About nine months after the Mobile Area Water and Sewer System (MAWSS) Board of Commissioners declined to take control of its assets, the embattled Prichard Water and Sewer Board could void a recent contract extension with the manager of its system.
The board and contractor Severn Trent have less than 100 days to resolve their issues before the contract, which is worth more than $30 million over the next five years, is terminated, Prichard Mayor Troy Ephriam said.
On March 9 the board, which is appointed by the Prichard City Council, voted 3-2 to begin the process of terminating the contract, but Severn Trent was never officially notified, board member Russell Heidelberg said. Instead, the board contacted Severn Trent by phone afterward to inform them of the vote.
Alternately, a proper letter advising Severn Trent of the board’s decision would have activated a 45-day period in which the two sides could work to resolve their issues, Heidelberg said.
“They were never notified to start the 45 days,” he said.
Ephriam confirmed that the board failed to properly notify Severn Trent.
Severn Trent Senior Vice President for Strategy and Market Development William Malarkey said while the company was aware of the board’s vote, it never received any notification of a breach of contract that would’ve started the termination process.
“We haven’t received notice and we continue to work under the current five-year contract,” Malarkey said.
Heidelberg, who voted against the move, said the board knew it didn’t have the resources to manage the system on its own and that’s why it didn’t send an official notification to the company.
He said the board had been trying unsuccessfully to borrow money since October.
“I knew we couldn’t get rid of Severn Trent,” Heidelberg said of his vote against terminating the contract. “We don’t have the resources to manage it, unless we get the money from somewhere else.”
Heidelberg and Malarkey confirmed Severn Trent sent a letter May 1 to the board officially notifying it of the $1.6 million in back fees it owed to the company. The letter kickstarted a 45-day resolution period, where Malarkey said the company hopes the issues can be worked out. He said they won’t be looking for the board to pay back the money in one lump sum, but want to develop a plan.
“We’ve been in Prichard for a while now and it’s our hope we stay there,” Malarkey said.
Although, Malarkey said, there has not been much progress in discussions, as the board has yet to respond to the Severn Trent letter. The initial resolution period ends in the middle of next month.
Heidelberg said at the end of the 45-day period both sides get an additional 60 days — 105 in all — before the contract is officially terminated.
“Severn Trent started the 105 days on their own,” Heidelberg said.
Both Ephriam and Heidelberg confirmed the board owes Severn Trent between $1.6 million and $2 million to date. Heidelberg said the board had gotten behind on its $400,000-per-month payments.
Malarkey declined to comment specifically on the relationship between the board and the company. He only said “there are issues that crop up from time to time,” but wouldn’t elaborate.
If the contract with Severn Trent is terminated, Heidelberg said, the board won’t have the money to manage the system on its own because it would have to purchase new equipment and pay employees.
Ephriam said he hopes to see a resolution that results in Severn Trent staying on board because it’s in the “best interest of the city.” He said he doesn’t believe there is a plan in place in the event Severn Trent’s contract is terminated.
In a June 2014 referendum, voters narrowly approved a measure that would have dissolved the board and allowed MAWSS to take over operation of the system. Although the MAWSS board of directors eventually declined the takeover, the concerns of voters that led to the measure’s approval are still valid, Prichard Councilwoman Severia Campbell-Morris said.
Campbell-Morris, who replaced Earline Martin-Harris on the council last year after campaigning on issues involving the water board, said she applauded the decision to terminate the five-year, $32.8 million contract.
“We are very pleased to know we have a board that is now looking at the concerns of citizens,” she said. “I think this will bring some great relief to the citizens.”
In addition to high water bills, which she said averages about $100 per resident, Campbell-Morris is concerned the city is not getting “the service we expect.” For example, she complained about a problem on Patricia and Whistler streets where sewage backs up when it rains. She said that has been a problem for 15 years.
Ephriam disagreed, saying Severn Trent has done everything they were contracted to do.
“I haven’t seen anything to prove they haven’t done what they needed to do,” he said. “I’m not aware of any issues I’ve heard from citizens. Most of the complaints have to do with bills.”
The pricey contract with Severn Trent was among reasons the MAWSS board cited when it declined to take over the Prichard board. But despite approval of the referendum, Campbell-Morris said she doesn’t see MAWSS rescuing the board now because of financial issues.
“I can understand someone not wanting to take on that debt,” Campbell-Morris said. “I look forward to seeing what will happen.”
In addition to the Severn Trent’s contract, which was approved the week before the takeover vote, MAWSS officials also subsequently discovered several contracts for which it would be responsible if it assumed the assets of Prichard’s system. These included a lobbying firm, a public relations firm and a consultant. Officials at the time said the board had a severe cash flow problem due to the obligations.
MAWSS spokeswoman Barbara Shaw was unable to comment on the issue, citing deadline constraints. Attempts to reach Prichard Water and Sewer Board Secretary/Treasurer Ayanna Payton and Chairman Jeremiah Hollins were unsuccessful as of press time Tuesday.