Youngsville: Cash on Ice!

   

Back in 2011, the residents of the City of Youngsville were presented with a tax referendum to fund “a” Sports Complex. City officials and media reports advertised that the 1-cent sales tax on the ballot would “pay for a new sports complex and recreational center that would take shape on 70 acres near the Sugar Mill Pond development.” The complex would also sell sponsorships to support ongoing operations. The general interpretation was that this was for a singular sports complex and recreational center. After all, that is what the people were sold. In reality, the ballot language brought before the voters was much broader.

Shall the Youngsville Sales Tax District No. 1 be authorized to levy a sales and use tax (the “Tax”) in the amount of one percent (1%) on the sale at retail, the use, the lease or rental, the consumption, and the storage for use or consumption of tangible personal property and on sales of services, to be used or consumed in Youngsville Sales District No. 1 commencing January 1, 2012 in perpetuity, as authorized under the provisions of Article VI, Section 29 of the Louisiana Constitution of 1974, as amended, and La. R.S. 33:2711, which tax is expected to generate approximately $1.2 million dollars in an entire year, for the acquisition, construction and equipping of a community center and related infrastructure and recreational facilities and ongoing operation and maintenance expenses of the facilities, the proceeds of the Tax may be funded into bonds in accordance with the laws of the State of Louisiana?

So, the tax (as passed by the people) was to build a community center (singular) and recreational facilities (plural). That’s not quite what anyone expected at the time. With the passage of a perpetual tax, recreational facilities were now receiving more dedicated funds than the police department. As it turns out, Wilson Viator, Mayor at the time, also seemed to believe the endeavor was for a single Sports Complex. In 2014 Mayor Viator announced the completion of the Sports Complex. Viator goes on to talk about the bright future of the City, but never once mentions any additional parks or facilities. It was done.

However, the up-and-coming candidate for Mayor, Ken Ritter. had a different perspective. In his first campaign for Mayor Ritter published a campaign ad referencing the Sports Complex. In part, it read: “Parks and facilities (plural) will be well managed and maintained.”

More Money In, More Money Out

The 2011 ballot language said the Sports Complex tax was expected to generate $1.2 million in the first year. Instead, it collected $1,751,848 or forty-six percent (46%) more. That’s on the 87th page (marked page 61) of the Lafayette School System’s 2012-2013 CAFR. With a combination of inflation and population growth in Youngsville, last year’s collection approached $5 million. You can see that number on page 103 of LPSS’s 2022-2023 ACFR. If you’d like to see how that number has grown over the years on a single page, the Lafayette Checkbook has data going back to 2017.

This year (2023 – 2024 Fiscal Year) the City of Youngsville has budgeted to spend $15.9 million on Sports Complex-related expenses. $13.6 million of that is coming from the sale of tax bonds. Effectively, they’re taking out a loan against the tax’s annual revenue. That $16 million is allocated for the lake evacuation and building of Linear Park, the construction of Veterans Park and Bark Park, as well as yet another expansion of the Youngsville Sports Complex.

What about all that money generated by selling sponsorships? Well, that only comes out to about $350,000 annually. However, the expenses of sign creation cost about $165,000.

In addition to the new sports complex, the City of Youngsville took over Foster Park from the Lafayette City-Parish Consolidated Government. The theme seems to be: we have the money (in perpetuity) so we need to keep spending it!

Youngsville on ice!

On August 24, 2023, a Special Meeting of the Council was held to discuss the appointment of an “Interim Chief.” It also called for a special election related to the office vacated by the resignation of Chief Rickey Boudreaux. But that wasn’t the only thing on the agenda. There was also a discussion item related to amending the 2023 – 2024 General Fund Budget for $100,000 to cover Christmas expenditures.

On September 6, 2023, Social Entertainment Productions, LLC forwarded an invoice to the City of Youngsville for $50,000 as a “project deposit.” The City paid that invoice on September 18, 2023. Afterward, at October’s Regular Council Meeting, a resolution was adopted authorizing the Mayor to negotiate an agreement with Social Entertainment, LLC and Party Central of Lafayette, Inc. for a public event for the holiday season.

The event that would run from November 25 to December 31, 2023, would come to be known as Youngsville on Ice. Over 90 corporate sponsors chipped in while the public reportedly purchased over 11,500 tickets. The City of Youngsville accounted for spending over $113,000.00 directly on the event. The largest reported expense was a $100,000 payment to a single vendor, Social Entertainment Productions, LLC, but those numbers aren’t final.

Not So Straightforward

Despite a resolution authorizing the Mayor to enter into agreements with two specific companies (Social Entertainment, LLC, and Party Central of Lafayette, Inc.) the Mayor entered into agreements with others as well. On November 13, 2023, the Mayor signed an agreement with Social Entertainment Productions, LLC, the same company he made a $50,000 payment to before ever signing a contract. But as it turns out Social Entertainment Productions, LLC and Social Entertainment, LLC are not the same. They are two distinctly different companies and the Mayor was never authorized to enter into any agreement with Social Entertainment Productions, LLC.

