NEW ORLEANS (Legal Newsline) - Louisiana Attorney General Buddy Caldwell, in an opinion released last week, said the city of New Orleans cannot claim any excess revenue made by the New Orleans Public Belt Railroad for its own use.
Republican state Sen. Conrad Appel III sought Caldwell's opinion in a letter dated Sept. 17 in hopes of clarifying the management and control of the railroad and to clearly define the roles of the state, the city and the railroad's board. Appel's district includes part of the city-owned track.
Last year, New Orleans Mayor Mitch Landrieu had suggested using funds from boards and commissions like the railroad's to help balance the city's budget, according to the Times-Picayune.
According to the newspaper, the railroad's $15 million operating budget for 2011 could see an extra $475,000.
Appel, in his letter to Caldwell, questioned whether the city would have a claim to any of that surplus revenue.
The attorney general, in his nine-page response released Wednesday, wrote that the revenues "may only be used by the NOPB Commission for purposes benefitting the NOPB, including expenditures for the operations of the NOPB railroad; the acquisition of assets, etc., for the operation of the NOPB railroad system; and the payment of the debts of the NOPB."
"Our reading of the governing laws leads this office to the conclusion that neither the City of New Orleans, nor any other public entity, has any 'claim' or right to any 'surplus' revenue that may accrue to the NOPB over the course of its continuing operations," Caldwell wrote.
Caldwell explained that the railroad is an unattached board of the city of New Orleans and therefore a political subdivision of the State.
As to who has control over the railroad, the attorney general said it is "exclusively vested" in the railroad's commission, which is composed of the mayor of New Orleans and 16 area taxpayers, with each member serving a 16-year term.
The only exception, Caldwell noted, is if the commission contracts with another party for the "operation, management and development of the public belt system."
Then, he said, it would be necessary for the city council members to determine that the interests of the city would be best served by the contract and the contract would be subject to council approval.
According to the Times-Picayune, outsourcing the railroad's management to a conglomerate of Class I railroads that use the tracks could be a possibility.
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.