Council authorizes President Martinez to negotiate purchase of water system; precursor to parish-wide sewer

Three made a quorum of the Utilities Committee.  Chairman Benny Johnson (l), Doc Satterlee and Oliver Joseph were all smiles before Thursday's Special Meeting

Three made a quorum of the Utilities Committee. Chairman Benny Johnson (l), Doc Satterlee and Oliver Joseph were all smiles before Thursday’s Special Meeting

For the first time in several months Ascension’s council Utilities Committee met, but only after Parish President Tommy Martinez called for a Special Meeting on Thursday at the Courthouse Annex in Gonzales.  A Special Meeting of the Finance Committee would follow before the regularly scheduled meeting of the full council.  What could be so urgent?  An undivided Parish Council would authorized President Tommy Martinez to negotiate the purchase of People’s Water Co. on Ascension’s west bank for up to $5 million.

President Martinez meets with District 10 Council candidate John Cagnolatti before the Utilities meeting

President Martinez meets with District 10 Council candidate John Cagnolatti before the Utilities meeting

“I think it’s something that’s important for the future of Ascension Parish, or I wouldn’t have asked for this Special Meeting,” Martinez insisted before Thursday’s Utilities meeting.  “It (purchasing People’s Water Co.) makes all the sense in the world.”

The parish and People’s Water tried to make a deal where Ascension would have acquired the west bank water system a year ago according to Martinez, but they could not get together on the price.  The parish president recalled that the offer was $4 million then and the company balked, seeking at least $7 million.  But that was then.

Martinez told the committee that the former owner passed on and his heirs want out of the water business.  Carol Aucoin attended the three meetings to observe for People’s Water but did not speak; not, that is, to any of the council/committee members.  But the company requested a written offer from the parish according to President Martinez.

A very interested party: Carol Aucoin observing Thursday's proceedings.

A very interested party: Carol Aucoin observing Thursday’s proceedings.

“I will tell you that there are other parties interested in People’s Water Co.,” Aucoin told Pelican Post as three Utilities Committee members arrived in the council chamber.

Whether that was merely an attempt at create leverage in the coming negotiation matters very little.  Both Utilities and Finance committees recommended authorizing President Martinez to negotiate the acquisition of People’s Water Co. for a price “not to exceed $5 million.”  The Council acceded to the recommendations without objection.  So the price is set, if a deal gets done.

It strains the imagination to think that People’s would take less since the maximum was so openly discussed, and Martinez is capped without further Council action.

“The west bank cannot support both the company and ACUD (Ascension Consolidated Utilities District) #1,” reasoned the parish president.  “There simply are not enough customers.”

And the parish is stuck with ACUD #1 which was near default when Ascension assumed its $5 million debt; a debt, according to Tommy Martinez, the parish would have been obligated for anyway.  The State of Louisiana would have insisted.

“We’d be subsidizing ACUD #1 for many, many years to come,” he said.  “Our accountants (Faulk & Winkler) project that we’ll be $700,000 to $1 million in the black annually which would offset the $5 million debt owed by ACUD #1,” Martinez answered one of Councilman Daniel “Doc” Satterlee’s four questions.

The last time the 11-member council authorized Martinez to negotiate a purchase left an acrid taste in Doc Satterlee’s mouth.  That was at the end of 2014 when the parish president was tasked with acquiring a site for Ascension’s sewer treatment plant, which is necessary before the parish can close on a low-interest, $60 million DEQ loan in furtherance of the long-discussed parish-wide sewer plan.

Presidential negotiations for that Geismar site were nixed when District 3 Councilman Travis Turner elicited help from District 7 representative Chris Loar and District 8’s Teri Casso to placate Turner’s Geismar constituency which resisted siting the treatment plant in their backyard.  All three Council members attended a Christmas week meeting at a Geismar church and vowed to halt the sale from going through.

File photo:  Doc Satterlee and President Tommy Martinez after negotiations for Geismar sewer treatment site fell through.

File photo: Doc Satterlee and President Tommy Martinez after negotiations for Geismar sewer treatment site fell through.

Satterlee is “passionate about (parish-wide) sewer” and he was quite perturbed at the potential treatment plant site being quashed.  The parish president kept him in the loop this time, meeting earlier in the week.  In fact, the District 4 representative offered his unmitigated support once his questions were satisfied.

Will water rates increase for the west bank consumers?

Yes, but People’s Water would have to seek an increase from Louisiana’s Public Service Commission in any event to make necessary improvements according to the parish president.

How will the $5 million purchase price be funded?

“We have $9 million banked in our sewer fund,” Tommy Martinez answered.  “Where we’re going with sewer, a public/private partnership, I think it’s best to pay in cash or we might very well be in line for a low interest loan similar to the DEQ sewer loan.  I think everyone has come to that conclusion; public/private sewer is the only real option.”

Ascension could bond out the $5 million but the president recommended against incurring that debt.

Would use of that sewer fund jeopardize the public/private partnership for parish-wide sewer?

To the contrary.  Sufficient water supply is a must if Ascension will ever treat its own sewage and People’s Water could satisfy the need…and several others.  All of which means the parish could turn the company into a money-maker while spurring economic development.

Ascension would pick up the water supply business for CF Industries’ huge nitrogen plant on the west bank and the recently announced 17,000 acre industrial overlay zone abutting Iberville Parish will also require massive amounts of water…if heavy industry ever actually materializes there.

“People’s Water has 3 million gallons of capacity and its only using 1 million per day,” Tommy Martinez covered the same ground for the Finance Committee which numbers all 11 Council members. “It’s also in compliance (with applicable regulatory standards)” even though it is an “older system.”

Which means that additional investment will be required.

“Donaldsonville (water) lines have to be upgraded,” Councilman Oliver Joseph conceded “along with other infrastructure.  But for economic development to occur, we have to have this.”

Joseph’s only west bank Council colleague agreed.

“Donaldsonville piping systems need repair but the benefits of consolidating the water will be significant, especially if we’re getting into the sewer business,” Councilman Kent Schexnaydre weighed in.  “This may seem like a small thing but this is a giant step forward for utilities in this parish; make no mistake about it.”

Ascension, like its neighbor St. James Parish, can access grant money to pipe water under the Mississippi River to the east bank.  People’s Water’s product comes from the river as opposed to an aquifer, many of which are experiencing salinity that could soon render the water undrinkable.

Tommy Martinez explained that the City of Gonzales, which uses about 1 millions gallons a day, may be a client for that water.

“Gonzales’ wells cannot keep pace with its water needs,” Kent Schexnaydre confirmed.

Speaking of Gonzales, due to Ascension’s lack of sewer and water, Gonzales has reaped a windfall of new tax revenue by annexing property targeted by commercial and residential development.  That is due to Ascension’s inability to provide sewer and water.  Gonzales continues to annex property which turns into new business and its corresponding tax revenue.

“We’re going to make an offer,” the Parish President concluded.  “I don’t know if they’ll take it, but…”

Comments

comments