Thursday, March 22, 2012

Stennis Study Of The PRVWSD Part 2

Continuation of excerpts from the Stennis Report
details here:

The Pearl River Valley Water Supply District:
An Overview For Decision Makers
The John C. Stennis Institute of Government
Mississippi State University

Pages 7 through 9
Link to full report HERE
Previous section HERE

Page 7
On September 5, 1958, Chancellor Robertson entered the final decree to create the Pearl River Valley Water Supply District; any party aggrieved by the final order of the court, who was a party to the proceedings, was provided a right of appeal to the Mississippi Supreme Court within 10 days.

Lewis L. Culley, a Jackson Realtor and Dr. Ben N. Walker, Jr., who were landowners in the District, brought suit against the creation of the District on multiple grounds including that Section 11(f) of the Pearl River Valley Water Supply District Act was unconstitutional; their attorney, John C. Sullivan, contended that Section 11(f) would allow the Board of Directors of the District to take lands under eminent domain that were not needed by the District and to later allow the board to resell the land to a private enterprise or to individual persons. On appeal to the Mississippi Supreme Court from the final decree of Chancery Court of Hinds County, the Court held that the Pearl River Valley Water Supply District Act was constitutionally valid and affirmed the decree creating the District (Culley et al. v. Pearl River Industrial Commission, 234 Miss. 788, 108 So. 2nd 390, 1959). Similar, subsequent cases, e.g. Horne et al. v. Pearl River Valley Water Supply District (1964) and Brown et al. v. Pearl River Valley Water Supply District (156 So. 2d 572, 1964), were interpreted by the courts in accordance with the principles laid down in Culley.

The Board of the Pearl River Valley Water Supply District was organized on September 5, 1958, the same

Page 8
day that the Chancery Court issued its decree creating the District. W. P. Bridges, Sr. was selected as Chairman; J.A. Morrow of Brandon was Vice Chairman; W.A. Huff of Forest was Secretary; and W.E. McIntyre of Brandon was Treasurer. The directors determined to secure a loan of $276,800 from the Housing and Home Finance Agency in Atlanta to provide preliminary financing to assist in continued engineering work and reservoir planning until bonds could be issued; the board selected Harza Engineering Company of Chicago (MWH Global) at the end of October 1958 and continued its association with Lester Engineering Company of Jackson.

During the early planning of the Pearl River Industrial Commission for the continuation of its activities, the committee had estimated that the assessed value of all property potentially affected by the reservoir was $365,000 and that property tax revenues to the governmental entities in the impacted counties totaled approximately $17,000 annually; International Paper Company owned approximately 20,000 acres of timber land within the area and had agreed to sell this land to the Commission on the provision that the project was supported by the majority of people within the five county area. At a meeting in December 1957, Vaughan Watkins, the attorney for the Commission, indicated that the best method for financing the project would be similar to that used for drainage districts, the use of a two mill tax levy similar to that used for port development in Jackson County, and through a contract with the City of Jackson to purchase water. He estimated that a rebate of two mills from the five counties would produce approximately $450,000 in revenue to support the project and that a special, additional two mill tax would generate an additional $450,000 in revenue. At a January 1958 meeting between the Water Reserve Committee, the Pearl River Industrial Commission, the City Commission of Jackson and the Hinds County Board of Supervisors, Mayor Allen Thompson of Jackson and the City Commission announced unanimous support for the project and a commitment to provide an annual payment of $500,000 from City of Jackson Water Department funds for the guarantee of a permanent water supply.

When the District Act was passed in 1958, The Mississippi Legislature authorized the District to issue bonds, not to exceed $25 million in principal amount, to support the

Page 9
implementation of the Pearl River Reservoir Project (§ 51-9-133); “The board of directors of the district is hereby authorized and empowered to issue bonds of the district for the purpose of paying the costs of acquiring, owning, constructing, operating, repairing, and maintaining the projects and works specified herein, including related facilities, and including all financing and financial advisory charges, interest during construction, engineering, legal, and other expenses incidental to and necessary for the foregoing, or for the carrying out of any power conferred by this article.” The payment of bonds issued by the District were to be secured solely by the pledge of the avails of a two mill ad valorem tax levy in the five counties encompassed within the District, provided for in § 51-9-13; and by the pledge of an additional special tax levy of two mills on the taxable property within the District in the event that its anticipated revenue and funds were insufficient for the payment of the principal and interest on bonds issued by the District (§ 51-9-139).

According to Sorrels (1962), the Board of the District had identified a plan to finance the project from four sources: 1) revenues from the two mill ad valorem tax from all five counties in the District; 2) revenues from the special two mill ad valorem tax levy on taxable property within the District; 3) revenue from a $500,000 annual payment from the City of Jackson to supply a guaranteed source of water; and 4) revenues from the sale or lease of property within the District and other revenues associated with the operating activities of the District. The Board sought out the services of financial consultants to assist in the structuring of the financing vehicles for the project and reviewed bids from investment consulting firms during the months of October and November of 1958. A fixed rate bid of $75,000 was submitted by the Leland R. Speed Company and this company was selected by the Board of Directors of the Pearl River Valley Water Supply District to provide investment and financial consulting services; the principal of the firm had also served as a member of the Water Reserve Committee.

The Rez News
Barnett Reservoir

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