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If deal goes through, Aloha Utilities will cost $90.5-million

DADE CITY — The County Commission decided Tuesday that it's worth $90.5-million to get rid of the black, smelly water and the associated racket of complaints over Aloha Utilities.

The County Commission voted 5-0 to green-light the purchase of the private southwest Pasco utility by a public utility agency, the Florida Government Utility Authority. The money will come from customers' monthly water and wastewater bills, which will go up after the purchase closes Dec. 17.

Customers said they're willing to swallow a rate hike — from $55 now to $88 for monthly water and sewer service combined — plus 5 percent increases each year.

"Why should we suffer the higher rates for bad water?" asked customer John Andrews, a Trinity resident and member of the Committee for Better Water Now.

The county joined the utility authority to eventually acquire local private systems. The agency buys private utilities and runs them until local governments can take over.

Aloha, which has 25,000 customers, has been a target for acquisition after more than a decade of customers' complaints.

The last hurdle is expected to be passed today after the agency has a public hearing at 10 a.m. at the New Port Richey City Hall.

Agency officials had no trouble winning the commission's support for the $90.5-million sale, although county officials had previously estimated the utility was worth only $60-million to $70-million.

"It's just a basic right to have good, quality water," Commissioner Jack Mariano said.

The agency's review said the county estimate didn't take into account growth in the system, recently approved higher rates and improvements planned. And higher rates were necessary to pay the asking price.

The company's first asking price was $135-million, Brian Armstrong, the agency's lead negotiator, told the board. County officials say Aloha asked for even more before.

Still, the purchase price is above a common baseline, which is essentially $2,400 per home, Armstrong and county officials said. The agency is paying almost $3,000.

"There is no 'one size fits all,' " Armstrong said.

Besides buying the system, the agency will spend about $14-million to overhaul the utility, abandoning wells with black water and adding more connections to the county's system. Aloha's senior management, which didn't speak at Tuesday's meeting, is expected to be replaced. The company is supposed to be liable for any problems that happen before the deal closes.

David DeCamp can be reached at ddecamp@sptimes.com or (800) 333-7505, ext. 6232.

>>FAST FACTS

HUD aid program

In other business, Pasco officials scheduled a workshop in two weeks to discuss how to dole out the $19.6-million in federal Housing and Urban Development aid the county was awarded recently.

The money would go to a county program to buy, fix and sell foreclosed homes. Greg Armstrong, president of the West Pasco Board of Realtors, has urged commissioners to include real estate agents and banks in the program.

But county officials say they need to comb through legal restrictions on the program, including the income limits for buyers getting the help.

If deal goes through, Aloha Utilities will cost $90.5-million 10/07/08 [Last modified: Thursday, October 9, 2008 3:38pm]
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