Judge Takes Control of Prichard Water System: In a firm response to the current leadership, a judge has appointed an outside expert to take control of the Prichard water system in Alabama.
Mobile County Circuit Judge Michael Youngpeter rejected the Prichard Water & Sewer Board’s proposal to name current Director Mac Underwood as the receiver. Instead, the judge followed the plan suggested by Synovus Bank, which manages the $55.78 million bonds the utility sold in 2019.
The judge highlighted the utility’s mismanagement and fiscal irresponsibility, leading to the dissipation of assets. He emphasized that 60% of the water purchased is lost through the dilapidated system, irrespective of fiscal fraud and theft.
The appointment of John S. Young Jr., a former private water company executive, was accepted by the judge. Young served as a receiver for the bankrupt Jefferson County sewer system in 2010 and contributed to the recovery efforts in Flint, Michigan.
Young will have extensive powers, including the ability to raise rates, spend money, hire and fire employees, and enter contracts. The judge ordered the creation of a citizens advisory council, representing Prichard and Chickasaw, to provide input on major decisions. The current board will remain but with the receiver as the ultimate authority.
Monthly reports and a master plan for system repair and replacement, debt payment, and a timeline for implementation are required from the receiver. The judge also mandated negotiations for a low-income household water assistance program and various studies related to the system’s affordability and alternate water sources.
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The order prohibits the water board from interfering with the receiver’s operations and mandates full cooperation. While significant, the judge’s order doesn’t conclude the dispute over the borrowed money, and litigation with Synovus Bank continues. The utility seeks a jury trial and the disclosure of bondholders’ identities, aiming to present its plan to regain stability.
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Who is on the Prichard Water Board?
Board members include Chairman Russell J. Heidelburg, Vice-Chairman Earnestine Moore, Secretary/Treasurer Beverly P. Bunch, and Members Cherry L. Doyle and Eloise Hamilton.