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Authority strikes $16.8M deal to buy Lindrick utility in Pasco

NEW PORT RICHEY — The public agency that bought Aloha Utilities has hammered out a $16.8 million deal to buy another private utility: Lindrick Service Corp., which has more than 4,600 customers in the New Port Richey waterfront area.

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Lindrick and the Florida Governmental Utility Authority have been negotiating for well over a year. Last month, amid a standstill in negotiations, Lindrick proposed raising its water and wastewater rates by nearly 60 percent — a figure that later went up to 66 percent — but then informed state regulators it could not meet key filing deadlines.

Negotiations started up again. Brian Armstrong, an attorney for the authority, told Pasco commissioners Tuesday that if the authority moves forward with the sale, then customers would still see rate increases to help offset about $4.25 million in capital improvements.

But the increases would be about half as much as Lindrick requested, he said, and phased in over a three-year period with the largest hike in the first year, around 15 to 20 percent.

Pasco County joined the authority last year with an eye toward scooping up about 10 of the small private utilities around the county. The authority's board, which consists of representatives of its member governments, expects to vote on the contract by November.

Lindrick officials were not on hand at Tuesday's meeting, but Armstrong said the contract appeared to be close to having their support as well.

"I think it's a pretty firm handshake," he said.

Armstrong also told commissioners that the authority wants to buy four smaller utilities — Colonial Manor, Virginia Cities, Pasco Utilities Inc. and Dixie Grove — for $4.25 million.

Officials want to finance the purchase of Lindrick and the package of smaller utilities through one bond offering. The goal is to close on both sales by the end of this year.

Lindrick president Joe Borda has been seeking $23 million for the utility, Armstrong said, and that figure included compensation for future connections within the Lindrick service area.

The proposed new price of $16.8 million does not include so-called futures, but the contract would give Borda credits so that he would not owe connection fees on his 400 lots when they are developed.

Under the authority's proposal, the $4.25 million in capital improvements include replacing a water main along Floramar Terrace and rehabilitating lift stations. When it was floating the idea of a rate hike, Lindrick had told regulators it expected to make $10 million in capital improvements, including the installation of a new reverse osmosis water treatment plant.

Armstrong said in an interview that the authority expects to make a much smaller investment in capital improvements because it expects to save money by purchasing water from the city of New Port Richey.

Commissioners said they supported the proposed purchase.

"To finally put this together, to take that next step, is fantastic," Chairman Jack Mariano said.

"I believe this is absolutely the right thing to do," Commissioner Michael Cox said.

Jodie Tillman can be reached at [email protected] or (727) 869-6247.

Authority strikes $16.8M deal to buy Lindrick utility in Pasco 10/20/09 [Last modified: Tuesday, October 20, 2009 8:53pm]
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