Building Trust with sound coastal
investment policies

Chapter Two: The CPRA, the Master Plan and the Coastal Fund

In response to Hurricanes Katrina and Rita in 2005, Gov. Kathleen Blanco and the Louisiana Legislature created the Coastal Protection and Restoration Authority to coordinate the local, state and federal efforts for comprehensive coastal protection and restoration.xxv With the creation of the CPRA, Louisiana further intensified its coastal protection and restoration programs by consolidating the coastal wetlands restoration and levee protection divisions within its transportation and natural resources departments under one new agency.

The CPRA was given clear authority to develop, implement and enforce a comprehensive integrated coastal protection and restoration strategy. In particular, the CPRA was tasked with developing a Coastal Master Plan, based on the best available science and engineering, to guide CPRA’s efforts to protect and restore Louisiana’s damaged and diminishing coast. The Louisiana Legislature requires the CPRA to update the Coastal Master Plan every five years. The next Master Plan is due in 2017. The Louisiana Legislature also requires the CPRA to produce an Annual Planxxvi that inventories projects, outlines their implementation schedules and identifies funding. The Annual Plan is a projection of revenues, projects and programs to be funded in the near future, or at least a three-year period.

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After further restructuring in 2009 and 2012, the CPRA is now Louisiana’s central administrative arm for coastal matters and the CPRA Board is the governing authority. In addition, the governor has a separate Advisory Commission on coastal issues. For more details on these agencies and their board members, see Appendix A.

Another state decision-making body is the Coastal Protection and Restoration Financing Corporation. This panel determines certain financing plans, such as whether new federal revenue sharing of offshore oil and gas will be used to support bonds for major coastal projects. The Corporation has not been very active but is expected to become more so in the near future. Still, the Corporation’s exact role and powers are not fully clear.

While Louisiana has made great strides in transforming the multi-agency efforts into a single agency accountable for designing and implementing the comprehensive coastal protection plan, much of the ultimate decision-making authority is held by the governor. The governor and CPRA have developed a well-formed process for advancing public policy and investment decisions. However, even with all of the legislative and constitutional safeguards in place for coastal funding, as we have recently witnessed, the ability to divert funds from pure coastal restoration and protection to other needs still exists and should be given additional attention as the coastal program moves into an implementation phase of development in the coming years.

It is important to recognize that the governor has strong influence over coastal policy and investment decisions, as he holds the authority to appoint the Executive Director of the CPRA, who is responsible for implementing the policies and executing the work of the agency. The governor also appoints the majority of the members of the CPRA board, the entity responsible for advancing the state’s policy and developing and providing oversight for the Master and Annual plans. Further, the majority of the members of the Governor’s Advisory Commission on Coastal Protection, Restoration, and Conservation – established to solicit input from coastal stakeholders -- are also appointed by the governor. The Governor’s Executive Assistant for Coastal Activities establishes policy and coordinates the duties of any state agency relative to integrated coastal protection and serves as the chair of CPRA.

Recommendation:
The governor should ensure that the Executive Director and CPRA Chair will provide leadership and accountability so that the Master Plan and Annual Plans are developed and executed based on the intent of the governing laws and done so in a manner not driven by politics, but rather in the best interest of the state, based on the best available science and technology.

The Master Plan

The state has a clearly defined legislatively mandated process for setting coastal priorities. The law requires that the state’s master plan for coastal protection and restoration include scientific data and other reasons as to why projects and programs are selected for inclusion and how each project or program advances the plan’s objectives. However, there is a deficiency in transparency and communication with the public during the project development and selection process. Further, as additional dollars flow into the state, there are questions as to whether and how the best science will be used as decisions are made.

Table3The Master Plan was updated in 2012 to account for improved science and methodology. The plan, approved unanimously by the Legislature, was based on a two-year analysis by state and international scientists and specialists whose work was used to select 109 of the most high performing projects for achieving the goals of comprehensive flood protection and restoration. The cost of fully funding the projects over time is estimated at $50 billion. The 2017 Coastal Master Plan is in development and continues to rely on the science and engineering expertise as well as citizen and stakeholder engagement.xxvii

The CPRA has an established process for decision-making and for engaging policy-makers and stakeholders in the planning process. The development of Louisiana’s Coastal Master Plan is generally recognized as an effective and transparent process by stakeholders. Further, there is a conscious goal to keep stakeholders informed through quarterly reports and independent sources of review, inclusive of focus groups and public meetings in parishes across the coast. The law also helps to protect the planning process from undue political influence by establishing procedures that provide for public participation and legislative oversight but do not permit legislators to substitute their own projects or funding priorities.

The Annual Coastal Plan is required to include a 3-year projection of expenditures. However, there is no retrospective reporting on what has been spent on projects. Several recommendations have been made by stakeholders that would better educate the public and improve transparency in decision-making for coastal funding, including adding specific notes for significant revenue changes and incorporating an income statement in the Annual Plan that would track previous projections and expenditures compared to current revenue projections.

