Tax bond needed for levee work

Since the U.S. Army Corps of Engineers is still in the process of restudying the area for the Morganza-to-the-Gulf hurricane protection project, and federal dollars may not be allocated for the project until well after 2014, state and local government have taken measures to jump start the project wherever possible.

Last week’s Terrebonne Levee and Conservation District meeting moved forward with a resolution to bond out the parish’s quarter-cent sales tax to help fund critical portions of the project.

“The next big priority is the Houma Navigational Canal floodgate and connecting levees, and Bayou Grand Caillou floodgate,” levee board director Reggie Dupre said. “The budget with everything, including engineering, design, pipeline relocation, land rights and mitigation is $120 million, and we have just south of $75 million in cash available through state and local funds. We’re about $45 million short.”

To make up for the difference, parish officials are looking to sell $49 million worth of bonds to be paid back over a 25-year period with the revenue generated from the quarter-cent sales tax. According to Jerry Osborne, the levee board’s bond attorney, the parish can expect a 5 percent interest rate on the bonds.

“For every $100 [the parish] spends, 25 cents goes to this project,” Dupre said, who explained the tax was voter approved in 2001 and was implemented in July of 2002.

“At the time the levee district did not have taxing authority, so the parish council put the tax on ballot,” he said. “There’s an agreement signed between the levee board and the parish that [the levee board] acts as an agent of the parish government on this tax. Part of that agreement says that with the joint concurrence of both the parish government and the levee district, proceeds of this tax can be bonded out for Morganza-to-the-Gulf in order to complete the permits [for the project].”

The levee board plans to bring a formal proposal to the parish council in mid-October, and if approved, the parish council would then send it to the State Bond Commission.

Dupre said the quarter-cent tax generates approximately $5 million a year, and it would take 10 years to save the rest of the money needed for the project, because only 66.6 percent of revenue generated can be used for the Morganza project.

“Do we sit back for 10 years and do nothing or do we aggressively move forward?” he asked.

Other parish officials agreed moving forward with the project was the best option for the parish.

“This is without question the most critical [issue] that faces our parish and has been quite a challenge,” Terrebonne Parish President Michel Claudet said at last week’s meeting. “I am 100 percent in support of this, and there should be no problem in meeting the debt requirement in the future. The most critical thing is providing the funding for the project at hand.”

Councilman Johnny Pizzolatto backed the idea of selling the bonds as well.

“We need the federal help but obviously we’re not getting it so we’ve taken it upon ourselves,” he said. “It’s because of the people of Terrebonne Parish that we are getting things done. I’m behind this resolution, anything that we can do to make this parish safer, this council is going to be behind it.”

Dupre estimated the earliest time to lock in an interest rate on the bonds would be December, after the proposal is approved by the parish and passed on to the State Bond Commission.