Broussard leaders recently renegotiated a wholesale water agreement with the Lafayette Utilities System they say is expected to save the city more than $6 million in short-term expenses associated with constructing new water wells.
Renegotiating the agreement has been a top priority for Broussard Mayor Ray Bourque since he took office in January.
"It's wonderful to be able to get past this after 10 months of work,"Bourque said, "to be able to get our contract extended, know that's behind us and move onto bigger and better things."
Broussard's agreement with LUS was originally set to expire in 2038 as is the case for other municipalities in Lafayette Parish that established water agreements with LUS in the late 1990s after consolidation. That expiration date changed a few years ago to July 31, 2020, primarily because of a kerfuffle between the previous administrations of the cities of Broussard and Lafayette.
The problem became public when Broussard received a bill from LUS for more than $800,000 for water that had bypassed an LUS meter from 2006 to 2011.
The exact details of what happened still aren't clear.
Lafayette leaders argued at the time that Broussard had been stealing the water; Broussard leaders countered that LUS failed to turn on a new meter, resulting in the discrepancy.
In a July 2013 settlement, LUS was ordered to pay Broussard back $275,000 of the city's original payment of $825,587 to LUS for water that had bypassed the meter. The settlement also led to changed terms of the water contract between Broussard and LUS — amending it to end in 2020 instead of 2038.
"The settlement was really down the middle," said Jeff Stewart, who until last month served as interim director of LUS. "Neither side seemed to be completely at fault, and I would imagine if this was LUS's fault or Broussard's fault, the settlement would have been heavily one-sided."
Broussard currently produces about 40% of the water it uses through six wells and purchases the other 60% from LUS, according to Broussard Public Works Director Mel Bertrand.
The city would need to construct at least two more wells at a cost of about $6.24 million to meet the needs of residents and businesses without help from LUS.
"To have to spend that money because of poor relationships doesn't help anybody," Bourque said. "We're a good customer. LUS has a good product. That money can be better used to serve the citizens of Broussard for other projects."
Investing millions into the construction and maintenance of additional water wells could save Broussard money in the long run, but it would take at least 20 years before the city saw any return on the investment, according to the mayor.
"It's really hard to justify those things unless you absolutely have a need for it because things can change in that amount of time," Bourque said. "Your need could be greater or less, and it's hard to predict 20 years down the road."
Partnering with LUS for water is also beneficial beyond the short-term savings because it provides additional fire protection to residents and businesses — especially to the oil and gas businesses located along U.S. 90, according to Broussard's public works director.
"It provides an additional redundancy to be able to fight a fire," Bertrand said. "LUS or Broussard could run out of water — and it happens during a fire; it's not that uncommon. A city that has a partnership has an additional water source during an emergency. LUS could provide us with additional water or we could provide them necessary water in turn."
Broussard is a significant customer for LUS. About one-third of LUS's revenue for wholesale water sales comes from the city.
But even if the agreement between LUS and Broussard had ended in 2020, it wouldn't have had a significant impact on LUS in terms of profitability because there would have been a reduction in expenses as a result, according to Stewart.
Ending the partnership only made sense at a time when Lafayette and Broussard leaders couldn't come to an agreement.
"This is mutually beneficial for both LUS and the municipalities," Stewart said. "They're not taking advantage of us. We're not taking advantage of them. It's one of those partnerships where everybody wins."