interim Director Teles Fremin were cleared of wrongdoing and returned to work, according to multiple sources. The administration has kept the names of the employees confidential but did confirm that two returned to work Monday.

You’re going to have a select group of individuals who disagree,” LCG Communications Director Jamie Angelle says in an interview. Defending the closed loop of decision makers, Angelle points out that LCG has more than 2,000 employees, and that the mayor-president can’t be expected to consult each of them to make big decisions. The apparent urgency behind the reorganization plan was motivated by a desire to realize the benefits sooner than later, Angelle say, not any “ulterior motive.”

Publicly, Guillory and Duhon downplayed how advanced plans were, telling The Acadiana Advocate in January that LUS insiders alerting the newspaper to the IT reorganization, and opposing it, were making assumptions about an idea in its infancy.

“When I say we’re in the beginning phases of even thinking about a possible reorganization for efficiency …” Guillory told The Advocate on Jan. 22, just days after an ordinance was drafted and distributed for discussion internally. “If the beginning has a beginning, that’s where we are.”

An assistant city-parish attorney noted some legal obstacles created by the charter amendments. Attorney Mike Hebert, who wrote the draft ordinance, dated January 17, flagged provisions in the new charter requiring LUS and LUS Fiber to be overseen exclusively by the City Council. But the reorganization plan, according to the draft ordinance, would place all of Fiber under a Department of Innovation overseen by the Parish Council, too. That department would also house all of IS&T — essentially LCG’s IT office — and peel IT staff away from LUS to make a robust innovation division charged with “streamlining” technology services within LCG.

“The proposed reorganization moves a department of LCG [LUS Fiber] governed only by the City Council into a department that will consist of city and parish functions and will be headed by appointees who presumably will be funded jointly by the City and Parish,” Hebert wrote in an email to Gray, Wingerter, Brooks and the mayor-president. 

For most of its existence, Fiber was a division of LUS. It was split off into its own department by former Mayor-President Joel Robideaux and the previous council in 2018. That decision was partially influenced by the then-brewing controversy around payments for services LUS and other LCG divisions made to LUS Fiber that may have violated a state law created to prevent LCG funds from propping up the municipal telecom. Robideaux reported his findings to the Public Service Commission, which has limited oversight on Fiber. Robideaux and the council agreed that Fiber needed its own leadership to thrive.

This reorganization would pull Fiber back into the fold of another entity, LCG, to which it sells services. On its face, that contradicts part of the original justification for breaking Fiber out on its own, laid out by Robideaux last year. The lingering controversy has been leveraged by Guillory to gather support for the reorganization generally. The mayor-president himself has consistently messaged that LUS in particular needs to be reined in, saying in a recent interview that the utility system is not a “sovereign state.”

Josh Guillory on LUS, I-49, Pride Month and ‘traditional values’

Lafayette’s conservative m-p on a range of topics, controversies and issues on the horizon.

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COLUMN: Rushing to shakeup LUS and Fiber is risky. Let’s take a deep breath first.

Efforts to save hundreds of thousands of dollars by consolidating IT departments could create risks that cost Lafayette millions of dollars. We need experienced leadership in place first before considering this proposal.

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Guillory pushes forward LUS/Fiber reorg ahead of naming permanent directors

The gist: Mayor-President Josh Guillory intends to stick with interim directors at LUS and LUS Fiber for several more months while moving to combine their IT personnel with LCG’s IT department. Both interim appointments, made by the last administration, were said to be “short-term” and of questionable qualifications. The reorganization has met some resistance. 

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The main pitch is cost savings. Pooling personnel could save $500,000 a year on IT services, according to Chief Administrative Officer Cydra Wingerter. This would primarily be achieved by using the consolidation to staff currently vacant positions, in a combined innovation group overseen by LCG Chief Information Officer Randy Gray. All 31 employees in the LUS network engineering division would come under Gray’s supervision.

“The next director is going to be in a better position,” Wingerter says. “It’s going to produce incredible savings across the board.”

Interim directors for LUS and LUS Fiber will remain in place for “several months,” Wingerter confirms. Lowell Duhon and Kayla Miles were installed over LUS and Fiber, respectively, by former Mayor-President Joel Robideaux to oversee an inquiry he launched into questionable payments made over the years by LUS and consolidated government to Fiber. Those payments allegedly amounted to millions in illegal subsidies to the municipal telecom. Both Duhon and Miles have remained in their positions despite the apparent wrap up of that investigation late last year. The findings were reported to the Public Service Commission, which has some oversight over Fiber, at the end of 2019. 

