An agreement for the City of Bossier City to provide water to the Caddo-Bossier Port Commission has been on the City Council’s agenda for over a month. On Monday, the Council held another workshop to answer more questions.
Eric England, the Port’s Chief Executive, once again appeared before the council to answer questions about the lengthy Joint Cooperative Endeavor Agreement.
The proposal would see Bossier City supply water to a 2,000-acre expansion of the port facility by utilizing the city’s existing water treatment and distribution capacity through new water mains paid for by the port, including a 30-inch water main, being drilled under the Red River – at a facility also built and paid for by the Port Commission.
The city would take over the operation of the plant.
The revenue-sharing agreement stipulates that the city will deliver half of any profits made under the plan after the city’s overheads are covered — or an amount equal to the port’s next scheduled principal and interest payment on the bonds used to construct the new water equals infrastructure and facilities, whichever is less, until bonds are repaid.
When the port chairman was questioned again by councilman Chris Smith about the arrangement that effectively got the city hooked on the bond loan payments, the port chairman admitted that that was indeed the spirit of the contract.
“What we are asking is not a profit from this deal, but debt service coverage,” Port Director England said.
However, prosecutor Charles Jacobs clarified that the agreement states that if water is not pumped through the system and no revenue is generated, the city will not be responsible for the port’s debt. And once the port’s bonds are paid off, the revenue-sharing arrangement ends.
“These are not debts on the city’s books because the city is not responsible for these debentures,” Jacobs added. “It’s a revenue sharing agreement. The port will bind, pay and build the infrastructure. What we have is a maintenance contract and a revenue share.”
Jacobs reiterated that once the city’s overheads are covered, any additional revenue would be shared equally between the port and the city, with the port’s share of that revenue being limited to the quarterly amount of its debt service.
“If the city isn’t producing enough water to service the port’s debt, the city isn’t responsible for that difference. If the city pays the port’s quarterly debt service, then whatever is produced thereafter, the city keeps 100% of the proceeds,” Jacobs said.
The Water Agreement must be reintroduced as a regulation before the Council can take a final vote.
— Feature photo: City Attorney Charles Jacobs
Advertising
Continue reading
Source