Could Slidell front city funds to elevate private homes and later seek FEMA reimbursement?

Plain-English summary

In a 2006 opinion numbered 05-0037, the Louisiana Attorney General concluded that Slidell could not advance city funds to pay contractors who elevated private homes under a FEMA flood-mitigation program. The city had previously paid contractors with federal grant money advanced through the state. A changed process called for Slidell to pay first and then request reimbursement. The AG said later reimbursement did not cure the problem with spending city money on private-property improvements without a legal obligation or authority.

The AG drew a clear source-of-funds distinction. It treated the earlier advance-funded payments as federal money outside the Louisiana constitutional restriction on state and local public funds. The opinion did not say all participation in the federal program was impermissible.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could Slidell pay elevation contractors with city money and be reimbursed later? A: No. The AG said the city lacked a legal obligation or authority to spend its own money improving private property, and later reimbursement was irrelevant to that conclusion.

Were the earlier FEMA-funded payments treated the same way? A: No. The AG said those payments used federal funds already advanced to the city, so the cited state constitutional restriction did not apply to them.

Was the issue whether home elevation was beneficial? A: The opinion focused on the absence of legal authority to give city funds for private-property improvement, not on whether reducing flood risk was worthwhile.

Background and constitutional framework

City Attorney Timothy Mathison described a FEMA program for repeatedly flooded residences. Under the old payment process, federal funds passed through the state before contractors were paid. Under the new process, the city was to advance its own money and seek reimbursement later. The AG applied Louisiana Constitution Article 7, Section 14 and stated that Slidell had “no general obligation or authority to individual property owners or citizens to expend public funds to improve or elevate their private property.” It found the new city-funded process prohibited while distinguishing the earlier federal-funded process.

Citations

• Louisiana Constitution Article 7, Section 14 (public-funds restriction discussed in the opinion).
• City of Port Allen v. Louisiana Municipal Risk Agency, 439 So.2d 399 (La. 1983) (legal-obligation standard cited in the opinion).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0037

Original opinion text

February 6, 2006
OPINION NUMBER 05-0037

90-A-2 PUBLIC FUNDS
La. Const. Article 7, Section 14

Mr. Timothy Mathison
City of Slidell is prohibited under Article 7,
Section 14 of the Louisiana Constitution from
City Attorney
using City funds to pay contractors for the
City of Slidell
elevation of private property.
P.O. Box 828
Slidell, Louisiana 70459

Dear Mr. Mathison:

You requested an Attorney General’s opinion regarding the FEMA flood hazard mitigation program (“Program”). You indicated that the City of Slidell has participated in the Program for the last several years. The City administers federal grant funds as a subgrantee of the State of Louisiana, the grantee. The program provides for the elevation of repetitively flooded residences located within the City. The homeowner contracts with a general contractor for performance of the work. The contractor submits requests for payments to the City’s third-party administrator upon completion of project milestones according to the contract. The City, on an ongoing basis, would submit requests to the State for advance of funds based upon future cash flow needs. The federal funds advanced by the State were used to pay the contractors. No City funds were expended in this process.

You advise that FEMA recently issued regulations providing for a different process for administering the Program. FEMA now requires that City funds be used to fund the payments to contractors. The City must then seek reimbursement of the funds expended. Upon approval, the City would be reimbursed by the State on a periodic basis, either quarterly or monthly. Essentially, instead of receiving federal funds from the State in advance of payments, and then using those funds to pay the requests for payments, FEMA now requires that the City use its own funds to pay the requests for payments, and then seek reimbursement from the State. You question whether the new FEMA payment process violates Article VII, Section 14 of the Louisiana Constitution or any other provision of law.

As you are no doubt aware, Article 7, Section 14 of the Louisiana Constitution prohibits the state or any of its political subdivisions from loaning, pledging or donating public funds or anything of value to or for any person, association or corporation, public or private. The Supreme Court has interpreted Art. VII, Sec. 14 to be violated whenever the state or a political subdivision seeks to give up something of value when it is under

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Mr. Timothy Mathison
OPINION NUMBER 05-0037
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no legal obligation to do so. City of Port Allen v. Louisiana Municipal Risk Agency, 439 So.2d 399 (La. 1983). We have interpreted legal obligation to mean that the expenditure of funds be sanctioned, authorized by law, or in the discharge of a legal duty. Attorney General Opinion Nos. 03-0444, 02-0162 and 00-14.

There can be no question but that the City of Slidell has no general obligation or authority to individual property owners or citizens to expend public funds to improve or elevate their private property. Therefore, it is the opinion of this office that the City of Slidell is prohibited under Article 7, Section 14 of the Louisiana Constitution from using City funds to pay contractors for the elevation of private property. The fact that the City may later seek to have those funds reimbursed is irrelevant.

Note that the payments made under the original process, where the City received FEMA grant funds and then used those funds to pay contractors, were not made in violation of Article 7, Section 14 of the Louisiana Constitution. The funds received as part of the Program are not funds of Louisiana, but rather are funds of the United States Government. Accordingly, Article 7, Section 14 does not apply. In accord is Attorney General Opinion No. 02-0414.

Trusting this adequately responds to your request, we remain

Yours very truly,

CHARLES C. FOTI, JR.
ATTORNEY GENERAL

BY: _________
KENNETH L. ROCHE, III
Assistant Attorney General

CCF, JR/KLR, III/jv

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OPINION NUMBER 05-0037

90-A-2 PUBLIC FUNDS
La. Const. Article 7, Section 14

City of Slidell is prohibited under Article 7, Section 14 of the Louisiana Constitution from using City funds to pay contractors for the elevation of private property.

Mr. Timothy Mathison
City Attorney
City of Slidell
P.O. Box 828
Slidell, Louisiana 70459

Date Received:

Date Released: February 6, 2006

KENNETH L. ROCHE, III
ASSISTANT ATTORNEY GENERAL