Recommendations:
The governor and his administration should emphasize the development of a Coastal Master Plan that relies on the best science and engineering data available and avoid politicizing the decision-making process.

The governor and his administration should develop new models of stakeholder engagement that improve the transparency and communication with the public during the project development, selection and implementation phases. An effective stakeholder engagement model should improve communication and provide more information and means of providing the information in an easily understood manner resulting in a higher probability of project implementation success.

The governor and Legislature should avoid politicizing the existing approval process for the Master and Annual Plan. Specifically they should resist any efforts to change the “up or down” vote or any other changes that would invite politics into the planning and project selection process.

The coastal Annual Reports should include retrospective reporting and better tracking of expenditures and projections.

Managing the money and contracts

The new governor and his administration will make significant policy and investment decisions that could impact the effectiveness of Louisiana’s response to the monumental task of restoring its coastal ecosystem and economy. Transparency in decision-making, procurement and expenditures within all of the allocation components of the RESTORE Act, the Natural Resource Damage Assessment and the National Fish and Wildlife Foundation’s Gulf Environmental Benefit Fund will all play a key role in establishing accountability and results. To ensure that dollars are spent as intended, the decision-making process for coastal restoration investments should be transparent and understood by the policy-makers, stakeholders and the public.

As more dollars flow into the state for coastal restoration and protection, there are more dollars for CPRA to manage. Likewise, businesses have more opportunities to compete for those dollars. As CPRA’s budget has grown, larger firms have been selected as prime contractors and consultants. Some of these firms, although capable of providing the work, are not Louisiana-based. Some smaller Louisiana firms are trying to build their capabilities to become sub-consultants. A report by Greater New Orleans Inc. -- “Analysis of Coastal Restoration Workforce Assets, Challenges, and Opportunities in South Louisiana” -- recommends ways to increase participation by local firms and employees in CPRA contracts. The report suggests leveraging economic development organizations and chambers of commerce for networking to introduce potential subs to prime contractors and provide business assistance, workforce recruitment and training aid. The report recommends piloting a professional services procurement opportunity for small-to-medium sized firms to determine the feasibility for the CPRA to manage smaller contracts. CPRA acknowledges this point and is working towards the same goal.

Recommendations:
The governor and Legislature should institutionalize the practice of employing transparency in decision-making for coastal funding. This will be a test of leadership for the new governor. He will have to insulate coastal restoration and protection from a variety of political influences that could sidetrack restoration efforts.

CPRA should leverage the new IT system, LAGov, to improve transparency and real-time public reporting regarding the state’s investments in coastal restoration and protection. Further, the state should leverage Louisiana’s Transparency and Accountability (LA TRAC) portal and online state spending database by including CPRA expenditures and contracts on the portal. Currently, there are a significant number of vendors’ payments generated outside of the state’s systems and not defined on LA TRAC.

CPRA should explore opportunities to build capacity for Louisiana firms so that they can compete for this work as more dollars for coastal restoration and protection flow into the state.

The Coastal Protection and Restoration Fund

Most of the money the state spends on coastal projects comes through the Coastal Protection and Restoration Fund, a constitutionally protected account that draws its money from the state, the federal government, various settlements related to the BP oil spill, mineral revenues from oil companies and other sources.

In 2014, PAR raised an alarm over the planned use of the Coastal Fund as a kind of fiscal washing machine to churn one-time non-coastal revenue into general operating dollars for the state budget. Fortunately, the Legislature saw fit to stop using the Coastal Fund for that kind of budget gimmick.

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The state Constitution says that once money is placed in the Coastal Fund, it must be spent on projects consistent with Louisiana’s Coastal Master Plan. However, there is an exception to the rule. To balance a mid-year budget deficit, the governor has the constitutional prerogative to skim a small portion of cash from a variety of state funds, including the Coastal Fund. A legislative committee must approve this action. Historically, the state has safeguarded the Coastal Fund from budget cuts. However, in February 2015, we saw for the first time an administration raid the Coastal Fund to address a mid-year budget deficit for the 2015 fiscal year. A subsequent action was taken under Gov. Jindal to effect another sweep for fiscal year 2016, again as a result of a mid-year deficit. With these sweeps, the Coastal Fund was raided of money that was to be spent on coastal restoration projects and management.

Recommendation:
As outlined in past PAR commentaries, the state’s practice of using the Coastal Protection and Restoration Fund as a pass-through to balance the state’s operating budget should be stopped. The governor and Legislature should avoid raiding, supplanting, redirecting and using budget gimmicks that result in reducing the funding dedicated to and available for investing in coastal protection and restoration. With the RESTORE Act and other federally regulated programs comes a higher level of scrutiny as to how the funds are expended, as well as more stringent and frequent audits. Questioned costs are subject to recapture.