PRESENTATION TO LAFAYETTE CITY PARISH GOVERNMENT CITY-PARISH COUNCIL MEEING OF MAY 17, 2016
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1 PRESENTATION TO LAFAYETTE CITY PARISH GOVERNMENT CITY-PARISH COUNCIL MEEING OF MAY 17, 2016 As long as the Court and LCG communicate, we can avoid litigation. We appreciate the assistance of the Administration and the Finance Department in working with the Court to amend the ordinance to remove incorrect language and to restore funding to the eight Judges secretaries in Lafayette Parish. However, this amendment defunds Lafayette Parish s share of cost of the twelve law clerks in the District. According to Lafayette Consolidated Government (LCG) the parish has sustained a 32% reduction in sales tax revenues in the approximate amount of $2,000,000. LCG blames the dramatic decrease in sales tax revenue on two (2) factors: 1. Whenever a municipality in the parish annexes a portion of the unincorporated area of the parish, the parish loses its 1 sales tax from that area; and 2. The unincorporated areas of the parish contain a disproportionate number of oil service companies that have sustained a drastic reduction in sales due to the drop in oil prices. While oil prices may be the cause of the current loss of revenue, the imminent collapse of parish government has been known to LCG for at least three (3) years. In former Mayor President Joey Durel s Budget Message to the City Parish Council in 2013, 2014 and 2015, he warned the council that the parish general funds, including the dedicated funds, were too small to meet the parish s needs. He warned that a train wreck is coming if something isn t fixed. Despite Durel s suggestions that tax revenues be increased or that consolidation be scrapped, or the charter amended, the council did nothing. This problem has been no secret to the Council and the administration. Though LCG knew this was coming, the court was not contacted regarding this problem until we were notified of impending cuts on April 26, Regrettably, now that the parish is out of money, LCG s solution is a drastic cut in funds to the District Court and the District Attorney. Despite representations in the meeting with LCG on Monday, May 9, 2016, that other departments were being cut, when pressed, LCG admitted on Friday that no other departments other than the District Attorney were being cut until the fiscal year. At the present time, LCG is proposing approximately $330, in cuts from the court budget for the remainder of this fiscal year. At the meeting with LCG, the court was advised that it is being disproportionately hit with the reduction because: 1. The court has other sources from which to pay court expenses referring to the JEF, and presumably the CSF; 2. LCG is cutting expenditures from the general fund that are not supported by different fund source such as a mileage or grant; and 1
2 3. The court is the agency with the largest expenditures in Category No. 2. The hope is that with the remaining parish reserves, the court will be able to limp through the remainder of this fiscal year (LCG s Fiscal Year ends October 31). Much more troubling is the situation for the Fiscal Year. Also, it should be noted that LCG characterizes their allocations to District Court as a supplement to the Criminal Court Fund creating an impression that the court is operating at a deficit. This gives the appearance that the court has underfunded itself and the parish is bailing out the system. The court was informed on April 26, 2016, that an introductory ordinance would be brought to the council on May 17, The ordinance stated that the operating budget is amended to provide for reductions of revenue and expenditures in the parish general fund and in the Criminal Court Fund and to remove all future operating subsidies to the Criminal Court Fund. Again, we appreciate the amendment removing this incorrect and misleading language from the ordinance. The final vote on the ordinance by the City-Parish council will be on June 7, There law is clear that parish government is obligated to provide funds mandated by state law to the District Court. However, the parish s duty to fund these statutorily mandated expenses is limited by the standard of reasonableness. There are several statutes in place regarding the funding of courts. La. R.S. 15: creates the Criminal Court Fund (CCF) which can be used by the District Court and District Attorney in defraying the expenses of the criminal courts of the parish as provided in Children s Code and R.S. 16:6, in defraying the expenses of the court in recording and transcribing of testimony for indigents charged with felonies, in defraying their expenses in the preparation of records and appeals in such cases, for all expenses and fees of the petit jury and grand jury, for witness fees, for cost and expenses of a parish law library, and for other expenses related to the judges of the criminal courts and the office of the District Attorney. Section I of R.S. 15: