A new company created by Bernhard Capital Partners is teaming up with Ascension Parish on a proposed public-private partnership to develop a new sewer system for the rapidly growing parish.
As envisioned, the new company, Ascension Sewer, will enter into a cooperative endeavor agreement with the parish to build out new wastewater treatment infrastructure and take over management of the system for the next 30 years. The parish will maintain ownership of the infrastructure and customer accounts.
“This basically is a procurement delivery method,” says Ascension Parish Public Works Director William Daniel, who has been spearheading the deal for the parish. “We could go out and raise the money through tax-free bonds and bid it out, or apply for grants, or pass a tax and go out for public bid. Or, we could do a P3. That’s what this is.”
The Bernhard company will invest some $225 million developing the first phase of the system alone, which will consist of a new sewer treatment plant on the Mississippi River as well as the buildout of a network of sewer lines along state highways 73 and 42. Phase one will serve more than 16,000 households in the northern part of Ascension Parish.
The proposed site of the new treatment facility has not been disclosed and BCP officials say they are still in the process of acquiring the property. But it will be located in an industrially zoned area away from neighborhoods and businesses and the treated discharge will go into the river, Daniel says.
The deal is significant for several reasons. For one, it will consolidate the splintered wastewater treatment delivery systems that have proven problematic for Ascension Parish. As part of the deal, Ascension Sewer is essentially acquiring the largest private wastewater treatment provider in the parish—a company called Ascension Wastewater Treatment—that serves nearly 16,000 households.
It will be combining that customer base with the 3,000 or so households served by the public system, Ascension Consolidated Sewer District No. 2, and will eventually tie into individual and small-scale, private treatment systems that serve thousands of other households throughout the parish.
Second, it will address growing environmental problems caused by the many small, private systems, which discharge effluent into bayous and streams. The Louisiana Department of Environmental Quality has declared Bayou Manchac, among others, to be an impaired system, meaning no additional treated wastewater can be discharged into it.
“We don’t want to come under an EPA consent decree,” Daniel says. “This gets out ahead of that.”
Finally, the deal is significant because it marks a new line of services for BCP, which has been aggressively growing its portfolio of companies in the industrial, energy and utilities sectors since its founding in 2013.
“This is sort of a natural progression for the services business that Bernhard has been involved in,” says Jeff Baudier, a managing partner with BCP since 2018 and former CLECO executive.
If all goes as planned, the deal will make financial sense for both the parish and BCP. The parish will get a new sewer system without having to hit up taxpayers for the outlay. BCP investors will make money—provided Ascension Sewer operates efficiently— through sewer user fees, which it will collect under the terms of its management contract.
Baudier says operating a public utility is not necessarily a profitable venture but he believes the new company will be able to make money.
“You’re not just consolidating the systems and much of the inefficiencies that drive costs up, but you’re bringing private sector leadership to publicly run systems,” he says. “We find that by doing that we’re able to find even more efficiency and drive even more excess cost out of the business.”
The Ascension Parish Council’s utility committee approved the deal, which is supported by Parish President Kenny Matassa, Tuesday night. It goes before the full parish council May 16. If approved, BCP executives say Ascension Sewer would put together a master plan for development within 90 days.