The Mobile Area Water and Sewer System announced today it will not be taking control of the Water Works and Sewer Board of the City of Prichard.

After an executive session held behind closed doors Tuesday afternoon, MAWSS spokeswoman Barbara Shaw cited a recently approved $32.8 million management contract, financial shortfalls and regulatory deficiencies are some of the reasons MAWSS will not be taking control over the Prichard system.

“It is with much regret we announce today that the Mobile Area Water and Sewer System cannot take over the Prichard Water Works due to a number of issues beyond MAWSS’ control,” MAWSS Chair Maynard Odom said in news release. “This decision was reached after an intense assessment of the system’s current contractual obligations, financial stability and its capital needs.”

Just a week before the county-wide vote to merge the two entities, the Prichard Water Board approved a multi-million dollar five-year management contract with Severn Trent Services, which has made it virtually impossible for MAWSS to assume responsibility, Odom said.

According to the press release, a review of financial information from late June showed Prichard was three months behind in payments, owing more than $1.2 million, to Severn Trent Services. However, during the same fiscal year, MAWSS reported the Prichard Board entered into numerous new contracts with an engineering firm, lobbyists, a public relations firm and a consultant, which led to paying for those services while also trying to meet its other financial obligations. Consequently, this left the Prichard system with a severe cash flow problem where expenses exceeded revenues and MAWSS would have to honor all legal contracts and debts if they took over the Prichard system, officials said.

Odom also said Prichard was due to receive a new permit from the Alabama Department of Environmental Management for the Morris Wastewater Treatment Plant, which is likely to require construction of a $4 million outfall project to bring it into regulatory compliance.

MAWSS believes the Prichard Board was not acting in the best interest of its customers when they renewed the Severn Trent contract and neglected to address other issues facing the “troubled” system.

“We applaud Senator Vivian Davis-Figures, Rep. Napoleon Bracy, the Concerned Citizens of Prichard and the voters in Mobile County who voted to allow MAWSS to manage the system,” Odom said. “But after assessing the impact of the STS contract and other issues, we just could not make the transfer work favorably without raising the rates of Prichard customers and no one wants to see that happen.”

In 2009 MAWSS offered to manage the Prichard system at a lower cost and offered to assist Prichard within the last year, MAWSS Director Charles Hyland said. Instead, Hyland said Prichard chose to sign a five-year renewal with Severn Trent, a commitment he believes their customers just could not afford.

“MAWSS wanted to bring more cost effective service to Prichard,” Hyland said. “This would have been a win-win for Prichard and would have also aided economic development in the region. But that’s not possible if we are paying a management company to do what we do on a daily basis.”