Dear Mr. Garrard:
We are writing to recall a portion of our prior opinion, number 05-0213, with regard to whether an Employment Agreement between Baton Rouge Area Convention and Visitors Bureau ("Bureau") and the Bureau's President/CEO, Mr. Paul Arrigo must be approved by the Louisiana State Bond Commission.
In Opinion No. 05-213 we concluded that "Because the Employment Agreement provides for a penalty for termination due to non-appropriation, it is the opinion of our office that the Employment Agreement creates debt and requires State Bond Commission approval." We recall this conclusion, and restate our opinion as follows:
While La. R.S. 39:1410.60 requires State Bond Commission approval for political subdivisions to incur debt, obligations under the Employment Agreement are not debt. The Employment Agreement is not a financing contract and, as such, does not incur "debt" as contemplated by the statute. The intent of the statute is to prevent political subdivisions from borrowing money without the approval of the State Bond Commission, not to restrict the ability of political subdivisions to enter into long-term contracts. The opinions relied upon in Opinion No. 05-213 dealt with financing type contracts, such as lease-purchase agreements and installment payment contracts. Because the Employment Agreement is not a financing contract, it is the opinion of this office that State Bond Commission approval is not required.
We regret any inconveniences our earlier opinion may have caused the Bureau. If you have any further questions regarding this matter, please do not hesitate to contact our office.
Yours very truly,
CHARLES C. FOTI, JR. ATTORNEY GENERAL
BY: KENNETH L. ROCHE, III Assistant Attorney General