provides that the three (3) parishes in the Fifteenth Judicial District are authorized to pay all or part of the salaries of the law clerks out of the Criminal Court Fund. The law clerks shall be employed to perform general duties as such and shall not be limited to those duties connected with criminal cases. La. R.S. 13: authorizes the judges, en banc, of the Fifteenth Judicial District Court to pay all or any part of the fees for reporting and transcribing testimony authorized under R.S. 13:961(F), or other applicable laws, and in addition to salaries otherwise provided, authorized or established by law, pay each of their court reporters a salary from the judicial expense fund (JEF). The judges, en banc, may appoint such secretarial, clerical, research, administrative, or other personnel as deemed necessary to expedite the business and functions of the court and pay all or any part of the salaries of such personnel out of JEF. The court may also pay out of the fund the cost of a law library, buying and/or maintaining any type of equipment and supplies, or other items consistent to maintain the sufficient operation of the court. In general, the fund can be used for any purpose or purposes connected with, incidental to, or related to the proper administration or function of the court or the offices of the individual judges and is in addition to any and all of 2
3 the funds, salaries or expenses or other monies that are now and hereinafter provided authorized, or established by law for any of the aforesaid purposes. R.S. 33:4713 states that each parish shall provide and bear the expense of a suitable building and requisite furniture for sitting of the District Courts. The language establishing the CCF and the JEF makes it clear that these funds are to support existing funding sources. The use of the words, defraying and in addition to, support this interpretation. Ch.C. Art. 419 provides that the parish is mandated to pay secretarial and other personnel authorized by the juvenile judge. Section I of 15:571.11, appears to use permissive, rather than mandatory language. The statute states that the three parishes are hereby authorized to pay all or part of the salaries of the law clerks out of the Criminal Court Fund of the Fifteenth Judicial District Court. The Supreme Court of Louisiana addressed this issue finding that the CCF is nothing more than a recognition by the legislature of the increased cost of operating the District Attorney's office. The CCF was never intended to wrest the primary responsibility for funding the... expenses from the shoulders of the legislative branch of government. See Reed v. Washington Parish Police Jury, 518 So.2d 1044 (La. 1/18/88). By analogy, the parish s primary responsibility for funding would also extend to the District Court. Recommendations to meet the current crisis: The most logical solution is for the court to make up the current deficit by using JEF and allowable Child Support Funds 1 (CSF). The two (2) family court law clerks and secretaries can be paid through CSF. The JEF, CCF and CSF can also pick up appropriate portions of office expenses, court reporter CD s, miscellaneous, library books and legal research. A constitutional argument can also be made that the LCG governmental scheme violates Article 6, 25, entitled, Courts Not Affected, of the Louisiana Constitution. Article 6 establishes Local Government in the Constitution. Section 25 states: Notwithstanding any provision of this Article, courts and their officers may be established or affected only as provided in Article V [Judicial Branch] of this constitution. The City-Parish charter and tax ordinances operate in such a way that parish government will inevitably fail financially. This scheme will effectively defund the judicial branch of 1 The CSF can only be used to fund an expedited process for the establishment of paternity and the establishment and enforcement of support and other related family and domestic matters in district courts using hearing officers. Domestic and family matters shall include divorce and all issues ancillary to a divorce proceeding; all child-related issues such as paternity, filiation, custody, visitation, and support in non-marital cases; all protective orders filed in accordance with, and the Children's Code and all injunctions filed in accordance with R.S. 46:2131, et seq., R.S. 46:2151, et seq., R.S. 9:361, 371, and 372 and Code of Civil Procedure Articles 3601, et seq., which involve personal abuse, terrorizing, stalking, or harassment; and enforcement of orders in any of these matters, including contempt of court. 3
