Six years ago, the Flagler County Commission, behind then-Administrator Craig Coffey’s deal-making, agreed to buy the Plantation Bay utility from developer Mori Hosseini for $5.5 million in a late-night vote despite public qualms that the county was acquiring a clunker, an official government consortium’s analysts that placed the utility’s value at no more than $1 million, and the reservations of three commissioners, though two voted for the deal anyway.
The acquisition proved to be a nightmare, and the utility far more expensive to fix and run than Coffey and his supporting commissioners had claimed at the time: the county accumulated a $13 million debt from three loans. The county is looking for a bail-out–both for the debt and to be rid of the utility.
Only one commissioner is still on the commission from those who voted for the deal: Charlie Ericksen. He’d voted for it despite his reservations. He remained entirely quiet Monday evening as commissioners and county officials in turn spoke in the most candid terms yet about the bad deal, about the terrible water quality residents have endured since (contradicting public claims–in effect, lies–by county officials to the contrary over the years), about the county’s incompetence as a utility operator, about the county’s dismal prospects of getting rid of the utility, and about one silver lining–the deal County Administrator Jerry Cameron arranged with the Florida Government Utility Authority to take over management for now, to the county’s substantial relief, but also at the substantial cost of $1.6 million a year.
Some of those confessional statements: “We had not been able to improve water quality, which was totally unacceptable” (Cameron). “We don’t have core competency in this area and we don’t have the proper qualified staff to be able to do that” (Commissioner Donald O’Brien). “It turns out that we the county is not the best organization talent wise and organization wise to run water treatment plant… We’re not going to build a reverse osmosis plant anymore” (Commissioner Dave Sullivan). “We’re just going to have a professional administration that is going to improve the situation for the residents of Plantation Bay, which is our responsibility” (County Attorney Al Hadeed).
It was as much a surrender to reality as it was a reversion to the deal the Florida Government Utility Authority had recommended six years ago, before the big debt, before the continued hardships to customers, the higher utility bills and the county’s many deceptions along the way, in a previous administration that had become skilled at making opaque, financially burdensome and questionable deals.
“We actually attempted to have the transaction from the developer to FGUA in 2010, 11, 12, and the developer refused to engage in that transaction,” Hadeed told the commission Monday evening, still avoiding mentioning Hosseini’s name openly (Hosseini is a politically powerful developer who’s frequently contributed to Flagler commissioners’ campaigns in the past, and whose Flagler deputy, David Haas, was a Flagler County administrator). “So it’s just come around,” Haded said.
The confessional aspect of Monday’s commission meeting was incidental to the issue before commissioners: a deal with FGUA to take over management. But because of the deal’s cost and an upcoming town hall meeting with Plantation Bay residents to explain the deal, in January, Cameron took time to place the matter in context–and to place a very large distance between himself, the 2013 deal and its catastrophic consequences.
“We were proceeding on information provided to me when I first got here with regards to what was going to be required to put our utility on a firm footing, comply with consent orders, and take steps to immediately improve water quality,” Cameron said. (Coffey and his deputy administrator are gone, but most of the rest of the administration is still in place.) “After approximately five or six months, it became clear to me that I was developing many questions that I was not able to get answered, and in spite of working with some consultants, we had not been able to improve water quality, which was totally unacceptable, because the water was in such bad shape that we were getting multiple complaints even daily with regard to that water quality. A little research showed that the water quality had never been acceptable during the time that we were managing the utility.”
That alone was a startling revelation: for six years, the county had delivered “unacceptable” water to residents of Plantation Bay.
Cameron sought advice and was directed to talk to the Florida Governmental Utility Authority, a consortium of 13 counties that runs the authority and provides water and sewer service to 100,000 customers (Cameron had mistakenly said 1 million). “They gave me definitive answers as to why we were having the problems that we were having,” Cameron said. “I gave them authorization to take over the operation of the utility for several weeks in order to see if they applied what they had discovered and applied corrective actions if we would indeed see the result. They assured me that I would see the result. As a result of that very short experiment, the water quality came up to really good quality water for the first time in anybody’s memory out there. As a result of that, I entered into discussions with them about possibly taking over the management of the utility. During that period of time that they would be managing it, we will look and see at the possibilities of us divesting ourselves of the utility.”
