Jackson County

FBI is investigating the Jackson County Utility Authority, official says

The Jackson County Utility Authority main office is a located on Jackson Avenue in Pascagoula, but it has four treatment plants around the county and other offices.
The Jackson County Utility Authority main office is a located on Jackson Avenue in Pascagoula, but it has four treatment plants around the county and other offices. klnelson@sunherald.com

The FBI has interviewed at least one member and one former member of the Board of Directors of the Jackson County Utility Authority, contacted the entity’s attorney for background information and audits and talked with some employees.

By Jackson County Supervisor Randy Bosarge’s estimate, the federal agency has been investigating the utility for about two months. Bosarge believes he was the third person they’ve spoken with. Bosarge was on the board of directors for seven years before he was elected as a Jackson County supervisor.

“I welcome an investigation,” Bosarge said, “because I know how transparent that organization is.”

He said he believes it has been tough on its contractors and above board in its financial dealings.

Jimmy Heidelberg, attorney for the utility, said the FBI asked to meet with a director, “and I gave them documents about flow, flow charts, and the Legislature (how the utility was established).”

The investigators appeared to be getting a handle on how the JCUA was made up.

Heidelberg said, “Other places have mayors on the board, we don’t. Harrison County handles garbage, and we don’t have garbage. All these UAs are different,” and established that way by the Legislature.

“I gave (the FBI) all of our audits, which have been perfectly clear,” he said. “We sent money back after our (Hurricane) Katrina projects.”

The entity was established in the early 1980s and restructured after Katrina hit in 2005.

As with the rest of the Coast, there was an influx of federal money after Katrina and JCUA received its share to repair sewage treatment plants and lift stations. JCUA also got money to build sewer systems north of Interstate 10 to attract homeowners to higher ground. While making repairs, the utility remained debt free, but a decision to borrow money for improvements in recent years triggered anger among officials in the county’s four cities.

Pascagoula has accused the utility of raising rates by 200 percent and all four cities sued for breach of contract because they feared JCUA was relying on the cities to help pay upkeep for new infrastructure in the outlying areas.

A lawsuit is only one side of the story, and the JCUA has told the Sun Herald the state and federal government had a great deal to do with how the millions were spent and there’s no way the cities are paying to maintain the outlying areas.

The FBI in Jackson said, “Consistent with Department of Justice and FBI policy, we can neither confirm nor deny whether a matter is under investigation.”

Bosarge said the FBI talked with him about his time on the board at JCUA.

“I told them the utility authority is a well-run organization and I enjoyed my time on it. I’ll stand behind it 100 percent,” he said. “We did a lot for Jackson County.”

He said storm water intrusion that comes through city sewer pipes and overwhelms the JCUA treatment plants after hard local rains has to be treated and charged for as if it were sewage. There’s no way to differentiate it, he said. State law requires that. So cities are billed more because of rains.

He said another misunderstandings is an average person’s utility bill within the cities.

JCUA charges $2.99 per 1,000 gallons of sewage treated for the first 5,000. So if someone used 5,000 gallons, about $15 of the bill would go to the JCUA. He said a customer with a $60 sewerage bill is paying JCUA $15 and the city $45.

JCUA is a pass-through organization, Bosarge said. “It survives on the rates it collects and has a reserve fund, otherwise it passes everything on.”

The JCUA board of directors has seven members, each of the four cities appointing one and three from the county.

Bosarge said there has been conflict with people wanting to run the JCUA politically, but he said he believes it’s running fine like it is.