Livingston Parish Council OKs resolution to apply for up to $91.3 million in sales-tax bonds

The Livingston Parish Council voted unanimously Thursday to allow bond counsel and advisors to apply to the State Bond Commission for a sales-tax revenue bond package with not-to-exceed parameters totaling $91,292,000. The resolution authorizes staff to seek rating and insurance and to return to council with formal ordinances if the parish chooses to issue debt.

Jim Ryan, the presenter on the proposal, told the council the “not to exceed” figures are a required set of parameters used to get review from the State Bond Commission and that the numbers are intentionally conservative. “That 7% on that IOU that I gave Aaron is never 7%. It’s just a function of exactly what you said,” Ryan said, explaining that bonds are priced on the market and may sell with a premium that effectively lowers the yield paid by the borrower.

The resolution does not obligate the parish to borrow or to spend money. Ryan said the “not to exceed” scenario assumes high interest rates and maximum contingency amounts so the bond commission can review the maximum possible liability; his team’s market estimate produces a much lower effective interest cost — about 3.5% in current markets — and a par amount the presenter estimated near $74.95 million with an expected premium that would net roughly $81.75 million for projects.

Why it matters: the council and administration are seeking to front-load funding for parish infrastructure, including road projects the administration has prioritized. Ryan said the bonds would be sales-tax-secured and that state law requires sales-tax bonds to meet a minimum debt-service-coverage ratio of 1.25 (125%). In the proposal before the council, current market calculations showed coverage closer to 2.5, well above the statutory minimum.

Council discussion focused on the technical nature of the parameters and the sequence of approvals required. Councilman Billy Shavers moved the resolution; Councilman Goff seconded. Councilman Goff emphasized that the proposed borrowing would not extend the length of the underlying sales tax beyond the voter-approved term. “You can’t,” Ryan agreed. After brief public questioning about rate volatility, Ryan said interest rates would be fixed on the day the bonds are sold and that market events between the application and sale could change pricing but would not change a fixed-rate issuance once executed.

The presenter outlined the near-term schedule: application to the State Bond Commission (planned for Sept. 17), an ordinance introduction at the council’s Sept. 25 meeting, and a final ordinance adoption on Oct. 9 if the parish chooses to proceed. He also said the bonds would be rated by Standard & Poor’s and that the team anticipated an investment-grade rating (double-A) based on current analysis.

The motion to let Ryan and his team make the application and begin the rating/insurance process passed unanimously. The resolution, the presenter said, simply authorizes the application and related preparatory work and does not commit the parish to issue bonds or spend funds.