Daily Report

This Morning's Headlines / Thu, July 24, 2014

BR business executives come out on both sides of anti-discrimination ordinance

Among the dozens of proponents and opponents of the proposed ordinance amendment to prohibit discrimination in employment, public accommodations and housing on the basis of veteran status, gender identity and sexual orientation at the Metro Council meeting Wednesday evening—which ended before the council could vote on the proposal—were business executives who weighed in on each side of the issue. Luke Kissam, president and CEO of Albemarle, asked the council to pass the ordinance in order to help businesses recruit employees from around the nation and globe to come to Baton Rouge. "We compete with cities that have already adopted an ordinance to show that they believe in basic fairness and equality," Kissam said. "This is an opportunity to send the message that we are a community that embraces and values diversity and judges people only on their merits." Executives from Lamar Advertising, Chase Bank and the Baton Rouge Area Chamber echoed Kissam's sentiments. "Over 90% of Fortune 500 companies have anti-discrimination policies that include sexual orientation," BRAC Executive Vice President and Chief Operating Officer Erin Monroe Wesley said, adding that excessive litigation should not be a concern. "On average, claims based on sexual orientation or gender identity were about 3% to 4% of the total number of employment discrimination claims, and so the evidence does not support the case that we open Pandora's box in terms of litigation." Small businessmen and professionals on the opposing side contended that the proposed ordinance was unnecessary and the language problematic. "In my business, I've had every race, creed, gender choice," said Caesar Garcia, who owned and operated C.G.'s Gymnastics for 35 years before selling it last year. "I must've been living under a rock, because I had no idea we were having this kind of disparity that we have to put this kind of language in this proposition." —Rachel Alexander Read the full story.

Today's poll question: Do you want a ballot measure to be put before local voters to change the city-parish plan of government to include a "fairness policy" opposing discrimination, including based on sexual orientation and gender identity?

Delgado says he expects Roper to take new attorney position OK'd by council

While all the attention at Wednesday night's Metro Council meeting was focused on the heated debate over the so-called fairness ordinance, the council did tend to a handful of other noteworthy items. Among them: It voted 9-2 to create a new attorney position for the City-Parish Employees' Retirement System that will serve as in-house special legal counsel to the system's board. Though council members say they created the position at the request of the retirement system—adding that the move has been in the works for several months—the position has reportedly been created for embattled Parish Attorney Mary Roper as part of a deal by which she would resign from her current post. Roper declined to comment after Wednesday's meeting. But Councilman John Delgado says, "The retirement board had been asking for this for a while, and the fact it is created does allow Mary to take the position now should she choose to do so … It is my understanding she will take that position." Earlier this summer, Delgado co-sponsored a motion along with councilmen Buddy Amoroso and Trae Welch to remove Roper from her job. A vote on that measure was later deferred because council members said they were working toward an "amicable resolution." Also Wednesday, the council approved the annexations of some 900 acres of property near the Mississippi River into the City of Baton Rouge. One of the requests came from Live Oak Stables Inc., The Baton Rouge Water Works Co. and a group of landowners that includes Prescott F. Bailey, James Bailey III, Virginia Bailey Noland, Claude Reynaud Jr., Charles Lane III and The Cottage Inc. Another request was from from the Lambert family's Riverboat Casinos Inc., which filed for annexation of 630 adjacent acres of land. Amoroso cast the lone dissenting vote against the annexations. —Stephanie Riegel

Publisher: La.'s strong credit, bond ratings tell 'the rest of the story'

In his latest column, Business Report Publisher Rolfe McCollister Jr. says there are a lot of critics, pundits and politicians who "constantly go on about the state budget every year and about how our use of funds is risky for Louisiana." Some even insist we need more taxes to survive, McCollister says. "But instead of listening to those statewide officials, legislators or left-leaning organizations (most of them run by former liberal journalists)—all with their own agenda—why not turn to the experts who make their living determining the state of government finances?" McCollister writes. "National credit firms live or die on the quality of their financial assessments, not on their politics." Since Gov. Bobby Jindal took office in 2008, McCollister notes, Louisiana has received eight credit rating upgrades from the three major credit-rating agencies. "Louisiana's credit ratings are currently the strongest they have been in two decades," he says, citing several ratings upgrades from Moody's, Fitch and S&P in recent years. As for a recent report that Louisiana's per-capita debt has reached a new high, McCollister notes the report provided no context. "You don't think the national credit-rating firms are aware of our income and per-capita debt when they issue their ratings?" he asks. "The national bond ratings—the best in two decades—are holistic. They include our state's financial condition, budget performance, management of expenditures and cash (including a state workforce reduced by 20,000 since 2008), growth of economy (in March 2014, surpassed 2 million employed—a record) and confidence in our ability to repay. As Paul Harvey would say, 'And that's the rest of the story.'" Read the full column, in which McCollister also touches on the upcoming elections, the LSU LIFT2 grant program and recent economic development wins for the state. He also congratulates this year's Top 100 Private Companies, which are featured in the new cover package of Business Report. Send your comments to editors@businessreport.com.

