Ascension Sewer responds to non-existent Sewer Committee

Ascension Sewer’s Jeff Baudier at microphone with Tom Pertuit in tow. (file photo)

Assuming the full council accepts the unanimous recommendation of the body on May 26, an ill-conceived Sewer Committee will be disbanded.  Which did not stop Ascension Sewer’s Jeff Baudier from answering two question he claims were posed to him by said committee (legal counsel insists no such questions were posed while Council Chairwoman Teri Casso cannot seem to recall).  Dated May 26, Baudier penned a three page reply, reproduced in its entirety below, which was forwarded .

NOTE:  We’ll pick apart Baudier’s assertions, many of which are dubious, in a separate analysis.


RE: Updated Proposal for a Construction, Operating and Cooperative Endeavor Agrement

Dear Committee Members:

Ascension Sewer, LLC (“Ascension Sewer”) submits this updated proposal (“Proposal”) for a Construction, Operating and Cooperative Endeavor Agreement (“C&O Agreement”) between ACUD#2 and Ascension Sewer as requested by the Ascension Parish Negotiating Committee (“Committee”) on our videoconference of April 30, 2020 and the Utilities Committee meeting held May 19, 2020.  This Proposal responds to several new circumstances that have occurred since the Parish Council last considered the C&O Agreement on December 20, 2019, as well as certain requests made by the Committee on the recent videoconference.

Orgeron leaves Casso holding the bag as Sewer Committee disbanding after one (official) meeting

In addition to asking that we update our Proposal, the Committee made two specific requests of Ascension Sewer in the videoconference.  The first was for us to provide our comparative analysis of the rates currently paid by ACUD#2 customers in light of the annual subsidies paid by the Parish to ACUD#2.  Accordingly, we are providing herewith a brief powerpoint summarizing our review of the current ACUD#2 rate subsidy.  This review demonstrates that since 2014 the rates of ACUD#2’s approximate 2,000 customers have been subsidized by an average of $115 per customer per month.  In other words, all Parish residents that do not receive service from ACUD#2 are paying to subsidize the 2,000 ACUD#2 customers.

The second request made by the Committee was that Ascension Sewer provide our assessment of any alternative plan proposed by the Parish Administration.  To date, the only information we have concerning the Administration’s alternative proposal is a presentation that was published by the media on May 11, 2020 entitled Ascension Parish Waste Water Treatment Preliminary Plan: Clean Waterways Ascension.  As discussed at the May 19th Utilities Committee meeting, this presentation does not contain sufficient information for us to assess the proposed project described therein operationally or financially.  Based on what is stated in the Administration’s presentation, it does appear that the Administration’s plan is significantly different than ours in the following respects:

Cointment plan $115 MILLION less than Ascension Sewer, $30 less in monthly rates

Administration’s Proposal

  • Size: 2 million gallons treated per day
  • Customers Covered: Approximately 3,000 customers over 10 years
  • Environmental Impact: Minimal reduction in effluent sent to Bayou Manchac
  • Time to Execute: 10 years
  • Treatment Technology: Treatment lagoons in residential areas

Ascension Sewer’s Proposal

  • Size: 5 million gallons treated per day initially, with expansion capability to 12 million gallons per day
  • Customers Covered: 8,000 customers growing to 11,000 customers in the first 5 years, with capacity to also connect all existing individual treatment units and future growth along the path of the system
  • Environmental Impact: The same individual treatment unit reductions achieved by the Administration’s proposal plus an additional three million gallons per day of treated water diverted from Bayou Manchac
  • Time to Execute: 5 years
  • Treatment Technology: Treatment lagoons in residential area One major state-of-the-art mechanical treatment plant on the Mississippi River

We have concerns about the negative environmental, social and developmental impacts of the Administration’s proposal, since it contemplates utilizing treatment lagoons to expand capacity at the existing Hillaryville treatment plant as well as at a new undisclosed location in Geismar.  Treatment lagoons are in our view a step backward.  Such an expansion at Hillaryville so close to residences, a school, churches and other civic gathering places would degrade the local environment of Hillaryville and permanently discourage future economic development and investment in that community.  In our opinion and that of our engineering team, the two proposals are not comparable because the Administration’s alternative is not a pathway to a modern Parish-wide consolidated sewer system.  Ascension Sewer’s proposal progresses the Parish forward and prepares it for future cleaner and sustainable growth.  We are therefore encouraged by Parish President Cointmment’s leadership in addressing individual treatment systems.  We had included that in our December proposal and provide more details on that in this updated proposal.

