Lafayette Utilities System is sometimes lovingly referred to at city hall as “the goose that laid the golden egg” — a municipal electric, water and sewer service that pumps more than $22 million into the city-parish coffers each year.
A long-simmering dispute over control of that goose could be coming to a boil.
Oversight of LUS been an issue ever since the once-separate governments of the city of Lafayette and Lafayette Parish consolidated in 1996.
The dispute turns on the fact that LUS is owned by the city, which despite the 1996 merger remains a separate legal entity.
But even though the city owns the utility system, City-Parish Council members with large rural constituencies beyond the city limits have the same say over LUS as council members with districts that are based in the city.
It’s a scenario that City-Parish President Joey Durel characterized as a “mind-boggling” slight against city residents.
The debate has been largely philosophical for some two decades, because as long as anyone can remember, the rural faction on the council had never voted down any LUS rate increase, fee or policy issue that the majority of the city faction supported.
That changed earlier this month, when the full rural faction joined with two dissenting members from the city faction to shoot down a proposal that would have allowed LUS to charge developers for expenses related to water and sewer lines those developers tap.
“Now we have been impacted by it, and it is opening more eyes than ever before,” said City-Parish Council Chairman Kenneth Boudreaux, who represents a city-based district in north Lafayette. He said he hopes to spark discussions this year that could put the utilities system back under the sole control of the city.
Concerns over whether the city would maintain control of LUS were central in the debate over consolidation in the 1990s.
The group that drafted the constitution-like charter setting up city-parish government made certain to include language stipulating that oversight of LUS would be given only to council members who had districts made up of at least 60 percent city residents.
Those councilmen were designated as members of the newly created Lafayette Public Utilities Authority, which the charter carved out as distinct from the full nine-member council to act independently in managing the utilities system.
In reality, though, the LPUA has little practical authority because of what city-parish attorneys say is murky language in the charter about whether the full council also should have a say on utilities issues.
The LPUA, now made up of five members with city-based districts, meets as a separate group before the full City-Parish Council meeting, but the policy since consolidation has been that any issue involving rates or fees or budgets — anything having to do with money — also must be approved by the full council.
When the developer fees came up for a decision on Jan. 6, the LPUA approved the fees by a vote of 3-2, but the full council voted the fees down 6-3, voiding the decision of the three-member majority on the LPUA.
Durel said it is the first time he can recall that the full council rejected a measure the LPUA had passed, raising what Durel sees as the troubling specter of more splits to come.
“It’s been precarious over the years, but it has generally worked,” Durel said of the tension between the LPUA and the full council.
City-Parish Councilman William Theriot, who represents mainly non-city residents in southern Lafayette Parish and cast his vote on Jan. 6 at odds with the LPUA, said he sees little cause for concern.
“This has been going on for a long time, and LUS has flourished,” Theriot said. “It’s one time since 1996.”
Theriot also points out one of the central problems with how the LPUA was set up in the city-parish charter.
Even though Theriot represents a largely rural district, he still has some constituents in the city of Lafayette. If he wasn’t allowed to vote on utilities issues, those residents wouldn’t have a voice in the management of their utility system.
City-Parish Councilman Jay Castille, who represents a large rural contingent in northern Lafayette Parish, shares that view.
“I’m voting for my city residents, that’s who I’m voting for. Whether I represent one city resident or 2,000 or 5,000,” he said.
That issue emerged even before consolidation formally went into effect in 1996, despite earlier assurances that the LPUA would have complete control of the utilities system.
“That was everyone’s understanding until a month or two before consolidation took place,” said LUS Director Terry Huval.
Control of LUS has been at the center of recent debates over possible deconsolidation, and several fixes to the issues related to LUS have been proposed over the years. These include giving each council member a weighted vote on utilities system issues based on how many city residents are in the council member’s district.
Another related problem is language in the charter that city-parish government bond attorneys have argued does not make it crystal clear that the LPUA has sole control of the utilities system.
That’s important because people who buy the utilities system bonds — essentially agreeing to loan LUS money for projects — want to be certain there will be no question about whether the LPUA has full authority to approve those bonds, said Jerry Osborne, who has worked as a bond attorney for city-parish government for as long as there has been a city-parish government.
“We get as close to 100 percent as possible. That’s what the bond holders rely upon,” Osborne said. “... That’s my job, to make it where he always feels safe, so I don’t take any chances.”
Durel said the legal questions frustrate him.
“Personally, if we didn’t have lawyers here, I would ignore the council,” Durel said. “They are not the governing authority of the utilities system.”
At stake in the dispute is not only a power struggle between the “city” and “parish” sides of city-parish government, but questions of whether city residents and rural residents see eye-to-eye on how to run the utilities system.
Rural residents, for example, might benefit if LUS launched an aggressive policy to offer water and sewer to areas beyond the city limits. City residents might worry about whether LUS would make enough money to recoup the costs of such a project, or whether providing service to rural residents might make future annexations by the city more difficult because the rural residents already have a major city service.
Similar issues are tied up in the larger debate over consolidation as a whole, and Durel and others have long complained about council members from rural districts voting on other city-specific issues, such as the budgets and policies of Lafayette’s police and fire departments.
Voters in 2011 rejected a measure to undo consolidation and return to two separate governments, but there is still talk of a tweaked version of consolidated government where only council members who represent the city of Lafayette vote on city issues, including the utilities system.
Boudreaux said deconsolidation is likely off the table, but he hopes to explore other fixes this year.
He was reluctant to delve into the details, other than to say he plans to reach out across the parish for a wide-ranging and inclusive discussion.
“I think the problem we have run into historically is fear,” he said of the prospects of tinkering with consolidation. “At the end of the day, you are going to have to have buy-in from all these people.”