GONZALES — Ascension Parish officials outlined Thursday how spending as much as $5 million to buy a small Donaldsonville water company could improve the parish’s medium-term finances and provide the infrastructure for Ascension to expand its utility business.
The rosy assessments came as Parish President Tommy Martinez and various council members hashed through the prospects of buying Peoples Water Service Co. of Donaldsonville during two special committee meetings. They voted unanimously as the full Parish Council to allow Martinez to make an offer for up to $5 million.
Peoples Water has about 3,000 customers, primarily inside the west bank city of Donaldsonville, but has a 3 million-gallon-per-day water plant that purifies Mississippi River water. Martinez told the Council Finance Committee that the plant uses about 1 million gallons per day of its capacity.
Martinez and council members suggested the rest could be used, in the long term, to supply water to industrial projects they hope will come to a proposed 17,000-acre industrial zone west of Donaldsonville.
Even further out in the future, Martinez and Councilman Kent Schexnaydre suggested, a water line could be run under the river to offer service in Darrow, Geismar and the city of Gonzales, where the parish officials say the city could one day soon be fighting with saltwater intrusion in its wells.
“This seems like a small thing, but this is a giant step in this parish in the utility area. Make no mistake about that,” Schexnaydre told the Finance Committee, which along with the Utilities Committee and full council met on the topic Thursday.
Martinez said the offer can be afforded through a number of options, including low-interest loans available to governments for water and sewer infrastructure, or even relying on sewer fund surpluses.
But Martinez, Schexnaydre and others also acknowledged the Peoples Water system and its water plant are old and will need upgrades.
Martinez said company officials approached the parish about a year ago, but the sides could not agree on a price. More recently, they asked again for an offer, which Martinez said brought him to the council Thursday.
While Martinez and others laid out a long-term vision for the system, Martinez also emphasized buying it could bring some immediate financial aid to the struggling Ascension Consolidated Utilities District No. 1 by providing it with a strong customer base. The parish had to take over the small west bank public district a few years ago and assumed debt payments for $5 million in loans for lines and other infrastructure.
Martinez told the Finance Committee that the parish has had to subsidize that district. But buying Peoples Water at the proposed price could turn that ACUD fund toward a $600,000 to $1 million annual profit that could be pumped back into the Peoples Water system.
Martinez also noted Peoples Water serves CF Industries just outside Donaldsonville. Already the world’s largest nitrogen plant, the fertilizer complex is undergoing a $2.1 billion expansion.
Martinez added that ACUD No. 1, which serves the west bank areas outside Donaldsonville, was projected to have 1,100 customers when it took out the loans but currently has 700 customers and can’t grow. Peoples Water can’t grow, either.
“So we’re going to be hopping along for many, many years trying to pay off that $5 million worth of debt off,” Martinez said. “Whereas if we do this, we have an opportunity to go ahead and pay that off without subsidizing it (the district) a whole lot.”
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