A dead-in-the-water effort to issue $18 million of revenue bonds to finance improvements to the non-federal levee between Braithwaite and White Ditch on the Eastbank of Plaquemines may have found new life through a resolution passed at the Plaquemines Parish Council’s June 24 meeting.

But the financial implications of the bond proposal and the resolution’s questionable legal reach left several members of local government, including two council members, unwilling to support the measure.

The resolution gives Council Chairman Don Beshel, who represents the Eastbank, the administrative authority to execute all documents and negotiations associated with the sale of the $18 million of revenue bonds, a duty typically left to the Parish President.

The resolution passed by a 7-2 margin, with District 4 representative Stuart Guey and District 5 representative Anthony Buras voting against the measure.

The push to finance the Eastbank levee project through a bond sale first emerged in November 2009, just ahead of 2010 budget hearings. At that time, the council offered a unanimous 7-0 vote in support of the bond sale, with Buras and District 9 Councilwoman Marla Cooper not present for the vote.

As the months passed, the proposed bond sale was advertised and approved by the state bond commission.

But the $18 million initiative stalled when Parish President Billy Nungesser would not give final approval for the sale, which essentially resulted in the parish rejecting all bids to purchase the bonds.

With this resolution, the council hopes to circumvent any opposition from Nungesser.

“The council voted to go forward last time,” Beshel said regarding the November 2009 vote. “Mr. Nungesser didn’t. The council voted to go forward again on this, with or without Mr. Nungesser.”

“My job is not to do this. I don’t want to do this if the president would sign it,” Beshel added. “Right now, there’s a trust issue.”

But it was the financial and legal issues surrounding the resolution that caught Buras and Guey’s attention.

Buras focused his questions on the long-term financial implications the bond sale could have on the parish and whether, in light of the BP oil spill and the current moratorium on new deepwater drilling, the council should encumber the parish with additional debt.

“Given the fact that [there is] a moratorium on deepwater drilling in the Gulf of Mexico and we don’t know what the outcome of that is going to be, and due to the fact that our sales tax base is certainly going to be lower than it was last year, I have my concerns,” Buras said.

Buras also asked how Beshel settled on the $18 million figure when, according to estimates Beshel had given Buras, the actual price of the project would exceed $30 million.

In response, Beshel indicated the $18 million figure was tied more to the parish’s bonding capacity than to the actual price tag for the project. Beshel said he just wants to get started on something.

“I’m going to tell you one thing, there is no might about it,” he said. “I’m going to flood on the Eastbank along with everyone else on the upper end. We’ve got to take action.”

Guey, on the other hand, focused on the legal problems associated with the resolution.

“It seems to me the parish council is the legislative body and this authorizes [Beshel to do] whatever is necessary to sell bonds for the parish,” Guey said. “Those things seem to be administrative functions.”

Guey pointed out that the parish charter reserves administrative duties for the parish president. Lead parish attorney Steve Braud agreed.

“My understanding is that this is an administrative function of the parish president,” Braud said. “As said before, the council has no administrative authority with the exception of the measures set forth in Judge [James] Canella’s opinion with regard to the port.”

Acknowledging the rift between the council and the adminstration, District 2 representative Keith Hinkley asked parish bond attorney Hugh Martin directly how he felt about the resolution.

“It would be a whole lot better if everybody was on board when we go to the rating agencies,” Martin answered.

Hinkley then asked, “Would you recommend it to be done this way?”

“If I had my druthers, I would not recommend this. I’d rather see everyone together,” Martin said.

Then Beshel posed a question to Hinkley: “Mr. Hinkley, what would you propose for me, if you were in my position, to do?”

“I guess, Mr. Beshel, I’d have to more forward like you are,” HInkley answered. “At the same time, we don’t want to do anything that’s going to affect the parish as a whole, and that’s a concern.”

Then, Hinkley asked Martin what impact it would have on the parish’s bond rating if, for some reason, the bids were rejected again.

Martin said he was afraid the parish would have a “black mark” against it if the bond sale fell through again. The only way the bond sale could fail, Martin said, would be if the council voted against the resolution or if a lawsuit was filed to stop the sale.

At that, District 7 representative Jay Friedman spoke up.

“The only thing that could actually affect us is if someone, whoever, would actually file a lawsuit against this council questioning the authority of this council?” Friedman asked.
“Yes,” Martin replied.

“That would be interesting to see,” Friedman said with a smile. “I’d be kind of interested to see the outcome of such litigation. Therefore, for that reason alone, I’ll vote for this motion.”

To move forward, the council must start the entire bond sale process again, a process which could begin as soon as the council’s July 8 meeting.

Nungesser, who did not attend the June 24 meeting, said after the fact that he fully supports raising the Eastbank levee from eight feet to 12 feet or more but that the parish can’t legally accept bond money for the levee without a detailed project in place.

“Until we know what we can do with the space we have now and the space it would take to raise it to 12 feet, it makes no sense to spend money on it,” Nungesser said.

Nungesser also said that, to begin the lift work, the levee would have to be degraded to about three feet, which would leave the area even more at risk during hurricane season.

“I would recommend we wait until after the season and then do whatever we can do to give us the best protection while we’re engineering and designing [a new federal levee],” he said.