Public Revenue Generation without Taxation
The Orleans Levee District was established by Act 93 of the 1890 General Assembly (Legislature) of the State of Louisiana (the “District”). The District’s primary responsibilities are operation and maintenance of the levees, embankments, seawalls, jetties, breakwaters, water basins, and other hurricane and flood protection improvements surrounding New Orleans. Act 292 of the 1928 Louisiana Legislature authorized the District to dedicate, construct, operate, and maintain public parks, beaches, marinas, aviation fields, and other like facilities.
Development of the lakefront of Lake Pontchartrain in the City of New Orleans actually began as a flood control project. Its purpose was to replace the substandard levees and unhealthy conditions occasioned by the marshes with sufficient high land and protective structures to secure the City from another era of flood disasters. The occurrence of high tide and hurricane winds made it imperative that adequate measures be taken to protect the shoreline and City. The idea of a lakefront development project originated in 1873 when W.H. Bell, City Surveyor, formulated a plan that presented the possibilities of combining flood protection with land development. Almost 55 years later, the Legislature authorized the Orleans Levee Board to implement the idea. An amendment to the 1921 Constitution was made by Act 292 of 1928, which empowered the Orleans Levee Board “to perform certain works of reclamation, construction, and improvement” and authorized the Board to sell, lease, or dispose of land not dedicated to public use.”
The New Orleans Lakefront Project reclaimed 2,000 acres of land from the lake, extending for a distance of 5.5 miles. In 1926, the Orleans Levee Board issued $4 million in bonds which made possible the pumping of the first 36 million cubic yards of hydraulic fill, creating new land from marshes and swamps. Completed in 1930, the land fill encompassed the present area between Robert E. Lee Boulevard and the Lake from the New Basin Canal to the Industrial Canal.
In 1930, a permanent lakefront levee was begun with the construction of 5.5 miles of seawall. A concrete, stepped seawall was adopted as the best means of providing the greatest flood protection while deterring the increasing erosion of the shoreline. The 8-foot high seawall took 2.5 years to complete at a cost of $2,640,000. It became the City’s frontline protection on Lake Pontchartrain.
In 1931, the Orleans Levee Board began construction of Lakefront Airport on 300 acres of reclaimed lake bottom, which was protected by a vertical-type seawall. At the time of its grand opening, it was considered an architectural masterpiece. Built by the same architect that designed the Louisiana State Capital Building, it was the first major airport in the region. Inside the terminal building, travelers would find an Art Deco wonderland, featuring murals by artist Xavier Gonzalez, friezes by Enrique Alferez, and an array of stone wall and floor treatment. The Airport was dedicated on February 10, 1934
Built at a cost of $4.5 million, the airport had a field measuring 3,000 feet long, thus qualifying for the U.S. Department of Commerce’s highest rating, AA-I. The Lakefront Airport was one of the nation’s most beloved airports during “The Golden Age of Aviation” and attracted well-known historic figures such as Amelia Earhart.
Six subdivisions were planned and developed during the following time frames: Lake Vista (West)-1939, Lake Vista (East)-1946, Lakeshore (West)-1951, Lakeshore (East)-1955, Lake Terrace-1953, and Lake Oaks-1960. When the Orleans Levee District sold the lots associated with these subdivisions, purchasers were promised state of the art utility infrastructure, and exceptional community service including uniform application of building restrictions, neighborhood park maintenance, and police protection all to be provided by the Orleans Levee District.
The “Inner Yacht Harbor” now known as Orleans Marina was built by the City of New Orleans and in 1960 the City transferred the administration of the Marina to the Orleans Levee District. Since that time, the District has managed the facility which includes 351 slips, parcels for up to 65 Boathouses and 4 marine service facilities.
South Shore Harbor Marina was developed in the mid-1980s to complement the Lakefront Airport and the Orleans Levee District’s other Non-Flood Protection assets. It consists of 447 slips ranging in size from 30’ to 80’ as well as 26 covered boat slips along the western edge of the marina.
Separating the Non-Flood Assets’ Administration
Prior to 2005, the Orleans Levee District operated the Non-Flood Protection facilities with revenues generated from the facilities. These revenues were not only enough to accomplish the daily operation and maintenance tasks, but were sufficient to provide excess revenue to the tasks required for operating and maintaining the flood protection system.
