Commissioners postpone decision about utility purchase (Citrus Springs)

By Terry Witt

Faced with conflicting information, Citrus County commissioners Tuesday postponed a decision on whether to move forward with the purchase of the Florida Governmental Utility Authority’s water and sewer systems in Citrus County.

Commissioners voted instead to pay an additional $25,000 to the law firm of Rose, Sundstrom & Bentley, the consultant that prepared a report for the board on the proposed purchase, to perform more detailed studies on how FGUA’s customers and the county might be impacted by the purchase.

The firm has already been paid $50,000 for the preliminary study.

The board also told its consultants to meet with FGUA officials to discuss why the numbers cited in their report are in conflict with FGUA’s numbers.

FGUA purchased 11 water utilities and five wastewater utilities from Florida Water Services Corp. in November 2003, but customers have complained since that time about the organization’s lack of accountability. FGUA has no elected officials on its governing board and the organization initially claimed that it was not subject to county or state regulation.

The commission’s interest in purchasing FGUA’s system was due in part to FGUA attempts to impose property assessments to pay for water line extensions and water line maintenance in Citrus Springs and Pine Ridge without county approval. Commissioners insisted on having the assessments reviewed by a local board.

FGUA relented and allowed the Citrus County Water and Wastewater Authority to review the assessments, but by then commissioners had begun discussing the possibility of buying FGUA’s systems in Citrus County. The county has an agreement with FGUA that gives it the right to make such a purchase.

However, FGUA officials claim the county would be better off if the utilities remained in FGUA ownership.

At Tuesday’s meeting, FGUA’s financial expert, David Miles, questioned the consultant’s conclusion that the county could operate FGUA’s 11 water and five sewer systems in Citrus County at a lower cost and with lower rates.

However, attorney John R. Jenkins, who headed the study, stood by the numbers and noted Miles, who is employed by Government Services Group, a for-profit organization that manages FGUA’s utilities, has a vested interest in FGUA retaining ownership.

Miles also alleged Jenkins had used inaccurate numbers to conclude FGUA would be forced to raise water and sewer rates by 11.55 percent by the year 2009.

Jenkins responded there was nothing wrong with the numbers but that he had made less-optimistic assumptions about customer and revenue growth than Miles, and his more conservative approach resulted in different conclusions.

Board members tentatively agreed to meet in special session on Jan. 17 to listen to revised numbers about the proposed county purchase. They will make a final decision on whether to hold the special meeting at the regularly scheduled Jan. 10 commission meeting. The proposed purchase will also be discussed on Jan. 10.

Commissioners also instructed Assistant County Administrator Tom Dick and Utilities Regulatory Director Robert Knight to head a county government team that will examine the financial and staff impacts that might occur if the county bought the FGUA systems and managed them in-house, or if the county hired a contractor to do the work. Citrus County Utilties, the county-owned system, would triple in size if FGUA’s utilities were added to it.

County Administrator Richard Wesch, who sits on FGUA’s board of directors and is Dick’s supervisor, was told he could not be a party to the staff study or the discussions between FGUA and the board’s consultant. Commissioner Vicki Phillips said he had a conflict of interest.