Ascension Parish/Ascension Sewer Construction and Operating CEA
NOTE: Parish President-Elect Clint Cointment presented 22 “points of concern” during the Parish Council’s consideration of the CEA above on Thursday. Given more time and information Cointment has added seven more items. All 29 “points of concern” can be reviewed below.
Because of severe time limitations on the council, council-elect, administration, Ascension Sewer, and all interested parties, due diligence has not been performed to protect Parish Government and the citizens of Ascension Parish. In addition, Ascension Sewer has made an offer embodied in the Agreement, Parish government has yet to counter this offer in order to negotiate the best possible rates for the citizens of our parish. There are many questions which must be answered to ensure the legal protection and benefit of Ascension Parish and its citizen tax and rate payers. Below is a list of items that must be provided and issues which must be addressed.
- A 5-year statement of affidavit on no conflict between Breazeale, Sachse & Wilson and Bernhard Capital Partners and any of its affiliates or subsidiaries.
- A 5-year statement of affidavit of no conflict between Ernst & Young Infrastructure Advisors, LLC and Bernhard Capital Partners and any of its affiliates or subsidiaries.
- The complete report from Breazeale, Sachse & Wilson (and its subconctractors, HNTB and Ernst & Young) analyzing any and all effects and concerns, whether legal, financial, or otherwise of the proposed Construction and Operation CEA. (These reports will be analyzed by Ascension Parish “In house” attorneys to see if further clarification is needed in the report to protect the best interest of the district and rate payers.)
- Initiate a contract to bring project design to, at least, a level that reduces “sensitivity” (see above) to plus or minus 10%, payment for such design to be negotiated at a reimbursable rate and to include: (a) a timeline; (b) a schedule of construction and operation; and (c) identification of package plant/treatment plants to be connected to the system.
- Have a 3rd-party, possibly Ernst & Young, prepare a rate-generating model that is done according to a specification agreed to by both parties.
- Complete analysis and language in the C & O agreement specifically outlining how rates will be adjusted or set in accordance with rate-generating model. Rates to increase (if costs increase) or decrease (if costs decrease) ;(By an independent party with the best interest of the Parish of Ascension and its rate payers.)
- Analysis of a “Cap” on the rate of return of 8% for Ascension Sewer as it relates to this agreement, allow monies above and beyond that rate to be reinvested to lower rates for the benefit of rate payers. (Complete analysis will be performed by our “in-house” attorneys and then be an independent party that represents the best interest of the Parish of Ascension and the rate payers).
- Complete analysis for “balanced risk” of both Ascension Parish and Ascension Sewer, Inc., getting away from the asymmetrical deal benefiting only one party to a more symmetrical deal with balanced risk. (This is to be done by an independent 3rd party with the best interest of the Parish of Ascension.)
- How are individual system “Mo-dads” treated in this agreement, (plan and timeline); what methods are being discussed to offset high hook-up fees?
- How are commercial rates compared to local municipalities and other parishes in the region? Being competitive on the commercial side will have economic impact to our tax structure and, more important, job creation for our local citizens.
- Specific language against any financial leveraging at any point during the term of the contract that does not specifically benefit rate payers. (This language will be reviewed by our “in house” attorneys and then by an independent 3rd party legal firm that benefits the interest of Ascension Parish and its rate payers).
- Analyze the incentives for delays and/or cost overruns within the contract; come up with language that creates a disincentive for delays and/cost overruns in the contract. (This is to be done with our “in-house” attorneys, then by an independent 3rd party legal firm with the best interest of the Parish of Ascension and its rate payers).
- “Business As Usual” analysis by Ernst & Young did not include the $15.8 million and $60 million DEQ loan, both available to the district, why was this done? (It does not give an apples-to-apples comparison). A complete comparison should be done with all available benefits associated with the district to get an accurate comparison.
- It was stated at the November 21, 2019 meeting of the Parish Council that Ascension Sewer will be wholly responsible for all right-of-way acquisition. Can this proposal, schedule or timeline of construction be completed without the Parish of Ascension passing a legislative act, “Quick-take” right of way acquisition? How does this affect the contract? How does the contract address right-way acquisition? (This needs to be addressed by both parties to the contract to ensure that the proposal itself is not reliant upon “Quick-take” right-of-way acquisition.) Language must be added to the contract to address this issue, any change or language (Must be reviewed by our “in-house” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and its rate payers).
