Mayor-President Joel Robideaux, in appointing interim directors for Lafayette Utilities System and the city's fiber operations, did not seek approval from consulting engineers as required in bond covenants.
Bond covenants are legally binding agreements between the issuer and purchaser of bonds with dos and don'ts designed to protect both parties in the transaction. LUS and the city sell bonds to finance construction.
The bond covenants state, "In the role as consulting engineer to the issuer, the consulting engineer is required to approve of the appointment of a chief operating officer."
Tony Georgis, managing director of NewGen Strategies and Solutions, said his consulting engineering firm was notified Robideaux appointed interim directors. The firm, he said, was not consulted about the appointments.
The mayor, Georgis said, sought legal counsel. He declined further comment.
Robideaux, in an email response to The Acadiana Advocate, wrote Tuesday, "The decision on an interim appointment was made after consultation with legal." It was determined, he said, that the bond covenant clause only applies to the appointment of a permanent director.
On Oct. 11, the day before an election to replace Robideaux, who chose not to run for a second term, he announced the appointment of Lowell Duhon as interim director of LUS and Kayla Miles as interim director of the fiber division. Duhon has been CAO for Lafayette Consolidated Government. He replaced Jeff Stewart, a long-time LUS engineer who was appointed interim director in July 2018 after the retirement of Director Terry Huval. Miles has been business manager of the fiber operations. She replaces Teles Fremin, appointed interim director of fiber in November 2018.
The change "was initiated to facilitate an internal review of the operations on behalf of the Louisiana Public Service Commission, which has limited oversight of both entities," according to a news release.
Robideaux told The Advocate in an Oct. 11 email the PSC did not request or require he appoint new directors for the internal review into whether the fiber operations were improperly supplemented by LUS.
Both LUS and the fiber division are under review by the PSC for two self-reported findings of possible violations. After notifying the PSC, that state agency asked that a more in-depth "and internally unbiased review" of all LUS fiber interagency transactions be performed, which necessitated the staff changes, according to the prepared statement.
The incident reported to the PSC on April 14, 2018, involved LUS wastewater and electric divisions paying the fiber division more than $1 million over several years for service that wasn't used because the final connections were never made. The fiber division paid LUS back more than $1.7 million, which included interest.
Robideaux, in a meeting July 8 with PSC representatives, said he self-reported another instance where LUS paid the fiber division about $8 million since 2011 for a power outage monitoring service that wasn't necessary or financially justified, to the benefit of the fiber division. The mayor-president alleges the payments were a violation of PSC rules and the Local Government Fair Competition Act.
Robideaux and the City-Parish Council have since split LUS and the fiber operations.