4 government depriving the citizenry of due process of law and the right to a speedy, public, and fair trial. See La. Const. Art. 1, 2 and 16. What can be done to resolve the crisis going forward? a) Increase Revenues. Sales and use taxes may be levied by a vote of a majority of the parish voters up to a maximum of 3%. However, the 3% limitation includes all sales taxes levied by municipalities. Because municipalities may levy a sales tax of up to 2 ½ % upon approval of voters, the availability of this source of revenue to the parish in incorporated areas is limited to ½%. However, in 2004, the legislature passed R.S. 47: which authorized Lafayette Parish to levy up to 1% additional sales and use tax not subject to the combined rate and limitations established by Article IV, Section 29A of the Louisiana Constitution. With the state imposing an additional 1 sales tax, the likelihood of the parish being able to impose an additional 1 sales tax parish wide, including the municipalities, is a long shot. LCG could propose an ad valorem tax to the voters of Lafayette Parish with a dedicated revenue stream to the District Court. At present, the Fifteenth Judicial District Court is financed from the Parish general fund with no dedicated tax. Ad valorem taxes are preferable to a sales tax because they are more stable and not impacted immediately by the economy. However, it should be noted that assessments can decrease over time in a depressed economy as the Assessor is required by law to reassess property values every four (4) years. In addition, the inventories of oil service companies have probably dropped significantly due to the oil crisis reducing property taxes paid by those entities. b) Reformation of the City-Parish expense split The parish splits the costs of administration and other positions with the city paying 58% and the parish paying 42%. How this division is calculated is uncertain. The total parish sales tax receipts are $6,307,299 while the city collects $111,040,583. Percentage wise the parish should be paying 5.675%. Total city revenues (non-utility) are approximately $300,000,000 while the parish revenues are $14,000,000. Under this scenario, the parish percentage should be 4.45%. This percentage would be even smaller if Lafayette Utilities System (LUS) income is included resulting in total revenues city revenues of $621,000,000. Also, management of the parish is minimal when compared to the city. The Courts, Sheriff, District Attorney, Assessor, Coroner and Registrar of Voters manage their own offices. LCG manages all of the city of Lafayette departments including LUS. This arbitrary division of expenses between the city and parish is grossly inequitable. c) Increase in court cost 4
5 The Court may be able to increase court costs pursuant to R.S. 13:3049 and R.S. 15:255. The former statute provides for compensation for jurors and the latter sets forth compensation for off-duty law enforcement witness fees. The Court is a awaiting a response from the supreme court judicial administrator as to whether supreme court approval is required to raise these court costs. d) Demand LCG spread the cuts between all mandated parish stakeholders At present, only the budgets of the DA and court system are being reduced. The justification with regard to the court is the existence of the JEF and because it is the largest agency being funded by LCG. Perhaps LCG should reduce all budgets on a pro-rata basis, or based upon some more equitable formula. e) A Cooperative Endeavor Agreement Once the Court gets past the hurdle of the fiscal year immediate attention should be given to entering into a Cooperative Endeavor Agreement with LCG. The need for such an agreement was mentioned in the Reed case and is sanctioned by the Louisiana Constitution. This agreement would need to contain an acknowledgment by LCG that it has a mandatory obligation to fund the reasonable and necessary expenses of the court. The agreement should also provide exactly what expenses would be paid from the JEF, CCF and CSF. Finally, the agreement should contain specific steps LCG obligates to undertake to solve the budget problems in District Court funding, whether it be deconsolidation, amendment of the charter, raising sales and/or property taxes, seeking legislation, etc. f) File a mandamus suit If a Cooperative Endeavor Agreement is not perfected with LCG, the Court has no choice but to institute a mandamus forcing LCG to conform its budget to provide court expenses which are reasonable and necessary to the function and administration of the court and/or seek to hold the LCG form of government unconstitutional as discussed above. Also, at some point, the JEF and CSF will be fully depleted. 2 A mandamus action should be filed sufficiently in advance of this event so that court operations will not be interrupted. The Judges pledge to engage in an open dialogue with City Parish government. In good faith, we will open our books, answer any question and do anything within the bounds of judicial ethics to assist the parish in solving the revenue problems and adequately funding it share of the Fifteenth Judicial District Court 2 The auditors recommend the court maintain a balance equal to at least two (2) months of expenses in the event of a natural disaster or some other unexpected event. 5
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