Flagler County government—and Flagler County taxpayers—are now in the utility business. Bunnell city government and its taxpayers have also just taken on a utility that dwarfs their own: the two governments late Wednesday evening jointly voted to buy the troubled Plantation Bay utility, a wreckage of a 28-year-old water and sewer system serving about 1,600 customers, most of them in Volusia County, for $5.5 million.
The price is far more than the utility is worth, according to the Florida Government Utilities Authority, a coalition of local governments that specializes in analyzing and acquiring utilities. The price is also half a million higher than it was just last month. It does not include millions of dollars in needed repairs to a utility that, by all accounts, is in shoddy condition, providing water so poor that many Plantation Bay residents won’t drink it, and in need of top-down repairs. Its water wells are either unusable or incapable of meeting demand. And the deal takes on a utility that is currently in violation of Florida Department of Environmental Protection orders, which identify penalties and legal action.
Still, commissioners for both governments called the acquisition a matter of “public interest.”
Both commissions approved the deal by 4-1 votes. Both governments are essentially now joined at the hip in ownership and management of the utility through a complicated agreement that has Bunnell as the owner of record, but Flagler as its partner, with both governments having oversight for any spending above $50,000. Flagler wanted the utility because it gives it more authority over devising water and development policy in the future, and it gives it more leverage against Palm Coast, which has used its utility as a driver of development and annexations. But the county couldn’t acquire the utility on its own: it needed Bunnell, because only a municipality can apply for municipal grants and loans at far more generous terms than a county can. And the county will be needing those loans.
Significantly, three of the county commission’s five members—George Hanns, Charlie Ericksen and Barbara Revels—were in principle opposed to the deal and skeptical about many of the details, and verbalized their opposition. Yet Revels and Ericksen approved it anyway. Only John Rogers opposed the deal on the Bunnell City Copmmission. “I don’t think it’s fair to the city or the county, the price that we have to pay,” Rogers aid.
It was one of the most consequential decisions by the Flagler County Commission and the Bunnell City Commission in years. But it took place after 10 p.m. Wednesday evening, at the end of a four-hour set of joint meetings that had drawn only a handful of people, many of whom had left by the time the two governments voted. And it involved hundreds of pages of documentation that the 10 commissioners and the public never saw until the evening of the meeting, and hundreds more they could have seen for the first time only a few days earlier.
Wednesday’s meeting began later than any of the county commission’s business meetings ever do, and was held out of the public eye at the Emergency Operations Center, where it could not be televised (it was accessible by audio on the web). The deal—as complex as it is momentous for the future size of both governments, and the dollar amounts they’ll be levying and collecting—was arranged largely out of the purview of commissioners by Flagler County Manager Craig Coffey, Bunnell City Manager Armando Martinez, and Plantation Bay developer and, until last night, utility owner Mori Hosseini.
Hosseini’s name was never mentioned throughout, as commissioners oddly insisted on referring to him only as the “current owner of the Plantation Bay system,” as Commissioner George Hanns—who cast the only dissenting vote for the county in the deal—repeatedly did in a candid and striking sum-up top explain his vote. Hanns essentially said that he did not trust Hosseini—the same Hosseini who had previously contributed generously to Hanns’ campaign.
Hanns recalled his history of working with Hosseini since 1992 (as long as he’s been a county commissioner). He recounted broken promises along the way, with Hosseini floating one purchase price for—as one example—the property he owned for the Matanzas bridge overpass. “To the best of my recollection, we had an agreed-upon price, and when the appraisals came in, the appraisals were much higher than the agreed-upon price,” Hanns said. Hosseini, he said, “refused to renegotiate or close on the agreed-upon price, and instead, to the best of my recollection, chose to go with the higher price. In return, there was an unwritten understanding that there would be some compensation to the county, possibly a senior citizen’s center to be built, at the expense of the current owner of the Plantation Bay utility, and that was just one thing that didn’t work out.”
On the other hand, Hosseini frequently asked the commission for extensions and accommodations for his development, which were granted. Hanns frequently heard him promise that improvements to the Plantation Bay utility would be forthcoming. They weren’t. “It’s my personal feelings based on a long timed history of working with this developer on different things, and I quite frankly believe that it is not worth what is being asked,” Hanns said. “There is not many choices. But whatever the decision of this board will do, I will honor and respect it.”