The terms listed below are intended to summarize only those terms of the C&O Agreement, or (ii) a legally binding or enforceable agreement of commitment of any party.  Any obligation of the parties or any of their respective affiliates will be only as set forth in that certain Cooperative Endeavor Agreement between Ascension Sewer and ACUD#2 (also referred to below as the “District”), dated as of May 20, 2019 (the “CEA”), or any future definitive agreements executed by the parties.  Capitalized terms used and not defined herein shall have the meanings ascribed to them in the CEA and the C&O Agreements respectively.

Customer rates:  Ascension Sewer will assume service to and receive payment from current District customers immediately upon the Transfer Date.  All customer rates will remain as currently set through December 31, 2020.  The initial customer rates provided for in the C&O Agreement will take effect on January 1, 2021.  The initial residential user fee is expected to be $57.90 per month.

District Cash:  The District’s initial financial contribution will be reduced from $15.8 million to $10.0 million.

LDEQ Loan:  The failure to obtain the proposed $60 million LDEQ State Revolving Fund loan will not impact the customer rates or project scope or timing.  References to the LDEQ loan will be removed from the C&O Agreement.

Oak Grove Upgrades:  Immediately upon execution of C&O Agreement, Ascension Sewer will commence the upgrade of the sewerage treatment system at Oak Grove Primary School in order to reduce further sanitary sewer overflows and bring that system into compliance with LDEQ regulations.  The initial upgrade will be through the installation of a temporary treatment system until such time as the school may be connected to the System.

Individual Systems:  Section 6.4 of the C&O Agreement describes how Ascension Sewer and the Parish will work together to establish a program of periodic inspection of Individual Treatment System(s).  The Committee has asked Ascension Sewer for further detail on the cost and timing of this program.  Ascension Sewer will be responsible for conducting the inspection program and will collect all fees related thereto.  The inspections will commence on January 1, 2021 and the initial charges will be $10.00 per month per Individual Treatment System and will include a minimum of two annual inspections for every Individual Treatment System.  The Parish will enact such ordinances as are necessary to implement and enforce the inspection program.  Ascension Sewer will promptly put a plan in place as discussed in Section 6.4 to incentivize the hook up of as many new customers to the System as possible from individual unit owners and new growth.

Customer Representation:  The Parish Council will enact amendments to the District’s enabling legislation to permit representatives of East Baton Rouge, Livingston and Iberville parishes to serve as members of the governing authority of the District or as a part of the District’s Board, as may be desired to satisfy concerns regarding representation of customers outside of Ascension Parish.

Termination:  The parties will make best faith efforts to obtain expedited Parish Council approval of a mutually-acceptable C&O Agreement.  Unless otherwise agreed, this Proposal shall terminate and become null and void unless the District, Ascension Sewer and NWI enter into a definitive agreement on or before July 31, 2020.  The termination of this Proposal shall not have any effect on the continued effectiveness and enforceability of the CEA.

The Parties to the C&O Agreement:  The December 20, 2019 draft of the C&O Agreement reflects ACUD#2 and Ascension Sewer as the parties to the agreement and contemplates that Ascension Wastewater Treatment, Inc. (“AWT”) would contribute its wastewater collection and treatment facilities and related assets (the “AWT Assets” as further defined in the C&O Agreement) to the District.  NWI now owns the AWT Assets.  Accordingly, NWI would be added as a party to the transaction to effect transfer of ownership of the AWT Assets (now owned by NWI) in substantially the same manner as contemplated under the C&O Agreement.  Either NWI or Ascension Sewer will become Operator under the C&O Agreement, depending upon what is most expedient to the completion of the treansaction.

We are excited to re-engage with the Committee to conclude negotiations and commence our partnership.  If there are any questions regarding this Proposal or if you would like to discuss further, please do not hesitate to contact Jeff Jenkins at 225-228-2501 or jeff@bernhardcapital.com or Jeff Baudier at 225-202-6980 or baudier@bernhardcapital.com.

Sincerely,

Jeff Baudier

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