The administration has been courting council members this week. Both parish and city council members would need to vote on a joint ordinance to approve the reorganization, just as they did with the administration’s successful bid to split up the Public Works Department. Administration officials met with City Councilwoman Liz Hebert and Parish Councilman Bryan Tabor Wednesday, rolling out a slide deck presentation to talk them through the plan. 

“I feel like it’s moving too fast,” Hebert says. “If it’s a great idea now, it’ll be a great idea when the [LUS] investigation is over.” Hebert says she wants to wait for permanent directors to be appointed and for an independent, forensic audit of LUS and Fiber’s finances to be completed. 

There is some concern about how the combined IT group would be budgeted and how it would affect the day-to-day work of LUS network engineers. It’s unclear how costs would be allocated between city and parish dollars and those of LUS ratepayers. LUS is self-funded by its utility sales, and annually contributes millions to the city general fund each year. Conceivably, the CIO would have control over the LUS network budget, which would in turn impact utility operations. The IT groups for LUS and LCG have roughly similar personnel costs, around $2.5 million. 

Lowell Duhon, left, was named interim LUS director by Joel Robideaux. LUS’s consulting engineer says Duhon is not qualified to hold the interim position.

Saving money may not be the right objective. Independent IT Consultant Doug Menefee believes LCG’s IT department is underfunded and understaffed. He argues that a reorganization could make sense, if the net effect is to improve the resources available for cybersecurity in particular. Cyberattacks hampered services in the city of New Orleans and the Louisiana Department of Motor Vehicles last year. He warns that saving money should not be the prime objective. 

“Consolidation shouldn’t come from cost savings but from efficient use of talent,” Menefee says, noting IT talent can be tough to find. There’s usefulness, he argues, in having a “single throat to choke” and in pooling skills. LUS may have resources that LCG’s IT group could benefit from.  

LUS advocates say this is a bad idea altogether. Former LUS top manager Andrew Duhon circulated an email to council members arguing that the plan puts LUS operations at risk. Duhon supervised the divisions targeted by the reorg. LUS network engineers are integrated into the utility’s everyday work, he says, including its power grid, cybersecurity systems, customer service applications and more. 

A “whistleblower” letter called the reorganization a “power grab” to prop up the city’s 311 initiative. The anonymous letter, sent around to media outlets on Jan. 21, prompted Guillory to dismiss the concerns, saying the plan was at the “beginning of the beginning.” Claiming to be an LUS employee, the tipster said there is no reason to “move control” for the sake of collaboration. 

LUS staff have reportedly been kept out of the loop. In his letter, the former CFO claims LUS staff members have been blocked out of the proposal’s development, which Wingerter denies. Asked to name specific LUS employees, she declined, citing only the interim director.

“Since LUS and LUS Fiber lack permanent directors, there is no real advocate for LUS,” Andrew Duhon writes in his letter to council members. 

Lowell Duhon took a considerable pay bump when Robideaux made him interim LUS director. He served as Robideaux’s CAO for all but the last few months of Robideaux’s term, until he was moved to LUS to oversee the investigation, boosting his annual pay from $125,000 to $250,000. That substantial raise garnered suspicion that Robideaux’s motives for the appointments were a kind of patronage. Robideaux tied the leadership shuffle to a request by the PSC, which the PSC subsequently denied.  

Consultants have questioned both Duhon’s and Miles’ qualifications. NewGen Strategies and Solutions, the consulting engineer required by LUS’ bond contracts, found both Duhon and Miles “lacking” in the appropriate experience to manage the day-to-day affairs of LUS and Fiber. The firm voiced those concerns in a letter sent to Robideaux in November. Robideaux mollified the consultant’s concern by insisting the appointments would be “short-term” until qualified directors could be appointed by a new administration in early 2020. 

Wingerter says the inquiry is still going. And she notes that the administration and consulting engineer have a “difference of opinion” about Lowell Duhon’s and Miles’ qualifications. She said new questionable charges have surfaced but declined to go into details. Lowell Duhon’s role, however, is not limited to the apparently ongoing investigation, she says, adding that the former CAO  oversees customer service, finance and other LUS activities. 

“He was the boss of the previous directors,” Wingerter says, defending Lowell Duhon’s fitness to run LUS.

LUS and Fiber both face a great deal of uncertainty in 2020. LUS is in the middle of a power planning process, set to wrap up this year, that could lead to a decision to retire and replace the coal-fired power plant that accounts for half the system’s electricity generating capacity. Fiber’s fate is largely in the hands of the PSC, which is purportedly reviewing the results of Robideaux’s 2019 investigation.

More with less: Guillory lays out his year-one launch initiatives for Lafayette

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. 

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“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.

Exiting office, Robideaux casts doubt on LUS Fiber

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. 

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“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.