Analysis: Pat Harrison district not alone with financial angst over departing member counties

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JACKSON, Mississippi — Mike Davis understands the angst felt by the Pat Harrison Waterway District when member counties leave and take their money with them.

Davis is executive director of the Pearl River Basin Development District. Since 2001, the district has lost five of its 15 member counties, including populous Rankin and Hinds counties.

"We lost 30 percent of our counties and 40 percent of our revenue," Davis said.

The partings in the Pearl River district were not as legally contentiously as those involving Pat Harrison.

The Mississippi Supreme Court ruled 5-4 this past week that Lamar County is not required to provide financial support to the Pat Harrison Waterway District beyond the date of its withdrawal from the district.

Pat Harrison argued contractual obligations with a trio of federal agencies that created the district's eight water parks remained with each of the district's 15 member counties "into perpetuity."

Pat Harrison calculated that Lamar County's "contractual obligations," including perpetual support of the parks, would run about $18.6 million. Instead, Lamar County will pay about $337,000 and leave the district.

"We didn't want to sue our member counties if they wanted to withdraw," Davis said. "There are certain steps they had to follow (to withdraw), and the counties followed those steps according to the law."

Mississippi has three water development districts, all established in the 1960s to protect and conserve water resources and promote economic development.

The districts are supported by member counties. The third district is the Tombigbee River Valley Water Management District in north Mississippi.

The Pat Harrison dispute began when Lamar County informed Pat Harrison in a Sept. 6, 2011, letter that it intended to leave the waterway district by following the dictates of legislation enacted in 1995.

State law mandated an independent audit be done to determine a county's share of any "bonds, contractual obligations, and any other indebtedness or liabilities of the district that are outstanding on the date of such county's withdrawal."

Chancery Judge Hollis McGehee in September 2012 ruled Lamar County could leave Pat Harrison. In 2013, McGehee ruled against the Pat Harrison's calculation that Lamar County's "contractual obligations," including perpetual support of the parks, would run about $18.6 million.

The Supreme Court's decision could decide the obligations of two other counties — Jasper and Forrest — that voted to sever their association with the Pat Harrison district. Jasper County officials say they were paying $168,000 a year to the district. Forrest County was paying about $460,000 a year.

In a dissenting opinion joined by three other colleagues, Justice Josiah Dennis Coleman said the majority erred by not considering whether future financial obligations were essential to the district's continued existence. Coleman said the contractual obligations do not cease with Lamar County's withdrawal.

"Rather, their yoke survives only to be shouldered by the remaining members of the district. Should (Thursday's) result lead to a mass exodus, woe to the last county standing that would alone bear the contractual obligations," Coleman said.

Presiding Justice Jess Dickinson wrote in the majority opinion that nothing in the statute "obligates a county, after withdrawal, to pay the district's future maintenance and operational obligations that have not been incurred and are not outstanding on withdrawal."

"If a withdrawing county must pay to perpetually operate and maintain the District's water parks and other structures, why would the Legislature have created a withdrawal statute in the first place?" Dickinson wrote.

Pearl River's Davis said the Legislature has helped out the district by promising $600,000 over three years while "we get more time to find alternative sources of funding to operate after 2017."

The other counties that left the Pearl River district were Attala, Lawrence and Copiah.

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