But divestiture is not likely any time soon.
“The possibility of turning that utility around over to anyone right now is nil, because of the tremendous debt load,” Cameron said. “You can’t make it up through substantially increasing rates, because they’re already the second-highest in the region.”
Based on the county’s current budget, the combined water and sewer utility generate revenue of $2.33 million from customers, but have an annual debt-service charges of $809,000, operating expenses of $938,000, and personnel expenses of $648,000. (Fore the water utility alone, revenue from customer billing is $1 million, personnel expenses are $327,000, operating expenses are $480,000, and debt service is $335,000, half of it principal, half of it interest.)
The actual loan for the acquisition of the entire Plantation Bay plant was $5.68 million, at an interest rate of 2.37 percent over 30 years. But that was just one loan, which started coming due in 2015 and won’t be paid off until 2043. Total cost: $8.1 million.
The county also borrowed $387,000 to repair the sewer plant, at 2.12 percent interest over 20 years. Total cost: $483,000. And it borrowed $3.8 million for the water system, at 3 percent interest over 15 years. Total cost: $4.7 million.
So the county’s combined debt at Plantation Bay is actually $13.3 million.
And of course that doesn’t reflect all of the county’s utility debts: the county is also paying on a $6 million loan for the Beverly Beach-Eagle Lakes utility, paying $156,000 a year for that. (See all those budget and debt figures broken down, according to the current county budget, here, though the debt chart on the $3.8 million loan reflects an earlier chart. The revised chart us here.)
The county is working with the Department of Environmental Protection, its legislators and its lobbyists to hunt for a debt bail-out (“to see if the large debt can be mitigated,” in Cameron’s words). Meanwhile, FGUA will do the job, which could be more permanent than temporary. “These are interim measures we’re putting in pending figuring out how to divest ourselves of that utility in the future. But if we can’t do that, we still have the options to enter into permanent management agreements with them,” Cameron said.
“The expertise they applied achieved amazing results,” he continued, now using language as familiar as language once used by his predecessor to describe water improvements at the utility. “The week before they took over management, I would not have been comfortable bathing in the water. Two weeks after they took over the management, I don’t hesitate to drink it, it’s just the same as bottled water that I have sitting on the desk here.”
Not so fast, Helen Siegel, a board member on the Plantation Bay homeowners’ association, said: “It has improved somewhat. But the water is not as good as it ever was today, in Plantation Bay. The water is still yellow,” she said. And Siegel agreed with another Plantation Bay resident who addressed the commission: the county should not vote on the agreement with FGUA before the town hall meeting on Jan. 22.
Jane Gentile-Youd, the Plantation bay resident who became a permanent fixture in the commission’s public comment segment, largely over Plantation Bay issues–she ran for a county commission in 2018–thanked Cameron for his candor, but said that was not the issue: “Nothing should be executed that contains our personal funds ever again until we have a town hall meeting,” Gentile-Youd said. “I am sure this FGUA would have no problem continuing on an interim basis just for a month until we have a town hall meeting, and let them keep on going on a temporary basis they are now. I have been getting many, many requests from people, including one of the officers of the board of directors, who specifically asks that at the town meeting, that Mr. Cameron be in charge, and that Mr. Mullins not attend the meeting.” Joe Mullins is a county commissioner who’s had verbal confrontations with Gentile-Youd, and vice versa, though it is unusual for a commissioner to be asked not to be present at a public meeting. “But I explained to this officer of our board of directors that that is a decision Mr. Mullins himself will have to make, but it’s been requested that he not be there.”
Cameron and Sullivan said nothing is irreversible about the deal with FGUA. The issue Monday was to approve new management oversight. “We’re not in the divestment conversation yet,” O’Brien said. “That will come another time after there’s been a full presentation to the community and the public, and then we can discuss the pros and cons of that decision.”
Commissioners unanimously approved the agreement.
