Details needed in hasty utility deal
© St. Petersburg Times
published September 24, 2002
When the Florida Governmental Utility Authority was making the pitch, almost all of the spectators were looking for a fastball. In fact, the FGUA hoped to end the game by buying the state's largest private utility, Florida Water Services, within the next couple of months.
But the FGUA, as well as most of the counties and cities where Florida Water operates its sewer and water plants, was thrown an unhittable curveball late last week. That's when a couple of small city governments in the Panhandle, operating as the Florida Water Services Authority, closed a deal to buy the utility for $471-million, which is significantly more than the $450-million the FGUA was prepared to pay.
Details are still emerging about how this megadeal came about so quietly and so quickly, and it raises more questions than it answers for governments where Florida Water's customers live:
Does this sale take away counties' or cities' authority to regulate rates or set standards of service? Will it prevent them from acquiring Florida Water's plants through condemnation proceedings? Will customers' rates rise? Can the Panhandle consortium now turn around and sell the systems individually or as a package deal to another buyer and, if it is an option, will the FGUA pursue such a deal?
It may take a boatload of lawyers floating down a river of taxpayers' cash to determine that, and threats about blocking the sale in court are already rising from some places where Florida Water has the most customers, including Citrus County, which has about 7,000 Florida Water customers, and Hernando County, which has roughly 33,000.
But the most pressing concern may be whether the newly formed Florida Water Services Authority actually had the power to purchase Florida Water Services without notifying any of the counties and cities where its 250,000 customers live.
If that were done without legally sufficient notification, then the deal
should be voided. But even if the letter of the disclosure law were followed, it falls woefully short of respecting the spirit of the law.
Regardless of whether you approve of the purchase agreement the FGUA has spent the past year putting together -- and was ready to formalize fairly soon -- Florida Water's unexpected sale to this new entity appears dubious. If nothing else, the Panhandle towns' offer is on the high side of what the FGUA and others believe is its actual worth. One wonders if the Florida Water Services Authority did its own due diligence, as most of the affected cities and counties did, in reaching the fair market appraisal.
The Citrus County Commission is expected to be briefed by its staff at today's regularly scheduled meeting. Without becoming a shill for the FGUA, the commission should be steadfast in pursuing the evolution and essentials of this atypical acquisition, with the priority being to protect the interests of its customers.
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