Bernadette Marse Tregre
February 3, 2009Remigius Coogen
February 5, 2009
The Lafourche Parish Government illegally sold a $10 million public improvement revenue bond for Road Sales Tax District No. 2, according to one longtime parish councilman.
Councilman Daniel Lorraine, who spent the last part of 2008 recovering from heart surgery, is outraged that the parish government allegedly misled the council when it authorized the bond sale in October 2008.
The council approved an ordinance awarding the contract to Stephens Inc., an Arkansas-based public finance company, for $330,000 on Oct. 18, 2008.
Lorraine, who was not present at the meeting, said prior to the vote, Councilman Rodney Doucet reportedly questioned the legality of the ordinance because sealed bids had not first been sought.
Parish President Charlotte Randolph reportedly told Doucet that the council could approve the ordinance because they were only authorizing the parish to pay for professional services, according to Lorraine. The measure is recorded as Ordinance 4414.
Doucet was unavailable for comment as of press time.
According to a 1985 report issued by the state Attorney General, it is illegal to sell bonds in Louisiana without advertising for sealed bids.
The Louisiana Attorney General’s Office rendered the opinion in response to a question tendered by the Sulfur City Council. The opinion states that all private sales of sales tax secured bonds must be made under the same terms and conditions of the advertisement for public sale.
“All bonds issued shall be advertised for sale on sealed bids, in accordance with the law of Louisiana providing a uniform advertising procedure for securities of public entities required to be sold at public sale on sealed bids…,” said then-Attorney General William J. Guste Jr.
Guste wrote that if the bonds are not sold pursuant to the advertisement, they may be sold by the governing authority privately within 60 days after advertising for sealed bids.
If the bond has not been sold, it has to be re-advertised in the same manner, according to Guste.
Lorraine believes that the council should rescind the Oct. 18 ordinance and advertise for sealed bids.
“I blame the administration,” he said. “They mislead the council and when one of the councilmen questioned the legality of what they were approving, Mrs. Randolph told him it was OK.”
Randolph said she has no concerns about the way bond authorization was handled.
“Mr. Lorraine is causing confusion, and he can follow through with this if he wants to,” she said. “Mr. Lorraine has been communicating with the bond company (Foley and Judell) since they designed the bond issuance in 2007.”
Past reports show that the half-cent Road Sales Tax District 2 sales and use tax that was proposed to the voters was designed by New Orleans-based bonding company Foley and Judell back in 2007.
According to Lorraine, Foley and Judell never submitted a bid for the bond sale in 2008.
He alleges that the council never advertised for bids for the bond sale. Lorraine said the parish administration submitted Stephens Inc. as the bidding company, and the council approved it.
“They never gave Foley and Judell a chance to submit a sealed bid on the bond issuance they designed,” he said. “In most cases, when a engineer performs preliminary work for a project, we tend to award the project to them.”
The funds from the bond sale will be used to finance roads and bridge improvements and drainage works for southern Lafourche, parish officials say.
The majority of the funds will be used to improve streets in Lorraine’s district near Golden Meadow, according to Randolph. However, she believes that the longer Lorraine delays the project, the longer the people will have to wait for the improvements.
“The bulk of the money will be spent in Mr. Lorraine’s district,” she said. “So if he wants to delay the project he is only hurting the people in his community.”