Revels, too, made clear that she was voting as if on the precipice of a sewer pit: “I have had people call me and contact me about this issue that were not plantation bay residents, very opposed to this,” Revels said. “However, most of them were under the assumption it was going to cost them something, and they were asking why would we be so stupid to do this. On the other hand I was expecting to have an outcry from the Plantation Bay residents here tonight that would wait it out to say, don’t do this because you’ve overpaid a developer, and you are going to make us pay for it, which is what’s stated, which is in fact the case. So I have been opposed to it basically because I think it’s a bad deal. However, these people need to have better water, and with all kinds of reservations about this, and it being a bad deal, I’m going to support the motion.”
Ericksen also justified with vote under cover of “public interest,” while openly questioning the commission’s role: “Fundamentally I don’t believe that a city or county government should own a utility as many that I see eventually run into situations similar to this, where the city fails to keep up with the technology and maintenance, and or spends the revenue on other city projects,” Ericksens aid. “A utility should be a business, not a government. In this case though, 1,500 households have faithfully paid their water-sewer bills for years, rightfully assuming that the operator was maintaining the system. Now they will be asked, or forced, to pay additional for the developer’s errors and omissions. They’re being held hostage one way or the other. They’ll be the victims, forced to pay higher rates. Am I willing to right a wrong? Yes, but under certain circumstances. One, we must live up to the commitment to provide the quality product. The commission and the county administrator will be accountable to maintain quality, and as Harry Truman said, the buck stops here.”
Frank Meeker, who, like Ericksen, joined the commission in November, after five years at the Palm Coast City Council, was unreservedly supportive of the deal.
“I agree with our findings that there is a public benefit that needs to happen here,” Meeker said.
“The question is who’s going to provide that public benefit. I don’t believe that you can leave it with this existing facility that’s operating this facility. The FGUA made a play, but it was just kind of laughed off. I’m sure there’s other private entities that may want to do this, and not only absorb the additional $7, $8 million additional improvements, plus put a mark-up on top of that, which is going to cost the rates to go up even higher, and the last option is to fall along and work with the city of Bunnell to make this happen. The history in Flagler County is sometimes we don’t look far enough ahead vision-wide. I’m always reminded of what happened in Palm Coast.”
Meeker then recalled how Palm Coast had a chance to buy Florida Water for roughly $35 million, passed, then ended up buying the utility in 2003 for close to $100 million. “That’s where the vision part comes in.”
But Palm Coast is currently struggling to keep up with the utility’s demands—and saddling its 75,000 residents with a planned rate increase of 22 percent over three years.
Dudley Doright says
Naturally Mr. Meeker would vote for this as he owes allegiance to Hosseini as payback in getting him elected. The wonderful sheepeoples of Failure County have voted Meeker in and now his folly will prevail!
in palm coast says
Isn’t a part of Plantation Bay in Volusia county??
Carol says
most of it.
Sucker says
The city of Bunnell has a champaign appetite on a beer budget.
George Hanns my hat goes off too you! I guess your experience on the commission has made you a wiser man. Amazing how the developer keeps screwing everyone over and over again, and no one but Hanns is smart sought to see it, say it, and avoid it from happening again. Let us not forget how much this developer contributed to Meekers campaign, and that he may run for reelection in 2014.
This developer needs to be run out of our state and prohibited from doing any business in our county.
Who is responsible for scheduling the meeting at EOC where it wasn’t televised, and for rushing this and for not exposing facts until after some had left, and for voting on anything without more research and discussion?
John Rogers you too have proven to be a man of character. I guarantee the county is going to get the best end of this deal.
tulip says
Well, Mori Hosseini once again made a fortune for himself while again putting the screws to Flagler county.
confidential says
Well, well, those Plantation customers better be prepared for increases enough to cover after a while those needed loans of about 14 million plus interest to buy, repair and maintain their water utility that will total almost 14 thousand to each of them 1600 customers…Because for sure us Flagler County taxpayers except the Bunnell ones, involved in the deal should not be funding it as that utility does not serve us.
