A Villages utility district agreed Thursday to begin the process of purchasing a utility owned by The Villages Developer – but not before tense moments arose over everything from a perceived conflict of interest issue to the length of time a board member would be allowed to speak during the nearly 50-minute-long discussion.
The seven-member board was presented with the possibility of purchasing the Central Sumter Utility Co., which is headed by a who’s who of Villages management. That company owns and operates a potable water treatment and distribution system and wastewater collection, treatment and disposal system and provides services to a portion of The Villages in unincorporated Sumter County, Wildwood and Fruitland Park.
The board voted 6-1 to move ahead with the 30-day due diligence process of buying the utility, which will require two firms to perform valuations of the proposed sale to be performed by Oct. 15. PFM Financial Advisors LLC, which currently works with NSCUDD, will perform the valuation of CSU. And Jones Edmunds will provide an update to a previous asset condition assessment they performed on CSU four years ago when a similar purchase deal fell through.
But NCSUDD board member Richard Rademacher vehemently opposed the decision to use PFM in the due diligence process. He expressed concerns because PFM purchased Fishkind & Associates earlier this year and that company did a similar valuation for the Developer when he first tried to sell CSU to NSCUDD in 2015. And he cited a recent Villages-News.com article that showed Fishkind & Associates had enjoyed a relationship with the Developer dating back to at least 1993.
“They should not be our choice to make this extremely important valuation,” Rademacher said. “I would hope all board members would take a moment to reflect on my concern.
Prior to Rademacher expressing his concerns, he requested to read a written statement he had put together prior to the meeting. Board Chairman Charlie Smith then questioned Rademacher on the length of the statement and said he wouldn’t allow him to “dominate” the meeting.
“We don’t have a lot of time,” Smith said.
A few minutes later, during the public comment portion of the hearing, Community Development District 10 Chairman Don Wiley encouraged all seven supervisors to take their time in making the decision about the purchase.
“This is going to impact all of us for a very long time,” he said. “The last thing we need to do is to buy something, only to find out three years down the road that we’ve got big issues.”
Wiley, who also serves on the Project Wide Advisory Committee, asked that Rademacher not be prohibited from reading his statement because of a time limit.
“We do not have time limits and anybody who is on this board or in this audience is welcome to speak as long as they wish,” Smith snapped. “There are no time limits here.”
“That’s not the impression you gave with your earlier statement,” Wiley responded.
“No sir, I never gave you that impression or anybody else that impression,” Smith fired back. “Please retract your statement.”
“I can’t do that, sir,” Wiley said, as Smith glared at him for several seconds.
Going forward, NSCUUD – the provider of solid waste sanitation services for Marion and Sumter County, and the Fruitland Park portion of The Villages – will have 30 days to investigate CSU.
Both utilities agree that if the lesser of the two preliminary valuations is not greater than 5 percent less than the higher preliminary valuation, the purchase price will be set at the lesser of the two figures.
If the lesser of the two preliminary valuations is greater than 5 percent lower, but not greater than 10 percent lower of the higher of the figures, the utility boards will agree to set the purchase price at the average of the two valuations.
If the lesser of the two figures is greater than 10 percent lower than the higher of the valuations, the utilities will instruct their valuation firms to meet and agree upon a determination of value.
Once the purchase price is set, the process to issue bonds to finance the purchase will proceed. NSCUUD will have the right to terminate the agreement by providing written notice to CSU by Oct. 5.
Rademacher was the only board member to vote against the agreement. Those voting for it were Smith, Dominic Beradi, Jerry Watts, Diane Spencer, Matthew Friedland and Thomas Hosken.
According to Florida Division of Corporations, or sunbiz.org, the officers for CSU are:
- President Mark Morse, Developer of The Villages;
- Vice President Martin L. Dzuro, who serves as assistant to the vice president of The Villages;
- Vice President Robert L. Chandler IV, vice president of development for The Villages;
- Vice President Harper D. Boone, son of Villages owner Jennifer Parr;
- Vice President Ryan McCabe, operations manager of The Villages and husband of Parr’s daughter, Paige;
- Secretary Kelsea Morse Manley, director of operations for The Villages; and
- Treasurer Kenneth D. Stoff, treasurer of the Holding Company of The Villages.