Sight unseen the Council Utilities Committee recommended a Cooperative Endeavor Agreement with “a consortium” of interests put together by Bernhard Capital Partners to undertake “East Bank Regional (Sewer) System.” If adopted by the Council tonight the parish will be stuck with Ascension Sewer, LLC and its four participating companies for at least 25 months as a Construction and Operating Agreement is negotiated. Infrastructure Director William Daniel, urging haste, would have us believe Ascension is facing a costly EPA Consent Decree but too many questions remain unanswered.
Daniel’s Chicken Little impersonation taps into longstanding threats of regulatory doom if Ascension cannot get sewer out of parish ditches and waterways. He said he wakes up every morning worrying about that dreaded EPA Consent Decree mandating cost-prohibitive remedial measures. There’s something to it given Louisiana Department of Health issues no more permits for discharge into Bayou Manchac, the most impaired of parish waterways.
How imminent is that regulatory Sword of Damocles? Can’t we reach out to the bureaucratic behemoth to pinpoint Judgment Day?
My greatest concern is the roster of companies comprising Ascension Sewer, LLC which includes Ascension Wastewater Treatment (AWT) the single greatest defiler of our precious, once pristine waterways. AWT and its owner, Tom Pertuit, was included in the last faux effort to bring comprehensive sanitary sewer to the east bank. Who remembers Ascension Environmental which looked an awful lot like Ascension Sewer’s ultimate plan, Phase I of which will involve a $225 million investment with guaranteed 8% Return on Investment according to Bernhard Capital Partners’ pitch to Utilities on May 7.
AWT was/is the most vital cog in any sewer treatment plan because its 16,000 customers must be included to pay off the debt incurred. AWT negotiated in bad faith when the parish last attempted east bank sanitary sewer and, given more recent deal-cutting…
I have little to no faith in AWT’s ongoing intentions.
The agreement being considered envisions “a more detailed description of the rights and obligations of the Company to construct, manage, operate and maintain the System as well as certain other administrative details related to the agreement or similar agreement (the “Construction and Operating Agreement”) to be finalized between the Parties.” Once the subject CEA is approved tonight, the parish CANNOT negotiate with any other potential provider because it includes Section 2.3 Exclusivity Period:
“Beginning on the CEA Effective Date, the Parties agree that, for a period of two (2) years, the Company shall have the exclusive right to negotiate an agreement with the District to construct, manage, operate and maintain the System. In the event the Parties are unable to execute a Construction and Operating Agreement within such time period, either Party may terminate this Agreement upon thirty (30) days’ written notice to the other Party.”
Effectively, the parish is locking itself into a 25-month period when Ascension Sewer, LLC is the only game in town. Monopolies never benefit the customer.
What if William Daniel is not merely “cackling wolf” (to mix a metaphor), and that dreaded EPA Consent Decree is handed down tomorrow? AWT and Ascension Sewer will have Ascension Parish’s toilet-flushers over a barrel. Unable to negotiate with anyone else, do you trust AWT and Bernhard Capital Partners to treat us fairly? I do not.
We can take some comfort in the fact that Bernhard must contend with AWT’s flights of fiscal fancy, and not parish negotiators. Parish ownership of all physical assets has substantial appeal. Best of all is the Parish Council’s retention of rate-setting which should afford some protection to customers/east bank residents forced onto the system.
But we are a long way from enjoying those protections and tonight’s CEA, a done deal, gives away all Ascension’s negotiating leverage. Berhard Capital Partners’ pitch man assuaged any Utilities’ fears last Tuesday, predicting the ultimate Construction and Operating Agreement would be finalized in 90 days. A 25-months (2 years, plus 30-day written notice provision) exclusive negotiating period is too long.
Remember what happened the last time the Council delved into a public utility without knowing all the facts.
When the former Chairman of Utilities buried an engineering/financial assessment of Peoples Water Company, the parish bought that pig-in-a-poke (renamed Parish Utilities of Ascension) and it is costing every taxpayer dearly. Fool me once…How many millions of dollars will it cost east bank residents?
Jeff Pettit, Candidate
Parish Council District 10