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President's Report-February 22, 2023

SOLAR FARM REGULATORY ORDINANCE-ITEM 2 OF AGENDA OF ADMINISTRATIVE/FINANCE COMMITTEE

Item 2 of the agenda for the Administrative/Finance Committee meeting is the discussion of proposed Ordinance Summary No. 1386-OR relative to the regulation of potential solar farm developments in St. Martin Parish.  This edict mirrors in many respects similar ordinances which have been adopted in other Parishes in the State.  To my knowledge, and as I will elaborate upon subsequently, there is at least one firm which is exploring the development of a solar farm in St. Martin Parish.  Therefore, I submit that the need for some sort of regulatory guidance at this point in time is of grave import.

I first recognized that there would be need for such regulation in 2021.  In fact, I reference these comments in my report of July 2021:

“When I discussed various informational items at your July regular meeting, I mentioned that the Parish should begin considering whether regulatory dictates associated with solar farm developments should be considered.  Solar farms are being constructed in several areas of the State of Louisiana, particularly in rural communities.  Indeed, many communities/parishes have issued moratoria on such developments to afford them ample time to accumulate reliable data concerns the pros and cons of these types of developments. 

There have been recent print media discussion on solar farms in several publications including the Acadiana Advocate. Considerations associated with these developments include, but certainly are not limited to, environmental impacts of the developments in general, type of materials used in the manufacture of the panels, the need for buffer zones, the maximum and minimum sizes of the farms, and their impact on property values.  Another concern is the potential negative effect on the agricultural industry.

I have retained the services of a law firm to research all the known issues/questions prompted by solar farms and reasonable regulations which have been considered or adopted by other jurisdictions.  Finally, I am concerned about any federal preemption which may render any potential local governmental regulations impotent, a situation experienced several years ago with the advent of cellular towers and subsidized housing developments.  I will keep you appraised of the fruits of this research.”

Subsequently, I stated in my report of August 2022 that:

“There have numerous developments in the industry on this matter [Solar Farms] including state and federal legislation.  Moreover, on July 29, 2022, I toured the UL Solar Test Lab located on Eraste Landry Road in Lafayette.  Our tour guide was Dr. Terrance Chambers who is also a member of a task force which was created by the Governor in 2020 to study, among other matters, solar power.  This is an evolving industry which certainly warrants our continued attention.  Numerous concerns and issues are implicated by the advent of solar developments.  At some point in the near future, I will invite Dr. Chambers to appear before the council to speak on this subject.  It should be noted that Dr. Chamber is a full-time engineering professor with UL.”

My comments were prophetic since, as alluded to previously, there has been significant movement towards the development of solar farms in both our Parish and in neighboring communities.  Specifically, I was contacted by representatives of AES Clean Energy and learned that the company is exploring the potential development of a solar farm on an 883.69 acre tract of land fronting on Louisiana Highway 31 near the St. John Sugarmill.  The property is currently used for agricultural pursuits (sugarcane).  The proposed venture would be a 100-megawatt facility which allegedly has the capacity to service 30,000 homes.  My research reflects that the cost to develop such a “farm” would be approximately $500,000 per acre.  Moreover, the property at issue was leased by its owners, Levert-St. John, LLC and Levert-St. John Farms, Inc., on August 19, 2019. Only a memorandum of the accord has been filed of record, and therefore, I am not privy to any of its specific terms.

There are many truths and untruths being propagated about solar farms.  Frankly, they are too numerous to cite herein.  However, the ordinance which is on your agenda is intended to assuage many of the concerns expressed about such developments and to ameliorate many negative impacts associated therewith.  Additionally, that proposed edict requires the posting of bond for any decommissioning costs in the event any development fails.

In view of the costs associated with the development of a solar farm, such a venture generally embraces requests for tax exemptions primarily directed at ad valorem assessments. The two most frequent utilized incentives are an industrial tax exemption and a PILOT program.  My discourse with two parishes in which companies have recently commenced the construction of solar farms reflect that those jurisdictions have opted to negotiate a PILOT agreement with those solar farm developers.

