Building Trust with sound coastal
investment policies

Chapter Four: Local Governance

Local governments are on the front lines in the battle to prevent flooding and land loss. They share a responsibility with the state to protect citizens, property and livelihoods. They must pursue their interests while also coordinating regionally. Water has no regard for politics, but well run parishes and levee districts might demonstrate that politics can have a strong impact on water. Transparent policies, management, cooperation and planning can make a difference in preventing devastation.

Coastal parishes in Louisiana have several sources of revenue to address their challenges. Local taxes and fees, levee district collections, federal grants and state support are among the chief traditional forms. More recently, local governments have been targeted for money from the Deepwater Horizon settlement and from the forthcoming federal revenue share from offshore drilling. Although these new distributions to the parishes are small in comparison to the overall revenue at play for the state and the Gulf region, the amounts are significant on a local scale.

The federal RESTORE Act created a process to distribute revenue from civil penalties following the 2010 BP oil spill. Among the dollars to be sent, Louisiana will get what is known as a Direct Component allocation of about $308 million. Coastal parishes will receive 30% of that allocation based on a distribution formula. The funds can be used for wide range eligible activities, including restoration and protection, mitigation, conservation management, state park improvements, infrastructure projects, planning and administrative costs, and tourism and seafood promotion. This range of options creates an important decision point for the local governments and levee districts: whether to leverage the windfall resource for impactful restoration and protection projects or spend the money on roads, ports, government operations or other purposes. The temptation will be to spread the money thinly for political reasons.

As a condition of receiving the funds, the RESTORE Act requires that the chief executive of the eligible parish certify to the governor that the parish has completed a comprehensive land use plan. The plan “may include milestones, projected completion of each activity, and a mechanism to evaluate the success of each activity in helping restore and protect the Gulf Coast region.” The RESTORE Act imposes other conditions including that “the project or program is designed to restore and project the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, coastal wetlands, or economy of the Gulf Coast.” The projects must be “selected based on meaningful input from the public, including broad-based participation from individuals, businesses, and nonprofit organizations.” In addition, natural resource protection or restoration projects must be “based on the best available science” and should be awarded with contracts that are “consistent with the standard procurement rules and regulations governing a comparable project or program in that state, including all applicable competitive bidding and audit requirements.”

The efforts of coastal parishes are crucial to the success of the state’s overall restoration efforts. Some coastal parishes are moving forward with plans, but how many of them will utilize the funds remains unclear. In many parishes, levee districts have been established through state legislation. Some parish governments serve as their flood protection authority in lieu of establishing a levee district. The levee and regional flood protection boards have the ability to levy district taxes for constructing and maintaining levees and flood protection. The governing authority also has the ability to issue bonds, subject to state Bond Commission approval, of which the proceeds are used for flood protection or for payment of any outstanding indebtedness.xxxii

The Coastal Protection and Restoration Authority is charged with oversight and administration of all matters related to hurricane protection and flood control.xxxiii The CPRA, in recognition of the importance of working with the parishes to achieve comprehensive integrated coastal protection, has developed a matching program and dedicated some of the state’s share of RESTORE Act funding for the eligible parishes.

Local Decision Making Process

The Direct Component funds are 35% of the RESTORE fund and each of the five southern states impacted will receive 7%. In Louisiana, 30% of the share of the state’s direct component is split among 20 coastal parishes, based on a complex formula that recognizes miles of shoreline oiled, parish population and parish size. The oiled parishes will receive a greater share of these funds than the other parishes.

All Louisiana coastal zone parishes—Ascension, Assumption, Calcasieu, Cameron, Iberia, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Terrebonne, Tangipahoa, and Vermilion—will receive a portion of the Direct Component funds, totaling $92 million, with $17.1 million available now.

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The U.S. Treasury is the agency that will receive applications and administer the Direct Component funds, including monitoring the use of funds for compliance with the Act and with Treasury’s regulations. The locals have the authority to determine what RESTORE act eligible projects they wish to fund with the dollars given.

The first step in the process of receiving Direct Component funds is the development of the Multi-Year Implementation Plan. The multiyear plan must consist of the projects/activities that the local government administration ranks and recommends. Then, that plan must be posted on the local government website for public review. In Louisiana, the law also requires the parish to have adopted a comprehensive land use plan that's consistent with or complementary to the state's Coastal Master Plan and approved by the governor.

