The depth of Corey “One Apple at a Time” Orgeron’s hypocrisy will be plumbed tonight. On Monday, from his Utilities Committee chair, Orgeron explained why he would not vote to appropriate $200,000 for President Clint Cointment’s administration to explore inspection/monitoring of Individual Treatment Units (separate and apart from those subdivision systems served by private wastewater companies). He said:
“I was not a huge fan of spending $600,000 to evaluate the Bernhard Capital Plan (Ernst & Young was hired in 2019 to do so, before Orgeron’s election to the District 4 seat). I really wasn’t and I voiced those concerns back in November when those fees were really being accumulated.
It’s a situation where I’m not certain that tax dollars were best spent in that scenario. I don’t want to make the same mistake twice. By doing this, knowing full well that we have a decision we’re gonna make inside of six weeks, so I think that’s why I asked Mr. (Ken) Dawson, can we scale down the cost so that the parish can move forward, get the information they need prior to this July 31 deadline?
And, if not, maybe we sit down and we look at one seller who’s bringing us their apples and, if we don’t like their apples, then we start shopping for more apples.”
Three days after his frugality bloviation, and Orgeron will be put to the test. Councilwoman Teri Casso, who chairs the full council, amended tonight’s agenda to add the following:
TO RETAIN THE FIRM OF ERNST & YOUNG
TO ANALYZE AND COMPARE SEWER PLANS
WHEREAS, Ascension Sewer, LLC has submitted a sewer plan to the Ascension Parish Governing Authority for wastewater operation on the East Bank of Ascension Parish, and
WHEREAS, the Parish Administration has developed an alternative.
WHEREAS, the Governing Authority desires a financial analysis of the alternative sewer plan to assist in its review of the plan.
THEREFORE BE IT RESOLVED, that the firm of Ernst & Young be retained to analyze the alternative sewer plan developed by the Parish Administration and to compare such plan with the plan submitted by Ascension Sewer, LLC.
Character counts, according the billboard advertising Orgeron’s law firm.
What about the July 31 deadline? It was imposed by Bernhard Capital Partners in a May 26 letter which read:
“The parties will make best faith efforts to obtain expedited Parish Council approval of a mutually-acceptable Construction & Operating 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 referenced CEA was approved by the last council in May 2019. It granted Bernhard Capital Partners (masquerading as Ascension Sewer, LLC) “the exclusive right to negotiate an agreement…to construct, manage, operate and maintain the System” for 24 months. Why is Bernhard playing hardball now?
Jeff Baudier, Bernhard’s point man, has been to the public speakers’ microphone to assure the council that the company is moving forward, with or without the agreement. Baudier has also stressed that Ascension Parish will be welcomed as a partner whenever it chooses to opt in, as part of the proposed agreement or anytime thereafter. Why the deadline?
We commend Chairwoman Casso for initiating an effort to compare the apples, no matter if the Utilities Chairman wants to digest Bernhard’s only.
President Cointment unveiled a “Preliminary Plan” on May 12, projecting substantial savings for tax and rate payers. But it is only a preliminary plan with an awful lot of details omitted. If there is a chance of viability, it should be explored though Ernst & Young can only crunch the numbers without assessing the technical aspects.
It’s a start. One glaring omission from Ernst & Young’s 2019 semi-analysis must be included. Appendix IV of the proposal, entitled Operator Termination Fee has never been analyzed.
Should the deal go south prior to its envisioned 30-year concession ending, Ascension Parish would be on the hook for a guaranteed “8% return on the aggregate amount of equity contributed (by Bernhard)” plus “the outstanding debt incurred…and any associated prepayment penalties and costs.”
This would bind the parish to terms of an agreement between Bernhard and its lender(s), a contract to which Ascension is not a party and will not be privy to the terms. Without some hard dollar cap on that amount, a vote to approve would be tantamount to malfeasance (a charge that Orgeron has employed recently).
The terms could be so onerous that Bernhard included section 9.3 in its proposal:
“If this Agreement terminates and as a result the parish owes an Operator Termination Fee, but it will not have cash resources available to make such payment in full, the parish agrees that it will promptly…work with (Bernhard) to agree upon an acceptable repayment plan, which may include: (i) seeking approval to issue bonds or other debt obligation in an amount sufficient to pay the termination payment or (ii) entering into another long-term operation and maintenance contract, in respect of the System that generates an up-front payment that, when combined with the other cash resources at the parish’s disposal, is an amount sufficient to pay the Operator Termination Fee.”
Which would place Ascension and every one of its taxpayers over a barrel in perpetuity.