GONZALES — Ascension Parish officials received a tough dose of reality as they recently got a first look at customer estimates for a proposed regional parish sewer system.
For $70 million in new sewer infrastructure planned in the Prairieville area, the parish would add just 2,041 new customers, a new parish analysis shows.
That’s hardly enough paying customers paying to support the long-term debt and operations and maintenance costs of the proposed system, and it would put the sewer system in perennial deficits, the analysis found.
Parish officials, who are under regulatory pressure to find a regional solution to Ascension’s array of small community sewer systems fouling parish bayous, are grappling now with how to proceed.
“We’ve just got to figure out how do we bridge that gap,” said Councilman Benny Johnson, chairman of the Council Utilities Committee.
In one sign of that commitment, the Parish Council on Thursday authorized final negotiations with landowner L.J. Grezaffi for 10 acres near the intersection of La. 73 and La. 30 in Geismar for a future regional sewer plant. The location, which appraised for about $87,000 per acre, is near the Mississippi River, the treated wastewater discharge point for the future regional system.
Parish officials had been banking on a $60 million low-interest loan through the state Department of Environmental Quality Clean Water State Revolving Fund. That loan, plus $10 million the parish is already spending on sewer trunk lines required for state highway expansions of La. 42 and La. 73, would have paid for the start of the system.
The system would be built in one of the most densely populated parts of unincorporated Ascension, but many of the customers — estimated at 20,000 overall — are already served by private companies that took over the sewer systems that came with the new subdivisions and businesses that sprouted along La. 42, La. 73 and the northern section of Airline Highway.
Parish bids to buy some of those systems and their customers have failed.
The parish’s analysis found about 218 customers who live along the new parish trunk lines under La. 42 and La. 73 or whose sewer systems currently discharge within 300 feet of those new lines would connect to the regional system.
Another 1,823 customers would be added over a 15-year period through the $60 million sewer expansion into surrounding neighborhoods that the DEQ loan would fund, the analysis found.
Bob Horner, chief parish engineer, said last week that the analysis, however, does not include customers in future subdivisions whose sewer systems could be handed over to parish control under a recently adopted parish sewer ordinance.
Paying $45 to $49 per month, those 2,041 residential and commercial customers would generate $1.1 million per year in user fees. Debt payments alone on the 20-year DEQ loan would be more than $3 million per year, the analysis found.
The remaining $2 million annual deficit would have to be covered with undedicated parish revenues that pay for roads, the jail, animal control, District Attorney’s Office and other needs. The deficit also would not include operational and maintenance costs for the regional system, which were not immediately available.
Councilman Daniel “Doc” Satterlee, who sits on the Council Utilities Committee that reviewed the analysis, called the numbers “woefully low and kind of scary” after they were unveiled Dec. 2.
“Right now, the numbers just aren’t adding up,” Johnson said.
Two lines of discussion have emerged since, as well as some sources of possible disagreement. Parish President Tommy Martinez told the committee that the analysis shows him what he has said for years about sewer, that the parish needs to pursue a public-private partnership to inject the necessary capital.
“That’s the only way it’s going to happen,” he said.
Martinez and parish officials tried such a partnership before, but that deal fell through in April 2011 and helped lead to the current path.
But Utilities Inc., which is buying the bankrupt Density Utilities of Louisiana sewer systems in Ascension and other parishes, has started broaching the topic anew with parish leaders. Utilities Inc. is eyeing other private systems in Ascension, too.
“We absolutely have an interest in some sort of partnership with the parish, and we’re pretty open to what the parish might see as mutually beneficial for both partners,” said Don Sudduth, president of Utilities Inc. of Louisiana, a subsidiary of the Illinois-based company.
Johnson said he is open to a public-private partnership but said it has to be a good deal for the parish. Otherwise, he said it is hard for him to see how the parish can afford the costs of sewer without new revenue.
“If we don’t need to pass any kind of tax, I’m all for it, but as far as providing this kind of service without some kind revenue stream, I don’t see it. If we had pipe in ground and customers already on the system, OK, not a problem. That would work, but we don’t,” he said.
On the other hand, Councilman Chris Loar, who also sits on the Utilities Committee, said he opposes a new tax for sewer.
“We have to reassess and try to come up with something that is a viable business plan,” Loar said.
Follow David J. Mitchell on Twitter, @NewsieDave.