Katrina funds spent on underused sewage plants

Officials in Mississippi took private property and spent tens of millions of dollars in Hurricane Katrina recovery money on sewage plants that may not be needed for decades, an Associated Press investigation shows.

In one case, a legal battle over a small strip of land between an 86-year-old woman, her family and a county utility board has prevented a $20 million sewage plant from connecting with part of its lines. The case raises questions about whether officials rushed to spend recovery money and used bruising tactics to obtain land to build projects that aren't needed now, and may prove to be a burden to taxpayers.

After Katrina, $650 million in U.S. Department of Housing and Urban Development money was set aside for sewage and water projects in south Mississippi. The biggest slice, about $234 million, went to the Harrison County Utility Authority, which serves the most populated county on the Mississippi coast. It's also where several multimillion-dollar sewage plants are sitting idle or underused.

The Harrison County water and wastewater plans were based on estimates that its population would grow as much as 76 percent by 2025. But the population actually dropped from 2000 to 2010, a period over which the wastewater plan expected to see 34 percent growth, according to the U.S. Census. Other studies have projected far less growth by 2025, including one estimate at 5 percent. Katrina has been blamed for the population decrease because thousands of homes were destroyed and residents displaced.

"For now, we're going to have water tanks that don't have water and we're going to have sewage treatment plants that don't treat sewage," said Al Gombos, who represents the city of D'Iberville on the Harrison County Utility Authority.

The population estimates came from a group of engineering firms hired by the Mississippi Department of Environmental Quality for $3.7 million in 2006.

Agency director Trudy Fisher said it's too early to second-guess the plan, because the plants and other infrastructure were built for long-term growth, not only the immediate future. She said the population estimates were based on numerous sources.

"We're dealing with projections, and by that very word, if you just listen to the word, it's a projection, it's a forecast. It's not a concrete 'right' number. There is no 'right' number, and everyone knew that going in," Fisher said.

To be sure, there were factors that slowed growth, like higher insurance rates after Katrina and the nation's economic slump. But another critical flaw is that the plan didn't provide funding to hook up customers to water tanks and sewage plants, board member Marlin Ladner, a Harrison County supervisor, said in a recent interview. Until that happens, costs could be charged to taxpayers who don't use the plants and not the actual users, he said.

Danny Boudreaux, the Harrison County engineer, said the county has hired an engineering firm to study how to make the best use of the water and sewage systems and to look for grants to get customers hooked up. The maintenance costs will be the same whether there's one customer or hundreds so there needs to be more customers to spread the cost around, he said.

"I use the analogy of what if someone gave you a 100-foot yacht. Thank you, but I can't afford to use it so it's stuck in the harbor," Boudreaux said.

Ask Helen Walker and her relatives what that all means to them, and they say it's pretty simple: Officials ruined a valuable piece of land that has been in their family for decades to build a sewage plant that's not needed.

Walker and her son, Jim Walker Jr., are asking for $3 million in a lawsuit that claims members of the utility authority conspired to take a 50-foot section of their land, then cut down trees and buried pipes without legal authority.

Jim Walker said their four acres slope away from the road and the easement, which runs parallel to the street, so it's impractical to build on the land. The proximity to a sewage plant — and the stench expected to come with it — makes the land essentially unsellable, he said.

That's why the Walkers said they were stunned by the utility authority's offer of $9,400 for the 50-foot stretch.

"It's caused me so much stress, but not just for me, for my family, too," Helen Walker said recently, fighting back tears.

Jim Walker said his family would keep fighting, noting many people can't because they don't have the time or money. He said there were some good men on the utility board but accused others of putting their own interests ahead of the public.

"They're cowards, and what they have done to my mother is despicable," he said. "They know who they are."

A judge had decided to hold a hearing last year to consider a protective order that would prevent officials from taking the land. But before the hearing could happen, Kim Herndon, of the contracting company, Yates Construction Co., sent an email to an employee of a subcontractor, S.H. Anthony Construction Co., that said: "I was just told by (Neel-Schaffer engineer) Charles Hill we need to install pipe on Walker property before hearing."

Workers cut the trees and laid the pipes over the weekend. The judge called that an "obvious effort to rush to complete that part of the project before a possible adverse ruling." He threw out the eminent domain case initiated by the utility and later awarded the Walkers $47,359 in attorney fees.

Utility officials are appealing that ruling and have started a new eminent domain case. Utility officials say they didn't properly notify all the owners of the Walker land the first time, but they're confident the utility will get the land this time.

A legislative committee said in a report last year that the plant near the Walkers' land is likely to be operated at no more than 11 percent capacity when completed. Another plant is likely to operate at 6 percent or less, and another will use less than 1 percent capacity upon completion.

Supporters of the state's plan say it was designed to support growth over the years, not for short-term utilization.

"The key thing to remember is that this is a 20-year plan, not a two-year plan," Biloxi Mayor A.J. Holloway, a member of the utility board, said in statement sent to the AP through a spokesman. He declined numerous interview requests.

Others say there was a rush to use the federal money and that caused big mistakes, like putting a giant sewage plant in a desirable residential area instead of using an alternate site near a cemetery.

"The overriding drive to provide capacity for a growing area was a legitimate consideration, but the implementation and the desire to speed things up without full vetting was a problem. Bad decisions were made," said Billy Hewes, a former state senator from Gulfport in Harrison County, who had urged the Gov. Haley Barbour in 2009 to consider moving the plant to an alternate site.

Robbie Wilbur, a spokesman for the Department of Environmental Quality, said the site was picked "because there were fewer endangered species issues, less wetlands impacts, better access, and lower construction costs."

Wilbur said the decision was made by local officials, but members of the utility authority dispute that.

"DEQ rejected all of those alternatives ... I want it on the record that we strenuously looked at these alternatives and asked for them and those things were rejected," Ladner, the Harrison County supervisor, said during a November 2009 board meeting. "They were determined that we put it there and if we don't ... we lose all funding."


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