President's Report-January 24, 2023
WATER SYSTEM GRADES/WATER SECTOR PROGRAM AWARD
Act 98 of the 2021 Regular Session of the Louisiana Legislature creates a program whereby the Louisiana Department of Health (“LDH”) assigns a grade for community water systems. LDH determines the letter grade based upon seven standards evaluating the infrastructure, accountability, and overall health risk of drinking water to consumers. The seven standards utilized are:
Federal Water Quality
State Water Quality
Operation and Maintenance
Secondary Contaminants (Iron and Manganese)
Preliminary grades were assigned last week and final grades will be forthcoming in May of this year. These are the first grading under the 2021 Legislation.
It is important to note that a low grade assigned to a particular system DOES NOT necessarily mean that the water produced is unsafe to drink. Rather a low grade generally means there are concerns about the long-term viability of the system.
The preliminary grade assigned to the ONLY system under the control of St. Martin Parish Government, the St. Martin Parish Industrial Park was a D. However, the information about our system which has yet to be considered should boost our preliminary grade substantially. Again, this will be in May of this year.
Also, our Industrial Water Plant services only the Food-N-Food store next to the St. John Sugar Mill, the Sugar Mill itself, primarily during grinding season, and the Agricultural structure in the Park. Also, the plant provides on a wholesale bases water to Water Works District Number 4 (Catahoula) which then is responsible for the provision of water within its jurisdiction. Parenthetically, that system scored a C and is also likely to see an increase in its grading in May.
The age of our infrastructure at the Water Plant has been, and remains, a concern. Indeed, that is the reason I began studying in 2019 the wisdom of a water consolidation of several local systems with our Industrial Plant serving as the anchor. Furthermore, you will note that over 4 million dollars of our ARPA money has been dedicated to water services. Additionally, I have been advised that last Thursday, the Water Sector Commission confirmed an eleven-million-dollar award in favor of St. Martin Parish to facilitate the prospective consolidation which we proposed in late 2021.
Consequently, St. Martin Parish has previously recognized the need to address water issues in our Parish and has adopted affirmative steps accordingly. Indeed, our consolidation plan is the first in our region, and LDH officials have acknowledged our efforts which is evident by virtue of our recent water sector award.
For your edification, all of the preliminary grades can be found at https://ldh.la.gov/page/4563.
OPIOID LITIGATION AND ALLOTTMENT
The Opioid Taskforce has received and deposited in a trust account the first tranche of money in connection with the settlement of the national opioid litigation about which I reported last month. As background information, I repeat those comments:
“Last October, I reported to you on the developments in the national opioid litigation in which both the State of Louisiana and St. Martin Parish were a party. As background information, I note the following upon which I have previously reported.
In early 2018, the Parish Council elected to participate in class action litigation involving the opioid crisis. Shortly afterwards, the Attorney General instituted similar litigation on behalf of the State of Louisiana. In the Fall of 2021, two proposed nationwide settlement agreements were reached which resolved all opioid litigation against the three largest pharmaceutical distributors, McKesson, Cardinal Health and AmerisourceBergen, and Janssen Pharmaceuticals, Inc. and its parent company, Johnson & Johnson.
Under the terms of the compromise, the settlement funds which total approximately $26 billion for all states will be divided over eighteen years among the participating states according to a formula developed by the Attorney Generals based in large measure upon population and documented harm caused by the epidemic in each state. Each state’s share is then further allocated within the state’s political subdivisions which participated in the litigation.
Attorney General Jeff Landry cited several compelling reasons as bases for each political subdivision to opt-in (agree) to the settlement including:
- The amounts paid under the settlement, while insufficient to abate the epidemic fully, will nonetheless allow state and local governments to commence with meaningful programs to curb opioid addiction, overdose, and death;
- Time was of the essence. The opioid epidemic continues to negatively impact our communities.
- If there was not sufficient political subdivision participation, the settlement would not have been finalized and more than 3,000 suits would have been sent back to courts for time consuming and costly litigation;
- The extent of participation determines the amount each state and its political subdivisions will receive since approximately one-half of the abatement funds are in the form of “incentive payments”; i.e., the higher the participation rate in the settlement, the larger the amount which each state receives;
- The opioid crisis is a national issue that warrants a national, consistent approach to its abatement; and
- Other defendants remain in litigation; thus, the infusion of proceeds now will allow abatement steps against other defendants to proceed.
