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Elected officials, consultants and representatives of Brudd Construction discuss the status of the parish’s Community Development Block Grant involving Brudd Construction. Participants include (clockwise, from top center) District Attorney Charles Riddle, consultants Alison Laborde and Kendall Magee (Frye-Magee), state Rep. Robert Johnson, consultant Marshal Pierite (Pierite Group), Brudd Construction owner Brad Brudd, Police Jury President Charles Jones, consultant Larry Andrews (Pierite Group), Police Jury Secretary-Treasurer Jamey Wiley, Asst. Secretary-Treasurer Laura Gaspard, Rep. Johnson aide Maria Trichell and Police Jurors Mark Borrel and Marsha Wiley. {Photo by Raymond L.. Daye}

Police Jury strives to avoid grant default

May have to repay $180,000 if solution not found

 

    Efforts to avoid defaulting on a Louisiana Community Block Grant have gone into “overdrive” as the Avoyelles Police Jury faces a Jan. 1, 2017 deadline that could cost the parish $180,000.
   The Police Jury decided at a special meeting on Sept. 27 to endorse Brudd Construction’s request for an extension to meet the requirements of a grant  awarded for a project that was supposed to have begun at the Port of Avoyelles in 2011.
   There were several delays in getting started, and then a downturn in public works construction projects forced Brudd to make adjustments in the type of projects it handled.
   A “working session”  to discuss the potential default on the grant was held on Sept. 21 and included consultants for the Avoyelles Police Jury and for Brudd Construction. 
  Brudd had pledged to create 27 permanent jobs as a condition of the grant. At this time, only nine permanent jobs have been created. It was noted that at least 100 temporary construction jobs have been created over that period, but those cannot count toward fulfilling the grant condition.
  In its request for an extension -- which would be the second three-year extension for the project -- Brudd Construction says it will be able to fully comply with the conditions of the grant within 24 months. It is also asking for consideration of reducing the number of jobs from 27 to 18, which might be met without the need for an extension. 
  “We are months away from default and have to face this issue,” Police Jury President Charles Jones told the group at the committee meeting. “We are not likely to meet that deadline.”
  Jones said he is more optimistic now that a solution will be found. If not, he said, “We will have no alternative but to go back on Brudd to cover our costs. The contract for the LCDBG is between us and the state. However, we have a contract with Brudd” that covers what happens in the event of default.
  Jones said he is also encouraged by state Sen. Eric LaFleur’s offer “to intervene on our behalf with the Office of Community Development in support of our efforts to comply with the terms of the grant.”
 
Two major concerns
   The parish is facing two major concerns related to this issue.
  The first is a provision requiring the parish to repay the state $10,000 for every job less than the 27 promised. At this time, with 18 fewer jobs than required, the parish would be required to pay back $180,000. The second is the likelihood that the Police Jury will not be eligible for another block grant until it complies with the terms of this grant or pays the penalty.
   The jury’s problem does not affect other local governments in the parish from applying and receiving LCDB grants.
   Jones said state officials have said they will “entertain” a request for a second three-year extension to meet the grant conditions, “but that is not a guarantee that they will. We will need ample justification to support that request.”
   Brad Brudd, owner of Brudd Construction, said the grant was for sewer and water improvements at the Port of Avoyelles in Simmesport so the company could create a maintenance facility there, which would result in the creation of permanent jobs.
   After the grant funds were received in 2011, there were several delays in the project, including a requirement to obtain a second environmental impact study to obtain a permit from the Army Corps of Engineers.
   Brudd said the contractor received authorization to proceed on the project in August 2013.
  Consultant Kendall Magee, hired to manage the grant project, said that work was finished in May 2014, but Brudd did not have full access to the maintenance facility because it did not have an access road. A temporary access road was built, but the permanent road was not finished until September 2015.
   In addition, public works construction projects took a downturn during that period, forcing the company to adjust its business plan, Brudd said.
   He said the company is now doing more industrial projects and a lower percentage of business in the highway construction area.
   “We were unable to fully implement the initial plan and now we are in a time where we have to adjust due to a change in the market,” Brudd said.
   Brudd said RFI, an affiliate of Brudd Construction, will add 10 to 20 jobs within the next two to three years due to that change in the construction market. Those new jobs can count toward the number promised in the grant.
 
Three options
    There are at least three possible ways the jury can try to avoid default.
    The first and most-often mentioned is to ask for a three-year extension. The parish is currently operating under the first three-year extension, which expires  Jan. 1.
    Larry Andrews, with Pierite Group, said there are two other ways to address the pending deadline. Pierite Group has been hired by Brudd to assist in this issue.
   Andrews said one option is to ask for an amendment to the grant conditions, reducing the 27-job requirement to 15 or 16. He said a justification for that request is the fact that about 400 construction jobs have been lost in Avoyelles Parish since 2014 due to the state’s budget problems and an overall downturn in construction.
   “By the end of December, Brudd will have created 15 to 17 new jobs and would be in compliance with the grant if the amendment is approved,” he added.
   It was noted that Brudd was required to match about $270,000 of the grant in costs and in-kind services on the project. Brudd exceeded that obligation by approximately $100,000.
The third possibility, then, is to ask the state to offset the deficit in the job creation obligation with Brudd’s excess contribution in the other provision of the grant requirements.
   “Of course, we would like for Brad to create those additional 18 jobs before the deadline or get an extension to meet that requirement, and also be declared grant-eligible again,” Johnson told the group. “That is the ‘having our cake and eating it, too’ scenario.
    “We don’t want to be in the position where somebody has to pay back $180,000,” he continued. “That is the worst case scenario.”