Coffey paid $5.5 mill for a piece of crap that was appraised at approx $1 mill???i was at the meeting the plantation bay residents when we were given the report from an engineering co. We were told the entire system was in deplorable condition , tanks were damaged, the emergency generator was worthless and the electric supply to it was a wire running through the trees. At the time of meeting we were also advised that Mori Hussein’s had been given numerous violations for failure to maintain this system , He never paid the violations and he never did any of the necessary work to correct the violations. Mr Coffey along with Bunnell city manager were at this meeting and he referred to himself as the Lone Ranger and the Bunnell manager as But now we know who was held up . Coffey walks and we take all his incompetent decisions and pay pay pay. Why should have any confidence in what the present Bocc or Mr Cameron do now ?????tax payers of Flagler we have been raped by our politicians they screw up and no one is held responsible they have pretty good protection because they know the people elected behind them will do nothing to correct the incompetencies of previous officials… NOOOOO I don’t want Mullin at our town hall meeting and I voted for that man .Big mouth and nothing else he comes here from Ga and we fall for his crap WE WERE WARNED ….
I am glad I could smell a rat and didn’t vote for none of the one’s responsible that bought this useless utility and gave Houseini 5.5 millions for that garbage that neither for free should have gotten six years ago. I neither voted for the one’s in BOCC today. My honest choices lost for just few ballots. This is the ill manner on which they waste specially Palmcoaster’s hard earned taxes as we keep paying this county for non services double the taxes we pay to the city of Palm Coast. Meanwhile the county commissioners underpay the sheriff for no less than 600,000 needed for more traffic units in the largest county city that has 989 residents per square mile versus the county 189 per square mile while they force us to fund these thievery in favor of developers. What about Houseini selling his castle inside Plantation Bay and refund us the 5.5 million for the lemon handed to the county other than donating campus halls to Daytona College to perpetuate his name? Does he drink and bathe in that same water the rest of the members use inside his HOA?
Why don’t the commissioners stop trying to keep developers happy and think about working for their constituents.
Tom Brady says
The developers are why they’re commissioners.
You are all MAGA people you deserve it
Simply Amazing says
Amazing that another example of Heidi Petito’s incompetence is being swept under the rug and hidden my Jerry Cameron. Add this to the lies about Captains and Bings, transportation issues, parks, Sheriff’s Office, Sear’s building, and the old bank on Old Kings. What does she have on him?
Sure looks like the county should stay away from buying things. Lost its ass hare, on the old hospital, the bank building it bought, and the Sears building. Looks like they have more money than brains. Pretty sad. Poor decisions like that from others would bankrupt them
Edith Campins says
Another case where the chickens are coming home to roost. This was a corrupt deal and everyone knew it. Just like overpaying for the Sheriff’s building, just like overpaying for the mold infested Sears building we didn’t even have a use for. The Flagler County Commission is driving us into bankruptcy, one deal at a time.
Drop a bomb on it and be done with it. Also get rid of the governmental corruption in this county/city that put people in this situation to begin with. Enough is ENOUGH!
Percy's mother says
QUESTIONS: (for FlaglerLive)
1. Was there a realtor involved in the original transaction?
2. Is it possible to find out which Flagler County commissioners received contributions from Mr. Hosseini?
3. Due to my not wanting to look it up, is Charlie Ericksen running for re-election?
1. If Joe Mullins wants to attend a town meeting regarding this problem, he can attend the town meeting (Ms. Gentile-Youd). What the hell is this country coming to? Joe Mullins speaks what he thinks, and that’s okay by me. At least he has the guts to speak what he thinks.
2. As a Flagler County resident, I do not want to subside the Plantation Bay residents with my tax dollars.
Contributions are listed on the elections supervisor’s office going back to 2012. Curiously, that year of the three candidates who ran and won–Barbara Revels, Frank meeker and George Hanns–only Hanns in the past had taken contributions from Hosseini, but he was the only commissioner to vote against the deal. Revels and Meeker voted for. Ericksen is not running in 2020.
Concerned Citizen says
This county cannot do anything right. This has been an issue from day 1 and has never been resolved. Now the BOCC and County Administrator will shift blame yet again. No one owns up to anything. And the words ethical conduct don’t mean anything anymore.
