Wednesday, May 23, 2012

Theriot Attacks Fiber Obscuring Council's Role in Larger Fiscal Debacle

The Lafayette City-Parish council heard a disturbing report from its auditor last night, the core of which was that Lafayette City Government had run out of the savings it had been coasting on since 2008 when the budget last actually balanced and was now faced with a fiscal crisis. 

So we get this headline: Audit: LUS Fiber lost $45,000 a day. Say whaaat? 

The Advertiser has returned to the days of coverage that sacrifices informed, informative reporting for sensationalism. 

This sort of story misses the real news to focus on sensational headlines and personality politics. Honestly, the real story is contained in the last paragraphs—that LCG as a whole has been living beyond its means every year since 2008. Not mentioned in this story is that the core critique was that LCG lost 9.7 million dollars in the last fiscal year which finally depleted reserves. The audit notes that LCG should be keeping a minimum of $14.5 million in a reserve, 'rainy day,' savings account but that the City-Parish is down to 3.8 million.

Durel, no doubt knowing this audit was coming, has been upfront about this in last few weeks saying that the crunch was coming because the city-parish council (which has responsibility for the budget) has run out of savings.

That Theriot, who is an officer of the council, should froth and foam about LUS Fiber rather than deal seriously with the actual problem that the council faces is predictable. He'd rather attack the supposed fiscal mismanagement of a public utility than face his own role in the fiscal mismanagement of LCG. He'd rather his ideological allies and followers do the same and skip lightly over his own failure to fix the very sort of problems he was elected to fix.

Focusing on LUS Fiber's "losses" is the most obvious sort of misdirection. Anyone who has followed the story of LUS Fiber knows that it is supposed to be losing money now. It's in the business plan, for gosh sakes. You borrow seed money via the bonds in order to build the physical assets that you expect to pay back the loan. Business 101,  Building a fiber-optic network from scratch requires enormous upfront capital. The plan presented to the public made it crystal clear that the division would lose money on paper for years, that was the whole point of borrowing 125 million dollars to buy construction bonds. The story even mentions this truth—in passing. Even Theriot, blinded as he might be by his own ideology, surely understands this basic bit of business management.

 Theriot, the only person interviewed for this story, gamed it all very nicely. He's getting to be quite the politician. Expect a follow-up make-good story that interviews Mayor-President Durel and utility director Huval tomorrow. That's the one where the community leaders have to explain, again, what bond money is and what it is used for. And that story will put off, for yet another day, the real story that the Advertiser should be writing: Audit Finds LCG has Run Out of Savings.

Update: Right after posting this I settled down to read the rest of my morning papers...and found that the Advocate's Richard Burgess had reported the story and reported it well. The title: "Budget cushion dwindling." The story focuses on the real problems the audit revealed and mentions LUS Fiber in the final paragraphs, clearly providing the context needed to understand its fiscal picture. Theriot is not provided a platform—nor is Durel or Huval.

Update #2, 5/25/12: Durel and Huval have responded to the Advertiser's article during an interview on  on KPEL. I covered that interview in a separate blog post.