Although Lafayette Mayor-President Joel Robideaux has spent the last several days saying he’s talking with several companies interested in buying LUS, our media partners at the Advocate report he has signed a nonbinding letter of intent to pursue a deal with the Bernhard Capital Partners group.
Under the deal in the letter, a Bernhard affiliate, NextGen, would assume all responsibility for operating LUS and also would be entitled to all income from LUS. In return, NextGen would pay the city $246 million in cash and assume more than $200 million in debt; would pay the city $64 million every three years if LUS’s base rate revenue grows at least 2.1 percent annually; and NextGen and the city would split any base rate revenue growth that exceeds 2.1 percent.
To read the story and see the entire letter for yourself, click here.
Robideaux told reporters Tuesday that any sale or management agreement with another company would have to go to LPUA, then to the City-Parish Council for approval, but would not need to go to voters if another company were to manage LUS. There’s an entire section of the Lafayette City-Parish Charter that deals with the subject. You can read the entire charter for yourself by clicking here. But, here’s the entire text of that section:
A. The Lafayette Public Utilities Authority shall not sell, lease or in any manner dispose of the utility system or any substantial part thereof without approval by a majority vote of the qualified electors residing within the boundaries of the City of Lafayette voting in an election called for that purpose. This shall not be construed to prevent the disposal, with the approval of the consulting engineers, of property which has become obsolete, unserviceable and not necessary for the efficient operation of the utility system. The proceeds of the sale of such property shall be used to purchase or construct other capital improvements for the utility system.
B. In the event of the sale or lease of the public utility, the proceeds shall be used for capital improvements in the City of Lafayette.
Robideaux is scheduled to appear before the LPUA on Tuesday to explain his discussions. KATC has spoken with most council members since the news broke and none have said they knew anything about Robideaux’s "negotiations."
Although Robideaux said other electric companies have approached him with the same interest — including Entergy and the firm that bought Cleco — Bernhard has shown the most serious interest, he said.
Robideaux said Tyron Picard, of the governmental consulting firm the Picard Group, made the introduction. The Picard Group represents Bernhard.
Our investigative team uncovered ties between the Robideaux administration and the company.
Campaign finance records show Bernhard and its subsidiaries have contributed at least $8,500 to Robideaux since his 2015 campaign for mayor-president.
Bernhard is also represented by the Picard Group whose senior director of state affairs is former state senator Mike Michot.
Michot and Robideaux are long-time political allies who served in the legislature together. In 2009, the two founded a PAC together. Michot served as chair of Robideaux’s transition team before he took office.
Michot remains on that PAC, which has helped push tax propositions on the mayor’s behalf.