It is significant to note that St. Martin Parish’s share is .84% of Louisiana’s share which has been determined/verified based upon the formula established by the settlement terms. Moreover, the settlement proceeds will be channeled into treatment and educational modalities established on a regional basis.
On December 2, 2021, the Council adopted Resolution Number 21-091-RS approving of the settlement and authorizing the execution of documents and attestations associated therewith.
As a consequence of the settlement, and pursuant to legislative edicts, a task force was formed to administer the settlement proceeds. By virtue of action of the Attorney General that task force evolved into an entity labeled, “Opioid Abatement Administration Corporation.” This organization will be governed by a five-member board and will have the obligation to administer the settlement proceeds received by the State of Louisiana and to ensure that the funds are properly distributed and expended appropriately.
Under the terms of the settlement, all proceeds are disturbed as follows:
7.5% for attorney fees
3% for Administrative Fees
20% to the Louisiana Sheriffs
69.5% to the political subdivisions of the State which participated in the settlement
The settlement will be funded over a period of eighteen years. St. Martin Parish’s share over the 18 years will be $2,730,000 with each annual payment to the Parish being 151,666.67. All proceeds received by the Sheriffs and participating political subdivisions MUST BE USED FOR OPIOID TREATMENT, INTERVENTION, AND PREVENTION.
I have the honor of having been selected to serve on the Board of the Opioid Abatement Administration Corporation, and in fact was elected as the President. The other members are David Butler (Mayor of Woodworth), Sheriff K.P. Gibson of Acadia Parish, Dr. James Hussey, and Dr. Arwen Podesta. Both of the physicians are Behavioral Health experts. As an aside, we receive no compensation although I intend to request that part of the administrative fee be consumed to for E&O coverage for the Board. The Board has only had one organizational meeting thus far. A second meeting will be held in the first part of January, 2023, in Baton Rouge.
Of course, I will be submitting to you my idea of how our share of the proceeds should be spent. At this point, I believe that a worthy use would be to better fund the Parish’s drug court program. Any ideas any of you may have would be greatly appreciated.”
Since that report, I have received and reviewed the settlement documents and exhibits which are attached thereto. Furthermore, the first public meeting of the Taskforce took place in Baton Rouge on Friday, January 13, 2023. I submit that the most significant aspect of that meeting addressed the following matter.
As was mentioned at the outset of the January 13th meeting, and pursuant to a conference on January 5, 2023, among the Attorney General’s Office, the attorneys for the plaintiffs in the class action litigation, the executive counsel for the Taskforce, and myself, the AG’s representative and the plaintiff’s attorneys emphatically declared that the intent behind the Memorandum of Understanding (“MOU”), which sets forth the terms of the opioid settlement was that all of the allotments due each Parish as set forth in Exhibit B of the agreement be paid DIRECTLY to the local governmental units as defined in the MOU. Unfortunately, this oral declaration of intent does not in my view comport with the express language of the MOU.
Under the terms of the MOU in Section 3, there are primarily three classifications of local governmental units as regards the allocation of the settlement proceeds:
“Qualified Parishes” defined in Section A(11) of the MOU as the parishes in the state with a population of 300,000 or more. There are only three such parishes: East Baton Rouge, Orleans, and Jefferson;
The Sheriffs of the Parishes; and
All other Parishes.
Section C(1)(d) of the MOU provides that the Qualified Parish’s share, including the Municipalities within that Parish, will be paid to the Qualified Parish…” However, in Section C(1)( e), the MOU states:
“For all other Parishes, the funds allocated for those Parishes and Municipalities shall be paid on a regional basis consistent with the Louisiana Department of Health Regions, as set forth in Exhibit B. The regional share of the funds will be paid to the designated Parish as set forth in Exhibit B and expended for Approved Purposes…”.
The last page of Exhibit B to the MOU identifies the “Lead Parish” for each LDH region. As an aside, the Lead Parish for our LDH region is Lafayette Parish.
The conflict between the oral statement of intent and the written language of the MOU is further amplified by Section B(7) of the latter which requires that the Lead Parish submit an annual report which must include the amounts received by each parish within its region and the program(s) for which the disbursements were used.