One clarification…was NOT Palm Coast that refused to buy thru its first right of refusal our utility for 35 million from ITT before 1999, as we were under the jurisdiction and authority of Flagler county as an unincorporated area. Palm Coast incorporated in 1999 well after the county and ITT together or just ITT manipulated the deal in favor of Florida Water to buy it for 35 million so after about 5 years could sell it to the City of Palm Coast for 89 millions….and was take it or leave it as we had Wall Street betting on it behind some obscure little towns names in the Florida panhandle. So (PC) we did the right thing in 2003 and had no choice but buying it or be under the Wall Street investors rates and foot.
This time I have to agree with Meeker as maybe the county now was pressured in the same way by Mori Housini..entertainned by other potential investors? and after the lesson taken from ITT to Florida Water’s bad deal in Palm Coast unincorporated area then, now decided to go ahead an buy the Plantation one.
Water utility generates a very good revenue and is a profitable business…when properly managed! The problem created now in Palm Coast is that their utility use the reserves account to fund, failed over expansion, doomed projects like the desalt plant, the widening of Old Kings Road south for a phantom Walmart, the lent plus 5 millions not refunded yet for the Town Center CRA and so many other projects we may not even be aware off, I know of some consultants for the Parkway east paid 75,000 just to convince us residents in the area “what was best to approve for the developers and of course that we had not right to oppose” and on top we footed the 75,000.
Mel Bronson says
SSSHHHHHhhhh….. let’s get this deal done in the dark before any of the public is any wiser.
Magnolia says
Is anybody interested in filing a lawsuit from the taxpayers, denying our agreement in this? Our city and county are struggling and they are burrowing money and driving us into debt irresponsibly, for a developer, the same developer making a fortune off our taxpayers while we receive nothing in return.
Class action lawsuit, anybody? We have the right to say no to this mounting, irresponsible debt.
I am beginning to think our politicians and developer belong in jail.
PJ says
The meeting had to held there because the GSB chambers could not have both boards seated at the same time.
So the EOC was eaiser and they could face each other with the powerpoint presentation between the boards.
Also it was advertised for everyone to be there in fact it was advertised by both boards. If people want to come this was their chance.
So no hiding out on this one!
Lastly at least this time the government did something to help people with a health risk issue. I think it is about time that a municipality came to fix an issue not just ignore it.
Poptart says
“However, these people need to have better water, and with all kinds of reservations about this, and it being a bad deal, I’m going to support the motion.” {Barbara Revells]. What! Being a bad deal and vote for it? Even though it’s a cesspool you want the taxpayers to bail out 1600 Plantation Bay homeowners that most don’t live in Flagler County. Why didn’t Volusia buy this? Bout time Hanns did the right thing.
Hosseini is a snake-in-the-grass and is laughing all the way to the bank.
Carol says
Lets hope they do better at water managing than they did at Fish Camp managing , Spending more of our taxes while telling us how broke the county is, if they would spend a fraction of this creating jobs in the county, I wouldnt mind paying more taxes if it meant my friends and family could get a job.
Magnolia says
Ever wonder why jobs and business is going on all around us, but not here? New restaurant opening every week in Daytona, but it takes YEARS to bring in Outback and Home Depot? Zaxby’s tried for over 5 months. City blames it on not filling out the paperwork correctly. We’re not filling out paperwork correctly, we keep voting these looters into office, over and over again. How many of you are receiving money from developers here? it is becoming obvious now what is happening here. Instead of repairing, opening up old shopping centers, you move on to the next developer, the next handout, the next payoff.
Mori Hooseini has received a staggering amount of millions from our politicians. I’d like to see his bank records and those of our politicians, including the city manager’s. Maybe the FBI can help us out?
How much are said politicians receiving in return? “First you opposed the measure and then you all agreed?” Are you out of your minds? Do you think Donald Trump is living here? WE LIVE HERE, the ones who are rapidly running through the last bit of savings we have. The only ones to benefit from these huge profits are the major developers and they have found a gold mine in Flagler County. We need to replace our council and commission, or send them straight to jail for malfeasance. Let’s see your records. Open them up. The same with the Chamber. Palm Coast REEEEEEEKS.
The city has been telling us they have been maintaining our water system. LIES! They have taken out millions from the fund.
