LEPA power sales contract approved by Morgan City council

MORGAN CITY, La. — The City Council approved a power sales contract between the city and the Louisiana Energy and Power Authority for a 10 megawatt share of a 64 megawatt power plant scheduled to come to Morgan City by 2015.

The council had already approved a resolution at a special meeting on March 12 to declare its intention to enter into the power sales contract.

The acceptance of the power sales agreement will allow for the construction of the new power plant in Morgan City, said former Morgan City Mayor Tim Matte. He serves as a LEPA board member.

The six other cities involved in the project include New Roads, Plaquemine, Rayne, Vidalia, Houma and Jonesville.

Matte said assuming that the cities that are considering sharing in the proposed new power plant to be built in Morgan City stay on board, then they will be able to take the power sales agreements and borrow the funds necessary to begin the project. If everything goes according to schedule, they look to borrow the funds by August, Matte said.

The estimated completion date for the entire power plant project is September 2015, he said.

Matte attended a presentation in Rayne last week for the proposed plant and said the other cities are continuing to go through the process of evaluating the project.

“It’s more critical to Morgan City in the sense that we’ve got to make some decisions … over the next several years about what do you do with the power plant as it exists now,” Matte said.

Bringing a new power plant to the city takes some of the pressure off making a decision on the city’s power plant currently in use, he said.

The debt service for the new power plant project plus the debt service on LEPA’s Rodemacher plant still does not equal the original debt service on the Rodemacher project, Matte said. The city would just be “redoing its finances” and “not incurring an additional debt service,” he said.

The 10 megawatt share the city would have in the new power plant would take care of 25 percent of the city’s load and with the Rodemacher plant, about 75 percent of the city’s power load is accounted for, Matte said. The city “can play to market” for the remaining portion of the city’s power load without much risk, he said.

Matte said the project is “viable” and “will bring a long-term benefit to” Morgan City and all the other cities involved in the project. Morgan City is the first one among the interested cities to discuss approving the power sales contract at a public meeting. Houma will discuss approving the power sales contract at a meeting today, he said.

The council also discussed the city garbage truck issues, which was exacerbated by a truck that caught fire on Jan. 29.

Mayor Frank “Boo” Grizzaffi said the city has three garbage trucks working now and staff that can pick up the garbage, but that is only a temporary solution.

The city is now down to two options, either buy used garbage trucks or privatize the city’s garbage pickup, Grizzaffi said. Originally, Grizzaffi considered leasing but said there are too many risks associated with that option.

The city charges $12.19 per month per household for garbage pickup.

Roddy Matherne of Progressive Waste Solutions Inc., which has garbage contracts with the City of Patterson, the Town of Berwick and St. Mary Parish, spoke to the council about talks he has had with Grizzaffi about possibly becoming the city’s garbage contractor.

Grizzaffi said if the city chose to go with Progressive, he has talked to Matherne about trying to lock in a long-term rate for garbage collection.

Matherne said Progressive would have two to three spare trucks on location but could get other trucks if necessary. Going with Progressive would be about a $2 million investment for the city, Matherne said, but would bring a lot of tax revenue to the city.

Grizzaffi said the city is working toward getting a final price for privatizing garbage pickup and will then bring the proposal before the public.

If the city signed a contract with Progressive, it would take them up to 90 days to get new trucks in, Grizzaffi said. Matherne said 90 days is the maximum, and the wait could be as short as 60 days.

“Just off the top of my head, right now, I’m not in favor of going private. We’ve done it this way for a while,” said City Councilman James Fontenot. From doing some calculations, Fontenot said he thinks the city will save $200,000 per year by not going private. He has talked to residents in the city, most of who are in favor of keeping the city’s publicly run garbage collection system, he said.

Matherne said if the city decided to not go private and buy used trucks, the city would probably have to spend $80,000 to $150,000 on a used truck and would still have an old truck requiring repairs.

City councilman Tim Hymel said the city is already losing a lot of money in the sanitation department.

Fontenot said he wants to hear more of what the public thinks of the proposals.

“We’re trying to solve the problem forever. And that’s why it’s going to be a difficult choice,” Grizzaffi said. “What number’s correct? I’ve seen more numbers than anybody and everybody walks up and they’ve got different numbers.”

In other business, the council

—Approved the request of Donna Meyer, St. Mary Parish Chamber of Commerce president, to be able to serve beer on July 20 at the Bayou BBQ Bash and the request of Don Tellman, chairman of the Bayou BBQ Bash, to close off Greenwood Street at Second Street to Arkansas and Third Street in that vicinity from 9 a.m. to 5 p.m. for the Bayou BBQ Bash.

—Approved a request from Steve Morrell, manager of the city’s Main Street program, to hold the Atchafalaya Arts & Food Festival June 8 from 4 to 6 p.m. allowing guests to purchase a ticket to sample food from restaurants downtown. After that, a Main Street fundraiser concert will be held in Lawrence Park from 6 to 8 p.m.

—Approved an ordinance to provide for separate reserve fund accounts and to issue and sell utilities revenue refunding bonds.

—Introduced an ordinance to adopt the city’s millage rates for 2013. The millage rates, which add up to 17.62 mills on the dollar, are the same rates as they were for 2012, Grizzaffi said.

—Approved the finance committee’s recommendations to allocate $9,150 from the city’s general fund to purchase a new air conditioner for the police department and to allocate $25,000 from the general fund for the public works department to hire a new cement crew employee.

—Approved the planning and zoning commission’s recommendation to approve the H&B Young Foundation’s request to amend the district and land use regulations for the city’s General Plaza district to include the description “business and professional offices” to the list of uses permitted for district.

—Expanded the agenda to introduce an ordinance that would amend the General Plaza district and land use regulations to include business and professional offices.

—Approved a pre-clearance liquor and beer permit for Calvin Valentine at Prime Tyme Sports Bar on Clothilde Street.

—Approved a resolution to declare substantial completion of the Roadway Repairs & Improvements project, Phase VI.

—Approved a resolution to declare April Fair Housing Month.

—Approved a resolution to authorize a signature for amendment 3 for the cooperative agreement regarding Lake End Cabins.

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