At this stage of the matter, I seek only to put into place a regulatory ordinance to protect the general public and neighboring property owners.  Also, a primary factor to consider is the impact on the agricultural community in the event too many solar farms are developed in an area. Another critical concern is the negative impact, if any, on neighboring property. Finally, I note that my discourse with AES officials reflect that no construction activities are planned until latter 2025 or early 2026.  Nonetheless, I submit that the enactment of regulations of the nature set forth in the proposed ordinance is in order NOW.

 

FOOD TRUCK ORDINANCE-ITEM 5 OF THE AGENDA FOR THE ADMINISTRATIVE/FINANCE COMMITTEE

This particular item of the agenda seeks to establish certain guidelines associated with mobile vendors.  It has been perceived as an attempt to completely ban mobile vendors/food trucks.  Such is not case as a mere perusal of the proposed ordinance will reflect.  Nonetheless, as with the prior proposed ordinance, there may be some provisions which may require revision to address unforeseen issues which that edict does not envision.

One positive aspect which cannot be overlooked is that the ordinance requires a permit for all mobile vendors transacting business in the Parish.  Consequently, out-of-parish vendors would not enjoy any advantage over our local mobile vendors from either a permit or tax perspective.  Similarly, all mobile vendors will be subject to the same permit requirements as other business providing food services.

This type of ordinance is somewhat akin to what is known as a “Green River Ordinance” and hence warrants consideration of several federal precepts inclusive of the “dormant” commerce clause of the United States Constitution.  From a legal standpoint, there is nothing offensive about the regulatory aspects of ordinance relative to those technical, legal considerations.

         

WATER SECTOR AWARD/WATER CONSOLIDATION

In my January 2023 Committee Report, I informed the Council that there was a possibility that we would receive an award of 11 million dollars from the state Water Sector Program, all related to the consolidation plan for our Industrial Plant, Water Works District Number 4, and the City of St. Martinville.  By letter dated February 6, 2023, that award was confirmed.  This award, together with our budgeted amount of $3.3 million dollars from our ARPA fund, should afford ample revenue to refurbish the affected water plants and other infrastructure associated with the consolidated water system.  This is exciting news and validates the wisdom of our plans.

As background data, I offer the following remarks from my reports of September and June of 2022:

“Also appearing on the agenda for your special meeting is an item which seeks the extension of the cessation date of Water Works District No. 4.  The district will terminate in accordance with prior action of the Council which was taken by Ordinance on December 7, 2021, and by Resolution adopted on March 2, 2021, all in connection with the water consolidation plan.  However, the plan implementation has again been delayed as a result of the application for funding through the water sector program.  Thus, it will be necessary to extend the cessation date to accommodate the processing of our water sector application.  I note again that such action was last taken on March 2, 2022, by the Council.

As regards our water sector application, I note that our application was submitted at the end of last month.  We believe that our application is strong and the commitment St. Martin Parish has made, monetarily, will yield major dividends in the scoring of our application.  As background information, I remind you of these remarks from my June report:

‘The State has issued the guidelines for the Round 2 funding of the Water Sector Program.  Applications will be received between July, 15, 2022, and August 31, 2022.  It is anticipated that the State will have $450 million available for funding for water and sewer projects, with a maximum grant amount of $5,000,000 per individual project and a minimum match of 25%.  If the application embraces a consolidation of water systems, then the maximum match is $5,000,000 PER SYSTEM!  Round 1 of the program awarded $300 million for water and sewer projects.  Consolidation is a high priority in the grading process as is the “shovel readiness” of the project.   Moreover, the ability to provide a local match merits a high grade in the selection process. Thus, we should be in a position to present a potent application.

