If anyone had serious doubts about the validity of Bunnell and Flagler County acquiring the decrepit Plantation Bay utility for more than $6 million—at least twice its value—most of those doubts were dispelled Thursday evening. The reason: Plantation Bay residents themselves want their local governments to take over the utility, and desperately want to be rid of its current ownership by Plantation Bay developer Mori Hosseini, who’s let the utility decay over the years.
Some 85 residents of Plantation Bay filled a meeting hall at St. Mary’s Catholic Church in Korona to hear county and Bunnell officials answer dozens of their questions and concerns. County Administrator Craig Coffey, Bunnell City Manager Armando Martinez and County Commission Chairman Nate McLaughlin, each dressed in a suit, answered questions for 90 minutes in turns, often candidly and at times incompletely, passing the buck either to the absent Hosseini (without naming him) or to the uncertainty of the future.
Residents had many concerns and anxieties about the future—whether they’d be taxed more (no), how far their rates would go up (50 percent by 2018), whether Volusia County residents, who account for half the development’s population, would pay more than Flagler residents (no), and why the county and the city were paying so much for a troubled plant (to avoid litigation and get going on cleaning up the water).
Despite lingering questions, two residents summed up the sense of the community. At the beginning of the meeting, Jane Gentile-Youd pointed to a folder full of the boil-water notices she’s been collecting since 2005, and spoke of how tired she was of those notices. At the end of the meeting, another resident stood up and said: “I don’t know how many people agree with me but we have been residents of Plantation Bay since 2001, and—god, I’m so happy that you guys have come along.”
It appeared that most of the people in the hall agreed with him, because the hall erupted in applause.
It was that sort of response that convinced even those who may have had second thoughts about the deal to more assuredly support it. Those included John Rogers, the only Bunnell city commissioner who voted against the deal last month; Charlie Ericksen, the county commissioner who earlier this week floated a motion to rescind the deal; and McLaughlin, who said he would have readily walked away from the deal had he heard an outcry from Plantation Bay residents to do so.
“Today’s meeting you heard the cry of the people,” Rogers said after the meeting. “It softened my heart toward the purchase. I still think it’s an awful lot of money, and we’re giving away the farm, and we have to rebuild the thing from the ground up. But I heard the citizens there. I will say this, that people I have spoken with in the city limits of Bunnell were not in favor of this purchase.”
“That’s because they don’t understand,” fellow-commissioner Elbert Tucker said, “that the residents of Plantation bay are the ones who are going to pay for it.”
Coffey told the residents that it was either that price or “a long, protracted legal battle.”
“If I came in here tonight,” McLaughlin had told the assembly, “if you all came in and said, do not do this, leave us alone, we’ll handle our own problems, if you had said that to me, we’d probably, the commission would probably walk away. But what I’m seeing in your faces is that you understand that we understand your dilemma, and we’re in this together, so if there’s anyone who really thinks it’s just the worst idea to ever come down the road that you control your own utility, just speak now or forever hold your peace. Other than you, Russ.”
McLaughlin was referring to Russ Reinke, who chairs the county’s planning and zoning board and has been its conscience on the Plantation Bay deal (which won’t be signed until May). Reinke had to remind the trio of county and city officials that absent from the advertised selling price of $5.5 million was the 150 credits for development impact fees that Hosseini is also getting, and an additional 400 impact fee credits in the form of a cap. In other words, the county pledged to cap 400 additional impact fees at $6,500 each. The combined value of the credits could add upwards of $600,000 in costs to the county.
That, of course, is without going into the costs of repairing, and in the case of the sewer plant, virtually rebuilding, the 28-year-old utility, which currently serves 1,600 customers. The repair costs for the water plant are estimated at $2.4 million by the Florida Government Utilities Authority, those of the sewer plant at $3.9 million. Those figures are two years old. Coffey, the county administrator, expects to finance $7 million in repair costs in addition to the purchasing costs, and the credits.
Bunnell and county officials aren’t denying that Hosseini is getting more money than the utility is worth. “He’s getting a good deal,” is how McLaughlin put it, though Tucker, the Bunnell city commissioner who voted for the acquisition, put it more bluntly: “He’s taking advantage,” Tucker said. “He’s getting a good deal at the expense of those who’ll wind up paying for the deal, that’s the people of Plantation Bay.”