Following Hurricane Katrina’s disastrous effects, Louisianans called for changes in the management of the flood protection systems that defended them from Hurricane Storm Surge. In response to these calls, the Louisiana Legislature through Act 1 of the 1st Extraordinary Session of 2006 created Flood Protection Authorities on both the East and West banks of the Mississippi River in the Greater New Orleans Area that would begin managing the Flood Control Systems on January 1, 2007. On the East Bank, this consolidated management of the East Jefferson Levee District, the Orleans Levee District, and the Lake Borgne Basin Levee District was placed under a single Southeast Louisiana Flood Protection Authority – East Board (SLFPAE). La.Rev.Stat. 38:§330. Also at this time in an effort to increase flood protection management efficiency, the legislature withdrew responsibility for the management of the non-flood protection assets of the Orleans Levee District. Although the flood and non-flood protection assets were placed under different management, the Orleans Levee District, which is a separate political subdivision of the State of Louisiana and a public levee district, is the owner of the flood and non-flood protection assets. The consolidation of the levee districts was lauded by many as a strong first step in the rebuilding process. However, in the wake of these decisions lay the remains of once prosperous public facilities devastated by the ravages of the storm surge of Hurricane Katrina. The business model that once provided thirty percent of the Orleans Levee District’s revenue could now barely sustain its own facilities.
In 2007 following the creation of SLFPAE and the removal of the Non-Flood Protection Assets from the Flood Authority’s purview, the management of the assets was turned over to the State of Louisiana through the Division of Administration (DOA). The DOA allowed for minimal staff to manage the assets, and during this time the reconstruction began. From 2007 to 2010, the DOA made little progress in rebuilding the assets due to a lack of funding. No tax revenues were allocated and the once fully self-funded and revenue producing properties were blighted by the disaster. Finally, in 2010, the Louisiana Legislature transferred the management and control of the Non-Flood Protection Assets to the Non-Flood Protection Asset Management Authority (“NFPAMA” or “Authority” or “Management Authority”), which was originally established as an agency of the State of Louisiana placed within the Louisiana Department of Transportation and Development until January 1, 2012 when under the implementing legislation the Management Authority became a political subdivision of the State of Louisiana. La. Rev. Stat. 38:§330.12 & §330.12.1. The first meeting of the Board was held on October 7, 2010 and since that time, the Management Authority has overseen the resurgence of the Lakefront.
The NFPAMA manages Orleans Marina, South Shore Harbor Marina, New Orleans Lakefront Airport (NOLA), the Lake Vista Community Center (LVCC) and land leases along the New Basin Canal (NBC), as well as the 5.5 mile long Lakeshore Park along Lakeshore Drive. Additionally, the NFPAMA maintains the parks associated with the Lakeshore, Lake Vista, Lake Terrace, and Lake Oaks subdivisions as well as the New Basin Canal Park located on the median between West End and Pontchartrain Boulevards. The NFPAMA also provides service to the subdivisions in the form of building restriction reviews to ensure compliance with building restrictions enacted after the reclamation and development of the respective subdivisions.
The adopted mission of the NFPAMA is to prudently manage its assets for the benefit of all stakeholders, to optimize revenues with the ultimate goal of having fully developed and maintained facilities, and to provide surplus revenues to the Orleans Levee District when available.
Managing the Non-Flood Assets
The NFPAMA operates similarly to a property management company. Staff operate in either an administrative capacity or a maintenance capacity. Administrative duties are consistent and require adequate staffing levels to ensure administrative functions are processed and maintained appropriately. Maintenance duties can vary in both significance and scale. Because of this, it is important to maintain a staff of highly skilled maintenance technicians that can identify maintenance needs and react appropriately with either in house support or with the assistance of skilled contractors. The organization chart depicts the projected staffing needs to return and maintain all of the Authority’s facilities to peak condition. Administrative and Maintenance functions required for the proper management include Executive Administration, Finance, Human Resources, Marina Administration, Airport Administration, Airport Rescue and Fire Fighting, and Facility Maintenance and Operations.
