Federal housing authorities are auditing the use of more than $650 million in grants designated for an ambitious plan for sewage and water systems across south Mississippi in the wake of Hurricane Katrina, The Associated Press has learned.
The money was divided among five south Mississippi counties, with the most, more than $230 million, set aside for the largest, Harrison County. The entire plan is being audited by the Office of Inspector General for the U.S. Department of Housing and Urban Development, said Robbie Wilbur, spokesman for the Mississippi Department of Environmental Quality. Wilbur's agency hired engineering firms to draft the Gulf Region Water and Wastewater Plan after Hurricane Katrina struck in August 2005.
HUD officials would not comment on whether an audit is being done.
In June, an AP investigation found that officials implementing the plan in one county spent millions of federal dollars on sewage plants and water tanks that may not be needed for decades.
The AP found the state-hired engineering firms based the plan on projections of huge growth in many areas. However, other studies estimated much more modest growth, and populations in many coastal areas actually declined, in part because Katrina displaced thousands of residents whose homes were destroyed.
The Harrison County Utility Authority used eminent domain to take private property to build its sewage system and left some landowners complaining of strong-arm tactics. The utility is made up of the mayors of the five cities in Harrison County, or their designated representatives, and two members from the Harrison County Board of Supervisors.
Officials who defend the project say it was meant to encourage long-term growth, and much of the infrastructure was put in the northern part of the county with the expectation that the population would move further inland to higher ground. But some plants and water tanks in those areas don't have enough customers to justify using them.
Jim Simpson, lawyer for the authority, said the audit is not a criminal matter.
The audit could simply lead to recommendations for the future, or it could lead to criminal investigations. If the auditors find evidence of a crime, that information would be handed over to HUD's criminal investigators and could ultimately be handed over to the U.S. Justice Department for prosecution.
Simpson said that among projects being audited by HUD is the use of $457,000 by officials in Harrison County to buy a half-acre parcel for a new water tank, apparently overlooking the fact that the land had been used for as an electrical transformer site, which raised questions about whether it was contaminated.
A warning sign on the site was taken down after the AP began asking questions about the land. Wilbur, the spokesman for Mississippi's environmental agency, said testing did not find contaminants on the site. Still, some officials have said the site could leave the utility authority vulnerable to being sued if someone in the area gets sick, even if it isn't directly caused by substances at the site. And the utility will have to pay to have power lines moved if it decides to use the property.
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