Thursday, January 05, 2006

Louisiana Governor Remodels Offices After Katrina

From WBRZ TV in Baton Rouge (hat tip to Ace of Trump):

Shortly after the two hurricanes, Gov. Kathleen Blanco decided to renovate some of her staff's offices. At the time of her decision, Blanco also was hinting at deep budget cuts to state programs and the possibility of laying off 20 percent of the state workforce.

The project cost $564,838.

The newly refurbished office space on the sixth floor of the State Capitol includes hookups and mounts for two flat screen televisions, Swedish granite countertops, walnut paneling and frosted laminated glass. The floor, which will not be accessible to the public, was redesigned to add three new offices, a conference room and file storage areas.

...

Concerned about the perception of fixing up their office space while slashing others' spending, Jimmy Clarke, Blanco's chief of staff, said Friday the governor's top aides considered not fixing the 6th floor.

But the sixth floor project was bid six days before Hurricane Katrina came ashore near Buras on Aug. 29. Clarke said he became concerned that the state could be sued successfully if the restoration project were shut down.

"We certainly would not have initiated this work post-Katrina and Rita," Clarke said. "Given all that the state faces at this time, these renovations would be a very low priority."

The excuse that the bid for the remodeling was done 6 days before Katrina is not a very good one. First, it is not clear from the information given that the state of Louisiana in fact had a binding contract with the winning bidder. If not, the state is not obligated in any way.

Second, if there is a binding contract, the state can negotiate with the winning bidder and can pay a sum of money to terminate the contract. The contractor is entitled only to the amount of profit it would have made on the project. The state's negotiator's can make it very clear that the project will be scrutinized closely and will be held to the highest standard, which would reduce the amount of potential profit. The state's negotiators can also bring public pressure to bear on the contractor, especially in the wake of Katrina with the resulting financial pressure on the state. Hardball negotiating is not an unknown tactic in any governor's office, I can assure you.

(In the City of Houston, where I live, the current mayor, a Democrat, came into office facing a financial mess created by his incompetent predecessor, also a Democrat. The new mayor cleaned up the mess through hardball negotiating with unions and city employees over the pension obligations.)

In the worst case scenario for Louisiana, take the case to court before a jury of Louisiana citizens. The state will still pay out less than the total cost of the renovations.

With these renovations in the governor's office, Gov. Blanco shows more concern for contractors and her staff than for the citizens of Louisiana. Her decision making is slow, as we saw in the immediate aftermath of Katrina, and her judgment is poor. Gov. Blanco is probably the worst governor in the nation.

Louisiana elected her and deserves her. It will be interesting to see whether she wins re-election.

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