Complications undermine water deal
© St. Petersburg Times
published January 6, 2002
In four days, Florida Water Services is expected to announce whether it will accept an offer from the Florida Governmental Utility Authority to buy Florida Water's assets throughout the state. The transaction is worth $515-million overall, and that includes the company's estimated $44-million operation in Hernando County.
In December, the Hernando County Commission supported the proposal, which would result in the county acquiring the water and sewer system from the GUA in a couple of years.
But now, after months of planning -- much of it shrouded in secrecy and plagued by controversy -- the commissioners still don't have enough reliable information to know for certain whether the deal is in the long-term best interests of Hernando County residents.
Commission is in a bind
The commission has County Administrator Paul McIntosh and County Attorney Garth Coller to thank for being in that bind. Their neglect -- and in some instances manipulation -- of the board's policies and procedures to accomplish their self-described "game plan" for protecting the county's water supply, backfired. Now, instead of inspiring confidence in their decisions, they provoke contempt from confused commissioners and suspicion from a wary public.
It has been less than two months since commissioners rewarded McIntosh and Coller with sweetened, multiyear contracts. Who would have thought the sweetened severance packages the board approved might be tested so soon?
But there will be ample time for the commission to review the duo's performances in coming weeks. In addition to the State Attorney's Office looking into possible bidding irregularities regarding the hiring of a consultant, Hartman & Associates, details are still emerging about how the pair circumvented normal purchasing procedures, misinterpreted board policy and how McIntosh may have violated the Sunshine Law by meeting separately with the commissioners to form a consensus and take action that should have been authorized only by the group.
Basic questions unanswered
While the commissioners wait for those stories to unfold, they must try to find answers to two fundamental questions about the Florida Water deal, including:
Is the price fair? So far, the county is forced to take the word of the GUA, which has valued Florida Water's Hernando County operations at $44-million. Hartman & Associates was supposed to come up with its own findings, known as due diligence, but because the commission balked at McIntosh's streamlined selection of the Orlando firm, that never happened. If the commission is going to accept the GUA's numbers, they should keep in mind that the lawyers who are crafting this deal stand to make millions of dollars if the bond issue goes through. That self-interest cannot be overlooked, and neither should the fact one of the lawyers, Brian Armstrong, worked for Florida Water before pitching this deal on behalf of the GUA.
Who will operate the system for the GUA until the county assumes the debt on the bonds and in approximately two years? Originally, the plan called for Florida Water to continue running the service, but now that is in question, according to the GUA. Or, will the county try to operate the utility with public employees? If that is the case, how much will it cost for personnel and equipment?
The commission will have difficulty answering those questions because the three people on their staff who are the most knowledgeable about this very complicated deal are McIntosh, Coller and Franchise Director Chuck Lewis. Unfortunately, the commissioners can no longer depend on any of them to provide objective opinions and independent analysis.
Lewis has admitted he accepted a gift from Hartman & Associates and that he used wording supplied by the firm, which also was his former employer, to write the bid specifications. McIntosh has shown such zeal for pushing this deal through that the board had to reprimand him for violating its policy on sole-source contracting. Meanwhile, Coller has defended those missteps by weaving tenuous legal arguments that are fitted better for covering McIntosh's backside than those of his bosses on the commission.
Urgency is unwarranted
In short, commissioners simply cannot rely on the advice of the people they are paying to be in the know.
Despite the overused rhetoric and emotional appeals from McIntosh and the GUA, there is no imminent threat of Hernando County's water supply being raided by outside interests, private or public. State law has sufficient provisions to prevent that now, and they likely will be strengthened in the Legislature's upcoming session.
The absence of a verifiable threat, the absence of objective opinions about the long-term effects of the buyout, and a lack of confidence in their staff should be enough to compel commissioners to postpone this idea for a while. The GUA can continue its pursuit of Florida Water's properties independently, or defer until the County Commission is in a better position to make an informed decision.
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