A Villages utility district voted last week to move forward with the purchase of a utility owned by The Villages Developer – despite a vehement objection from one of its board members and concerns expressed by a veteran Community Development District supervisor.
The Villages Developer – the guy with the reputation for trying to peddle worn-out buildings to the Amenity Authority Committee for top dollar prices – offered to sell the Central Sumter Utility Co. (CSU) to the North Sumter County Utility Dependent District (NSCUDD) board. CSU 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. And for the record, it’s headed by a who’s who of Villages management.
At Thursday’s meeting, board member Richard Rademacher raised a concern because PFM Financial Advisors LLC, which currently works with NSCUDD, will perform one of two required valuations of CSU. Rademacher pointed out that Fishkind & Associates – a group that did a valuation on CSU for the Developer when a similar deal fell through in 2015 – is now part of PFM.
Rademacher also cited a recent Villages-News.com article that showed Fishkind & Associates has worked with the Developer dating back to at least 1993. And he rightly questioned a conflict of interest issue with using largely the same personnel to do NSCUDD’s bidding this time around when there clearly is a legitimate concern about Fishkind’s well-known, longstanding ties to the Developer.
Community Development District 10 Chairman Don Wiley, who also serves on the Project Wide Advisory Committee, encouraged the NSCUDD board to move slow and consider the purchase of CSU carefully. He even pointed out that the schedule going forward looks rushed – the valuations of the utility end Oct. 15 and if the price can be agreed upon, the deal moves forward.
“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.”
With the exception of Rademacher, it isn’t far-fetched to suggest this was a done deal before the NSCUDD members walked into the room. Chairman Charlie Smith even told Rademacher that time was limited for his statement and he wouldn’t allow him to “dominate” the meeting. And then, when Wiley asked Smith to give Rademacher the time he needed, the chairman snapped at him and said there were no time limits and he had never given anyone the impression there was.
Note to Smith: Listen to the tape of the meeting and then call Wiley with an apology. You said it. Everybody in the room knows you said it. And you couldn’t possibly have looked more like you were in the Developer’s pocket than you did at that moment.
Eventually, Rademacher was allowed to read his statement suggesting a conflict of interest in using PFM for the valuation. His plea fell on deaf ears and all of the other board members – Smith, Dominic Berardi, Jerry Watts, Matt Friedland, Diane Spencer and Tom Hosken – voted in favor of moving forward.
How much the utilities will be valued remains to be seen. There’s somewhat of a complicated formula that determines the purchase price based on what firms on both sides of the transaction come up with. But be rest assured that it will be in the millions of dollars and that Wiley was correct when he said it will be on the backs of residents if it goes bad.
Wiley’s concerns, no doubt, were based on the AAC’s purchase of the El Santiago Club from the Developer in July 2013 and the recent “offer” that was later withdrawn regarding Hacienda Hills Country Club.
In case you aren’t aware of it, the AAC shelled out $350,000 for the El Santiago Club and quickly discovered they’d purchased a gigantic lemon. AAC member Rich Lambrecht offered a warning in opposing the purchase – “We don’t know if it’s full of mold or what condition it is in” – but the group moved ahead and purchased the building anyway, only to find out it was a disaster and the only real solution was to tear it down.
Earlier this year, the Developer floated the idea of selling the troubled Hacienda Hills Country Club to the AAC. Not surprisingly, when questions and concerns poured out of the woodwork – CDD 3 Supervisor Gail Lazenby made his disdain for the purchase loud and clear – the Developer first demanded “full market value” and then pulled the offer off the table.
Unfortunately, those lessons didn’t lead NSCUDD to insist on taking its time to ponder the CSU offer and really do its homework. Like Rademacher, we have huge concerns with any of the Fishkind people – it’s no secret the company’s founder, Hank Fishkind, has been tight with the Developer for a long time – working in any situation that won’t benefit the Developer. And we can’t imagine them coming in with a price that’s lower than what the Developer will demand.
We also wholeheartedly agree with Wiley’s statement that this could be costly for residents. With Sumter County property taxes getting ready to go up 25 percent, reassessed property values and the amenity fee cap removed, the last thing residents – many of whom are on fixed incomes – need is to have to deal with another costly boondoggle dumped on them by the Developer.
Unfortunately, thousands upon thousands of Villagers were sold a false bill of goods when they moved here. They were told of a cap on amenity fees, which no longer exists. They were told of a promise made by late Developer H. Gary Morse that the community would stop at State Road 44. It did not. And they were assured that all future generations of the Morse family would have their backs going forward.
In our estimation, they do not. We see this attempt to sell CSU as nothing more than a way to line the pockets of the fourth generation Morse Millennials and the officers of the utility – Mark Morse, Martin L. Dzuro, Robert L. Chandler IV, Harper D. Boone, Ryan McCabe, Kelsea Morse Manley and Kenneth D. Stoff – with massive wads of cash.
Frankly, we think it’s a shame that they have no qualms about doing that on the backs of the retirees who saved and saved to come here and live the best years of their lives – without greedy hands constantly pillaging their wallets and pocketbooks.