Can a Louisiana neighborhood improvement and security district use public funds to send its members to social functions like sporting events or theater productions?

Plain-English summary

Leonard McCollum, Jr., the president of the Seabrook Neighborhood Improvement and Security District, asked the Louisiana AG whether the district could spend public funds to send district members to social functions like sporting events or local theater productions. The stated purpose was building camaraderie and the "overall betterment of the District." The AG said no.

The analysis runs through La. Const. art. VII, § 14(A), which prohibits the state and its political subdivisions from loaning, pledging, or donating their funds, credit, property, or things of value to any person, association, or corporation, public or private. The Louisiana Supreme Court interpreted that provision in Board of Directors of the Industrial Development Board of the City of Gonzales v. All Taxpayers (2006), commonly called Cabela's. Cabela's held that a prohibited donation occurs when public funds or property are "gratuitously alienated."

The AG's office distilled Cabela's into a three-part test that has appeared in many subsequent AG opinions. For a public expenditure to be constitutionally permissible, the public entity must show all three:
1. Legal authority to make the expenditure.
2. A public purpose that comports with the governmental purpose the entity has legal authority to pursue, and the expenditure taken as a whole must not appear gratuitous.
3. A demonstrable, objective, and reasonable expectation of receiving something real and substantial in exchange.

The Seabrook District was established under La. R.S. 33:9091.16 "for the primary object and purpose of promoting and encouraging the beautification, security, and overall betterment of the district." The AG found no direct connection between district members attending sporting events or theater productions and the statutorily-prescribed purpose of beautification, security, or betterment. The District also did not show it would receive anything "real and substantial" in exchange.

The opinion compared two prior AG opinions to illustrate the distinction:
- Op. 08-0328 said the City of Monroe could not spend public funds on employee social gatherings even when city business and presentations would be conducted during the gatherings. Social camaraderie alone, the AG said, is not a public purpose.
- Op. 12-0180 said the Cullen Police Department could spend public funds on a "National Night Out Against Crime" event, because the event directly furthered the police department's anti-crime mission. The benefit (community-police partnership, crime awareness) was real and substantial in relation to the agency's legal mission.

The Seabrook District's proposal looked more like Monroe's social gatherings than Cullen's anti-crime event. The result: the proposed expenditures are prohibited donations of public funds.

What this means for you

If you sit on a Louisiana neighborhood improvement district, security district, or special district board. This opinion is a sharp reminder that "team building" and "member camaraderie" are not by themselves public purposes that justify spending district funds. Before authorizing any expenditure that benefits members personally (tickets to events, meals beyond ordinary meeting refreshments, retreats), apply the Cabela's test in writing in the meeting minutes: name the legal authority, name the public purpose tied to your enabling statute, and name the specific real-and-substantial return the district expects.

If you are evaluating whether a particular expenditure is permissible. The clearest framework: read your enabling statute, write down what your special district is legally authorized to do, and ask whether the proposed expenditure furthers that exact mission. If a Cullen-style direct mission tie-in is not obvious, the expenditure is at risk.

If you are a treasurer, accountant, or auditor for a special district. Flag any expenditure for entertainment, social events, member travel to non-business destinations, or other "morale" categories. Ask the board to document the Cabela's analysis on the record before approving. Auditors increasingly look for this trail.

If you are an elected official or community member who serves on multiple boards. Even when you are unpaid, your service is not legally distinct from the district's mission. Public funds spent on you must satisfy the Cabela's test as if any other expenditure were being scrutinized. The "we're all volunteers" framing does not change the constitutional analysis.

If you are an attorney advising a Louisiana special district. Cite this opinion alongside Cabela's, Op. 08-0328, and Op. 12-0180 when boards push back on guidance to avoid social-event funding. The line between an ordinary meeting expense (refreshments at a meeting, mileage reimbursement for board work) and an impermissible donation (theater tickets, sporting events, retreats unrelated to the district's mission) is in the agency's enabling statute, not in the board's sense of what is "reasonable."

Common questions

Q: We're a small neighborhood district. We can't even pay for the board to attend a sporting event together?
A: Not with district funds, under this opinion. If individual board members want to attend such events together, they have to pay personally. The constitutional bar applies regardless of the dollar amount or the size of the district.

