The Southside Economic Development District, or SEDD, failed to convince the state Bond Commission last week to add a 0.55-percent sales tax proposition to the May 4 general election ballot.
SEDD wants the sales tax levied for eight years beginning Oct. 1 for the purpose of building, acquiring or upgrading capital improvement projects and any other purposes, though specifics about such purposes remain unknown. The proposed sales tax is projected to generate $1 million each year, or some $8 million over its term.
Bond Commission members, Monroe City Council members and the Monroe Chamber of Commerce have pointed out SEDD’s questionable expenditures, challenged the lack of spending plans and disputed some contradictory statements made by SEDD’s executive director, Charles Theus.
State Treasurer John Schroder, who presides over the Bond Commission, told Theus last week the Bond Commission’s ad hoc subcommittee might consider SEDD’s request next month if SEDD could secure a resolution of support from the City Council.
City Council Chairwoman Gretchen Ezernack told The Ouachita Citizen on Tuesday afternoon that SEDD’s request would not be added to the council’s regular meeting later that day.
“It’s not on our agenda for tonight,” Ezernack said. “We’ll have to wait to see if it’s added at the next council meeting.”
Ezernack said a full discussion about SEDD’s tax proposal needed to be held.
“I would like to hear what they have to say and what their plans are,” Ezernack said. “If it was on tonight’s agenda without any additional information, I would not be in favor of it. If it is added to the agenda, they need to come to answer lots and lots of questions.”
Without consideration of SEDD’s request on Tuesday, SEDD would likely have to wait to ask for a resolution of support from the City Council during its March 12 meeting. That would be one day later than the Bond Commission’s ad hoc subcommittee meeting, possibly delaying SEDD’s efforts until an election date in the fall or another later date.
“I’m glad they suggested it needed to be put on the ballot at a later time because there is a need to know all the ramifications of the measure,” Ezernack said.
When asked whether SEDD would consider adding the sales tax measure to the October primary election ballot instead, Theus simply said, “We would like to move forward with the May ballot.”
Voter turnout for the May 4 municipal election is expected to be weak compared to the October primary election featuring a statewide governor’s race and several legislative district races among others.
Secretary of State Kyle Ardoin said the estimated cost of holding the election for voters to consider SEDD’s proposed tax would cost some $25,000, if held on May 4. The cost of the election would be borne solely by SEDD, unless it waited until October when the cost of the election would be shared among the state and other entities, according to Ardoin.
SEDD’s expenditures questioned
When the Bond Commission took up SEDD’s request during its Feb. 21 hearing, Bond Commission members were informed Monroe Mayor Jamie Mayo supported SEDD’s tax measure while the Monroe Chamber of Commerce opposed it.
The letter of opposition from business members of the Chamber of Commerce was the basis of several concerns voiced by Bond Commission members.
State Rep. Phillip DeVillier was the first member of the Bond Commission to heave questions at Theus about the sales tax proposition. DeVillier voiced concerns that SEDD’s sales tax proposal could make it more difficult for other nearby local governmental entities to garner approval for any future tax proposals supporting more critical public services: police services, fire trucks, classroom teachers’ salaries.
“It may somewhat tie the hands of the locals trying to get these things,” said DeVillier, R-Eunice.
State Rep. Cameron Henry, who chairs the House Appropriations Committee, asked Theus about SEDD’s expenditures of revenues generated by a 2-percent hotel occupancy tax approved in late 2017.
According to Theus, revenues from the hotel occupancy tax and financial support from Mayo’s economic development fund were the sources of SEDD’s $140,000 in the bank.
Speaking of the hotel tax, Theus said, “It’s good for planning, but we can’t really do any projects with it.”
Henry’s questions were direct.
“What have you accomplished to date with the money you have received?” said Henry, R-Metairie.
Theus could not list any accomplishments. He claimed SEDD’s funds were being saved for a bridge repair project.
“Well, we have really set aside the funds to do a bridge,” Theus said. “We had a bridge that was unsafe for kids crossing at Wossman High School — no, no — Carroll High School. So we’re setting funds to renovate that bridge.”
“We’ve done studies with the money that the mayor gave us,” Theus added.
During Theus’ spiel about setting aside funds for future projects, Henry rubbed his eyes and forehead, waiting for Theus to complete his remarks.
“OK, but I mean, aside from studying things — obviously the bridge sounds like something that is extremely worthwhile doing, but are you finished doing that?” Henry said.