On June 16, 2022, I conferred with Todd Vincent of Sellers & Associates to guide us through the application process.  This firm is also assisting the Parish in our consolidation efforts, and they have done substantial work in identifying the precise steps which we must adopt to confect a functionable consolidation.  Of course, we have set aside a portion of our ARPA funds for the consolidation. Consequently, Sellers & Associates will be preparing an agreement relative to the administration of a prospective application for funding through the Water Sector Program.  I again note that applications will be accepted between July 15, 2002, and August 31, 2022, with the awards being announced in late October or early November.’”

It will take approximately 2-3 months for the necessary documents associated with the award to be prepared and executed.  Thereafter, the engineering plans associated with the necessary infrastructure improvements can be finalized and steps to fully implement the consolidation can commence in earnest.

 

ROUND-A-BOUTS

There are four roundabouts in St. Martin Parish, all of which have been constructed by the Louisiana Department of Transportation and Development (“DOTD”).  Two of the roundabouts are on La. Highway 347 at Exit 115 (Henderson I-10 Exit), one is at the intersection of Doyle Melancon Road and Grand Point Highway, and the fourth is on La. Highway 31 at its intersection with Semede Highway.  All of the roundabouts are equipped with underground utilities (water and electricity).

In the summer of 2021, acting in conjunction with our Tourism Department, Jennifer Stelly, the Executive Director with SMEDA, developed preliminary plans for the erection of signage and the construction of particular ornamentation on the roundabouts.  The estimated costs for the enhancements of all four of the roundabouts were $200,000.  The Department of Tourism agreed to finance the projects and therefore we budgeted that amount for the endeavor.

Thereafter, meetings were held with, and approval of the designs secured from, the Mayors of each municipality in which the roundabouts are situated or which are adjacent to them.  Those municipalities are Breaux Bridge, Henderson, and St. Martinville.  I attended meetings of the City Councils for each municipality and presented the approved designs.

On August 16, 2021, an application for a permit for the development of the roundabouts was submitted to DOTD.  After the passage of several months, DOTD advised that there were numerous design steps which had to be addressed before it would issue the requested permit.  Suffice it state that the conditions imposed by DOTD were so arduous and technical that it was necessary to retain the services of a landscape architect.  Hence, such a firm was recruited, and its principals then began preparing the technical design revisions which required further communications with DOTD.  At one point in the process, DOTD required that “sight triangles” be developed.  Consequently, it was necessary to engage an engineering firm for this purpose.

In January of this year, the landscape architectural firm met with me, Laci Laperouse (Director of Tourism), and Jennifer Stelly.  At that time, we were advised that the estimated cost to develop the planned enhancement of the roundabouts was over $260,000.00 EACH.  Reasonable attempts to reduce the scale and scope of the projects were projected to save only $50,000 for each roundabout.  Of course, I could not justify expending $800,000 to a million dollars for the embellishment of the roundabouts as planned.

Therefore, on February 15, 2023, I met with the mayors in the affected municipalities and advised them accordingly.  It was agreed that we would revisit this matter in several months to evaluate whether the construction industry costs have decreased to the point where the endeavor would be financially reasonable.  Candidly, I do not anticipate that the expense will change significantly so as to justify proceeding as planned.  Indeed, prior to the Covid-19 pandemic, a roundabout in a neighboring parish, similar in scope, cost $180,000 to develop.  At this juncture, I am inclined to recommend the planting of vegetative materials that will embellish the roundabout and require minimum maintenance. 

 

DEFAMATORY SOCIAL MEDIA POSTS

 With some reticence, but out of sense of protecting our employees, I feel compelled to report of the following.  Many of you are aware of three social media posts on February 14, 15, and 16, 2023, which included accusations that a named employee placed, on Parish time and at Parish expense, cold patch materials on a private road.  In connection with that post, I received a telephone call from a member of the public who was an immediate family member of the author of that post.  That individual echoed the essence of the post.  Another similar social media message was posted on the following day, February 16, 2023.  In any case, my office investigated the complaint and determined that it was absolutely false and without any factual foundation.  Indeed, it was my conclusion, and remains my entrenched belief, that the post was the product of a personal issue. 

