A few hours before it appeared by the Parish Council Utilities Committee on October 8, we received a press release from Ascension Sewer, LLC touting the economic windfall of its plan. Hiring Dr. James Richardson, Alumni Professor of Economics and Public Administration at Louisiana State University to make its case, the whole pitch was based on manipulable numbers.
Here are the ten questions we posed to Ascension Sewer and Jeff Baudier (three of which received answers).
- How many current AWT package plants outside of Ascension Parish will be included in the coverage area?
If this proposal is approved, AWT will contribute all of its assets to the ACUD #2, including 30 package plants located outside of Ascension in Iberville, East Baton Rouge and Livingston. These customers will be part of the full customer base and will pay the same new rates as all customers in the consolidated system. As the regulatory authority over ACUD#2, the Parish Council will have ratemaking authority and control over the System and the assets comprising the System. Ascension Sewer will be responsible for all maintenance and compliance of the System and will continually evaluate options to connect all package systems, including the out-of-parish systems into consolidated treatment facilities.
- How many dollars will be infused directly from Ascension Parish, either from a DEQ loan or from the parish’s wastewater construction fund?
This proposal assumes that $15.8 in funds on the balance sheet of the 2018 audited report for ACUD #2 remain as assets of ACUD#2 to be contributed toward the construction of the new system. As a partnership, both the private utility and the public utility will contribute their assets to the venture, which includes cash assets. Also, Ascension Sewer’s discussions with the Parish indicated that these funds were already dedicated to the same sewer construction projects.
The LDEQ loan of $60m is also expected to be part of the financing package for the $215 million construction project for upgrading the Parish sewer system and constructing a wastewater treatment facility which is the designated and approved use by LDEQ of the loan funds. Although ACUD#2 may have to be the named debtor on the loan, which still needs to be confirmed, Ascension Sewer will have the obligation to make all payments on the loan and ensure repayment, so the Parish will not have to make any of loan payments. The use of the $15.8 and the lower interest rate SRF loan are two benefits that allow us to keep the rates low.
- Who paid Dr. Richardson to conduct the study?
The study was commissioned by Ascension Sewer using publicly available financial data from the Parish finance office with costs and rate estimates as proposed in the COA. Let us know if you have further questions.
We did, and we asked them.
- How (from what source) will the $60 million DEQ-SRF loan be repaid?
- Will that long-term indebtedness be treated like a bond issue and, if so, what dedicated revenue source will be committed to retiring the debt?
- Since there is not $15.8 million left in AP’s water/wastewater construction fund, how much does Ascension Sewer anticipate the starting monthly sewer rate to be?
- Does that have any effect on the annual 4% increase and, if so, please explain if you can?
- We understood Mr. Baudier to say that AP Schools are eager to tie into Ascension Sewer’s system. Is Ascension Parish Public Schools willing to defray any of the substantial capital investment?
- Has that prospect even been explored?
- And now, for the most important question; when will the Construction/Operations agreement be available for public review?
We’ll keep you posted if Mr. Baudier deigns to respond.