FGUA BOARD MEETING

NEXT FGUA BOARD MEETING MARCH 16 - 17 th in Golden Gate 10 - 2pm

Citrus County BOCC: Buy utility systems

By Terry Witt



Rejecting a staff recommendation, the Citrus County Commission voted 3-2 on Tuesday to purchase a government utility’s local 11 water and five sewer systems, estimated to be worth about $30 million.

Staff members advised against purchasing the Florida Governmental Utility Authority systems. Assistant County Administrator Tom Dick recited a long list of unrelated sewer and road projects he said had spread county staff thin, but he also said the systems FGUA owns would be better run if the county owned them.


Commissioner Vicki Phillips said the time had come to purchase FGUA systems. She described FGUA as an organization lacking in accountability, and she said the utility had a conflict of interest in the way it does business.

“We are doing the right thing. It’s now or never,” Phillips said. “We won’t be able to buy these systems in five years.”

Phillips’ motion to start the purchase process followed the defeat of a motion by Commissioner Jim Fowler to forego the purchase for three years. His motion died 3-2.

The approval of Phillips’ motion starts a long process. The county will have to conduct an inventory of FGUA’s property and prepare the necessary documents to finance the $29 million to $30 million purchase.

County Commissioner Dennis Damato supported staff’s recommendation to postpone purchasing systems for several years. Damato and Fowler agreed the timing wasn’t right and they wanted to take another look at the purchase when the county was in a better position to take on such a large project.

Conflict of interest?

But Commission Chairman Gary Bartell and Commissioner Joyce Valentino sided with Phillips, both citing the accountability issue. Bartell said he was also concerned about FGUA’s conflict of interest.

Phillips and Bartell were referring to the relationship between FGUA, a government organization that has no employees, and the private contractor that operates it, Government Services Group (GSG).

An acquisition assessment report by the county’s consultant, Rose, Sunstrom & Bentley, LLP, said the two firms have an intimate relationship and that “a potential conflict of interest exists” in the ownership arrangement.

The report said the Nabors law firm lobbied the Florida Legislature in 1997 for changes in the law that made government utilities like FGUA possible, and is now utility counsel and bond counsel for FGUA. The report said the law firm earned $752,711 in 2004 as counsel for FGUA.

The assessment report said three lawyers in the Nabors firm at one time held three of the five seats on GSG’s board of directors, and it said that GSG has been the only FGUA system manager since its creation in 1999. The Nabors firm no longer assists the board of directors. GSG receives a 3 percent fee for approved capital improvement projects, such as water line extensions.

Phillips said she had no confidence in FGUA’s promise that it would continue allowing the county to review its rates. She said FGUA had refused to give ground when the county demanded the right to review assessments for Pine Ridge and Citrus Springs. She said the utility relented only when its leaders were reminded that its agreement with the county gave the county Water and Wastewater Authority the power to make such reviews.

Little opposition

There was little opposition to the FGUA purchase at the meeting. Representatives of Pine Ridge and Sugarmill Woods, both of which are served by the government utility, said they had no opposition.

“We have no objection to the county taking over,” said Paul “Skip” Christiansen, president of the Sugarmill Woods Civic Association. “It’s always been assumed the county would take over.” FGUA’s contract with the county gives the county the option of buying the systems.

Tallahassee attorney Mike Twomey, representing the Pine Ridge Property Owners Association, said his clients want political accountability and they won’t get it without county ownership of FGUA’s systems.

He reminded commissioners that the last time he came to Citrus County it was to challenge FGUA’s plan to levy property assessments for water line extensions in Pine Ridge. FGUA initially claimed it was a government utility and could not be regulated by the county.

Twomey said county staff noted in their report that GSG has hired a public relations person to interact with residents. He questioned the value of such a move as it relates to accountability.

“What are they going to do, spin bringing those lift stations into compliance?” Twomey said.

Pine Ridge resident Robert Bennett said the community continues to have issues with water quality and quantity, and he urged commissioners to take over the system.

But Damato said the county has neither the staff nor the time to purchase FGUA’s systems at this time. He recommended allowing FGUA to continue as owner and establishing a strong relationship with FGUA to ensure compliance with the county’s requirements.

Damato suggested the board return in three to five years to reconsider the purchase. He also reminded commissioners of the mechanical problems with the systems FGUA owns. He said the county would inherit the cost of maintenance and repairs if it goes through with the purchase.

County staff estimated it would take $6 million to $8 million to bring FGUA’s systems up to minimum county standards, but John Jenkins, the county’s lead consultant, said the county could operate the systems for about $350,000 less than FGUA annually. He said the savings could be placed in reserve or used to finance about $6 million in improvements.