September 23, 2011 2:46:00 PM
STARKVILLE -- Between 450 and 500 west Starkville residents will soon have a new water provider and lower rates.
The city is close to finalizing its acquisition of Bluefield Water Association following a three-year legal squabble over services provided to customers in the expanding commercial area near the Highway 25 bypass.
The city of Starkville and Bluefield recently agreed to a settlement that will see the city acquire all of Bluefield's assets and infrastructure, which covers eight square miles between Longview and Highway 12.
The Mississippi Public Service Commission granted the transfer on Sept. 15, and the Starkville Board of Aldermen Tuesday authorized Mayor Parker Wiseman to finalize the acquisition.
Starkville Director of Public Services Doug Devlin said Bluefield customers will now pay lower base rates, though exactly how much hasn't been determined.
"We're excited about having these new customers in our family and providing quality services to them," Devlin said.
The city stands to gain more from the acquisition, as Starkville's Industrial Park is located in Bluefield's certificated area.
Devlin said Bluefield's pipes weren't big enough to handle commercial and industrial water demands, which caused a snag in an agreement the two sides signed in 1986. Since then, Starkville had provided water to Bluefield's eastern service area, which Bluefield distributed to its customers. Starkville billed Bluefield at its rates, while Bluefield billed it customers at its own rates.
"They had plenty of capable piping for residential," Devlin said. "But some industry may come in and say 'We need 3 million gallons a month,' and the size of pipes they had wouldn't be sufficient. The city of Starkville just has more capacity to handle large industrial facilities. It'll make the development in attracting industries more streamlined."
Citing a shortage of water in 2007, Bluefield requested the city allow it to access a larger water main, but the city refused. Bluefield then requested and received an injunction citing breach of contract. The city quickly appealed and eventually got the 5th Circuit Court of Appeals to reverse the decision.
Bluefield and the city began to pursue a settlement last summer, six years after the city initially tried to acquire Bluefield.
After a year of litigation, the city agreed to take over all of Bluefield's service areas, inside and outside the city limits. As part of the agreement, the city took on an unspecified amount of Bluefield's debt to the United States Department of Agriculture's Rural Development Division, which originally financed the startup of the not-for-profit company.
Starkville's attorney, Brett Harvey of Jackson-based firm Phelps Dunbar, said the debt is a "reasonably" small amount and will be paid by Bluefield's liquid assets.
"It's fairly clear at this point their principal liability was their debt to the USDA," Harvey said. " I believe, in fact, it will all be paid off before the acquisition takes place. It's a win-win for the city after a long, difficult litigation."
Bluefield representatives declined comment on the acquisition. A message left for Bluefield's attorney, Jim Herring, was not returned.
Harvey said Bluefield's members had to reach a two-thirds majority vote to enter into the settlement.
"If it wasn't unanimous, it was pretty close to it," Harvey said. "I think they all deserve a lot of credit, including leadership at Bluefield like (Association President) Paul Welch."
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