072419 Ascension sewer plan

A PLAN FOR REGIONAL SEWER IN ASCENSION: Ascension Parish government is considering a public-private partnership to bring regional sewer service to the parish. The first $200 million phase of that plan would encompass Prairieville, Dutchtown, Geismar and areas outside Gonzales, starting with hooking up a number of subdivisions.

GONZALES — In January 2009, Cedric Grant, at that time the Ascension Parish chief administrative officer, announced parish government would seek millions of dollars in federal loans through the state Department of Environmental Quality for a new regional sewer system.

By that August of that year, the parish would end up getting an $18 million low-interest loan from the state's Clean Water Revolving Loan Fund and then, in late 2013, DEQ agreed to increase the loan to $60 million as the parish's ambitions for the sewer system expanded.

Approaching six years later, after attempts to bring that regional system to life have twisted and turned and failed, parish officials said DEQ's top officials are now telling them that it's time to act or lose the loan, which has been offered at a 0.95% interest rate.

"They made it clear, in no uncertain terms, that if we did not have a positive vote on Ascension Sewer, that the $60 million would go away," William Daniel, the parish infrastructure director, told a Parish Council committee earlier this week.

Ascension Sewer LLC is a consortium of two local engineering firms, Ascension Wastewater Treatment, the major private sewer in the parish, and Bernhard Capital Partners Management.

The for-profit group wants to broker a public-private partnership with the parish to design, build and maintain a regional east bank system that, in its first phase, would bring in Prairieville, Dutchtown, Geismar and parts of unincorporated Gonzales at a cost of $200 million.

The Parish Council would be the rate-setting authority, but the first 10 years of the deal would have built-in 4% annual increases, taking monthly rates from $56 to $82.89 by the last year. 

While the financial figures have not yet been made available, the $60 million loan is said to be a critical piece of the partnership's method of keeping sewer rates competitive.

Daniel's report about the state loan followed a recent meeting at DEQ with Secretary Chuck Carr Brown, Parish Council members Teri Casso and Daniel "Doc" Satterlee and Jeff Baudier, managing partner of Bernhard Capital.

Daniel emphasized that the comments from Brown were not intended as a threat but that the secretary said he has financial considerations to worry about with the loan fund. Daniel added that Brown said DEQ has held the $60 million offer longer than it has for any other parish or community but is doing so based on the parish's progress with Ascension Sewer.

"But he said, 'You've been to the altar before, and you didn't get wed then, so … I'm not passing judgment on whether you are going to do it this time or not, but I can tell you the $60 million is going to go away (if you don't act),'" Daniel said Brown told the parish officials.

Casso, who is the council chairwoman, and Sattlerlee, who is the council's Utilities Committee chairman, agreed that Daniel's account matched what they heard from Brown.

Daniel's announcement Tuesday night to the Utilities Committee was one sign that pressure is ratcheting up on the council to act on the proposed 30-year sewer deal while under tight deadlines and in the heat of an election year where growth and infrastructure are important issues. 

A council vote slated for mid-September would allow the parish and Ascension Sewer to exclusively negotiate for up to two years on a deal. The council hasn't even seen the deal contract, members have said, as lawyers continue to work on it.

Some candidates running for Parish Council have questioned the need to have exclusive negotiations and called on the body to wait until a new council and administration are in place early next year after the fall elections.

“What I'm saying is this lame-duck administration and this lame-duck council being in a rush to do something in an election year is absolutely wrong, absolutely wrong,” Jeff Pettit, who is running for a Gonzales-area council seat, said in an interview. 

In a Wednesday interview, Greg Langley, DEQ spokesman, said Brown didn't dispute Daniel's account but suggested the comments weren't in as stark terms as Daniel presented them.

Langley said Brown told the parish officials that the awarded money has been obligated for several years and that if it isn't going to be used through a concrete plan with a concrete start date, it would be de-obligated so the loan capacity could be used by another community.

"He wants to urge them to come through with a plan to use the money and not just say, 'This is our goal,'" Langley said.

The revolving loan fund, which had assets of $596 million in mid-2018, uses a combination of Clean Water Act grants from the U.S. Environmental Protection Agency and state matching money to lend at low interest to communities for infrastructure to improve water quality. Payments on those loans with interest recapitalize the fund for new loans to other communities.

"It's important that we benefit as many people as possible with this money," Langley said.

He also emphasized that Brown and DEQ were not endorsing one sewer plan or another but just saying that the parish should settle on a plan that would use the loan dollars.  

“We told them that they need to solidify their plans to secure the funding,” Brown added in a statement.

Some council members also expressed discomfort with the pace of the sewer effort.

Under Daniel's urging, the committee made recommendations Tuesday to hire the new firm of Baton Rouge lawyer Tim Hardy and also an arm of Jacobs Engineering that analyzes public-private partnerships.

Daniel said he wants the council to have the Ascension Sewer proposal vetted before the key votes in September.

Council members Teri Casso, Bill Dawson and Benny Johnson questioned Daniel, though, about how Jacobs Engineering came to be selected. The council members also aired concerns whether Jacobs could have prior business relationships with Bernhard Capital or its owner, Jim Bernhard, the former Shaw Group chief executive officer.

Asking Daniel directly, "why the big rush," Johnson shared his unease with selecting Jacobs outside the usual request for proposal process and without his having information about their background or fees in advance.

Daniel said he had to make the decision himself because he needed someone soon to look the Ascension Sewer deal.

Daniel added he has been informed Bernhard Capital doesn't have any current conflicts with Jacobs or Ascension Sewer, but as part of a recommendation for Jacobs' contract, the committee wants to look at parish evaluations of Jacobs and other applicants Daniel solicited and an investigation of any conflicts between Jacobs and Bernhard Capital and its companies.

Email David J. Mitchell at dmitchell@theadvocate.com

Follow David J. Mitchell on Twitter, @NewsieDave.