Where was the PUC in all this? Hooseini’s plant is contaminated. Why did they not take control of it, as they are supposed to do and require him to fix it? It was privately owned. That is their role, to protect the citizens from things like this. What the hell have they been doing?
Everyone reading this needs to file a complaint with the PUC and the Governor’s office and the feds, if they’ll listen to you. You are being HAD here in Palm Coast. Oh, but you don’t care….you’re the ones who put the lobbyist for the builders and developers right on the council.
Jesus, people. What’s it going to take to get you to DO SOMETHING ABOUT THIS????
really? says
Why reward someone for poor business practices? It really sounds like a payoff to me. Why can’t Plantation Bay residents initiate a class action lawsuit against Hosseini? Another burden we are forced to endure.
Samuel Smith says
It’s because the mantra of “let them fail, the free market will fix everything” only applies when you’re rich and doing well. The minute the business model fails, or the investments tank, then all of that survival of the fittest randian economic philosophical crap gets thrown right out of the window and suddenly it’s the state’s responsibility to bail them out, which happens every time because guess what: it takes money to run for an office that matters, and that’s where the rich come in.
Vincent Liguori says
More water charges on top of Palm Coast’s $78 million and the beat goes on.
FRANK DILIBERTO says
LETS UNITE AND STOP THIS INSANE TRANSACTION WHILE WE STILL CAN !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thanks Meeker hope you do well in the reelection, money should be no problem.
tulip says
My guess is that Hanns voted ‘”no” because he was confident the majority vote would be yes. By voting “no” he looks like a hero for the next election and doesn’t need Mori’s money for campaigning. Mori had been told many times to fix that system and never did. Shame on the officials who allowed Mori to get away with not fixing the system. I wonder what the benefit was to the ones who “looked away.”
I realize owning a water system is a good thing because that will give the county control of our water system and how much to charge, and we won’t be held captive by some one else holding us hostage to pay whatever they chose to charge us, which could be a whole lot more.
It seems like all of a sudden costly changes are appearing on the scene. PC”s water, security cops, buying junky water systems—what’s next?
Charles Gardner says
Didn’t study the documents? Uninformed city and county officials? Those who spoke against it should have voted against it. Eyes wide shut?
Magnolia says
Mr. Gardner: Eyes open, hands out.
This should have gone before the voters. It now has every appearance of being fraud.
Diego Miller says
The County Commission and Mr. Coffey have once again screwed up. The Desalination plant was the best option. Flagler could have been the water capital of Florida. Another late nite, back room shady deal that violates the sunshine law. They fired Mr. David Haas, for undisclosed reasons, discharged Union employees and now buy a delapidated money pit.
Magnolia says
Mr. Miller, take a careful look to where Mr. Haas is currently employed.
The Honest One says
Mr Miller, in case you and everyone blogging here are not aware, Mr Haas is Mori H.’s riight hand man
Old Timer says
I’m already in the red for next years social security COLA and didn’t even get it yet, if there is a COLA increase next year? You think these people we elect care?
PJ says
Hanns vote no to it a “back at ya” Hosseini because of Hosseini’s action on the Matanzas property for the overpass. Hosseini is a fox and ruthless businessman. Hosseini owns alot of property and pushes his weight around. Go Check out the size of his building on Speedway proves my point. Ego!
Hanns mentioned this point about Matanzas propery overpass at the meeting and Hosseini’s false truths and promises. Hanns’s vote was cremonial at best.
Rogers did not get all the information as he may have missed the informative one-on-one meetings the City/County managers have. If you are not at such an important meeting then you missed critical information. Check with him on this, why he could not get there for his executive meeting. So his vote about the price was at best non-informed.
As far as Rogers saying the price is too high yes likely and we may all even agree with him here, but Meeker said it best. “I learned one thing from the Palm Coast plant purchase” “We should have bought the plant at 22m not the later price of 86mil”
When this plant is rebuilt and serving more customers the value will be big.
I’ve recently been accused of not having my facts straight or distorting them well you got them good this time.
Municipalities need to be in the utilities industry as thet are the responsible party to do so.
Good safe drinking water is not only a must but the requirement.
Hosseini may have likley put these folks health at risk with intentionally ignoring the water system.I hope the folks from the Plantation bay developement appreciates the help but from the number of folks that showed up it is highly unlikley.
