Decrying the Prichard water system’s “extreme mismanagement,” an attorney for Synovus Bank on Tuesday asked a judge to take away day-to-day operational control from the utility’s board of directors.
Synovus, which manages the $55.78 million that the Prichard Water Works & Sewer Board borrowed in 2019,earlier this year after the utility missed payments into a bond fund used to pay creditors who invested in the bond sale.
in rates. What’s more, according to testimony Tuesday, the board was prepared to impose a much more substantial hike – 40.5 percent for six months. Testimony will continue Wednesday before Mobile County Circuit Judge Michael Youngpeter, who must decide whether to grant the bank’s request to appoint a so-called receiver who would have wide latitude to ensure that the system pays back the money it owes.Dean Matthews, senior vice president of Synovus and managing director of the bank’s corporate trust division, spent nearly the entire day on the witness stand. He went over the agreement the utility signed in 2019 when it borrowed the money.
Likewise, Matthews testified, there were a number of troubling red flags over the past couple of years. He testified that financial records indicated that the utility operated at a lost two of the years since borrowing the money. The only net gain amounted to about $10,000, he said.in February indicating that leaky pipes cause the system to lose as much as 60 percent of the water it buys from the Mobile Area Water and Sewer System. He said the monetary loss -- $2.
However, Matthews acknowledged, the bank refused to allow the utility to use any of the borrowed money for that purpose.
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