If public humility is your thing, all you have to do is appear before a state legislative committee or state commission unprepared to provide answers to even the most basic of questions.
That’s what happened last Friday in two separate legislative committee rooms during meetings of the State Bond Commission and the Joint Legislative Committee on the Budget (JLCB) during discussions of capital outlay projects and BA-7 requests, respectively.
BA-7s are budget request forms used to make changes in revenues and/or expenditure line items during the year. Agencies submit them to the Division of Administration (DOA) Budget Office and if approved there, they are placed on the monthly agenda of the JLCB for consideration.
Bond Commission Chairman State Treasurer John Kennedy was particularly rankled over the shifting of construction projects to be replaced by $5 million in capital improvements to the LSU Health Sciences Building in Shreveport which is being taken over by Biomedical Research Foundation of Northwest Louisiana (BRF).
After Mark Moses of State Facility Planning and Control submitted changes to the commission, Kennedy said, “In July, you said the list was top priority and shovel ready. Now you’re saying they are not. What changed?”
“Cash flow needs have changed,” Moses said. “We’re shifting money. Eighteen projects are complete and on 76 others, there has been no activity and if the need is not there, we shift the dollars.”
“Why did you say in July that they were top priority?” Kennedy asked again. “The problem is if we replace them with something else, the original projects go to the back of the line. We’re shutting 90 projects down even though we have already spent money on some of them and now we’re sending those projects to the back of the line.”
Kennedy then launched into his ongoing criticism of the privatization of the Louisiana Medical Center at Shreveport and E.A. Conway Medical Center in Monroe. “We’re making $5 million in capital improvements to the Health Science Center. Who’s going to own that?”
Liz Murrill, DOA chief legal counsel, said, “We own the building. They (BRF) are leasing it.”
“We’re spending $4.8 million on scanner clinical and research imaging equipment for Biomedical Research Foundation…”
“This is a non-state entity. The dollars are being used for a public purpose,” Murrill said.
“Like an NGO (non-government organization)? We’re just giving it to them?”
“We’re providing money for this piece of equipment,” she said.
“Do we require them to file quarterly reports?”
“It’s contemplated it will be used for a public purpose,” she said, failing to answer his question.
Kennedy then asked if the legislative auditor would be able to audit the expenditure of the funds to which Murrill said, “I assume so, just as with any capital outlay projects.”
“One of the conditions of the agreement is there would be no public record,” Kennedy said, referring to a clause in the certificate of agreement between the LSU Board of Stuporvisors and BRF which says, “Financial and other records created by, for or otherwise belonging to BRF or BRFHH (BRF Hospital Holdings) shall remain in the possession, custody and control of BRF and BRFHH, respectively,” and that “such records shall be clearly marked as confidential and/or proprietary,” and thus protected from Louisiana public records laws.
“A public record is a public record,” Murrill said somewhat tentatively. “We have procedures to decide what is public record.”
“Who decides what’s public?” Kennedy asked.
“It depends on who gets the request.”
“Do you have a problem adding a condition to these purchases on the legislative auditor’s being able to audit the purchases?”
“I think that’s the case now,” Murrill said.
“Why are we buying this for the Biomedical Center instead of LSU?” Kennedy asked.
Mimi Hedgecock of the LSU School of Medicine—and formerly Jindal’s policy advisor—said the purchase was part of the partnership with BRF prior to the certificate of agreement between LSU and BRF.
“Is it accurate to say we have not picked an operator of the hospital yet?” Kennedy asked. “The testimony before the Louisiana Joint Budget Committee was they (BRF) were going to pick an operator. We’re entering a 99-year lease and don’t know who is even going to run the facility. The legislature has no say. How can we audit if we don’t know who’s running it? We can’t audit HCA (Hospital Corp. of America).
“This makes a mockery of the capital outlay procedure,” Kennedy said. “You’re supposed to be building a priority of projects. In July, you cam to us and said these projects were absolutely top priority and (were) shovel ready. Now they’re not shovel ready or top priority. Now we have new projects and these projects are going to the back of the line. I don’t think this is a good way to do business.”