The NFPAMA is a political subdivision and public board created by the Louisiana Legislature and it must comply with Louisiana Open Meetings Law. La.Rev.Stat. 42:§11, et seq. The Executive Administration team coordinates all public meetings and prepares all documentation for these meetings. Meeting agendas must be advertised, and formal meeting minutes must be produced for all Board and Committee meetings. As of the writing of this plan, the Authority holds one board meeting a month and has six standing committees with monthly meetings. The standing committees are Airport, Finance, Marina, Commercial Real Estate, Legal; and Recreation and Subdivision. In addition, ad hoc committees such as Human Resources, Insurance, and DBE hold public meetings on an as needed basis. Executive Administration has a responsibility to hold these meeting in a manner sensitive to the public and in accordance with the Louisiana Open Meetings Law and additionally must respond to the public as warranted when requests are made for public information.
The NFPAMA is responsible for managing diverse facilities with varying needs and must maintain a strong finance department. Accounts receivable must track all leaseholds which include slip leases at the marinas; land leases at the Marinas, NBC, and NOLA; and, facility leases at NOLA and LVCC. These leaseholds must be tracked for payment as well as term enforcement such as CPI adjustment, exercise of options, and facility use terms. Accounts Payable must manage all purchases to ensure documentation justifying the expense is procured. The Authority participates in the Federal Aviation Administration (FAA) and Louisiana Department of Transportation and Development (LaDOTD) Airport Improvement Grant Programs for aviation facilities. These grants carry Grant Assurances that must be complied with to ensure the availability of future funding. All accounting practices must comply with federal and state laws for government agencies and are subject to an annual audit that is performed by an outside Auditor. Because of the nature of the facility ownership by the OLD, the audit is performed in conjunction with the Southeast Louisiana Flood Protection Authority – East’s annual audit.
As a political subdivision of the State of Louisiana, all employment actions must comply with State Civil Service requirements. Staff must ensure compliance with these regulations. In addition, staff manages the participation of Management Authority employees in the Office of Group Benefits Program for employee benefits as well as the Louisiana State Employees Retirement System.
Administration for the Marinas must ensure tenant responsiveness to the lease terms, manage new and renewal leases to ensure adequate document submission and compliance with lease terms, and monitor marina maintenance status and revenue collections. Annual leases are utilized in the marinas, but lease terms should be evaluated on a regular basis to optimize tenant and staff efforts and the management of these leases.
Airport Administration must manage all facets of the Airport’s operations including airfield inspection and maintenance in accordance with FAA and LaDOTD grant assurances, hangar and tenant facility management in accordance with lease terms, fuel farm management and maintenance, and terminal management and maintenance. Maintenance activity is coordinated through the operations staff to ensure that NOLA can accommodate its tenants and aviation customers.
Maintenance staffing must be adequate to perform day to day maintenance tasks and to respond swiftly to facility damage via in house labor or specialty contractors. All maintenance staff also must be competent in public bid laws and Authority purchasing rules. In addition, staff are expected to produce bid packages for repairs and to manage contracts for repair and maintenance activity to ensure the Authority is achieving the best value from its contracts and complying with all Federal and State grant requirements.
Each of the Authority’s facilities requires specialized attention because of their unique nature. While an overall approach to centralize administration and maintenance activities should offer economies of scale and enhance efficiencies for the administration and maintenance of all the facilities, the need for specialized knowledge and skills exists. This Asset Management Plan will evaluate each facility for its existing and potential revenue as well as their current and expected peak operating costs such that the facility’s operations are optimized and all of the facility’s components are fully developed and maintained.
This Asset Management Plan will detail each of the Authority’s managed facilities and for each asset will define the desired Standard of Service (SoS), evaluate available performance metrics and present goals regarding the operation, maintenance, and long-term performance of the facilities managed by the Authority. The objective of the Authority should be to eliminate deferred maintenance that has accumulated over the years by applying funding to a strategically developed list of deferred maintenance projects. By applying any available revenue to the restoration of the managed assets, the Authority can realize its mission of fully developing and maintaining the assets. This will serve to enhance the value and the viability of the facilities well into the future and produce excess revenue to defray the costs of flood protection in the City of New Orleans as mandated under the legislation creating the Management Authority. La. Rev. Stat. 38:§330.12(c).