In view of the foregoing, the Taskforce was confronted with resolving or determining whether the Lead Parish should receive the amounts allocated for all the Parishes within its respective LDH region or whether each of the “non-qualified” parishes should receive directly the allocation set forth In Exhibit B of the MOU. There were suggestions that the three “qualified parishes” and sheriffs received their designated allotments immediately since there is no ambiguity created by the conflict between the orally expressed intent and terms of the MOU. For the reasons set forth below, I rebuffed such proposals taking the positions we should not favor one jurisdiction over another. After entertaining discourse on this issue, the Taskforce approved the distribution of the allotments identified in Exhibit B to each Parish, Sheriff, and qualified Parish contingent upon the Lead Parishes’ written concurrence.
As a Taskforce, we are eager to disburse the allotments. Indeed, despite the conflict highlighted herein, it seems without question that the “Qualified Parishes” and “Sheriffs” are entitled to their respective allotments Nonetheless, it seems patently unfair that some governmental units receive disbursements while others do not. As I noted at the Taskforce meeting on January 13, 2023, the ambiguity of the MOU, as regards the stated oral intent, seems to have no effect on larger Parishes.
Last Wednesday, January 18, 2023, the Taskforce’s executive counsel, Loren Lampert, and I had a conference with the Lead Parishes together with representatives of the Louisiana Police Jury Association including the Executive Director, Guy Cormier. Every “Lead Parish” concurred that EACH parish should receive its allotment DIRECTLY. Meanwhile, we are working on developing a mechanism to amend the MOU to clarify this particular issue, and others which are not germane at this point in time.
I am appreciative of the assistance of the LPJAL in facilitating the January 18th conference and in circulating a CEA which memorializes the Lead Parishes’ concurrence in the distribution of allotments DIRECTLY to each Parish. Once those CEA are prepared and signed ALL allotments will be paid.
The first payment to be received by St. Martin Parish is $230,067.91. The Sheriff shall receive $57,516.98.
ISSUE WITH FOUR MILE BAYOU ROAD IMPROVEMENTS
In the 2017 Legislative Session, St. Martin Parish was awarded $645,000 P-1 in Capital Outlay Funds for improvements to Four Mile Bayou Road in Stephensville. However, after the award of the contract for the road improvements, it was determined that the condition of the bridges on that road simply could not accommodate the construction equipment necessary to perform the road repairs. Therefore, in the Summer of 2018, the Capital Outlay award was redirected from road improvements to bridge repairs. The necessary documentation was then confected, and bridge repairs commenced. That work, however, was significantly delayed because of major flooding in the Spring and Summer of 2019.
The bridge repairs were completed in March of 2021 with substantial completion and acceptance being granted on March 30, 2021. On April 27, 2021, the Parish received from the Office of Facility Planning & Control (“FP&C”) the net amount due from the award, $609,986.91, all representing the cost of the bridge repairs.
Of course, the original project, road improvements, were not addressed. Thus, the Parish submitted an application for Capital Outlay Funds to improve the road, all within the original scope of the original request. The Capital Outlay application was approved, and by Act Number 485 of the 2021 Legislative Session, the Parish was awarded $739,000, P-1, and $150,000, P-5, expressly for “Road Improvements on Four-Mile Bayou Road.” Noteworthy is that this award was SUBSEQUENT to the bridge repairs and FP&C distribution of the previous $609,986.00 award.
On January 13, 2022, the Parish received from FP&C what is referred to as a Funding Summary Statement which confirmed that the available Capital Outlay money for the Road Improvements were $749,000. Thus, the Parish proceeded to retain the engineers to prepare the plans and design for the road improvements. Parenthetically, I note that those were completed this fall and, as required by FP&C, submitted for approval prior to bidding the project. Meanwhile, by Act Number 117 of the 2022 Legislative Session, St. Martin Parish received an additional $255,308 (P-1-$105,308 and P-5-$150,000) for those road improvements.
Next, on December 13, 2022, I was advised by FP&C that the project could not be bid because the only available money through Capital Outlay was $143,250 of P5 Non-Cash Line of Credit. This is in total contradiction to the funding summary and the explicit awards in the 2021 and 2022 Legislative Sessions, not to mention FP&C’s own funding summary statement issued on January 13, 2022.