So to all the pepole that will now come out of the woodwork and condem the County/Bunnell joint water works you would be better served to respect what they did as this gives bigger capacity to serve many more residents of Flagler county and southern Bunnell. ……….PJ
Magnolia says
PJ, NOBODY appreciates government run like this, millions to Mr. Hooseini who should have been made to pay for the repairs himself and not “flipping it” to us in the name of profit. This is not capitalism, IT IS FRAUD. It is why we have state agencies like the PUC who are supposed to be involved.
Are they on the payroll of Mr. Mori Hooseini as well or just incompetent? Either way, it must be investigated. If municipalities must be in the utilities industry, then the local government cannot be allowed to use them as a piggy bank. THAT IS FRAUD. WE have become Mori’s piggy bank. Do you expect us to believe kickbacks are not taking place?
People like you who think we should thank them for jilting and poisoning us in the name of “what’s good for you” are the problem here. We need to DEMAND an investigation. I’m done standing back while Palm Coast taxpayers are raped by their elected officials and this developer.
I encourage each of you to contact: the PUC, the Governor’s office, and the FBI, in that order with a copy of this article. These records ALL NEED TO BE OPENED for an investigation.
PJ says
Magnolia,
It does not look like both governments are trying do anything wrong here. I see it as they did get rid of the bad developer here, this time.
More important to us all is we do get a facility that both municipalities could use. Also that area is now not subject to or forced to take Palm Coast out of control water rates. Your concerns are well intentioned.
The state FDEP did nothing for years to this facility and they have the authority. The FBI alert should be there not with the County or Bunnell. How did Hosseini get away with that?
The County had no powers to just go in and claim the facility so the only logical way was to buy this clown out. Too bad he gets paid for it it bothers us all.
I hope those people get some ambulance chasing lawyer to sue Hosseini for all the monies paid to him over the years as he sat by and did nothing but produce bad water you can’t even bath in.
Please re-think your worry and consider the fact that this county government stood up on behalf of the people. Remember they did the same for the folks out in the mondex and put a drinking water well out there for them.
I think as a businessman they did a really good thing with a return that will be huge for all the taxpayers. I don’t like the price but sometimes you just have to make things happen for the bigger picture. I hope I was clear in some of my points here for you?…..PJ
Magnolia says
PJ, your points were excellent. But that does not excuse the fact that we paid MILLIONS for a plant that doesn’t work and that they knew this wasn’t right. Why did no one on the commission contact the FDEP? How about Meeker? Water is his specialty.
Now we are subjected to fines and God knows what else. I don’t consider taking chances like this, without the FDEP, or the PUC doing their jobs, to be good government. That looks like a payoff to me. And I don’t think you’re going to get any high 5’s from the citizens here over this one, either. Why didn’t they have the FDEP step in for an evaluation before making the deal? That would have been responsible government.
I do agree on one thing. Hosseini needs to be sued and I would include the County. That will ensure they never do something like this again outside the government agency process. The deal stunk from day one or it would have gone through that process.
We all want the same things you do, PJ, believe me. But you don’t get to cut corners like this to get there. You owe that much to the people of Flagler County.
Carol says
I dont think the water plant was bought to serve the residents of Flagler County, it was bought to make money off the residents of Plantation Bay which is mostly in Volusia county. ???
confidential says
Magnolia we can even think about a taxpayers class action lawsuit against this consummated deal if before we do not check what is that the Flagler County Charter and also Bunnell’s Charter (if you are their resident) reads regarding utility services to be provided and right to purchase them without a referendum. Because even about the time back when these charters were written those developers had their interest covered all over the print.
Regarding PJ’s comment ,I have to agree with him this time as when in 2003 we, in Palm Coast bought the utility from Florida Water for 89 million and we were about maybe 50,000 served, then at a cost of about $1780 per customer. Now a 5.5 million to 1600 customers to start with the cost per customer double at over $3,400 each. without counting the 8 million at least required for needed and mandated improvement . Like Palm Coast paid 89 million and needed inmediately about 60 million on improvements. Probably some hedge fund from Wall Street will buy it from Hosseini if county and Bunnell won’t. Hope ultimately becomes a good business and not another fiasco.