The next step is the Treasury will review the parish’s Multi-Year plan for completeness and conformity with regulations, and then notify the parish when it can begin to submit grant applications. The parish will have to complete a separate grant application package for each proposed project or activity listed in the multiyear plan. The grant application will require more specificity. Parishes may apply for initial funds to develop a Multi-Year Plan. Parishes may also be able to secure funds to create a system to review grant applications, award grant sub-recipients, monitor grants and set up audit procedures. Parishes may also seek reimbursement for some funds already expended in furtherance of the RESTORE Act and public involvement activities.

Then, each applicant must complete an Operational Self-Assessment, and it must be reviewed and accepted by Treasury before funds may be awarded. The Multi-Year Plan and subsequent grant applications will be submitted and managed by the Treasury’s online grant system call GrantSolution.com. The Treasury will utilize another online system for grant disbursement payments called Automatic Standard Application for Payments.

Several parishes have submitted their Multi-Year Plan and grant applications that propose investing their allocated funding in important coastal restoration projects. However, as illustrated in a recent public debate regarding Jefferson Parish spending part of the BP settlement on pay raises, the risk of redirecting the funding to other local government needs is high.

The Gulf of Mexico Energy Security Act of 2006 (GOMESA) created revenue sharing provisions for the four Gulf oil and gas producing states including the state of Louisiana and its coastal political subdivisions. GOMESA funds are to be used for coastal conservation, restoration and hurricane protection. The Act included two phases of GOMESA revenue sharing: Phase I began in Fiscal year 2007 and shared 37.5 percent of all qualified OCS revenues, including bonus bids, rentals and production royalty, among the four States and their coastal political subdivisions from new leases issued in two small geographic areas in the Gulf of Mexico. Additionally, 12.5 percent of revenues were allocated to the Land and Water Conservation Fund (LWCF). The total amount disbursed to all coastal local governments in 2014 was $1.4 million.

Phase II of GOMESA revenue sharing begins in Fiscal Year 2017. It expands the revenue sharing across the Gulf of Mexico OCS. A revenue sharing cap of $500 million per year for the four Gulf producing States, their CPS’s and the LWCF applies from fiscal years 2016 through 2055. In 2018, the revenue share for Louisiana and its CPS’s will significantly increase providing more dollars for the coastal conservation, restoration and hurricane protection.

Louisiana Levee Districts

While levee boards seem like local entities they are actually creations of state government. The Louisiana constitution provides that the Legislature may create, consolidate, divide or reorganize level districts. Generally, levee districts are created by law in statue. While historic focus of these districts has been on preventing river flooding, with increasing coastal land loss, a shift has occurred to preventing coastal flooding in the southern levee districts.

Appointments to levee boards are covered by the constitution and allow the Legislature to set the member. However, except for regional boards, levee board members must be residents of the districts on which they serve.

The constitution also provides that if a levee district is situated entirely within on parish, it may be consolidated into the parish government. An example is the consolidated city-parish of Baton Rouge. Flood protection and levee maintenance are handled by the Department of Public Works.

As public bodies, levee boards must follow the state’s open meetings, open records and ethics laws. As a creation of the state, they must also follow state procurement laws. This includes the statutes regarding consulting contracts (for design and engineering) and construction.

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Funding sources

The constitution (Article VII Section 39) provides for the funding of levee districts. District created prior to January 1, 2006 may levy annually a tax not to exceed five mills. New districts may also levy a tax but it must be approved by a vote of the people. Not all districts are funded by property taxes. For example, the South Lafourche Levee also has a sales tax to help support their program.

CPRA oversight

Much as the state Board of Elementary and Secondary education oversees local school boards, CPRA exercise oversight authority over levee districts. CPRA conducts quarterly inspection of local levees and provides policy guidance. CPRA can even intervene in a levee district’s governance if deemed necessary. RS 49:214.6.3 provides that “the exercise of any authority with respect to hurricane protection and flood control by a political subdivision within the coastal area is subject to the oversight and approval of the authority in accordance with rules and regulations adopted by the authority.”

