DONALDSONVILLE — The Ascension Parish Council agreed Thursday to bump up its offer price for Peoples Water Service Co. from $5 million to $5.9 million, matching the number the parish administration and the company have already agreed upon in principle.
The unopposed vote at the Parish Courthouse clears the way for outgoing Parish President Tommy Martinez to finalize the acquisition of the water company that has served the city of Donaldsonville since 1941.
Martinez announced late last month that he and the owner of Peoples Water had reached a tentative deal, but the purchase price was $900,000 more than the $5 million offer the council had previously authorized him to make. The funding is expected to come from cash reserves in an east bank parish utility district, Martinez has said.
Thursday’s vote, which was adopted without public comment and in Martinez’s absence, gives him the authority to throw the extra cash into the pot and try to finalize a deal before he finishes his final term of office in early January 2016.
The Parish Council vote also means, if the parish buys Peoples Water, that the parish has agreed to keep the company’s 15 employees for at least six months and to put down a $250,000 retainer fee, essentially a deposit for the deal.
Martinez also has proposed a long-term plan tied to the acquisition that would result in a 33 percent rate increase for Peoples Water residential customers in the city only. Under that increase, the average bills of residential customers in Donaldsonville would rise from $33.59 per month to $44.65 per month.
Industrial users, including the expanding CF Industries, and commercial customers would see even larger percentage increases, a summary of the plan says.
The proposed purchase would allow the parish to combine the 3,100-customer water system serving Donaldsonville with a spread-out, parish-owned water district of 700 customers that exists on the city’s periphery and extends into the upriver community of Modeste.
The parish system, known as Ascension Consolidated Utilities District No. 1, has not been able to turn a profit and has had trouble maintaining disinfection levels to kill a brain-eating amoeba, due to long stretches of pipeline. The parish is currently trying to clear out the amoeba by boosting chlorine levels for an extended period of time.
The Peoples Water purchase would give the parish a centrally located, 3 million gallon per day water plant and disinfection system on the Mississippi River and allow the parish to stop buying and piping in water from neighboring parishes.
The mass of new customers paying higher rates also is expected to improve ACUD finances.
Martinez has proposed taking out a $9.1 million loan to pay off $5 million in debts owed by ACUD No. 1 and to do $4.1 million in upgrades to the Peoples Water system, the plan summary says.
The deal would still need state Public Service Commission review and additional Parish Council approval.
In related action Thursday, the council agreed to put down a $167,000 grant match to have the U.S. Army Corps of Engineers plan and design the connection between the now separate ACUD No. 1 and Peoples Water systems.
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