Magnolia says
Confidential, I doubt very seriously that a Wall Street hedge fund would be interested in Hooseini’s broken down, polluted system. They would have had the PUC seize it, force him to bring it up to code first, as the law says they are supposed to do. Pretty soon nothing in this area will be worth anything if this gang are allowed to keep funding developers.
It will take millions to bring it up to standards and the citizens will pay for that and any fines imposed in the meantime. We’ll be paying millions before it’s even fit to drink. Do you seriously think this is going to attract people to move to this area? Most wouldn’t touch it the way it is run now. There is a reason this country has a horrible business reputation in Florida. Those who tried this down south are in jail for much less.
We have legal recourse. We can ask for an investigation of all parties involved. Why do we continue to build out to suit developers when our population is not growing? Have you missed the acres and acres of projects begun by developers going nowhere? Have you missed the fortune Hooseini is making off Flagler, the PEOPLE of Flagler?
We have a right to demand they open the books. And investigation will verify what is going on here, since the PUC were clearly not watching this one. Demand on or expect to be robbed blind.
m&m says
You get what and who you voted for..
Popp3084 says
Good job city of Bunnell now we can provide municipal services to the southern part of the county and we can get some much needed income to the city
Justice For All says
And they’ll keep passing legislation at the County and City Public Hearings because no one goes or cares. Is it because citizens have given up because the it’s the same old ding dong. And the music keeps playing on and no one listens.
Wasted says
13.1 million dollars has been wasted again. WASTED!!!! No wonder our taxes are going to be increased. They should of voted No! If our commissioners were working for us don’t you think they would of voted No! Instead they brought a 5.5 million dollar junk yard, that needs over 8 million in repairs. A plan would have been in place for like Allen Peterson said for a county take over. And as far as Bunnell running the water and sewer, there water is horrible just ask anyone who lives there. The employees at the courthouse won’t even drink it.
Mel Bronson says
The politicians starting at the top with Pres. Broke Obama operate with complete immunity as the SNEER at the public. They know the media will cover for them and keep the public ignorant, confused and gullible.
The local government is just as culpable as they watch the Federal Obama administration and Congress screw the people over an over and over and over and over and over.n
confidential says
Mel please leave Obama out of it, as most local elected one’s and administrators deciding it all by majority, are Republicans.
@ Magnolia I agree, maybe the FBI should be called in…like done on Broward and Dade before, in order to back out of this Hosseini deal….and just let the hedge fund manager take it. Back in 2003 we had to fight for our PC utility against some hedge funds behind the names of city of Milton, etc in the panhandle,.
Plantation BayResident says
I think the residents of Plantation Bay, together with Flagler County and Bunnell should file a class action negligence suit against St. Johns Water Management and FDEP and try to recover punitive damages for those of ‘us’ whose health was ‘allowed’ to be put at risk and ‘Pray to the court for a final order including actual damages – the costs make the necessary repairs/replacements to bring the water into safety standards as well as total reimbursement of all legal fees ( including expert witness fees) and court costs……. Our tax money PAYS these two state agencies who in my lay opinion are jointly 100% responsible for the current condition of this utilty that thousands of people are affected by, including a local doctor and vet and other entities outside of Plantation Bay as well as inside Plantation Bay.
PB Prestwick Section Resident says
I’ve lived in PB for nearly 10 yrs. Let me tell you about “BAD” water. It can kill you! Living at the end of the water line, I have had black stuff coming out of my faucets from the day we moved in. I am one of those people in PB that won’t drink the water. It’s obvious to me that Flagler County and Bunnell are buying into a mess. We have had “Boil Water” signs up in the Preswick section many times. It’s an inconvenience but I always thought that the management of our water was going to provide good water and that boiling water for a few days would be worth it. Not so. There are contaminents in our water. We get mailed reports now and then indicating what kinds of bacteria are being treated.and with what chemicals…sometimes these mailings actually state that in some cases the treatments (chemicals) may cause cancer. Ugh! Mr. Hosseini should be ashamed of himself for allowing this to continue for as long as it has. It’s criminal and in my opinion, he should be punished not rewarded. It makes me sick to think that he can make a profit from this whole thing. Taking legal action makes sense.