Negotiations between Ascension Parish government and the private Ascension Sewer partnership may be closing in on a breakthrough after more than a year and a half of discussions about building a regional sewer system for the east side of the parish.
The partnership, which is backed by a Jim Bernhard private equity firm, is now seeking to build its own regional system in eastern Ascension, run the parish's sewer services and possibly very soon buy them out if voters give their nod later this year, parish and company officials said.
The deal has yet to receive public approval from Parish President Clint Cointment, who declined to comment Monday until he had more information about its details.
But the latest proposal represents a major turn for the parish and Ascension Sewer, which had earlier proposed building a system that the parish would own at the end of a 30-year deal. That deal has bogged down, however.
Like the older deal, the new proposal would result in rate increases for Ascension Sewer’s nearly 17,000 customers and possibly for the parish’s 2,000 additional customers also.
But the agreement would generate millions in upfront cash and annual franchise fees for parish government and millions more in potential savings from not having to run a parish sewer system that has cost taxpayers nearly $3 million per year to subsidize.
The Parish Council is expected to consider the deal and a related asset purchase agreement on Sept. 17 after the council's Utilities Committee forwarded it Monday.
The new agreement is proposed for 30 years or until the parish sold its assets to Ascension Sewer, which may not be very long.
Council member Corey Orgeron, who leads the Utilities Committee, said he would like to have a required public vote on the sale of the parish’s sewer assets on the Dec. 5 ballot if the full council approves the deal.
Before any sale, an appraisal of the parish’s sewer assets would have to be conducted.
Other council members on the committee sounded open to the deal, if not ready to move forward.
Councilman Alvin “Coach” Thomas, who is in his second stint on the council, said he has been working on the sewer issue since 1996. He said that every year the parish has waited to act, the price has gone up.
Under questioning from Thomas, Cointment said the parish has spent about $1 million since early 2019 on vetting and negotiating Ascension Sewer’s various proposals.
“Let’s work it out, and let’s move forward with it and get it done,” Thomas said. “We have to bite the bullet. Somebody has to bite the bullet. It’s as simple as that.”
Council Chair Teri Casso aired the sentiments of other members thanking them, Cointment and other councilmen for their work on the latest proposal, though she said it could still have further changes before the council votes next month.
The council members’ comments came after Jeff Baudier detailed Ascension Sewer’s latest plans in an online meeting Monday.
Baudier, a manager with Ascension Sewer, is a top official in Bernhard Capital Partners Management, the private equity firm that is the financial muscle behind Ascension Sewer.
Baudier also talked about the partnership’s attempts to inform the public about those plans earlier this month through its “We Care” campaign on billboards, cable television advertising, its website, direct mail and an online webinar that generated hundreds of thousands of impressions and tens of thousands of contacts.
Baudier noted that about 10 people had responded directly to the campaign with comments, which he took as good sign, though Council member Joel Robert later questioned the level of public contact.
Baudier also highlighted some of the differences between the latest proposal and an earlier one.
Under the new proposal, Ascension Sewer would make a $15 million cash payment upfront to the parish and save the parish $13.5 million that the parish would have had to spend on upgrading it own sewer system in Oak Grove and on the earlier deal with Ascension Sewer.
The partnership plans to spend more than $200 million on a regional system that discharges into the Mississippi River. The new treatment system would allow the company to retire existing neighborhood treatment plants for Ascension Sewer’s and the parish’s customers, opening up green space in those areas and ultimately removing 3 million gallons of sewer discharge from ecologically damaged bayous in the parish, Baudier added.
Baudier told the council Monday that any rate increases Ascension Sewer would seek would be fair and affordable and used to finance that new system.
Though he did not discuss numbers, he said in an earlier interview, that rates would probably go up to $50 per month in 2021 and around $58 per month in 2022 with annual escalations of about $3 per month afterward.
The rate increases would need state Public Service Commission approval; the earlier Ascension Sewer deal proposed similar increases.
The $15 million transfer fee would also need PSC approval.
For the parish government customers, the Parish Council would retain rate-setting authority until the sale.
During the life of the proposed concession, Ascension Sewer would pay an annual franchise fee based on gross customer receipts, estimated at roughly $500,000 to $1 million per year.
Any payments made to the parish during the life of the concession would be credited against the final cost of a parish buyout, the offer letter says.
Under the initial agreement, Ascension Sewer would also conduct inspections of thousands of home septic systems.
Tom Pertuit, the former owner of Ascension Wastewater Treatment, was also on hand with Baudier for the discussion.
Ascension Sewer now owns the Pertuit’s old sewer assets through National Water Infrastructure, a Bernhard Capital entity, after a sale in April for an undisclosed price. With the purchase, NWI is the largest private sewer company in the state with nearly 17,000 customers and a major operator in Ascension.