When will someone file a law suit against our BOCC and start holding them accountable?
I just want to point out that most of plantation bay is in volusia county so Flagler taxpayers are going to pay this cost and receive little of the benefit. I urge our state representatives to investigate this matter further for possible fraud starting with an audit by the state auditor general. Paying $5.5 million when appraised at $1 million is more than incompetence alone can explain.
cotton pickin mess. thanks Coffey and friendsss.
Jane Gentile-Youd says
Every stinkin’ cent squandered by Flagler County has been and still is ALL our personal money – not our tax dollars – Flagler County commits to third parties without our permission, consent , advice, input or participation.
One reason I ran for commission was to put an end to picking the personal pockets of citizens without their consent!
A request was made by the undersigned, for the umpteenth time in 6 years that a Water Board be formed consisting of users and payers from both Flagler County residents in Plantation Bay as well as Volusia County residents to be an integral part of all meetings, decisions, etc . It is mind boggling and I maintain that the entire ‘deal’ from purchase through today is outside the limits of what should be a democracy. Flagler County made deals using other people’s money from day 1 through today without ever getting permission from ‘those people” – us.
The initial purchase , and the county pledging monies they do not have the permission or vested right to pledge – especially from the wallets of residents of another county who can’t even vote at elections- has me baffled and I maintain until today that the initial purchase should have been put to a vote FIRST by those of us paying and that we have representatives who are a part of every decision regarding every dime spent and how those dimes are spent. Another reason I blame County Attorney Al Hadeed for incompetence ( my opinion)
This Town Hall meeting I hope will contain a plan to make ‘us’ an integral requirement – via a board at minimum – before any more designs, plans, are bought and paid for ( squandered mostly) with our personal non taxable money.
I thank Flagler Live, and most of all editor Pierre Tristam for ‘air; time in letting me vent ( sometimes over the top – yes) over an issue which will be 7 years old next month. I pray Jerry Cameron steers us in the right direction and is successful in canceling a huge chunk of our current outstanding debt of over – 6.5 million to be exact – and that the violations remaining almost 7 years later – ignored by the ‘seller’ be corrected and paid for by the FDEP, the state, and/or the seller as they were transferred to us , and still remain uncorrected which should have never ever been allowed. My opinion is : Coffey got away scot free and Hadeed is still milking us hundreds of thousands in addition to our rip off water bills, for playing ‘legal zoom’ instead of protecting us. . Before I forget – according to Plantation Bay gate access Joe Mullins has never driven into Plantation Bay one single time and he is ‘our’ area Flagler County Commissioner.
I apologize to all if I sound like a broken record because I am a broken record…
This runs deeper than I thought. Had pen in hand ready to choose Plantation Bay over Halifax Plantation on the other side of 95 in Volusia county. Both comparable in amenities and costs. Why would anyone now choose Plantation with this going on?
So the county paid $5.5 million for a worthless pile of crap, with multiple violations, to a developer that pulls in HUNDREDS OF MILLIONS a year building communities that end up not being able to sustain themselves. He moves on to another area and doesn’t look back. Oh, and along the way, he donates and supports candidates and gives money for tax deductions in the area. Has the county thought of asking him and his mega-millions company to do the right thing and refund the money he was paid? That money – using the power of leveraging – has earned him many times over the amount he received. Perhaps instead of another new building with his name on it, he could buy the utility back and name it after himself.
Christopher Goodfellow says
Another of Coffey’s gifts to County Taxpayers. The poor decisions nevertheless lie at the feet of the Commissioners who oversaw each of these projects. What a mess!
We must be smarter. The County is growing by leaps snd bounds. We need more competent overseers.
Did an independent party quality control water after corrective action ?
Mrs. Knight says
Has anyone filed a public corruption complaint?
Can anyone expect that a public corruption scam complaint will be investigated by the current Fed..? Laughable to say the least.
Just vote honest people in.
Rod Gilbert says
The mess will continue. I suggested years ago that Plantation Bay buy water from the City of Ormond Beach WTP.