Prichard water board approves steep rate hikes for customers

PRICHARD, Ala. (WALA) - Residents here and in Chickasaw soon will pay more for their water and sewer service.

The Prichard Water Works & Sewer Board on Tuesday voted to approve rate increases and adopted a new budget for the fiscal year that starts in October. The board also voted to begin negotiations with a consortium of businesses to take over day-to-day operation of the system.

The board took three separate 4-1 votes in front of a largely hostile crowd of people who came to voice their opposition.

The base rate for water and sewer service will increase 22 percent for residents of Prichard and Chickasaw. The amount charged for each 1,000 additional gallons above the minimum amount, customers will pay 3 percent more. Those new rates will take effect Nov. 1.

Mac Underwood, the system’s director, said the new rates will cover an expected 3 percent increase in the cost of buying water from the Mobile Area Water and Sewer System. He said it also ensures that the system will be able to make timely payments on the $55.78 million it borrowed in 2019 and replenishes a debt reserve fund it is having to dip into to make those payments this year to Synovus Bank.

“This budget would fully fund operations,” Underwood said. “It covers debt service. … It funds 47 positions.”

The other significant vote Tuesday kicks off negotiations with a group of private companies for a contract with would give up day-to-day operational control in exchange for a large up-front injection of cash.

Many of the people who attended Tuesday’s meeting expressed anger over rate hikes on a comparatively poor population that already has some of the highest rates in the state. They cheered on board member Cherry Doyle, who voted “no” on all three measures. She delivered an impassioned critique of the system’s leadership.

“We need somebody that’s got a heart for the people,” she said. “We don’t need anybody here that fattens their pocket.”

She reiterated that point moments later, staring directly at board attorney Jay Ross: “It’s money in the budget to fatten your pockets.”

Underwood said the system has not invested adequately in maintenance, which he added contributes to the system losing more than half of the water it purchases from MAWSS.

Severia Campbell Morris, a former city councilwoman, said the hikes would force low-income people to chose between water and other basic necessities.

“The impact it will have is we won’t be able to afford it. It’ll have a fatal impact on us. Where are we gonna get the money? If we get the money, that means we don’t get out medication. If we get the money, that means that we don’t go to the doctor.”

The budget increases spending on fixing water pipes from $70,000 in the current year to $245,000 in the fiscal year started Oct. 1. Money dedicated to sewer repairs also would be $25,000, up from $75,000. Tank maintenance will rise from nothing to $120,000.

Underwood said the system works diligently to plug leaks, but he added they pop up frequently. He recalled one recent day where there were 20 leaks at the same time. In fact, he added, there are leaks that the system has not even identified.

“The crews are fixing leaks as fast as they can,” he said.

But Underwood said the system needs more resources. The budget includes a $65,000 contract with a company to detect leaks.

A potential deal with the private management consortium is still a ways off, according to Underwood. That group includes Kohlberg Kravis Roberts & Co., a global investment firm, and Inframark LLC., a leading provider of public and private infrastructure services. Oppenheimer & Co. and Water Capital Partners are serving as project advisers.

It would require approval of a new franchise agreement by the city councils in Prichard and Chickasaw. Synovus Bank, the bond servicer for the money they system borrowed, also would have to agree. Synovus has sued the utility, alleging that it has failed to fulfill the terms of the bond. The company has asked a judge to appoint a receiver to take control of the system.

Mobile County Circuit Judge Michael Youngpeter has scheduled a hearing for Oct. 10 in that case. Doyle made it clear she prefers that outcome to the current leadership.

“We need to let Judge Youngpeter know we want receivership,” she said.

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