Members of the North Sumter County Utility Dependent District approved a resolution Thursday setting water and wastewater user rates, fees, charges and operating policies and procedures for the $98.5 million Developer-owned utility it has agreed to purchase.
The move regarding Central Sumter Utility, however, didn’t come without questions from Community Development District 10 Chairman Don Wiley and NSCUDD board member Richard Rademacher, who also is from the same district. Both expressed concerns about a provision of the fee schedule that would allow the board to adjust rates by 2.5 percent each year for the next 10 years.
Wiley said he had urged the board to move slowly on the CSU purchase – the pre-closing closing took place Thursday and the final closing is set for Monday – but they moved ahead quickly in September.
“I start to question that now,” said Wiley, who also serves on the Project Wide Advisory Committee.
Wiley added that his own water bill has only gone up by two percent over a five-year period, which makes him think it’s a better deal to have CSU privately owned instead of being a part of NSCUDD.
“There’s no justification for this,” he said.
Rademacher read a long statement echoing many of Wiley’s concerns.
“We purchased CSU from a firm that certainly operates to make a profit,” he said. “The rates they charged would, I assume, give them a profit in its operation. Thus, those same rates should give NSCUDD a positive balance in year one and maybe for a few additional years.”
District Manager Richard Baier assured board members that the current rates paid by CSU customers aren’t going up this year. Assistant District Manager Kenny Blocker also explained that the inclusion of the provision for 2.5 percent increases for the next 10 years was necessary to make the sale possible and the purchase of the bonds feasible.
“When you acquire this utility as we are, we have to issue debt to pay for the utility,” he said of the rate structure.
Baier compared it to going from being a renter to taking out a mortgage and purchasing a home.
“You take on that debt to pay for the long-term holding of that mortgage by a financial institution,” he said. “Just like with this purchase, we have a cost, which we have to cover.”
But Baier also told board members that having the allowance for 2.5 percent increase built into the rate structure doesn’t mean it’s actually going to happen. He said those decisions will be made each year during the budgeting process after the staff has a chance to analyze potential cost savings and how well the utility is performing.
“We may after the first year have experience and come back and say, ‘We can actually modify it,” Baier said. “What I’ve tried to assure you is that we’re going to run an efficient utility.”
Board Chairman Charlie Smith told Rademacher that he was in favor of moving forward based on the advice of the many experts working for the board.
“Don’t you believe that once they advise us, we probably ought to follow that advice?” he asked. “They are a lot smarter about these things than I am, so I would take their advice.”
Rademacher said he understood Smith’s thoughts but added that as an elected official, it’s the board members’ duty to review recommendations, ask questions and talk among themselves about any action that will be taken.
The other board members – Vice Chair Dominic Berardi, Jerry Watts and Diane Spencer – all agreed with Smith and said they were satisfied with the staff’s recommendation to move forward. The resolution then passed 4-1 with Rademacher casting the only “no” vote (board members Matthew Friedland and Thomas Hoskens didn’t attend the meeting).
The NSCUDD board voted 6-1 in September to move ahead with the purchase of CSU, which 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. It was headed by a who’s who of Villages management, that according to the Florida Division of Corporations, or sunbiz.org, includes:
- 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. Stoff also represents the Brownwood Community Development District on the Project Wide Advisory Committee.