Technical difficulties barely slowed the meeting, however, and Moody city officials dealt with the city’s sewer situation even as some residents questioned their plans.
Specifically, the city took the following action: The City Council approved a $3 million “bridge loan” to the GUS board, which the board will repay to the city after satisfying its debt obligations. The GUS board also authorized Mayor Joe Lee — who also serves as chairman of the board — to terminate its agreement with Alabama Utility Services, the company that had been running the system since the city purchased it from Birmingham.
Attorneys Bill Weathington and Frank McPhillips explained the actions to the board, the council and the audience. According to Weathington, the actions will allow the city to consolidate its loan, in the hopes of lowering its interest rates and possibly reducing the fees coming from the city’s customer base.
Lee told the crowd the city is “doing the best we can with what we have to work with.”
That didn’t appease the concerns of everyone in the room. Resident Bob Bragg said he is “disgusted” with the GUS Board and wondered if the city has a real plan.
“I know we can’t do anything about what’s already happened,” Bragg said. “I know there’s been trouble; our rates have gone up, and that means there’s trouble.
“I just want to know if the city has a plan.”
Moody passed its most recent rate increase in December 2009, raising both the baseline and usage rates for residential and commercial customers. In March 2010, the council hired McPhillips — a bond attorney — to renegotiate the GUS Board’s bond issue; then, in April, the GUS Board authorized Weathington and Lee to “take any action necessary” on its behalf.
Then, in May, Lee responded to published reports linking AUS to Bill Blount, a Montgomery investment banker recently sentenced to federal prison stemming from a bribery conviction in Jefferson County.
Moody resident Harvey Love says his sewer rates have increased 40 percent since the city bought the system.
“I think we would all agree this has been convoluted from the outset,” Love said. “We’re receiving the blunt end of all this.
“There’s an old saying, ‘Baffle them with BS.’ I’m not sure what’s going on, but I do know we’re receiving the blunt of this mess.”
Following the meeting, Lee said he understood the concerns of the residents.
“I would be suspicious as well,” he said. “But people have to believe in government and what we’re trying to do to make everything right. Everything we do is to try to make things better for the city.
“If we don’t do something now, it’s going to fall apart at some point.”
According to its attorney, Alton Parker, AUS has not filed for bankruptcy — as was erroneously reported last week — but the board did vote to terminate its agreement. The city has been in charge of the “receivables” related to the sewer system since April, with city project manager Dave Treadwell overseeing the operation. Treadwell presented a budget Thursday that shows a monthly surplus of nearly $14,000, after the bridge loan.
“We’re hopeful we can operate at a small surplus,” Treadwell said Thursday. “This will allow us to replenish our reserve fund and eventually allow us to give consideration to rolling back the rates.
“It won’t work if we continue what we’re doing right now. This (bridge loan) will work.”
Treadwell also offered to answer any questions any customer might have (his telephone number is 205-640-0322).
One resident asked if the GUS Board would be dissolved. Lee, however, said the board will continue to operate and commended its members for their efforts.
“I appreciate what the GUS has done to get to where we are,” he said. “They’ve put in a lot of hours to get this thing fixed, and they’re all volunteers.
“We put ourselves in this situation, and it’s our job to fix it. We’re doing the best we know how.”
Contact Will Heath at wheath@thestclairtimes.com.
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