Osceola buys chunk of private water utility

Noelle Haner-Dorr
Staff Writer

APOPKA -- It's a done deal.

Seven Florida municipalities, including Osceola County, have coughed up millions to buy pieces of the state's largest private water utility, Florida Water Services Corp.

"The negotiations have been going on for a very long time," says Lonnie Groot, an attorney for Palm Coast. "But, in the past four months, things really picked up speed."

The road to this deal -- which involves just half of the utility -- is littered with two failed purchase offers, lawsuits, a government audit, legislative action, a gubernatorial veto and a legal debate over the jurisdiction of the Florida Public Service Commission.

The deal killer came earlier this year when a Leon County Circuit Court ruled that Florida Water Services would have to get approval from Florida's Public Service Commission, which regulates utilities, for any sale to a quasi-governmental authority.

Instead, the utility's parent company terminated the sale, and moved to sell pieces of the utility to those cities and counties already using it.

Each municipality will issue tax-exempt revenue bonds to make their purchases. All expect all of the deals to close before the end of the year.

More deals are to come.

Lisa Lochridge, a spokeswoman for the company, says about 80 systems remain in the utility. Although the company hopes to sell them to one buyer, it is talking to multiple buyers.

One of those is JEA, the quasi-governmental Jacksonville utility authority handling electric, water and sewer systems there. It has been negotiating the purchase of Florida Water Services' system in Duval County.

The system, which serves 5,488 water and 5,009 sewer customers, is expected to sell for roughly $25 million.

Other individual buyers include Marion and Nassau counties, as well as Amelia Island. All completed condemnation proceedings and purchased their utilities for $22.3 million, $17.2 million and $9.8 million respectively.

Additionally, Volusia County is working to purchase the portion of the utility serving Deltona.

According to David Byron, a spokesman for Volusia, county and city officials are working out the legal fine points. Says Byron, "I believe we will see a deal soon, and Deltona will end up
owning the system."