Questions were raised Thursday about the timing and value of the proposed $111 million purchase of an irrigation company from The Villages Operating Co.
The purchase is being considered by the North Sumter County Utility Dependent District Board of Directors, which is made up of seven elected Villagers from Community Development Districts 5 though 10.
They are considering the purchase of the Sumter Water Conservation Authority LLC irrigation system from the Developer.
SWCA covers 6,317 acres and serves 13,859 homes in The Villages, 530 general commercial connections, 54 bulk commercial connections, 47 fire protection service connections and six golf courses, according to Robert Farner of Clymer Farner Barley, an engineering firm which has been involved in the development of The Villages since 1992.
“Construction of the SWCA system infrastructure began in 2011. The infrastructure is 10 years old or less and is in excellent condition,” Farner told the NSCUDD board.
NSCUDD Director Richard Rademacher, a resident of Community Development District 10, questioned whether the engineer who designed and oversaw the construction of the system was providing an independent assessment of the potential $111 million purchase to be funded by residents.
“I find it interesting you are reviewing your own work, and you also work for the seller. I am not sure you are making an independent judgement. I would prefer to hear from someone who has no ties to the Developer. This is something that bothers me,” Rademacher said.
That prompted a question about timing from a fellow NSCUDD director.
“Why all of a sudden are we purchasing this? Is the Developer just trying to get this off his back?” asked Matt Friedland, a resident of the Village of Charlotte.
In 2019, the NSCUDD board agreed to pay $98.5 million for the Developer-owned Central Sumter Utility. SWCA has been described as the “sister component” of CSU.
Village of Gilchrist resident Dan Warren also questioned the timing of the purchase as well as the price.
He provided a chart showing that the Developer in 2014 reported to the Florida Public Services Commission that the value of SWCA was $29 million. In 2015, Fishkind & Associates, a firm with long ties to the Developer, estimated SWCA’s value at $80 million. Now the price has climbed to $111 million.
“Maybe our timing is off. Maybe we should wait. If you waited two or three years from now, maybe we’d get it at a lower price,” Warren said.
There were questions as to whether NSCUDD should purchase or pass on the irrigation company.
“It’s our mission to buy those utilities and to manage them,” said Deputy District Manager Kenny Blocker.
Other NSCUDD members argued it’s better to be in the driver’s seat when it comes to the management of the utility company.
“We have the ability to control what we charge our residents. An independent for-profit company doesn’t have the same motive that we do,” said NSCUDD Director Tom Hosken.
NSCUDD Board Chairman Dominic Berardi said purchasing SWCA makes sound financial sense.
“Any money left over doesn’t go into somebody else’s pocket,” he said.
The board voted to accept the valuation report and move to the next stage of the purchase. The lone vote in opposition was cast by Rademacher.
