October 2023

LEGAL BRIEFS
Official Publication of the
Safeguarding Public
Louisiana
Dollars
Rural Water Association
Index Listings
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Adv Code 179697
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A precedent-setting case
from Gonzales considered
this constitutional provision
and produced the “Cabela’s
Test,” which generally provides
that if the municipality
has an expectation of receiving
something of commensurate
value in return for its
monetary investment, then it
is not an unconstitutional donation.
Further, there are numerous
exceptions provided
in the Constitution, including
the use of public funds to aid
the needy, the donation of
abandoned/blighted property
to non-profits, intergov-
A contemplation of government
Tel:(800) 369-6220, (3
funding naturally leads
Fax: (352) 331
to a discussion about how
Regardless of how a municipality realizes
Thornton, Musso, &Bellemin
those monies may be spent.
revenue, once received, those monies
Philosophically, we must remember
that public funds become public funds subject to transparent
I approve this ad copy for use in the following issues: LWR-R0018
Authorized Signature:
should be treated as sacred.
President Grover Cleveland, accounting and strict expenditure rules.
Date:
who won as a reform candidate,
put it bluntly: “Under ernmental exchanges, and
Artwork Contact:
our scheme of government the reduction of excessive
the waste of public money is a water charges. Expenditures
crime against the citizen.” of public dollars outside the
Regardless of how a municipality
realizes revenue, once
received, those monies become
public funds subject to
transparent accounting and
strict expenditure rules. A fundamental
restriction is found
in Article VII, Section 14 of the
Louisiana Constitution: “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.”
realm of usual government
operations should be carefully
reviewed under the
advice of counsel to ensure
that they do not amount to
unconstitutional dedications
of money or property.
Even when an expenditure
does not trigger constitutional
analysis, there are laws and
regulations that control how
public monies may be spent.
For example, if a municipality
is procuring goods or services
that exceed certain thresholds,
it must abide by the mandates
of the Public Bid Law. The LMA
offers a suite of purchasing
services through our subsidiary
LaMATS, most at no cost
to LMA members. Please visit
https://www.lamats.net/lps for
more information.
If the source of the public
funding is a state or federal
grant (including capital
outlay, Water Sector, ARPA
and IIJA), there are specific
program guidelines that
govern the expenditure of
those dollars. These may include
specific procurement
requirements, limited eligible
purposes for spending, and
mandatory reporting.
The mechanics of spending
public money are also a consideration.
Though there is
some small variance depending
on charter type, generally
the governing board/council
must allocate money for designated
purposes, including
maintaining a current bud-
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