After a great deal of discussion with Facility Planning, I have been advised that despite the funding summary of January 13 2022, and despite the fact that there was separate capital Outlay awards in 2021 and 2022 AFTER DISBURSEMENT OF THE 2017 AWARD, the state considered the latter awards as a mere “re-authorization” of the prior award. Consequently, FP&C is adamant that there is no available/ additional funding for the road improvements. To obfuscate the matter even more, on January 12, 2023, I received from FP&C a “revised” funding summary which is almost identical to the one received on January 13, 2022.
The position of FP&C is in my view completely untenable. We sought and received capital outlay funding in 2021 and 2022 separately and distinctly from the bridge repairs and AFTER disbursement of the awards for the bridges. Nonetheless, FP&C is not relenting from its position. Consequently, I requested a personal conference with Representative Vincent St. Blanc who represents the Stephensville areas of the Parish. We will be conferring Monday morning, January 23, 2023.
Additionally, I note that Richard Minvielle, our consultant on Capital Outlay concurs with my position. Of course, I will keep you posted on the developments in this unusual, and disappointing development.
ROAD STRIPING-ITEM 1 OF PUBLIC WORKS COMMITTEE MEETING
As a prelude to my discourse on this item, I refer you to these observations from my May 22, 2022 report:
“We are cognizant of the need to “stripe” many of our roads. As such, the following roads have been selected for enhanced signage and striping as part of the Local Road Safety Program administered through the Louisiana Technical Assistance Program. (“LTAP”). The roads selected for this project are:
Breaux Bridge Senior High School Road from Doyle Melancon to La. 3039
Bayou Fuselier Road from La. 93 (Bayou Courtableau) to McVeigh Road
Bayou Portage from La. 3083 (Bayou Alexander) to Terminus
Bordelon Road from La. 328 (Anse Broussard) to La. 347 (Grand Point)
Capritto Road from La. 96 (Terrace) to Cypress Island
Chess Broussard Road from the Lafayette Parish line to Sawmill
Johnson Road from Jim Sells to La. 678 (Grand Anse)
Leed Champagne Road from Paul Joseph to Russo Milazzo
Melvin Dupuis Road from La. 328 (Anse Broussard) to La. 347 (Grand Point)
Poche Bridge Road from La. 31 (Main Hwy.) to La. 328 (Anse Broussard)
Salt Mine Hwy from La. 94 (Mills Hwy.) to Saw Mill
Section 28 Road from La. 96 (Catahoula Hwy.) to La. 3039 (Nursery)
Stephensville Road from La. 70 to Pontoon Bridge Road
True Friend Road from La. 31 to La. 31
Will Angelle Road from La. 347 (Bushville Hwy.) to La. 686 (Coteau Rodaire)”
The estimated cost for the striping and signage is $864,000.00, and will be funded totally (no match) by the LTAP. I am currently awaiting an Entity/State Agreement for this endeavor.”
Since that report, I have received and executed the DOTD contract for the striping. Likewise, the map of the striping referenced in the contract provides for work on ten additional roads:
Doyle Melancon Road
Zin Zin Road
Herman Dupuis Road
Lady of the Lake Road
On January 3, 2023, I requested from DOTD a timetable for the striping Also, I solicited information relative to the precise list of roads and the type of stirping; i.e., center line, fog line, etc.
Meanwhile, at my request, Public Works has prepared and submitted a list of roads which the supervisors had determined should be candidates for striping based upon their inspections. Similarly, I am awaiting receipt from Sellers & Associates of the final road “grades” which will determine which roads we will overlay as part of our Road District Improvement Program. There has and will be, of course, an overlapping of roads lists
In any case, once armed with all of the foregoing data, we will launch into a striping program with the money specifically budgeted for FY 2023 striping. As is obvious, we do not want to stripe any roads which will be overlaid by our program and/or striped by the State. I am hopeful striping will commence no later than early Spring of this year using the funds we have budgeted for that purpose.
ITEM 2 OF PUBLIC WORKS MEEITNG-COULEE LASALLE PROJECT
Item 2 of your Public Works Committee agenda calls for the discussion regarding a resolution affirming the Parish’s monetary commitment for this project. This is necessary to protect the one-million-dollar award which we received for this project through the Louisiana Watershed Initiative. Since the Office of Community Development (“OCD”) is responsible for the disbursement of this award, the requested commitment is required under the guidelines of that agency.