On February 17, 2023, I spoke with the individual who had telephoned my office and advised her of my finding.  Also, I made it clear that St. Martin Parish Government would not allow to go unaddressed the publishing of malicious untruths about the conduct of a Parish employee in the performance of his duties.  I was assured there would be no future social media posts.

As elected officials, we are far too often wrongfully blamed and/or criticized for matters.  I suppose that such goes with the positions we hold.  However, when the work of our employees is wrongfully, falsely, and with malice the source of social media posts, then I will respond accordingly to protect their integrity and that of their fellow employees. Of course, what may transpire outside the realm of parish government matters does not merit any response since such is a personal issue unrelated to our affairs.

 

INSURANCE COVERAGES/PROGRAM

As I advised at the Regular Meeting on February 7, 2023, I have completed finalizing our insurance program for 2023.  For purposes of posterity, the following are the final costs for each area of coverage, all of which was disclosed at the aforesaid meeting:

          Liability and Casualty:             $185,932.01

          Property Insurance                   $819,350.35

          Fire Serviced District               $180,099.29

          Workers Compensation:           $165,536.00

          Auto                                        $185,682.01

          Inland Marine                          $35,746.00

          Cyber                                      $29,622.00

          Health Unit                              $10,800.00

          Third Party Administration       $25,675.00

          TOTAL                                  $1,638,443.37

 

The cost of property insurance for 2023 increased 227.48%, from $250,200.41 in 2022 to $819,350.35 for 2023.  This unexpected, pronounced increase was due to several factors primarily related to the number of losses nationwide which the insurance industry has sustained as a result of an increase in both the number and intensity of adverse weather events.  Fewer companies are willing to do business in the State of Louisiana especially for large structures and for significant coverage amounts.  Indeed, the cost of re-insurance is 60% alone.

 Our property insurance program covers 43 structures for a total coverage of 50 million dollars.  No single company would underwrite our buildings; therefore, our insurance plan was structured in layers:  $5 million primary coverage underwritten by two companies; $5 million excess coverage of that amount provided by two insurers; $15 million coverage in excess of $10 million underwritten by four insurers; and, $25 million in excess of $25 million with a conglomerate of several other carriers.

We had the option to reduce our coverages to $25 million for a savings of approximately $171,000.00.  That alternative was not deemed feasible upon considering the fact that four of the most critical Parish buildings are situated within a city block of each other:  the courthouse, clerk of court/assessor/registrar of voters, sheriff’s office and jail, and the Parish’s central office complex.  One localized event, such as a tornado, could easily wreak damages in excess of $50 million with respect to these necessary Parish facilities alone.

We have been able, from a budgetary perspective, spread the increase in the property insurance over several funds without any serious impact on our fund balances.  Also, we had budgeted for a significant increase in the costs of all lines of coverages, many of which fortunately did not materialize.  Finally, the increase in the costs should impel Parishes throughout the state to become more aggressive in challenging the numerous, unfair imposition of unfunded mandates by the state.

St. Martin Parish is not alone relative to the tribulations being experienced with increased costs with property insurance.  For example, one Parish President advised me that property insurance for his parish, which includes approximately 70 buildings, increased 177%, even with a reduction in coverage of over 50%.  The state of his Parish’s financial structure simply could not afford full coverage unlike ours.

It would be remiss if I neglected to report that the costs of workers compensation insurance decreased 17.10% from $199,700.00 to $165,536.00.  Moreover, the costs of our health care coverage stayed the same.  That expense is $1,434,655.92.

The 2023 total cost for Parish insurance coverage is:

          Property and Liability                     $1,638,443.37

          Health Insurance                              $1,434,655.92

                   TOTAL                                  $3,073,099.29

The combined increase is 55.37%

For easy reference, I have prepared the following table comparing insurance costs over the last two years.  The chart does not list healthcare which remained the same.

