posted on February 06, 2010 12:29
St. Tammany Parish Government will take the largest step in its history to ensure a cleaner environment for both today and tomorrow with the acquisition of water and wastewater facilities owned by Southeast Louisiana Water & Sewer Company, LLC in St. Tammany Parish. When coupled with the parish’s operations of Cross Gates Utilities, St. Tammany is taking a significant step in both managing utility costs for residents, managing growth, and creating a unified system for reducing the amount of improperly treated sewage into our waterways.
At the Thursday, February 4th meeting of the St. Tammany Parish Council, the parish’s bond counsel opened and read the bids to sell an estimated $40,565,000 in utility revenue bonds to finance the acquisition. The Parish Council voted to accept the lowest bid. The repayment of the bonds will come from utility fees, with no planned increase in service costs. No taxes will be used for this purpose.
The estimated cost breakdown is:
Deposit to Acquisition Fund $36,000,000
Net Deposit to Debt Service Reserve Fund $2,604,500
Working Capital Reserve $1,000,000
Estimated Costs of Issuance $1,334,334
Less Premium Received $(373,834)
Total Bonds Issued $40,565,000
“We are taking a private utility company’s profit and using it to make the bond payments for the public acquisition of the utility system,” said Parish President Kevin Davis. “Revenues will no longer go to private investors, but rather be used to acquire the utility on behalf of the citizens of St. Tammany. We were able to do this successfully with Cross Gates Utilities, the parish’s pilot project for developing a utility management plan.”
SELA will be paid $36 million, the fair market value as determined in the appraisal by R.W. Beck, for the utility system.
In July 2009, SELA served 8,227 customers with water services and 6,526 customers with wastewater services in 131 subdivisions or service areas. Fixed asset acquisition includes approximately 200 servitudes or easements; over 20 pieces of real property (land & improvements); leases; equipment and infrastructure including 702,235 linear feet of water mains, sewer mains and lift stations, water and wastewater treatment facilities. SELA is now permitted 4.1 million gallons of wastewater per day, with over 500 thousand gallons of unused capacity.
Most SELA employees will transfer to St. Tammany Parish government employment, along with all necessary supplies, materials and equipment. Management of the operations will be combined with the Cross Gates Utility system and will be under the supervision of the Department of Environmental Services.
In January 2005, St. Tammany Parish adopted a ten-year capital infrastructure plan of which wastewater treatment was a major component. Stricter state and federal environmental protection guidelines that took effect in 2008 require these significant steps to improve environmental quality.
“We will use the available treatment capacity to bring areas without central sewer systems into a LDEQ permitted wastewater treatment facility,” said Greg Gorden, director of Environmental Services. “This will reduce the pollutants entering our waterways.”
With the acquisition, St. Tammany Parish will serve approximately 11 thousand potable water customers and 9 thousand wastewater treatment customers in 2010 in the urbanized areas of the parish. Extension of the systems will come as funding allows.
“Katrina changed our timetable and some of our planning processes,” said Gorden, Director of Environmental Services. “We have adapted to new requirements and regulations in the interim.”
“This is a major step for St. Tammany’s ecology,” said President Davis. “We will be better able to provide sound utility infrastructure while at the same time keeping utility rates for citizens at the lowest responsible level. The parish council and I agree that this will be of great benefit to St. Tammany’s citizens.”