Q: What can a Seabrook-type district actually spend money on?
A: Things that directly serve the statutorily-listed purposes. For Seabrook, that means beautification (landscaping, signage, public art), security (private security patrols, surveillance equipment, lighting), and overall district betterment (capital improvements, district-wide events like community cleanups that involve the public, not just members). Routine governance costs (meeting facilities, recordkeeping, legal counsel) are generally allowed because they enable the district to function.

Q: What if we tie a social event to district business by holding a board meeting at the venue?
A: That was the City of Monroe's argument in Op. 08-0328, and the AG rejected it there. Holding a meeting at a sporting event or theater does not by itself convert a social outing into a public-purpose expenditure. The substance of what the funds buy is what matters, not the agenda label.

Q: Does the Cabela's standard apply to all Louisiana special districts, not just security districts?
A: Yes. La. Const. art. VII, § 14(A) applies to all political subdivisions of the state. The Cabela's three-part test has been applied consistently by the AG across cities, parishes, school boards, special districts, and other political subdivisions.

Q: What about an event that combines a board meeting, a district planning discussion, and ends with dinner?
A: Reasonable meal expenses incurred during legitimate district business are generally treated separately from social events. The risk is when the social component dominates. If the public-purpose component (district business actually conducted at the gathering) is clearly the main purpose and the meal is incidental, courts and the AG have been more flexible. Document the agenda.

Background and statutory framework

Constitutional prohibition. La. Const. art. VII, § 14(A) provides: "Except as otherwise provided by this constitution, the funds, credit, property, or things of value of the state or of any political subdivision shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private." The provision targets gratuitous transfers of public resources. Subsection (B) lists permitted exceptions; subsection (C) authorizes cooperative endeavors for public purposes.

Cabela's standard. In Board of Directors of the Industrial Development Board of the City of Gonzales v. All Taxpayers, 2005-2298 (La. 9/6/06), 938 So.2d 11, the Louisiana Supreme Court held that a prohibited donation occurs when public funds or property are "gratuitously alienated." Subsequent AG opinions have distilled the case into a three-part test requiring legal authority, public purpose, and real-and-substantial expected return.

Seabrook District. La. R.S. 33:9091.16 created the Seabrook Neighborhood Improvement and Security District in New Orleans for the primary purpose of promoting and encouraging the beautification, security, and overall betterment of the district. The District is a political subdivision of the state.

Prior AG opinions.
- La. Atty. Gen. Op. No. 08-0328 (City of Monroe could not fund employee social gatherings even with embedded business presentations).
- La. Atty. Gen. Op. No. 12-0180 (Cullen Police Department could spend public funds on a "National Night Out Against Crime" event because it directly furthered the agency's anti-crime mission).

Liz Murrill is the Attorney General of Louisiana. Judy H. Lester signed the opinion as Assistant Attorney General.

Citations and references

Constitutional provisions:
- La. Const. art. VII, § 14 (prohibited donations of public funds)
- La. Const. art. VII, § 14(A) (gratuitous alienation bar)

Statutes:
- La. R.S. 33:9091.16 (Seabrook Neighborhood Improvement and Security District)

Cases:
- Board of Directors of the Industrial Development Board of the City of Gonzales, Louisiana, Inc. v. All Taxpayers, Property Owners, Citizens of the City of Gonzales, et al., 2005-2298 (La. 9/6/06), 938 So.2d 11 ("Cabela's")

Prior AG opinions:
- La. Atty. Gen. Op. No. 08-0328 (Monroe employee gatherings)
- La. Atty. Gen. Op. No. 12-0180 (Cullen Night Out Against Crime)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/24-0163

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

STATE OF LOUISIANA
DEPARTMENT OF JUSTICE
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 94005
BATON ROUGE, LA 70804-9005

LIZ MURRILL
ATTORNEY GENERAL

June 17, 2025

OPINION 24-0163

90-A-1 PUBLIC FUNDS
Mr. Leonard McCollum, Jr.
President — Seabrook Neighborhood Improvement & Security District
La Const art VII, § 14
La. R.S. 33:9091.16
5819 Arts Street
New Orleans, LA 70122

No public purpose exists for members of the Seabrook Neighborhood Improvement and Security District to attend planned social functions that do not align with the District's legislative purpose. Therefore, such an expenditure would violate La. Const. art. VII, § 14(A) as a prohibited donation of public funds.

Dear Mr. McCollum:

You have requested an opinion from this office regarding the expenditure of public funds by the Seabrook Neighborhood Improvement and Security District ("District"). The District is a political subdivision of the state and was legislatively established under La. R.S. 33:9091.16.

