By Rich Anderson
July 24, 2006

Albuquerque (NM) Mayor Martin J. Chavez chaired the Mayors Water Council Disaster Recovery Work Shop June 28 – 29 in Biloxi (MS). Biloxi Mayor A. J. Holloway hosted the event. The workshop was held to discuss the impact of the 2005 Hurricane season on water infrastructure in the Gulf Coast communities, and efforts to rebuild over the last several months.

Participating communities indicated that the level of storm surge impact and water and wind damage depended on where the infrastructure was located relative to the coast line and the storm path. The eye of Hurricane Katrina hit land in Gulfport (MS). Communities west of Gulfport, including New Orleans and Texas cities, all the way east to the Florida panhandle were affected. Storm surge damage to private property and public infrastructure was especially severe within ˝ to 1 mile from the shoreline. Water and wind damage was also quite severe as far north as Hattiesburg.

The hurricane impact on water infrastructure in Biloxi provides an example of the common problems experienced by communities in the region. The storm surge left all of the water plant lift stations underwater and inoperable. Additionally, the storm took out the local grid, and in order to get potable supplies the city brought in portable electric generators. The wastewater treatment plant and portions of the underground pipes were destroyed. Meridian (MS) had a similar experience. As the storm surge subsided it filled the sewer system with dirt, sand and debris that essentially clogged the system.

Another pervasive problem Gulf Coast cities are experiencing is the evacuation of moderate to large portions of the population. The extended loss of population has dramatically lowered utility billings that are necessary to repay water infrastructure bonds and loans. This is an area where some limited federal relief has been targeted. The Mississippi Department of Environmental Quality (MDEQ) estimates that as much as $58.5 million dollars worth of damage was done to drinking water infrastructure in the coastal cities and adjacent county area.

Recovery activities have been robust at the local level, and federal and state efforts are having an impact. Congress has authorized an $11.5 billion dollar package of hurricane relief and recovery funds for Mississippi, Alabama, Florida, Texas, and Louisiana; $5.05 billion is directed to the state of Mississippi.

Brian Sanderson, Deputy Director of Mississippi Governor Haley Barbour’s Office of Recovery and Renewal outlined the governor’s vision of how the federal relief funds would be used. The priorities are to utilize a portion for water, wastewater and storm water infrastructure, storm-proof infrastructure, and develop new infrastructure to accommodate growth and new growth patterns. HUD financial relief is restricted to use for enhancement of recovery, while FEMA funds are dedicated to repairing damaged property and public infrastructure. Holloway indicated that over $40 million dollars in FEMA work orders have been submitted just for debris removal in Biloxi.

MDEQ was directed by the state legislature and governor to develop a water infrastructure plan for the six-county coastal region. Mark Smith of the MDEQ presented information on how the plan is unfolding in the six county area close to the coast line. An inventory and damage analysis of water, wastewater and storm water systems using pre-Katrina and post-Katrina information has been completed. MDEQ is currently assessing anticipated demographic changes to determine future needs and to guide rebuilding plans. Later in the summer, the agency will identify barriers to growth and rehabilitation and develop alternatives. In September, the agency plans to recommend priorities. A draft plan will be released in late September and a schedule of public hearings will be set to gather public input.

Smith stated that an inventory of all wastewater treatment plant permits was completed in the six county area most impacted. They include: 354 industrial and commercial operations accounting for 387 million gallons of treatment a day (MGD); 25 municipal plants at 88 MGD; and, 25 other and federal operations at around 1 MGD, for a total of 475 MGD. Smith stated that 58 percent of municipal facilities were in operation one week after Katrina, and 97 percent were operable within three weeks of Katrina.

Joseph Sullivan, attorney with Hawkins Delafield & Wood, presented information on H.R. 4440, the Gulf Opportunity Act of 2005. The law named Alabama, Louisiana and Mississippi as Gulf Opportunity Zone states (the “GO Zone”) that are eligible for relief from certain tax code limits related to the use of private activity bonds (PABs) for public utilities. They are applicable to water and wastewater projects, and qualified project costs include costs of acquisition, construction, reconstruction or renovation of “public utility property” located in GO Zone. The standard PAB exempt facility “volume cap” restrictions in current tax law do not apply for projects in the GO Zone. A new limit applies for these states. GO Zone states or their political subdivisions can use PABs not to exceed $2,500 x state population. This means the allowable dollar amounts of PABs that can be issued are: (approximately) Alabama = $11.4 Billion; Louisiana = $11.3Billion; Mississippi = $7.3B.

Along with Vice President for American Water Walter Howard, Sullivan discussed the opportunity for the impacted communities to consider alternative financing and development models while planning to rehabilitate or replace impacted systems. They both described some of the benefits of Design-Build-Operate and Investor Owned Utility approaches that fall under the category of Public-Private Partnerships.

Wauwatosa (WI) Mayor Terry Estness ended the workshop by reminding participants that the Mayors Water Council will convene its Annual Water Summit in Santa Barbara (CA) on September 13 and 14. She mentioned that the Summit will continue the discussion on water infrastructure disaster recovery and include discussion on emergency preparedness and planning.