Could it be worth big bucks to SUEZ?

The City of Shreveport has the opportunity to realize big bucks and solve major civic headaches, all in one swoop, by negotiating with SUEZ, North America (NA) to either sell or operate its Department of Water and Sewerage (DOWAS). Public-private partnerships are becoming very common vehicles for private sector entities to assume a major share of the risks in terms of financing and construction of public sector infrastructure projects, and this is what SUEZ is proposing to the city.

SUEZ, NA has over 120 years of experience in water and waste water management, providing over 7.4 million residents with these services working with over 16,000 municipal and industrial sites to meet their infrastructure needs. For Shreveport SUEZ would assume all of the city’s responsibilities for upgrading its water and sewage operations to comply with the onerous EPA consent decree. And in addition SUEZ would assume all liabilities in the pending lawsuits concerning water billing and take over the city’s water billing operations, which are in great disarray.

If a sale was negotiated, then all of the employees of the Department of Water and Sewerage would become employees of SUEZ and would participate in a SUEZ retirement plan. Additionally, all of the assets of DOWAS, including the sewage and water lines, lift systems, buildings and equipment would be transferred to SUEZ. With this option, water and sewage rates would be set by the Louisiana Public Service Commission.

A sale to SUEZ would generate a tremendous windfall to the city; speculation is that the starting price for negotiations would be $500 million. Sale proceeds could completely fund the city’s pension deficit as well as its pension obligations for decades. Additionally, the city would have funds to fully staff the Shreveport Police Department to its authorized number with very competitive salaries as well as add programs to reduce crime. And the list of goodies that the city could spend this newfound money would go on and on.

With a concession agreement, SUEZ would operate the city’s water and sewage system, utilizing its management expertise, technological innovation and customer service experience to maximize efficiency and deliver of services as well as cost savings. This partnership would reduce operational costs, which could be guaranteed and pass future savings to the city. These additional dollars could provide capital dollars to ensure that water and sewer systems are sustainable for the duration of the concession agreement including the EPA consent decree requirements. With a concession agreement, the water and sewer rates would be set by the city in conjunction with SUEZ.

Mayor Tyler and the Shreveport City Council should give serious review and consideration to outsourcing its water and sewer services to SUEZ. The EPA consent decree is a major responsibility that is taxing many city departments and the ongoing water billing litigation continues to ring up substantial legal fees with a large potential liability for the city coffers. Shreveport government needs to be innovative in this time of declining population and deterioration of its tax base.

John E. Settle Jr. has been a resident of Shreveport since January 1977. His articles appear regularly in local publications. He can be reached at 742-5513 or e-mail to: john@jsettle.com