LINE

2022

2023

Amt. Change

% Change

Fire Service

$168,829.25

$180,099.29

$11,270.05

6.67%

Liability

$172,977.79

$185,932.01

$12,954.22

7.48%

Inland Marine

$28,346.00

$35,746.00

$7,400.00

26.10%

Cyber

$24,443.00

$29,622.00

$5,179.00

21.18%

Workers Comp.

$199,700.00

$165,536.00

-$34,164.00

-17.10%

Auto

$175,186.98

$185,682.01

$10,495.03

5.99%

Property

$250,200.41

$819,350.35

$569,149.94

227.48%

Health Unit

$9,820.71

$10,800.00.71

$980.00

10%

TPA

$25,000.00

$25,675.00

$675.00

2.7%

TOTAL

$1,054,504.12

$1,638,443.37

$583,939.23

55.37%

 

 

TAX COLLECTIONS

I have studied the tax collection reports for January 2023 and offer the following summary/evaluation:

Net Collections for Sales Tax District #1:

January 2023 Net Collections                      $369,425.17

January 2022 Net Collections                      $333,433.21

January 2021 Net Collections                      $339,857.21

Average 2022 Monthly Collections            $344,955.41

Average 2021 Monthly Collections            $309,495.52

Average 2020 Monthly Collections            $251,006.17


Collections for Sales Tax District #2:

January 2023 Net Collections                      $169,499.38

January 2022 Net Collections                      $147,535.47

January 2021 Net Collections                       $114,704.37

Average 2022 Monthly Collections            $140,560.01

Average 2021 Monthly Collections            112,363.68

Average 2020 Monthly Collections            $95,507.00

As evident by the foregoing, the amounts collected in January 2023 in both districts exceed the average monthly collections for 2022, 2021 and 2020.  As regards Sales Tax District No. 1, the January 2023 monthly collections are $35,991.96 GREATER than what was collected in January 2022.  In Sales Tax District #2, January 2023 collections were $21,963.91 GREATER than January 2022.  Furthermore, the collections in January 2023 for both districts far exceeded the average monthly collections for 2020, 2021, and 2022. Of course, it is difficult to draw any cogent conclusions from only one month of collection especially when one considers the impact of holiday spending during the relevant time frame.  Nonetheless, the January 2023 collections reflects a continuing trend of increased sales tax collections which became quite pronounced commencing with the last half of 2021.  Noteworthy is the fact that the increases are no doubt related to remote sales (internet transactions) and rising inflation.  My remarks in last month’s report remain pertinent on this point.

The hotel/motel tax collections for January 2023 were only $13,773.69 compared to January 2022 collections of $18,601.95 and 2021 January collections of $17,503.98.  I am constrained to further note that the average monthly collections for 2022 were $25,297.62 and were $26,404.71 in 2021.  The decline in the hotel/motel collections have occurred for the last several months and, frankly, are somewhat concerning.  I am, with guarded optimism, hopeful that our hotel/motel collections will increase significantly commencing in the Spring as we experience, hopefully, a plethora of fairs and festivals in our region.  This tax is “seasonal” in nature, and hence a comparison of collections during specific “seasons” is of more value.

Video Poker revenue for January 2023 was $188,364.94.  Last year, our collections in January were $181,169.91 and were $154,273.14 in January 2021.  Also, the total annual collections in 2022 were $2,181,723.16 compared to collections of $2,063,827.88 in 2021.  This computes to a 5.71% increase in 2022.  As you will recall, the 2021 collections were 35.62 % over 2020.  It will be interesting to gauge what effect, if any, the 2022 Senate Bill 13 will have on video poker collections.

Throughout the coming year, both our Director of Finance, Sean Hundley, and I will continue to closely scrutinize our revenue sources and keep you abreast of any and all developments.  Of course, revenue tracking is important but expenditures must also be vigilantly and regularly evaluated, especially during the current inflationary climate.