Bond commission approves up to $400 million general-obligation bond resolution to reimburse state expenditures; public comment raised bankruptcy concerns

The State Bond Commission on Feb. 20 approved a resolution authorizing the issuance of general-obligation bonds not to exceed $400,000,000 to fund $378,000,000 in lines of credit in the Capital Outlay Budget Act. Staff said proceeds would be used to reimburse the state for expenditures already made on two projects and that the two projects in question have a combined prior expenditure total of $20,208.

During public comment and member questions, an emailed comment was read asking whether reimbursing expenditures for the Hope Haven Madonna Manor campus and the Windhoven Healthcare/St. Andrews project could create complications if the properties were owned by the Archdiocese of New Orleans and subject to bankruptcy proceedings. A commission member asked whether approving the bonds could "tie up" funds in a bankruptcy.

Commission staff said they had consulted bond counsel, the attorney general's office and facility planning and did not see issues under state law or federal tax law. Roger Husser, director of facility planning, told the commission: "these are dollars that have already been dispersed to these two entities ... the bond sale is simply to reimburse those expenditures." He added that Comcare has purchased the building linked to that project, and that Jefferson Parish had it on the agenda to purchase the Hope Haven Madonna property, which the director said suggested there would be no continuing ownership relationship to complicate future expenditures.

The commission said it would sell the bonds in a competitive sale during a future State Bond Commission meeting and tentatively scheduled that sale for April 9, with a closing tentatively scheduled for April 24; members were told a quorum would be needed on April 9. The municipality's municipal-advisory and counsel team named in materials included Prag (municipal advisor), Butler Snow (bond counsel) and Aussing and Associates (co-bond counsel).

Representative Johnson moved approval; President Henry seconded. No objection was recorded and the resolution was approved.

Why it matters: The action authorizes a large general-obligation bond program intended to fund lines of credit in the Capital Outlay Budget Act and to reimburse previously made state expenditures. The item drew public concern about potential interactions with a bankruptcy matter; staff said legal and tax counsel reviewed the question and did not identify a prohibiting issue.