Joint Budget Committee
Things got even testier at the Joint Budget Committee, thanks to the amateurish performance of witnesses appearing on behalf of the Recovery School District (RSD), just another ongoing embarrassment for the Louisiana Department of Education (DOE).
The fun began when committee member Jim Fannin (R-Jonesboro), who also serves as House Appropriations Committee chairman, questioned RSD’s claim to having $34 million in self-generated funds for the projects it was submitting.
“Explain how you self-generated $34 million,” he said. “It’s unusual for RSD to self-generate that many dollars.
The breakdown given was $27.13 million in new market tax credits, $3.37 million from insurance proceeds and $4.05 million from Harris Capital funding for construction of Wheatly and McDonough 42 schools.
Fannin responded that the way the budget was presented was “confusing.” He said he was seeing too many “other” expenditures on the BA-7 submitted by RSD. “You have legal expenses of $800,000,” he said. “I never saw legal expenses of $800,000 to rebuild two schools.”
“Those legal fees pay for 82 schools—the entire master plan,” said RSD spokesperson Annie Cambre.
But it was Sen. Ed Murray (D-New Orleans) who peppered the RSD types with a barrage of withering questions—withering because the RSD representatives were woefully ill-prepared with answers much as State Superintendent John White has been since his appointment in January of 2012.
Murray asked about the expenditure of $375,000 in funds for engineering and architectural costs before RSD had authority to spend the money. “Are we using any of this $375,000 to pay them already?” he asked.
“Most were paid from multiple fund sources,” responded a young, unidentified red-headed RSD representative who more resembled a high school FBLA member than a public education professional.
“Let me ask my question again,” Murray said. “Are we using any of this $375,000 to pay them already?”
“For some of them, yes. Some are eligible from FEMA, some not,” said Red.
“Then why are we just now getting this request if we’re already using the money?”
“We already had some authority but we just realized we need additional authority.”
Murray, beginning to show his exasperation, then asked, “How much of the $375,000 have we spent so far?”
“I don’t know,” said Red. “I can get that for you.”
“It disturbs me that we’re spending money without authority to do so,” Murray said. “Let’s go to the legal expense of $800,000. How much of that have we spent?”
“Again, I don’t have that exact number,” said Red. “I can get that for you.”
“Mr. Chairman,” Murray said to committee Chairman Jack Donahue (R-Mandeville), “can we get them to come back next month when they have answers?”
“That would seem appropriate,” said Donahue. “There’re a lot more questions than answers.”
Bordelon, in a last-ditch effort to salvage the request said, “It’s important that everyone understand the timing of the Wheatly-McDonough projects. There will be several thousand students affected by any delay. The New Market tax programs and closing times are specific. Timing is of the essence.”
“We’d like to help you guys,” Donahue said, “but when you come here you don’t have sufficient information to answer questions. I don’t know how you think we can approve something when you can’t answer questions about the money you’re asking for that you’ve already spent and how many dollars are involved.”
“We were utilizing previously granted authority,” Bordelon said.
“I appreciate that,” Bordelon said, “but on the other hand, you’re already spending it and didn’t come for authority to do that until you started spending the money. And when members ask how many dollars have already been spent, and you can’t answer, that’s a problem.”
“It was my understanding we were operating under previously granted authority,” Bordelon persisted.
“That’s not what was said,” Bordelon said. “That was not the testimony. The testimony was you were already spending that money but you don’t know how many dollars were spent.”
Murray’s motion to defer action until next month passed unanimously and Murray then had one last word of advice to Bordelon.
“You say this is going to affect ‘several thousand students.’ I’m pretty familiar with Wheatly and McDonough 42. You don’t have several thousand students in those two schools. We want you, when you come before this committee, to tell us accurate information.”
Sen. Dan Claitor (R-Baton Rouge) added, “When you come back, be prepared to discuss the oddly round legal expenses and issues related to that.”