The Coulee LaSalle Project was initially a $4 million endeavor which was budgeted to be funded by HMGP in the amount of $2 million and by $2 million from the 2016 Bond Issue. The project included the cleaning, snagging, and enhancement of the both Cypress Bayou and Coulee LaSalle beginning at Louisiana Highway 182, and extending downstream to Bayou Tortue at the Lafayette/St. Martin Parish line. Unfortunately, FEMA did not approve the expenditure of the HMGP funds because of an unfavorable BCA. However, we nonetheless received the LWI one-million-dollar award. Therefore, the project was amended to include only the clearing of the channels and the replacement of the Hughes Road Bridge. Moreover, the LWI award was great news and validates the wisdom of the overall project.
On August 8, 2022, Ms. Krystal Dabney, Recovery Analyst with the Office of Community Development, conducted a telephone conference among myself, Kasey Courville, Callen Huval, and Sellers & Associates (Nick Sonnier and Todd Vincent), the engineers for the project. At that time, we discussed the OCD’s request for a commitment resolution, the need for an amended budget and timeline, and the current scope of the project. On September 6, 2022, the Council passed Resolution Number 22-057-RS verifying its original commitment. Thereafter, and as discussed during the Public Works presentation to the Council on October 18, 2022, the costs for the project has substantially increased as a consequence of factors associated with the aforementioned BCA and the current financial/economic climate. Thus, another commitment Resolution is in order. There is sufficient funding from the Bond proceeds to absorb the unexpected increase in the cost of the project without compromise to any other project including the Bayou Amy-Portage project.
I am in receipt of the final tax reports for 2022. As is customary, to aid in the evaluation of these tax collections, I have prepared the following comparative summary:
- Net Collections for Sales Tax District #1:
January-December 2022 Net Collections: $4,139,464.97
January-December 2021 Net Collections: $3,713,946.26
January-December 2020 Net Collections: $3,012,074.13
Average 2022 12-month Net Collections: $344,955.41
Average 2021 12-month Net Collections: $309,495.52
Average 2020 12-month Net Collections: $251,006.17
- Net Collections for Sales Tax District #2:
January-December 2022 Net Collections: $1,686,720.20
January-December 2021 Net Collections: $1,348,364.20
January-December 2020 Net Collections: $1,146,084.06
Average 2022 12-month Net Collections: $140,560.01
Average 2021 12-month Net Collections: $112,363.68
Average 2020 12-month Net Collections: $95,507.00
The foregoing reflects that the average net amounts collected in January-December 2022 in both districts exceed the average 12-month net collections in both 2021 and 2020. As regards Sales Tax District No. 1, the total 2022 collections are $425,518.73 GREATER than the annual collections 2021. In Sales Tax District #2, the toatl 2022 net collections were $338,356.00 GREATER than the collections for January-December 2021.
From a monthly perspective, the December 2022 net collections for District No. 1 totaled $302,693.30 while the December net collections for 2021 and 2020 were, respectively, $322,880.75 and $230,879.50. Although the December collections in Sales Tax District 1 were less than the previous months, they were nonetheless the higher than most of the prior 2022 months. Most notably, the collections were greater that the collections for the month of December for the last several years.
In Sales Tax District No. 2, the December 2022 net collections were $120,548.32 contrasted to December net collections of $136,426.60 and $73,473.63 in 2021 and 2020 respectively. The last quarter of collections in 2022, combined, remain the largest monthly collections in District No. 2 since January 2015.
I maintain the posture taken in almost every report that an analysis of tax receipts simply on a per month comparative basis can be misleading while yearly comparisons offer a better picture of the strength of sale tax collections. As noted in the above comparative summaries and as evidenced from the following contrasts in collections, our sales tax receipts appear to remain strong despite uncertainty in our local economy.
At this point, what is significant is that our total net collections for 2022 in Sales Tax District #1 were $425,518.73 greater than in 2021. In Sales Tax District #2, the 2022 net collections were $338,356.00 greater than in 2021. This computes to an increase of 11.45% for Sales Tax District 1 and 25.09% increase in Sales Tax District 2. The annual inflationary rate for our area ranges from 8% to 10%, depending upon what economical sources one utilizes. In a nutshell, the good news is that we still experienced an increase in our sales taxes in 2022 even after adjusting the receipts for the marked rise in inflation.
