Dec. 17–After years of threats to end a federal revenue-sharing program from Gulf of Mexico oil leases, Terrebonne Parish has decided to take a proactive measure to ensure the parish receives over $16 million in oil revenue money.
Parish President Gordy Dove said the parish has successfully bonded out $16.8 million in Gulf of Mexico Energy Security Act money to use for hurricane protection and coastal restoration projects.
Typically, the parish receives about $1.2 million annually from the Gulf of Mexico Energy Security Act, Dove said.
However, Presidents Barack Obama and Donald Trump have attempted to end the federal program that funnels revenues from Gulf of Mexico oil leases to four states — Alabama, Louisiana, Mississippi and Texas.
Members of Louisiana’s congressional delegation have been able to keep the money in place, for now. Rather than risk losing the annual payments in the future, Dove said the parish decided to issue these high-risk bonds now to speed up several projects.
Under the bond agreement, the parish will receive $14.6 million up front to use for various coastal protection projects, plus $1.2 million in a reserve fund by the end of the deal, Dove said. The rest of the money goes for the bond attorney and other fees.
Bond investors will earn a 5.5 percent interest rate.
The bonds could be paid off in 15 years or less with the $1.2 million annual GOMESA money, depending on the amount the parish continues to receive, Dove said.
However, if the federal government decides to end the revenue-sharing program, the parish will not be on the hook for any remaining payments, he said.
“Terrebonne Parish is not responsible if the federal government quits paying,” Dove said. “We’ll keep the $14.6 million.”
Essentially, the parish has nothing to lose with this deal, he said.
Cameron Parish was the first to issue this type of bond earlier this year. Terrebonne is the second, Dove said.
The money is going toward several projects, including a $10 million lock system in Bayou Terrebonne in Montegut, a $2.5 million conveyance channel in Chauvin, engineering for the Elliot Jones Pump Station, a potential pump station and water control structure on land currently owned by Shell in the La. 311 corridor, and other miscellaneous pumps and street drainage projects, Dove said.
All of those projects are expected to be completed by the end of 2019 or early 2020.
The parish is moving to a widespread lock system that will allow ships and local fishermen better access to waterways, even when water levels are on the rise.
“We’re trying to prepare this parish that if we do get a 20- or 30-inch rain, we can handle it,” Dove said.
After vetting the agreement with parish Chief Financial Officer Kandace Mauldin, the parish president said he doesn’t see any downside to these bonds.
“What worries me is the rest of the country doesn’t want us to have this money,” Dove said. “If this would put the parish in debt, I wouldn’t do it.”
Staff Writer Julia Arenstam can be reached at 448-7636 or email@example.com. Follow her on Twitter at @JuliaArenstam.
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