By: Jennifer Britt
The Parsons Advocate
John C. Stump a representative from Steptoe and Johnson, PLLC presented the Tucker County Commission with papers that needed their signatures and approval for submission to the Public Service Commission for the completion of the first step in creating the Blackwater Public Service District (PSD). Stump explained the steps of the lengthy process and answered questions from the Commission and others.
According to his biograph on the Steptoe and Johnson webpage at www.steptoe-johnson.com, “Stump concentrates his practice in the areas of municipal bonds, project finance, economic development and utility regulation. Mr. Stump’s experience includes significant involvement in tax-exempt and taxable bond issues of all types, a variety of economic development projects, and providing legal representation to utilities, financial institutions, and municipal and other public bodies.
Stump has extensive experience as bond counsel, underwriter’s counsel, and issuer’s counsel for tax-exempt and taxable bond issues for public works of state agencies, counties, municipalities, and public service districts, as well as conduit financings for 501(c)(3) corporations, private educational institutions, and industrial development projects.
Stump has represented a number of companies, ranging from Fortune 500 international conglomerates to privately held start-ups, in the negotiation and identification of state economic development incentive packages. He has negotiated, and implemented, all types of development incentives, including Tax Increment Financing, Economic Opportunity Districts and Tourism Development Credits.
Stump regularly represents utilities before regulatory agencies. His experience includes testifying as an expert witness before regulatory agencies on project financing issues.”
Before the Public Service Commission will approve the creation of the Blackwater PSD the commission working along with the mayors from Thomas and Davis would need to create a board of three to five members. The board will then assume the responsibility of designing the PSD. Once the project is complete and running adequately the PSD will acquire any sewage project debt from both Davis and Thomas as well as the maintenance and upkeep of the drainage pipes.
City of Thomas Mayor, Jodi Flanagan, asked, “Both City of Thomas and Davis has projects that are getting ready to come out with projects for I & I for the separation of water. Would it be better to wait until the PSD is created and let them fund those projects? Say we get a grant for $1 million, and we have to take a loan out for 20 percent of the grant who pays the 20 percent?” Stump answered, “All your debt that is associated with the sewer system so long as the PSD is taking over the collections systems as well. And that it is my anticipation or at least what is being discussed.”
Davis and Thomas will no be in the sewage business. The PSD will remove all sewer obligations for Davis and Thomas. All sewer bonds will be assumed by the PSD. Discussions will need to take place, but those meetings can not happen until the board and PSD is created. Stump said, “It is important to create the board, so everyone is on the same page.”
The design of the project, obtaining all the permits needed, and be in a position to actually go to construction will take approximately two years. The installation of the project has an unseen time gauge based upon the time it takes to obtain the approval from the Public Service District. The PSD could be done from start to finish in two to three years but that would be tough according to Stump.
Stump explained the process by saying, “The most likely structure I see is the Public Service District is created. The Public Service District assumes responsibility for the design after the board members are appointed by the county commission. Because whatever is built they are going to have to own and operate it. So those people who are going to be responsible for it need to do the design to understand what is done. Once the project is done, whatever occurs and speaking of a regional waste water plant, even if it is ponds, the district in order to build that will acquire the assets of both municipalities. Now, will that happen before construction of the regional plant or after. I have seen it done both ways.
Commissioner Fred Davis asked, “What happens if one council does not agree?” Stump responded stating that once the board is created, the councils have to vote whether they want to transfer over all assets to the PSD. If one does not and the state steps in the most likely occurrence will be that all funds will cease. In rare cases the state has offered incentives for the council go forward.
Commissioner Mike Rosenau asked, “How much will the rate increase if they go with PSD verses their own towns?” Stump responded with, “The creation of the PSD by itself should not increase rates. I never say rates will go down. It should provide synergies such a one billing system, one audit, one insurance, and I believe that if you just merge the two entities I do not believe that should have a significant impact on customer rates other than whatever rate increases need to happen.”
The next steps will be the creation of a board by the county commissions and both councils being in agreement.