Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Utilities topic
No spam. Unsubscribe anytime.
Abita Springs told DEEQ requires 10-year projection, possible minimum annual utility-rate increase
Summary
Council was told the DEEQ will only accept a 10-year projection that assumes a 1.25 debt-coverage ratio and a resolution that includes a minimum annual rate increase; staff said the town will return with a revised resolution once the agency provides the exact required minimum.
Council members spent a significant portion of Tuesday’s meeting discussing requirements tied to a planned DEEQ bond for water infrastructure.
Staff explained that DEEQ requires the town to submit a 10-year financial projection demonstrating at least a 1.25 debt-coverage ratio at the maximum annual debt-service level. The town’s existing rate-resolution links annual adjustments to the consumer price index, but staff said DEEQ will not accept CPI-only language; instead the agency wants a resolution that guarantees a minimum annual percentage increase so that revenues can be modeled conservatively over the 10-year projection.
Officials said they have not yet received the precise minimum percentage DEEQ will accept. Council and bond counsel discussed examples ranging from roughly 1% up to about 2% as possible minimums. Until DEEQ supplies the figure, town staff said they cannot finalize the 10-year projection and must return to the council with a proposed amendment to the current rate resolution.
Councilors also discussed complementary approaches to pay for system improvements, including a system-development fee for new subdivisions and a geographic surcharge for properties that require expanded capacity; staff said any such fees would be structured to sunset when the loan or project is repaid. The administration said it will present a draft resolution for the council’s consideration once DEEQ provides the required minimum percentage and bond counsel completes calculations.
Why it matters: the change would make part of the town’s revenue stream predictable and usable in debt-service modeling for a new bond. That could affect household bills over time if the council adopts a minimum yearly increase alongside CPI adjustments. The council did not adopt a new rate at Tuesday’s meeting; work on the resolution will continue.