Question

May the Seabrook Neighborhood Improvement and Security District expend public funds for members of the District to attend a planned social function for the purpose of the overall betterment of the District?

Conclusion

No. Because no public purpose exists for members of the District to attend planned social functions that do not align with the District's legislatively-created purpose, such an expenditure would violate La. Const. art. VII, § 14(A) as a prohibited donation of public funds.

Analysis

All questions concerning the use of public funds must be examined in light of La. Const. art. VII, § 14(A), which provides that "the funds, credit, property, or things of value of the state or of any political subdivision shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private." The Louisiana Supreme Court has held that a prohibited donation occurs "when public funds or property are gratuitously alienated." Board of Directors of the Industrial Development Board of the City of Gonzales, Louisiana, Inc. v. All Taxpayers, Property Owners, Citizens of the City of Gonzales, et al., 2005-2298 (La. 9/6/06), 938 So.2d 11. ("Cabela's").

Leonard McCollum, Jr.
Opinion 24-0163
Page 2

In light of the Cabela's case, it has consistently been the opinion of this office that in order for an expenditure or transfer of public funds to be constitutionally permissible, the public entity must have the legal authority to make the expenditure and must show: (i) a public purpose for the expenditure or transfer that comports with the governmental purpose the public entity has the legal authority to pursue; (ii) that the expenditure or transfer, taken as a whole, does not appear to be gratuitous; and (iii) that the public entity has a demonstrable, objective, and reasonable expectation of receiving something real and substantial in exchange for the expenditure or transfer of public funds. The Cabela's standard places a strong emphasis on the reciprocal obligations between parties to ensure that there is no gratuitous donation of public funds.

According to your request and subsequent clarification provided to our office, the District asks whether it may expend public funds for members to attend social functions, such as sporting events or productions at local theaters, including providing transportation and other related travel expenses. While we can appreciate the desire to foster camaraderie amongst members of the District, we do not believe expending public funds in this manner is constitutionally permissible for the following reasons.

The District is established under La. R.S. 33:9091.16 "for the primary object and purpose of promoting and encouraging the beautification, security, and overall betterment of the district." However, as there does not appear to be a direct connection between the attendance of the members at the events described and the overall betterment of the District, we are unable to find that a public purpose exists for such expenditures. Further, we have not been provided with any details that would suggest the District would receive something "real and substantial" in exchange for the funds expended in connection with these social functions. Therefore, such an expenditure would likely be considered gratuitous and a prohibited donation of public funds.

The following previously issued opinions may provide further assistance. Attorney General Opinion 08-0328 addressed whether the City of Monroe could expend public funds on strictly social gatherings for city employees. The stated purpose of such gatherings was to allow city employees to interact in a social setting to build camaraderie, morale, and team spirit. The City of Monroe stated that at most of the gatherings, city business would be discussed and a presentation would be made concerning issues relating to city business. However, our office still opined that a true public purpose for expending funds for such gatherings did not exist, and that the City failed to show that it would receive something real and substantial in return for "hosting" these social gatherings. Similar to your request, the benefit return on the expenditure of public funds for the City of Monroe was social camaraderie amongst its employees. While it's virtually certain that members of the District who would attend such proposed social functions would benefit from an increased sense of community and likely develop new bonds or friendships, it does not appear that attendance at such functions would enhance the beautification, security, or overall betterment of the District.

Leonard McCollum, Jr.
Opinion 24-0163
Page 3

In contrast, Attorney General Opinion 12-0180 found that the Cullen Police Department could permissibly expend public funds in connection with hosting a "National Night Out Against Crime" event. The purpose of the event was to raise awareness for crime and drug prevention, generate support for and participation in anti-crime activities, strengthen police-community partnerships, and send a message to criminals that neighborhoods are organized and fighting back. We determined that such a function furthered the goals and obligations of the police department by encouraging engagement in crime prevention activities and drug education. However, the Cullen Police Department was responsible for effectively demonstrating that it had a reasonable expectation of receiving something real and substantial in exchange for the expenditure of public funds for the "National Night Out Against Crime" event.

Considering the foregoing, it is the opinion of this office that no public purpose exists for the Seabrook Neighborhood Improvement and Security District to expend public funds for members of the District to attend planned social functions that do not align with the District's legislatively-created purpose.

We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.

Yours very truly,

LIZ MURRILL
ATTORNEY GENERAL

BY:
Judy H. Lester
Assistant Attorney General

LM/JHL