So, what is the agreement between the parties? You can read the entire thing here. In summary, the City of Youngsville will:

  1. Provide the venue free of charge.
  2. Pay for the insurance (cost of $8,009.00).
  3. Be responsible for permitting.
  4. Be responsible for holiday decorations (Youngsville spent over $50,000.00).
  5. Provide social media support (Youngsville contracts their social media operations for $12,000.00/month).
  6. Sign an agreement for and provide maintenance for an ice rink.

In exchange for paying all of these costs, Youngsville also agreed to pay $100,000 towards the Youngsville on Ice event upfront. The agreement also provides that the first $60,000.00 in profits are paid directly to Social Entertainment Productions, LLC. Then, any remaining profits are to be divided as follows. Social Entertainment Productions, LLC would receive 85% and the City of Youngsville would get the left-over 15%.

Add to this, Ritter also entered into a contract (pledge) with Outdooricerinks.com. That agreement can be found here. In doing so, Ritter co-obligated the City of Youngsville, along with Social Entertainment, LLC, and Party Central to Outdooricerinks.com for $155,484.

Is this even legal?

The Louisiana Local Government Budget Act provides: (LARS39:1311(C))

The adopted budget and any duly authorized amendments required by this Section shall constitute the authority of the chief executive or administrative officers of the political subdivision to incur liabilities and authorize expenditures from the respective budgeted funds during the fiscal year.

But there is a question as to whether the funds were ever budgeted. Remember at the August 2023 meeting there was a “budget discussion” and vote to allocate $100,000 for “Christmas expenditures.” This did not occur in the form of a resolution or ordinance. The City of Youngsville is a Lawrason Act Municipality. How many times did you hear that last year? Because of this, they are required to adopt and amend their budget by ordinance ONLY.

Louisiana Revised Statutes 33:406(A)(3) provides:

Any act of the board which would provide for the appropriation of funds, the incurrence of debt, or the issuance of bonds or other evidences of indebtedness shall be by ordinance. Notwithstanding the provisions of Paragraph (2) of this Subsection, the board may by resolution adopted by the affirmative vote of a majority of the members of the board require the expenditure of funds previously appropriated.

Even if the City of Youngsville had amended its budget by ordinance (WHICH THEY DIDN’T) or had directed the expenditure of funds previously appropriated by resolution (WHICH THEY DIDN’T) there remains a question as to whether the transaction itself is legal.

Article 7, Section 14 of the Louisiana Constitution specifically forbids the loaning, pledging, or donating of funds, credit, property, or things of value to or for any person, association or corporation. Although once somewhat straightforward, the courts (legislating from the bench) have made a mess of things. Clearly, the City of Youngsville fronted money to Social Entertainment Productions, LLC to invest in a for-profit event. Additionally, since an admission fee was charged to the “public event,” all funds derived from the event belong to the City. Any profit-sharing scheme entered into by the City of Youngsville also appears gratuitous.

How much did all of this cost?

At this time we still don’t know the total cost of the Youngsville on Ice event and probably won’t for several months. After all, the agreement outlines that the final accounting is not due until March 1, 2024. While the City of Youngsville has provided a profit and loss statement from the Youngsville on Ice event, the calculations are preliminary at best.

The document provided shows the portion of the profit sharing received by the City was $12,751.89. But that is only when they count the $100,000.00 donation from the City as “revenue” generated by the event. Without that gratuitous contribution, the entire event would have ended with a loss of -$14,987.43. And that’s only when you don’t consider the other tens of thousands the City also contributed to the event.

For example, Youngsville spent another $13,912.66 in Youngsville on Ice-related expenses. That doesn’t even account for in-kind contributions, such as City employee labor. Add to that, the City spent an additional $49,539.07 in Christmas expenditures (although not completely for this event). If you subtract those hard expenses and the $100,000.00 gratuitous donation the entire event ended with a loss of -$78,439.16.

Laissez les bons temps rouler!

The ink hasn’t dried on the event tabulation for Youngsville and additional expenses are more than certain to surface. However, the annual Mardi Gras event is right around the corner. The City of Youngsville is expecting to take in $81,000.00 in permit fees. That’s compared with only $56,000.00 generated the previous year. They’ve dedicated nearly a quarter million ($214,767 to be exact) to Mardi Gras-related expenses. Of that, $113,528 comes from the general fund, $42,094 from the dedicated police sales tax fund, and $59,145 from the dedicated Sports Complex fund.

Wait! What does Mardi Gras have to do with the “acquisition, construction and equipping of a community center and related infrastructure and recreational facilities and ongoing operation and maintenance expenses of the facilities”? Well, nothing! But the City of Youngsville has used these monies in the past. They’ve funded their float rental and bead throws for the Mayor, Council, Staff, Family, etc!

Laissez les bons temps rouler!

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