Tuesday, July 9, 2013

Kenner Citizens' Group Loses In 1st Round of Court Battle With City Over Bond Debt

As you know, Citizens For a Better Kenner, Inc., and myself (individually and as President of CFBK) filed a lawsuit regarding Mayor Yenni's proposed sale of $47 Million in bonds to finance a series of primarily beautification projects. Our lawsuit sought to invalidate the City Council ordinance authorizing the bond sale since there was not a public referendum as required by the City Charter and the State Bond Commission.

The City filed a motion to dismiss our lawsuit and filed exceptions stating that we did not follow the proper legal procedures. Judge Mentz in the 24th JDC Division F granted their motion to dismiss based upon procedural reasons. At no time did the City argue, or Judge Mentz find, that the merits of our lawsuit were invalid or incorrect.

In essence, the City won on a technicality.

Throughout this process, neither CFBK or myself have stated their opposition to Mayor Yenni's plan - our sole contention was that the people of Kenner should have the right to approve or not approve a debt plan that will be paid out over the next 20 years.

While we may discuss and debate individual projects, everyone (including myself) wants a better Kenner and no one wants to stand in the way of improving our city. However, on an issue that is this important and will impact the people of Kenner for decades; an issue that will significantly increase Kenner's debt at a time when many cities are reducing debt or facing bankruptcy; we feel strongly that the people of Kenner, through a public vote, should approve or not approve the choices of a handful of elected officials.

The fact that Mayor Yenni doesn't welcome a public vote and validation of his leadership and his plan and would rather demonize citizens like me and CFBK for attempting to protect the rights of Kenner citizens, should be troubling to Kenner residents.

The following is a statement regarding the lawsuit that was sent to members of the media:

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CFBK Issues Statement Regarding Judge’s Verdict Dismissing

Lawsuit Against the City Of Kenner

 Today, in the 24th Judicial District Court, Division F, Judge Michael Mentz, ruled in favor of the City of Kenner and granted their exceptions to a lawsuit filed by Citizens For a Better Kenner, Inc. (CFBK) and Walter Bennetti, President of CFBK. In doing so, Judge Mentz dismissed the lawsuit on procedural grounds.

The lawsuit sought to invalidate a Kenner City Council Ordinance which approved Mayor Mike Yenni’s plan to sell $47 Million in Sales Tax Revenue Bonds to finance beautification and other projects. CFBK contended that, per the City of Kenner Charter and State Bond Commission rules, any issuance of bonds of this type can only be done after a voter referendum and approval by more than 50% of the voters.

The exceptions filed by the City involved procedural issues. Judge Mentz did not make any ruling on the validity or merits of the lawsuit or address whether the Kenner City Charter and Louisiana State Bond Commission Rules and Procedures were followed by the City.

“We are naturally disappointed that Judge Mentz agreed with the City and dismissed our lawsuit based upon a technicality and not on its merits,” Bennetti said. “We believe that the people of the City of Kenner are entitled to approve Mayor Yenni’s plan. In fact, Mayor Yenni and the City Council should want the people of Kenner to approve and support his plan and validate that support by a public vote. It is discouraging that Mayor Yenni would rather rejoice in a legal technicality than debate whether the bond sale is legal or not, why the best interests and rights of the people of Kenner aren’t protected and whether he followed the City Charter and state law.”

“The verdict by Judge Mentz is appealable. CFBK will explore all options to ensure that the rights of the people of Kenner are protected despite the actions of Mayor Yenni and the Council.”

Regarding Mayor Yenni’s claims that the delay in selling the bonds due to this lawsuit cost the city money, Bennetti said, “There is no conclusive proof that the lawsuit caused the City to ‘lose’ money. Interest rates can, and do, go up and down. It is entirely conceivable that when the city markets the bonds, if they are allowed to market the bonds, interest rates will be beneficial and the city could save money. In addition, originally the city was required to place $3 Million of the bond proceeds into a debt service reserve fund. This requirement is no longer in effect giving Mayor Yenni even more of the proceeds than he had expected.”

 

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