County offers to buy private Summertree utility

Pasco tells its staff to offer $2 million for the system that serves Summertree.
After long-standing complaints about water quality and cost in the Summertree neighborhood, Pasco County is offering $2 million for the private system, owned by Utilities Inc. of Florida. iStockphoto.com
After long-standing complaints about water quality and cost in the Summertree neighborhood, Pasco County is offering $2 million for the private system, owned by Utilities Inc. of Florida.iStockphoto.com
Published April 30 2015

NEW PORT RICHEY — If you can't beat them, buy them.

That's the strategy being pursued by Pasco County as it seeks to remedy long-standing complaints about water quality and cost in the Summertree neighborhood. Last week, Pasco commissioners authorized their staff to offer $2 million for the private system, owned by Utilities Inc. of Florida, that serves 1,206 customers south of State Road 52 in west Pasco.

"I am delighted that the county has made the offer. This is the first chance that this community has to be able to get affordable water,'' said Anne Marie Ryan, leader of the ad hoc Summertree Water Alliance Task Force and a member of the county-formed steering committee trying to improve water quality and service for her and her neighbors.

A Utilities Inc. of Florida representative said the company was unable to comment because it had not yet received the county's proposal. But, it likely knew it would be coming, according to a county letter to utility president John Hoy, because the company suggested Pasco make a purchase offer.

Doing so cuts out the middleman, the Florida Government Utility Authority, which said in January that the utility had been reticent to provide financial information or allow the authority to inspect its premises.

Pasco joined the FGUA in 2008 as a precursor to trying to take public ownership of private water and sewer utilities, and the authority has since acquired Aloha Utilities and Lindrick Service Corp. in west Pasco and Mad Hatter Utilities in Land O'Lakes. But it was unable to even make an offer for Summertree, even though the company pledged in January "to do what is best for our customers and we are completely focused on that and working with all of the interested parties to that end.''

Assistant County Administrator Bruce Kennedy said the $2 million figure represents conservative assumptions and judgments of Summertree's revenues and expenses in the absence of the county's ability to perform thorough due diligence. In an April 14 memorandum to county commissioners, Kennedy said the offer "hopefully (will) stimulate the conversation and progress toward buy-out of this utility system.''

Commissioner Jack Mariano, who sits on the Summertree steering committee, agreed.

"At least it gives them a number for them to come talk to us. We do want to get to the table with them to go further,'' Mariano said.

That can't happen soon enough for the Summertree residents, who have complained for years about expensive but discolored water they say is unfit for drinking, cooking or clothes washing. In January, residents clad in red T-shirts jammed a highly charged commission meeting asking for county relief.

"We can't win against this corporation; they're killing us,'' Ryan said last week. "If they will sell to the county, all those horrible things will be over.''

Connecting the homes to the Pasco County system carries an estimated impact fee of $1 million, and, under state law, the private utility can profit by paying that fee upfront and then charging it back to residents for the next 22 years at a double-digit interest rate. If the county purchases the utility outright, the homeowners' connection costs likely would be financed by a short-term low-interest assessment charged through a municipal service unit.

Utilities of Florida Inc. acquired the private system serving Summertree, a 55-and-older community, in 1991. It never has been able to solve the complaints about yellow-colored water coming from customers' taps, despite charging rates that residents consider exorbitant.

"A sale,'' said Ryan, "would be the most advantageous thing for us and probably for them, too.''

Advertisement