The hotel/motel tax collections for January-December 2022 were $303,571.49 compared to 2021 collections of $316,856.6. Hence, the January-December collections were $13,285.12 less than 2021. This computes to a 4.19% decrease. I am hopeful that the reduction can be offset by the state appropriation. This reduction bears close scrutiny. Moreover, I note that our Tourism Director is working with several sources to identify many short term rental facilities which are doing business in our parish, but remitting no taxes to the Parish as required by law.
Video Poker revenue for 2022 was $2,181,723.16. Last year, our collections were $2,063,827.88 while the total collections for 2020 were $1524,015.01. The increase from 2021 is 5.71%. The increase from 2020 is 41.33%. This source of income is a valuable component of our budget which, frankly, in and of itself is somewhat discomforting.
I have not received any December reports on our Off-Track Betting receipts. Nonetheless, I simply close with these comments from my prior reports:
“The Off Track Betting (“OTB”) revenue continues to concerning. The collections continue to fall below that of previous years. For December we collected only $8,663.00 which compares to $11,961.00 in December of 2021. Our OTB revenue thus far this year has been $101,913.00, while the collection for the identical time frame in 2021 was $128,815.00. This is a reduction of 20.10%. Since all other revenue sources, including video poker revenue, have not decreased, I am constrained to once again repeat my admonitions about whether the Historical Horse Racing machines now allowed at OTB’s are having a negative impact on OTB revenue. You will recall my remarks from my September report which I referenced last month:
‘In the 2021 Regular Session of the Louisiana Legislature, Act Number 437 was enacted which legalizes historical horse racing machines for off-track betting (OTB) parlors. Historical racing machines (HHR) look and operate much like slot machines; however, in lieu of randomizing the outcome of a play, the HHR’s determine winners based on previously run races. On an HHR, one bets on the outcome of horse races just like he would at any Off-Track Betting Parlor or a horse racing track. The difference is that on an HHR, the betting is on actual past races, and when a bet is made, a race is randomly selected from a pool of nearly 100,000 prior races. Obviously, no identifying information, such as when and where the race took place and which horses and jockeys participated, is revealed. The machines are for all intents and purposes “slot machines.”
Recently, at least one local video poker operator has complained about the impact of these “slot machines” on video poker outlets. Noteworthy, is that there is a fear that those interested in gaming will opt to use the HHR’s devices to the exclusion of playing video poker machines. Of interest to local government is the fact that the HHR’s do not generate taxes for local government.
Louisiana has 17 off-track betting facilities which can offer these devices under Act 437. Also, the legislation provides that no facility may house more than fifty of the machines. Other key details of Act 437 are:
Authorizes HHR’s on the premises of off-track wagering facilities only via dedicated machines or personal mobile devices.
Limits each primary licensee or licensed off-track betting facility to no more than 50 machines.
Instructs the Louisiana State Racing Commission to promulgate rules for and license historical horse racing.
Limits the HHR commissions to 12% of all wagers.
Requires the licensee to disburse 20% of HHR revenue to horsemen’s purses.
While the state does not tax the HHR revenue, it is supposedly expected that the HHR will boost the horse racing activities, thus providing additional state revenue.
It is my understanding that West Baton Rouge Parish and Jefferson Parish have both enacted ordinances to limit the number of such machines in their respective jurisdictions. I am not privy to any of those ordinances, and frankly, I question whether a local jurisdiction can impose restrictions which are greater that what the state has imposed on such gaming activity. Also, I have not been provided any sort of empirical data which addresses the impact of HHR’s on video poker revenue or whether such devices impact the number of persons who play the video poker machines. Consequently, if you would like to proceed to address the possibility of any regulation of HHR’s, I suggest that you proceed with great caution. I have discussed this matter with the Executive Director of the PJAL who advises that the association’s legal staff is evaluating the concerns expressed by the video poker industry and may soon disseminate information for the guidance of local governments.
Finally, I note that the horse racing industry strongly endorsed this legislation which passed the House by a 84-11 vote and was carried in the Senate by an 33-3 vote.’”
I strongly suspect that the 2023 Legislative Session will see some remedial legislation on this issue of Historical Horse Racing devices.