Theus said an unidentified architect estimated the bridge repair project would cost $150,000 to repair.
“If we do the bridge nicely, it would cost $250,000,” Theus said.
Chamber of Commerce opposes SEDD tax measure
According to Henry and others, the Monroe Chamber of Commerce’s opposition to SEDD’s tax measure sparked a number of concerns.
“Obviously, not having the chamber of commerce in support of this does not help the situation,” Henry said. “To have them strongly opposed to it would tell me you need to get everybody on the same page before you come back.”
Rick McGimsey, legal counsel for Gov. John Bel Edwards’ Division of Administration, questioned a statement Theus made earlier in the hearing that SEDD had previously submitted a spending plan to the City Council.
“In the letter of opposition from the chamber of commerce, they made a comment that the district had not presented a plan on how the sales tax proceeds would be used to the city council or city planning commission to ensure it’s consistent with the city’s comprehensive plan,” McGimsey said. “Did I hear you earlier say you had a plan?”
“Thank you for the question,” said Theus, raising a packet of paper. “This plan was presented and approved by the City Council before I got there. We’re using the same plan.”
Theus claimed the City Council, Mayo’s administration and others approved the plan.
“Did we have that plan in our packet?” said DeVillier, referring to the documents submitted by SEDD in its application to the Bond Commission.
The answer was “No.”
Sue Nicholson, President/CEO of the Chamber of Commerce, challenged Theus’ remarks about the plan, which she pointed out was approved in the early 2000s — long before SEDD had any form of regular revenues.
“They’re taxing the poorest neighborhoods, and for what?” Nicholson said. “Charles has not said what he would do with that $8.8 million. He has not been clear on how he intends to spend that.”
A document provided to The Ouachita Citizen by the Chamber of Commerce showed there were more than 400 businesses within SEDD’s district, which encompasses a large geographical area and three council districts.
“When the district was created, it was gerrymandered to include as many businesses as possible,” Nicholson said.
Among other claims made last week, Theus said businesses in SEDD’s district supported the sales tax measure. When asked about those businesses, Theus said a business round table considered the sales tax measure and voiced support.
According to Nicholson, Theus’ claim was misleading. “He would make reference to the business round table,” Nicholson continued. “I’m not sure that he actually has a business round table. I think he is talking about a breakfast hosted by the mayor for businesses.”
“He (Theus) gave a terrible presentation of the plans for SEDD. He didn’t go to local businesses and say, ‘You guys want a tax?’ and they all raised their hands and said, ‘Yes, we do. Whoop-dee-doo.’”
City officials’ stance
on SEDD tax measure
During the Bond Commission’s hearing last week, Theus said he made a deal with Mayo and businesses in SEDD’s district to arrange SEDD’s sales tax increase proposal.
“We asked the mayor for a penny (sales tax),” Theus said. “He said, ‘Let me get with some of the business people.’ After getting with the business people and some of the people in the district to get together, the mayor said, ‘Let’s do eight years at whatever you suggest.’ ”
“The mayor is very conservative and business-minded,” Theus added.
In his remarks, Theus claimed the City Council had no concerns or questions about SEDD’s tax proposal when he appeared at the City Council’s Feb. 19 meeting.
City Councilman Michael Echols said Theus’ description of the Feb. 19 meeting was misleading, because SEDD’s tax proposal did not come before the City Council for discussion as an agenda item at that time.
“The public participation period is not a time for council members to go back and forth,” Echols said. “It’s there for people to make three minutes of statements. It is not a time for discussion.”
When asked last week whether the City Council supported the tax measure, Theus said, “I polled the council. The members I polled were in support.”
Later, Theus indicated he might not be able to persuade any members of the City Council to add SEDD’s resolution to the City Council’s agenda this week or in March. Faced with the possibility of not getting a resolution of support from the City Council, Theus indicated he wanted the Bond Commission to go ahead and vote on SEDD’s proposal.
Schroder, who claimed he received more phone calls than anyone else about SEDD’s tax measure, told Theus he would be required to obtain a letter of support from the City Council. According to Schroder, some of those phone calls pertained to “heartburn” stemming from Theus’ poor communication with the City Council.
Adam Parker, who serves as SEDD’s legal counsel, asked whether the Bond Commission would approve SEDD’s request to add the sales tax measure to the May 4 ballot contingent upon securing the City Council’s approval.
“No,” Schroder said. “We’ll do it the same way we do with everybody else.”