Merger of Business First, American Gateway to create largest locally based community bank

The merger of Baton Rouge-based banks Business First and American Gateway, as first reported by Daily Report this morning, will bring together one of the youngest banking institutions in the area with one of the oldest to create what is expected to be the largest locally headquartered community bank. It will also bring together a leading business banking institution and one that has a long-established personal banking portfolio. Though it's been just under nine years since Business First was founded by a group of businessmen including former Gov. Buddy Roemer—who now serves as chairman emeritus—president and CEO Jude Melville says the bank has grown very quickly and has already achieved a statewide reach. However, Business First has just one Baton Rouge location. Meanwhile, at 106 years old, American Gateway has a long local history and 10 branches spread across the Capital Region. "It's kind of unique in that this merger really isn't about cost-savings, it's about a foundation for growth," says Melville. "We have two very complementary institutions. They have been very successful over the decades in building a core deposit franchise across Baton Rouge. We have been very successful in developing our reputation as a leading commercial lender. So you take our lending capability and match it with their core deposit ability and we think we have a very strong portfolio moving forward.” Upon completion of the merger at the holding company level—which is expected in the fourth quarter and is still subject to some shareholder and regulatory approvals—American Gateway Bank will be merged with and into Business First Bank. The combined entity will operate under the Business First brand and include 16 branch locations, more than $1 billion in assets, $870 million in deposits, $700 million in loans and $100 million in equity. —Steve Sanoski Read the full story.

'225 Weekender': Enjoy Movies & Music on the Lawn

Baton Rouge Gallery pairs local band Minos the Saint with the romantic silent film Sunrise for its latest edition of the outdoor film series Movies & Music on the Lawn. As 225 Weekender reports, the inventive summer series continues Friday and features a never-before-heard score from the local band as a backdrop to the F.W. Murnau drama. Sunrise tells the story of a woman who has an affair with a farmer while on vacation. The film won one of the first Academy Awards in 1929 and was selected in 1989 for preservation in the Library of Congress' National Film Registry, which maintains films that are culturally, historically or aesthetically significant. The screening begins at 8 p.m. or sundown, whichever comes later. Admission is $5, which includes free bottomless popcorn. Read about this and more weekend events around the Capital City in the latest edition of the 225 Weekender e-newsletter.

High oil prices are bad for La. motorists, but good for the state

Motorists complain about rising prices at the pump as the price of oil rises, but to the state of Louisiana, the higher the price, the better. As The Shreveport Times reports, that's because Louisiana gets about $12 million a year extra every time the price of a barrel of oil climbs $1 and stays there. And with the price hovering around $104 a barrel, it's possible that Louisiana could receive more money than anticipated, says Greg Albrecht, one of the state economists that present forecasts used by the Revenue Estimating Conference. "It would have to be there for a few months before we would see the existing forecast change," Albrecht says. "Higher prices can't do anything but help" state finances. The current state forecast for the fiscal year is $96.69 a barrel. If the market price of oil averages out to $97.69 for the year, the state would reap another $12 million. The current projection is the state will receive $511.7 million in royalties, rentals, bonuses and mineral interest and $788 million in severance taxes from oil and gas exploration and extraction. If the price holds at $104 a barrel, which some forecasters say is unlikely, it would mean the state would get about $96 million extra. "It's only three months into the fiscal year," Albrecht says, so it's hard to get excited about the state receiving more revenue from mineral production. He says if the price is still high later in the year, the REC would increase the revenue prediction. The state can't spend more money than the amount the conference approves. Read the full story.

News roundup: Industry poll says Americans want more oil production, support offshore drilling … US jobless claims drop to lowest level since 2006 … US new home sales plummet 8.1% in June

Everyone's saying it: Americans overwhelmingly want the U.S. to produce more domestic oil and natural gas, but few believe the federal government is doing enough to encourage such activity, according to an industry-backed survey released Wednesday. FuelFix.com reports the poll, conducted by Harris Interactive for the American Petroleum Institute, shows that 68% of voters across the political spectrum support offshore drilling and the same percentage say they would be more likely to vote for a candidate who supports offshore drilling in the U.S. Read the full story.

On the hiring line: The number of people seeking U.S. unemployment benefits fell last week to its lowest level in eight years. The Labor Department says weekly applications for unemployment aid dropped 19,000 to a seasonally adjusted 284,000. That's the lowest reading since February 2006, nearly two years before the Great Recession began. The four-week average, a less volatile measure, declined 7,250 to 302,000. Claims for jobless aid have been falling for the past three months. The Associated Press has the full story.

In the basement: Sales of new U.S. homes plunged in June, a sign that real estate continues to be a weak spot in the economy. The Commerce Department says new home sales fell 8.1% last month to a seasonally adjusted annual rate of 406,000. The report also revised down the May sales rate to 442,000 from 504,000. The Associated Press reports new home sales fell 20% in the Northeast, followed by less extreme declines in the Midwest, South and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011.

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