A new report from the court-appointed receiver in charge of the long-troubled Water Works & Sewer Board of the City of Prichard says that the utility may need more than $400 million in repairs.
The receiver is tasked with recommending not only how to repair the system, but also how the utility will be managed going forward.
“There has not been enough investment in the system over the years,” John Young, Jr., the court-appointed receiver, says. “It’s crumbling around us.”
Young, who was appointed receiver of the water board in November by Mobile County Circuit Court Judge Michael Youngpeter, detailed in a June 28 report to the court the dire condition of the utility’s water and sewer infrastructure.
About 70% – or 188 miles – of the utility’s water pipes are in poor condition and will need to be replaced in the next 20 years, the report says. Thirty-two percent, or 46 miles, of the utility’s sewer pipes are also estimated to be in poor condition and will need to be replaced in the next 20 years.
In total, the combined cost to replace those pipes would total around $344 million, if it were done today. If the costs were to be spread out over the next 20 years, the cost to replace the pipes could be $476 million due to inflation, Young’s report notes.
That figure does not include repair costs for construction at utility facilities, including two wastewater treatment plants and 18 lift stations.
Prichard Mayor Jimmie Gardner said in a message to AL.com that he “was not surprised at all in the cost.” He also said that infrastructure is a problem and concern across the U.S.
These cost estimates come after Young and his team completed an “asset management study” of the utility as part of his duties as receiver. The utility would need to spend $20 million per year over the next 20 years in order to fully address the issues, he says.
“This is going to take decades to solve, just because of the magnitude of the problem,” Young said. “There’s no short-term solution.”
The Prichard water board serves both Prichard and Chickasaw, which have a population of 18,870 and 6,310, respectively. The utility is under consent orders with the Alabama Department of Environmental Management to repair both its wastewater and drinking water systems. The utility loses around 60% of the drinking water it purchases from Mobile Area Water and Sewer Service (MAWSS).
How the utility will pay for those repair costs is unclear, as the utility defaulted on a $55 million bond from Synovus Bank—leading to Young’s appointment last fall. In an upcoming “draft master plan” to be submitted to the court later this month, Young will detail his recommendations for funding repairs going forward, as well as who will govern the utility going forward, he says. The “alternatives analysis” regarding operation of the utility will also be submitted to ADEM.
The utility board was temporarily stripped of its power when Young was appointed receiver.
Young says he’s not sure what his recommendations will be yet. He will also take into consideration recommendations from the advisory council appointed to oversee his work.
Gardner says the city of Prichard supports the board’s ownership and operation of the utility going forward. In lieu of board management, he says the city would own and operate the system as a city department, with a management contract with a water operator or a concession agreement.
Other possibilities for management going forward include the Utility Board of Chickasaw purchasing and operating the system’s assets that serve their customers, with the Prichard board retaining ownership of the remaining assets, according to advisory council records. MAWSS is also considering taking over ownership and operation of the system, though it has not committed to doing so.
Since his appointment, Young says he will be able to procure federal funds from the American Rescue Plan Act and the Infrastructure Investment and Jobs Act (IIJA), sometimes known as the Bipartisan Infrastructure Law, administered through ADEM. But grants will not be enough, he says.
Some of the cost burden will be shifted onto ratepayers, Young says. However, residents of Prichard and Chickasaw are already burdened by the costs of their water bills. Around 32% of Prichard residents live in poverty, according to data from the U.S. Census Bureau; the poverty rate is similar in Chickasaw.
“The water affordability assessment of PWWSB shows that system finances, water rate levels, and service area income of PWWSB’s customers result in one of the most severe water bill burdens in Alabama and nationally,” Young’s report states.
Gardner says that the citizens of Prichard “deserve better and a better quality of life.” He says they echo his concerns about the infrastructure.
“Our citizens continue to suffer with high cost of water, because of the infrastructure problems,” he said in a message to AL.com.
An affordability/consumer assistance program study is underway and will be completed by the end of this month, the report says.
Young has a long history of aiding troubled water systems. In 2010, he was appointed receiver of the Jefferson County Environmental Services Department, just before that county’s bankruptcy. He also spent five years working to address lead contamination in the water system of Flint, Mich.
But he’s run into opposition from Prichard’s water board. The utility board appealed Young’s appointment as receiver to the Alabama Supreme Court, which affirmed his appointment in May.