- Specific language for the “unlock” to the agreement at the 30 year mark, all debts are to be paid off prior to the 30 year mark, absolutely no financial refinancing or leveraging beyond this 30 year mark, and all necessary information in favor of the district and its rate payers to end the contract, allowing options to enter in any new contract.
- Location of the sewer treatment plant has been a concern of several council members in the past, examine the location as it relates to neighboring residents, look at specific language and possibly sign a purchase agreement prior to the Construction and Operating CEA being executed. Also, location to be discussed in public townhall meetings.
- The termination fee agreement must be completely rewritten to balance out equal risk/reward scenarios, there must be equal penalties for the District and the Operator. (Must be reviewed by our “in-house” attorneys and by an independent 3rd party law firm with the best interest of the Parish of Ascension and its rate payers).
- The Termination Fee is “the fair market value of the system” to be “determined by an internationally recognized appraisal firm” pursuant to assumptions which all favor inflation of that system value. This concept of “fair market value of the system needs to be analyzed by (our “inhouse” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and its rate payers).
- There appears to be no mechanism by which the District might check harmful acts/decisions/etc. by the Operators. This must be analyzed in the agreement by (our “inhouse” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and its rate payers).
- Analyze the language in the agreement “without consent of the District, AS/BCP can sell, lease, alienate, etc. all or a portion of its property (corporeal or incorporeal) which at any terms it deems proper (Section 4.3(a)” (Must be reviewed by our “in-house” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and its rate payers)
- Analyze the language in the agreement, “May, without District consent, borrow any sum, subject to any terms (like an interest rate specifically mentioned and left up to AS/BCP discretion), from any entity, including from any Affiliate of the Operator.(Section 4.3(b)” (Must be reviewed by our “in-house” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and its rate payers)
- Analyze the language in the C & O “May encumber the System, without the District’s consent (Section 4.3(c)) under the terms of Section 3.1(d) which allows for encumbrances in favor of “Contractors, carriers, mechanics, warehousemen, materialmen…”(Must be reviewed by our “in-house” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and it’s rate payers).
- For the first ten years of agreement an annual 4% rate increase is provided contractually, with the ability of Ascension Sewer to request rate increases when annual growth falls below 3%. At present Ascension Parish population growth rate has averaged around 2%. From the outset of this agreement Ascension Sewer would be, arguably, entitled to seek a rate increase. (Must be reviewed by our “in-house” attorneys and by a 3rd party independent law firm with the best interest of the Parish of Ascension and its rate payers).
- Given the assertion made by several parties recently that no existing private residences outside of Ascension Wastewater Treatment’s current customer base will be forced to tie into the System in Phase I, it seems virtually impossible to attain the 3% annual growth rate referenced in Item 23 above. Require a detailed demographic analysis demonstrating that the growth projection is attainable.
- A clearly defined Phase I (with timeline and amount of construction anticipated).
- For years 11-30: (a) a timeline; (b) a schedule of construction and operation; and (c) identification of package plant/treatment plants to be connected to the system.
- A “track page” with table or chart evidencing changes to the Construction and Operating CEA depicting evolution of the document from the version on November 1, 2019 until present day and going forward so that all variations of the document may be compared/contrasted.
- Certain provisions in the working draft of the Construction and Operating CEA can be construed to mean that Ascension Parish might be responsible for attorney fees incurred by Ascension Sewer. In no case shall Ascension Parish ever be responsible for Ascension Sewer’s, and/or any of its affiliates’ attorney fees, whether in an adverse action, 3rd party action, indemnification and/or any litigation involving either party to the Construction and Operating CEA.
- The tax and rate paying citizens of Ascension Parish will be saddled with this agreement. For the most part, those citizens have been excluded from the process. The public must be afforded every reasonable opportunity to review all relevant documents and ask any questions in a forum designed to provide answers. During the 2017-18 Master Land Use Plan process there were upwards of a dozen Open Houses and that only cost taxpayers $450,000. The potential monetary burden on every resident, sort of like a tax, mandates a process as open and transparent as possible. To that end multiple Open House, or town hall meetings must be conducted across Ascension Parish.
As I’ve finalized items of concern, I realized that the document has and continues to change to reflect issues discussed at the November 21, 2019 council meeting. I am asking for time to review the most recent changes and, as your next Parish President, a seat at the negotiating table to ensure that your health, safety, and welfare is protected.
Parish President-Elect Clint Cointment