Land Use
 

BioDistrict violates state law requiring hearing to let public offer input on budget

By Ariella Cohen, The Lens staff writer |

Nearly two years into its operations, the state-funded organization coordinating development of a new biomedical district spanning downtown, Mid-City and Gert Town has never held a public hearing on its $2.5 million budget.

The lack of public input puts the Greater New Orleans Biosciences Economic Development District squarely in violation of a 30-year-old law requiring all government entities with a budget more than $500,000 to hold a public budget hearing. The law is meant to provide taxpayers with “an opportunity to participate in the budgetary process prior to the adoption of the budget.” The district’s failure to comply with the state statue came out in an annual audit recently submitted to the state.

Reached by telephone Thursday, district president and CEO Jim McNamara acknowledged the organization didn’t comply with the law in 2010 and 2011, but he said that such missteps were “not unusual” for young entities, that, like the bioscience district, lack a predictable stream of income.

“It’s not really much of an issue,” McNamara said. “I mean, it’s an issue with respect to transparency. At all times you want to have public disclosure, but because we don’t have a regular revenue stream and didn’t get our funds until after 2010 had begun, we could not hold a hearing.”

In 2011, he said, the organization did not hold a public hearing because it didn’t realize the requirement applied.

“Until we figured out what kind of agency we were, we didn’t know to hold the hearing,” McNamara said.

The confusion over the agency’s regulations didn’t stop it from spending money, though.

About half its $2.5 million budget has already been spent. Most of the money, $1.1 million, went to consulting fees, the majority to pay for a master plan done by the global engineering and project management firm, AECOM. Another $151,000 covered salary and benefits for McNamara, the district’s only employee. The remainder of the cash went to operating expenses, including $66,000 for rent and utilities and $17,385 for district marketing materials.

This district was created by an act of Legislature authored by Sen. Karen Carter Peterson, D-New Orleans, and signed into law just weeks before Hurricane Katrina in 2005. Known as the BioDistrict, it is a political subdivision bounded by Loyola Avenue, Iberville Street, Carrollton Avenue and Earhart Boulevard. The Veterans Affairs Hospital and University Medical Center now under construction cover only a small section of the 1,500-acre district, now occupied by mix of homes, small businesses catering to a middle- or working-class population and in some areas, empty or abandoned lots.

The BioDistrict, created through a 2005 act of the legislature, spans 1,500 acres of Mid-City, Gert Town and the Central Business District.

With its mission of luring new businesses into the district, the government entity has powers akin to a university, including the right to issue tax-exempt bonds, to ask voters for a property tax increase, charge fees to landowners within its boundaries and enter into agreements with other public agencies. Like a university, the BioDistrict has the power to acquire and retain land without paying property taxes. Though it does not have the power to seize land through eminent domain, it is free to purchase land or enter into partnerships with agencies that do have the power to take land through eminent domain.

The BioDistrict has drawn concerns from district residents who fear redevelopment will happen without their input.

Yet despite its relative power and unspent money, the district today exists mostly on paper. McNamara said he is no longer receiving compensation for his work with the BioDistrict because of the organization’s unsteady finances. That, he said, makes it even harder to follow state public budget laws.

“We have no predictable income stream,” McNamara said. “It’s hard to have a public budget and have a public hearing and not be funded. Until we have a regular revenue stream, we may have these slip-ups occur, but in no way do we intend to have them occur.”

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  • Obadiah

    Finally – someone begins to bring some scrutiny to bear.

    The BioDistrict needs a lot more investigating.

  • It’s worth rereading http://citiwire.net/post/2615/ which I wrote last year, despite the ill-founded comment at the end which is factually wrong.