The St. Bernard Parish Hospital has proved a complex and emotional issue for both the residence of the parish and all officials involved. A tangled web of tax-credits, millage rate adjustments and bond documents has been employed to make a $90 million project a manageable monetary burden for the average taxpayer.

So, when the Hospital Service District and the Hospital Foundation Board approached the Council with documents that could net another $515,000 for the municipality’s forthcoming asset, the Hospital Service District thought it was an easy sell. But as Council Chairman Guy McInnis put it, with the hospital, it is always an emotional debate.

That debate continued at the February 7 Council meeting, when Councilman Nathan Gorbaty, District B, argued the fact that if this $515,000 could have been added to the HSD, why not instead ease the burden on taxpayers, and questioned what exactly the money was going toward.

“At our last Council meeting, we awarded… well, they awarded,” Gorbaty said, pointing to the other sitting members, “I voted against giving the HSD an extra $515,000 towards their budget.
“Yet, on their very next agenda, they [HSD] have on there for the Chairman Wayne Landry and Vice-Chairman George Cavignac to take a trip to New York to meet with Goldman Sachs,” Gorbaty said. “My question to them is: where did the funding to go to New York come from to meet with Goldman Sachs? Did the taxpayers pay? Did it come out Chairman Landry’s pocket? And second: why did the Vice-Chairman have to accompany the chairman?”

Responding was the Vice-Chairman and sitting Councilman-at-Large West, George Cavignac, who said that the trip did not come out of taxpayer dollars but was paid for by HSD chairman Landry, as were many previous trips, totaling about $25,000 over his three year tenure on the board.

“I had to accompany because I’m the Chair of the hospital foundation,” Cavignac said.

Cavignac was referring to the separate foundation, created in conjunction with the Medical Office Building, which is now under construction. Cavignac has also been one of the members involved in negotiating the new market tax credits for the hospital, which he said was another reason his presence was requested for the investor meeting in New York.

Councilman Cavignac not only asserted that Gorbaty was wrong in his assumptions about the trip, but even on the matter previously passed for the additional $515,000 for the Hospital Service District.

“You didn’t vote against awarding the HSD any extra funding,” Cavignac said. “I don’t know if you’re aware of this, but the Council has nothing to do with the Hospital project. They appoint the members, but once that happens the Hospital board is a political subdivision of the state… the Council has no authority except some technicalities, so just to clarify, no money was awarded from the budget.”

Cavignac said that the millage being collected maintained its same structure and rate, eight mils over nine years. However, because the hospital being built is considered a safe investment, as is the tax revenue being raised by the people of St. Bernard, the HSD was able to “refinance” in a way, and get a lower rate, which yielded more capital for the same amount of money.

“So, forgive us,” Councilman Cavignac said to Gorbaty, “for stretching the dollar of the taxpayers into more dollars.”

“You did get another $515,000 out of us,” Councilman-at-Large East Guy McInnis said, referring to the fact that the HSD did need Council approval for the “refinance” that yielded the additional funds. However, the debate between the councilmen and HSD sitting members hinged less on the money, and more on credit for the extra funds.

“We approved that, and we have some authority.” McInnis said that the Council’s authority in this matter is also apparent by the fact that Chairman Landry regularly reports to the Council.

For his part, Gorbaty said that even if the argument about the $515,000 in funds was moot as being additional money for the HSD, why couldn’t the lower rate be used to save the taxpayers money for the further nine years?

“It may not have raised taxes, but it could have lowered the taxes,” Gorbaty said. “My concern is simply the HSD budgeted for $12 million and the interest rates went lower, and I wanted to see about giving that back to the taxpayers.”

Councilman Cavignac and HSD Chairman Landry both repudiated that assessment, saying the choice here was not between higher or lower taxes, but between getting more money for the hospital by refinancing the deal, or leaving it all on the table by doing nothing.

“The eight mils has been passed, it’s a fixed figure, it does not change,” Landry said, and went on to say, “We were prudent enough that we got more mileage from their [the peoples’] money. He [Gorbaty] has no comprehension what-so-ever of the sophisticated financials of this project. And leaving half-a-million on the table is not good business sense.”

As for the claims about the New York trip, Landry countered by saying, “For me to take on personally an excess of $25,000 and then to take that contribution and fling it around and insult me is absolutely uncharacteristic of a political official.”

Following the point of discussion, the HSD met in chambers for a public meeting, and added an agenda item, appointing Landry as the official contact for Council members who have any questions regarding the hospital or the financial transactions surrounding the facility.

Story by William Dilella