Residents were curious about the county and the city teaming up to buy the utility. “I’d like to know, what’s in it for Bunnell? I man, why are they doing it? This Lone Ranger thing scares me,” a Plantation Bay resident said at one point.
Coffey and Martinez said it was a good deal for residents, and that neither the city nor the county could have done it as easily without the other. “It’s basically being a good neighbor to my county, we feel good that they came to us, and what we’re trying to do is work together,” Martinez said.
True, but that’s not the whole picture. Both county and city know that by controlling water utilities, they also control development strategy—and operate an enterprise that can generate cash and subsidize government operations. Higher water and sewer rates, in other words, are used to keep property taxes lower than they otherwise would be. For the county, there is an added incentive to go into the utility business: To hedge off Palm Coast’s use of its own utility and water lines as an instrument of annexation. Under Florida law, the local government that provides water and sewer service to residents outside of a city limit may annex those residents. Bunnell, too, is already in the utility business.
So local governments’ motive to get into the utility business is not just a good-neighbor thing. In Flagler County’s case, it is especially not: it is positioning the county to keep Palm Coast from being too much of a neighbor, and it is using Bunnell for leverage.
The county is the driving force behind the purchase, but the county cannot secure grants nor can it secure 30-year loans to finance the project, as cities can. So by joining with Bunnell, the county is piggy-backing on Bunnell’s ability to secure those advantages. “Doing it without them would have been a lot more expensive over time,” McLaughlin said.
Coffey revealed on Thursday evening to what extent the arrangement is a marriage of convenience, and that a divorce may take place in the future. “At some point they may fade out of the picture and it may be just Flagler County,” Coffey said of Bunnell.
As for costs, Coffey said Plantation Bay rate payers will see an immediate 30 percent increase in rates, then 5 percent a year for four years, a prospect that generated little reaction from the residents.
In sum, the residents and the two governments may have vastly different motives regarding the purchase of the utility away from Hosseini. But the end result, at least as far as Plantation Bay residents are concerned, converge: the utility would be in more reliable, more accountable hands, and the promise of repairs and cleaner water could be relied on. For the county and Bunnell, that convergence is the necessary political oil to make the deal go through, despite its cost—and even as it leaves mostly unspoken the county’s larger aims: to be in the utility business both to generate new cash in a severely restricted property-tax environment, and to pl;ay a heavier strategic role in defining development’s path in Flagler County, especially as a counterweight to Palm Coast.
Thursday’s meeting appeared to seal the deal.
“Now that I’ve come here and I’ve had this, I’m sold, and I want to move forward” McLaughlin concluded after the meeting. “For me, especially as the signature on this as the chair this year, I’d have signed the paper, and I couldn’t do that without having this meeting first.” He added: “I’m convinced now that this is the right thing to do, this is what they want, this is what they feel they need, and I’m convinced of their desire for us to do it.”
Even Ericksen, the county commissioner who’d moved to rescind the Plantation bay purchase earlier this week, was more comfortable about the deal after the meeting. But if he’s convinced that residents want Bunnell and the county to buy the utility, he’s less convinced that the two governments are doing the job properly.
“The reason I wanted to rescind is that I think the commissioners have questions that didn’t come up, similar to the ones that the rate-payers had. I think this was an excellent meeting. If I was a rate-payer, this was an excellent meeting,” Ericksen said. “I’m still concerned with the time it’s taking to get a contract that the commissioners only had two hours to talk about, approved. I understand there are still issues with that contract. I asked, during the last meeting, what was the status of the title insurance. According to them, it has to be done within two months of May 30, which is a week and a half from today. The answer was that it was partially done, it took them longer to get the title information, but they will get the title done. I’m used to working with deadlines, I’m used to communicating with the decision-makers the status of where we’re going, what’s still yet to be done, and I still don’t think we have all the information. What I was trying to do is just to get the motion to rescind seconded, so that we could have an honest discussion, and I could hear what the further questions of the board members were, of the county administrator. I think this should be done, but I want answers as to why it’s taking so long to get a contract signed. I can’t sit down, Coffey can’t tell me what other commissioners’ questions are. I want the whole commission to have the benefit of what other people are hearing and saying.”
Bunnell Mayor Catherine Robinson and Commissioner-elect Bill Baxley also attended the meeting.