More than a year after its closeout, Bayou la Batre officials are asking questions about the $38.7 million grant that funded its new sewer treatment facility.
The Community Development Block Grant was awarded from HUD after Hurricane Katrina for water and sewer improvements, but it also included citywide street paving projects.
Of the grant’s total funding, $24 million was set aside for a state-of-the-art sewer treatment plant and the demolition of the city’s existing, 40-year-old treatment facility.
However, the old treatment plant still stands and has become an eyesore and a liability. Mayor Brett Dungan took the opportunity in the closing minutes of the June 26 City Council meeting to point the finger at the city’s Utilities Board.
“This grant was supposed to accomplish many things, but some of those things were not accomplished — one of them being the demolition of the previous sewer plant,” Dungan said. “Now we have an abandoned sewer plant that looks like a bombed-out World War II building.”
At the behest of Dungan, the council discussed the issue before voting unanimously to authorize city attorney Bill Wasden to review what actions could be taken to force the utilities board to finance the facility’s demolition.
The motion was based on the assumption the city owns the property, but the old sewage facility is the board’s responsibility.
However, the only thing both parties can seem to agree on is that neither knows who should be responsible for the building’s demolition.
“It seems like to me there was a lease given to the Utilities Board for the use of it, but I’ve not looked at the lease,” said Sylvia Raley, chairman of the BLBUB. “I think that needs to be looked at by attorneys to ascertain whose responsibility it is.”
Wasden was authorized by the city to do just that, but Dungan also said he’d “absolutely” be looking into ways to fine the utilities board for violating the city’s building codes.
The legal owner of the building isn’t the only thing the city is unsure of – officials have also had a hard time determining where to find a copy of the original grant.
The original grant writer was Janey Galbraith, who was convicted in 2012 for her role in a scandal involving former Mayor Stan Wright and a separate federal housing grant from FEMA, but during the investigation, the FBI seized several thousand documents related to the city’s finances. Since then, some documents have been returned.
Dungan’s assistant, Wanda Overstreet, said the city has a good bit of information on the CDBG grant but doesn’t have the original application.
“They said they brought back what was ‘no longer of use to them,’” Overstreet said. “We’re not sure (if this grant was part the documents seized) because we didn’t inventory the box before it went. The FBI could still have those documents.”
After Galbraith was arrested, Diane Burnett was brought in to finish managing the grant. Burnett said when she took over, the FBI had indeed had secured the grant’s original documents.
So Burnett contacted the Alabama Department of Economic and Community Affairs, which distributed the grant funds to the city from the state level.
She said ADECA was helpful, but the grant itself had seen 500 amendments, which made tracking its original plans difficult.
The number of amendments alarmed Dungan, but Burnett said the changes could be attributed to the scope of the project and its large number of “moving parts.”
“Everything was complete (when I took over) except the new treatment plant and the final payment for a water storage tank,” Burnett said. “As far as (the demolition of the old sewer facility) being listed in the grant application, I’m not sure.”
Lagniappe made contact with a representative at ADECA, but as of press time was still waiting for more information.
Despite not having the application, Overstreet said the building should have been demolished because “it’s the city’s understanding the funding was built-in.”
“One of the things I’m calling for is a financial and technical audit of that grant so we can find out where the money was and how it was spent,” Dungan said. “We believe money was given to the utilities board to do that job.”
Though the project heavily involved the Utilities Board, Burnett said the city applied for the grant, received all of the funding and handed all payments directly to contractors.
Raley said funding was originally in place for the demolition, but some funding had to be repurposed when the city “ran of money to finish the grant.”
“The city had to divert some of the money to completing the (new) plant,” Raley said. “They had underestimated the of cost of building it.”
Raley agreed the city was in charge of all the money throughout the entire grant process.
Craig Bryant, an engineer for the Utilities Board, said funding shortfalls were the reason some parts of the grant weren’t completed as planned.
“It wasn’t just demolishing the plant that got left out,” Bryant said. “All the asphalt parking and access areas weren’t completed, and there were other things put in later that were paid for though other grants.”
According to Bryant, millions in additional funding was sought by the city to finish the project. Those came from sources like ADEM and the Rural Development Association among others.
Raley said another factor was the price increases the area saw after Hurricane Katrina.
“After Katrina, the economy bottomed out. There was a big influx in what it cost for the materials,” Raley said. “So who do you blame it on? (The city) had a grant administrator. If there was a misuse of funds, where did they go?”
The accusations aimed at the Utilities Board come amid an ongoing dispute between both entities that started shortly after Dungan took office.
Since then, Dungan has been denied a position as the board’s superintendent. The members have also filed a lawsuit to block the city’s recent appointment to the board and have ceased accepting and processing payments for trash services on behalf of the city.
“It’s all about power, control and about the money … period,” Raley said. “I don’t want to say that they’re not all doing their job, but I wish they would at least give us a chance and try talking to us first before making accusations.”
After a recent council meeting, Dungan admitted he hadn’t directly reached out to discuss the issue with the utilities board.
Raley maintains the issue is about retaliation, but in the meantime, the Utilities Board has plans to do what they can to address the issue.
“As soon as we can take a break and go down there, we’re going to put the scrap in one pile and clean up around the building, but I don’t know what we can do about the demolition until we can look at the lease to find out who it belongs to,” she said. “Some of our guys have been pulling scrap off the building to sell so someone could make money off it to help demo it.”
She said permission to remove the scrap metal was given to the utilities board by Wright before he left office, but since then, the board has put that process on hold.
Wasden said he would be checking on the lease situation to see who officially owns the building. He’ll present his findings at the council’s next meeting.
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