Southeast Louisiana Flood Protection Authority- East

The Southeast Louisiana Flood Protection Authority-East (SLFPA-E) was established on January 1st, 2007 by the Act No. 1 of the 2006 First Extraordinary Session of the Louisiana Legislature. SLFPA-E oversees East Jefferson, Lake Borgne Basin, and Orleans Levee Districts. This encompasses Jefferson, St. Bernard, Orleans, and Tangipahoa Parishes. SLFPA-E manages over 114 miles of federal levees and 41.62 miles of non-federal levees throughout the three levee districts. SLFPA-E receives five hundred thousand dollars annually from the Louisiana Coastal Protection and Restoration Fund.

Southeast Louisiana Flood Protection Authority- West

The Southeast Louisiana Flood Protection Authority- West was established on January 1st, 2007 by the Act No. 1 of the 2006 First Extraordinary Session of the Louisiana Legislature. SLFPA-W is the governing authority overseeing West Jefferson Levee District and Algiers Levee District. SLFPA-W oversees the West Bank and Vicinity Hurricane Protection Project which provides flood protections for residents in portions of West Jefferson, Algiers, Orleans, Belle Chasse, Plaquemines, and St. Charles. The project begun in 1991, however it was not completed prior to the landing of Hurricanes Katrina and Rita. Following the extensive flooding, the U.S. Army Corps of Engineers were directed to rebuild the failed flood protection system. Currently SLFPA-W manages the project with the Coastal Protection and Restoration Authority.

South Lafourche Levee District

The South Lafourche Levee District was created in 1970 (or 1968). The district manages 48 miles of federal levees and 1 mile of flood wall, which creates The Larose to Golden Meadow Hurricane Protection system. The system is built in a loop between Larose and Golden Meadow along Bayou Lafourche. The levees protect a critical low segment of highways that support Port Fourchon, where 90 percent of the Nation’s Gulf deep offshore oil production is transported. In 2012, approximately $115,000,000 had been spent to build the levees, pumping stations and drainage structures in the district.

Pontchartrain Levee District

The Pontchartrain Levee District was created by the legislature in 1895. Today, the district includes 115 miles of Eastbank Mississippi River levee and 10 miles of Hurricane Protection Levee in St. Charles Parish. Included in the district are East Baton Rouge, Iberville, Ascension, St. James, St. John the Baptist, and St. Charles Parishes. The district operates on an annual budget of $8.2 million.

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Some local governing authorities have had success in raising local millages or taxes to operate and maintain flood protection infrastructure, while others have not. Local governments are not always prepared for these future expenses and need to develop plans and strategies to explore funding sources.

Watersheds do not follow neat political boundaries. Coordination is paramount if efforts by levee districts are to be maximized. Constant review is also necessary to ensure that the levee district boundaries are well-suited to allow those districts to effectively raise funds to accomplish their missions. Recently a number of levee districts have been unsuccessful at raising local revenue simply to fund their basic obligations. Does this suggest the organization and or boundaries of the district are not effective or are their other reasons voters are unwilling to fund a basic public safety feature of their community? With many districts facing exponentially increasing costs to operate and maintain their systems, this will be an important issue in the future.

Local governments play a valuable role in overall coastal restoration efforts. They will need to employ the same level of transparency and decision-making criteria as the state to ensure these funds are spent wisely. And, both the state and local governments will need to cooperate on this share effort to maximize the impact of our investments.

Recommendations:
The Administration should continue the state matching program to leverage RESTORE Act funding through the RESTORE State-Parish Matching Program in an effort to encourage local governing authorities to use these funds for coastal protection and restoration and avoid diverting the funds for other use. Further, the state should consider the feasibility of implementing this policy for GOMESA funding.

Local governing authorities should ensure that the decision-making and procurement process for allocating and investing the funds are done in a transparent manner that includes public input.

Further, there needs to be an auditing process established to ensure that the funds are spent how they are intended to be spent, especially for the GOMESA and significant new funding streams.

The CPRA should require that local governing authorities enter into an agreement with the state to provide for operation and maintenance of these assets.

If feasible, the CPRA should develop guidance for the coastal parishes and provide technical assistance, as needed. This assistance should not only be limited to helping each parish implement projects, but ensuring that the projects work together as a cohesive unit. As long as parishes stick closely to the projects outlined in the Master Plan, coordination between parishes becomes less of a problem.

iConst. Art. VII. § 39, 40
iiR.S. 49:214.6.3