County bailing out, seeks new management for HOA-governed community’s water utility

By Deborah Goonan, Independent American Communities


Flagler County Administrator Jerry Cameron recently informed Plantation Bay homeowners at a board of county commissioners meeting that management of its troublesome water and sewer utility has been transferred to Florida Governmental Utility Authority (FGUA).

FGUA is a private utility company that provides utility operations for local governments in Florida. The organization is directed by a 6-member board, consisting of one representative appointed by each county it serves.

According to local news journals, FGUA is currently providing utility services to Plantation Bay on a month-to-month basis. But Flagler County Commissioners hope to hammer out plans for FGUA to purchase its utility by Feb. 1, 2021.

For now, the county is paying the authority approximately $136,000 per month for interim operation of the utility.

Plantation Bay is a master planned, gated, HOA-governed golf community of more then 1,800 homes, straddling the border between Flagler and Volusia County.

A privately-owned water and wastewater utility company served the community from its beginnings in the 1980s until 2013.


History of problems with Plantation Bay Utilities

For many years, Plantation Bay Utilities was owned by its developer, Mori Hosseini.

The utility company struggled financially to keep up with the demands of a growing community. After the housing market crashed in 2008, new home sales plummeted, limiting the number of rate payers.

The housing market began to recover by 2012, but the age of the utility infrastructure, combined with years of deferred maintenance, had taken its toll.

For more than a decade, Plantation Bay owners and residents complained of poor water quality, discoloration, and foul odor. The Public Utilities Commission considered a rate increase, then rejected that request, due to opposition from Plantation Bay property owners.

Hosseini began considering offers to sell the private utilities. But there were no buyers willing to pay his price.


Pre-purchase town hall meeting

Nearly 100 Plantation Bay homeowners packed a town hall meeting hosted by Flagler County in February 2013.

At that meeting, an engineer from WadeTrim presented his assessment of the condition of Plantation Bay Utilities, highlighting portions of his January 2013 report.

PB Utility Due Diligence

Leading up to 2012, Florida Department of Environmental Protection had issued several violations to the utility for excessive levels of disinfectant by-products, triggering frequent boil-water advisories.

Two of the community’s four wells were being over-pumped. The under-used wells produced discolored water that was difficult to treat.

FDEP also hit PB Utilities with wastewater quality violations for fecal coliform in 2011 and 2012. The utility was required to transport its wastewater to a second treatment facility, rather than discharging it back into the aquifer or using treated water for irrigation of the golf course.

The physical condition of the equipment, utility lines, and pumps showed significant signs of deterioration. The utility facility lacked a back-up wastewater processing plant, in the event of system failure.

Clearly, something had to be done.

At the time, homeowner sentiment and local politics favored a public takeover of Plantation Bay Utilities.


Public purchase of utilities

Back in early 2013, Flagler County commissioners saw ownership of a utility operation as a cash cow. Plantation Bay’s development agreement called for about 4,000 additional homes, all of them future rate payers.

And Plantation Bay homeowners were hopeful that their local government would be more responsive and competent in operating their water and wastewater utility plants.

So, through and inter-local agreement, Flagler County and City of Bunnell acquired joint ownership of Plantation Bay water and sewer utility in 2013. Under the terms of the agreement, the local governments paid Plantation Bay’s developer, Mori Hosseini, $5.5 million.

But, within months after purchase, Flagler and Bunnell officials realized that it was going to cost far more than expected — at least $13 million vs. $7 million — to rehab the water and wastewater systems.

Interestingly, in 2011, according to a report in the Daytona-Beach News Journal, FGUA had recommended the county pay no more than $1 million for the water and wastewater utilities at Plantation Bay.

At the time, Flagler County commissioners — most of whom no longer hold seats on the board — ignored that advice. They feared protracted litigation from utility owner, Hosseini, if the county didn’t agree to his inflated purchase price.


Six years of time and money wasted?

Flagler County officials have spent the past six years working with consultants, trying to come up with an affordable plan to improve water quality.

During that time, utility rates in Plantation Bay increased by more than 50%, with little or no value to show for the added expense.

In 2016, the County also applied for, and received, a $2 million grant to help with the exorbitant cost of rebuilding the water plant. For several years, Flagler utility officials talked about installing a reserve osmosis filtration system.

But as of February 2019, owners and residents still complained about Plantation Bay’s water, with its noticeable yellow tint and foul odor.


Potential wastewater catastrophe

To make matters worse, Plantation Bay residents learned this February that the main holding tank in the wastewater (sewage) treatment plant was so badly corroded that it now buckles under the weight of wastewater.

Fearing a potential environmental catastrophe and expensive clean up, homeowners demanded that Flagler County request a $10 million from Florida state legislature. That’s the estimated cost to completely rebuild the Plantation Bay wastewater plant.

By March of 2019, Flagler County Commission had voted to move forward with ‘phase 2’ and spend another fortune toward the goal of rebuilding the wastewater plant, despite concerns from homeowners in Plantation Bay.


Reverse osmosis system approved

Two months later, County Commissioners awarded a $6 million contract to Sawcross, Inc. of Jacksonville, to install a reverse osmosis system to clean up Plantation Bay’s drinking water. Most of that money was proposed to be borrowed at 2.99% interest rate.

Frustrated homeowners in Plantation Bay continued to put pressure on Flagler County to stop wasting time and money, and actually solve their water and wastewater problems.

Then last month, County Administrator Jerry Cameron met with FGUA to discuss possible solutions.

Cameron, who recently replaced former County Administrator, Craig Coffey, quickly concluded that the county lacks the technical expertise to operate water and wastewater utilities.

Cameron recommended that the Commission enter into an agreement to allow FGUA to operate and manage the utility plant.

According to several local reports, within weeks after FGUA took over operations of Flagler County’s utility plant, Plantation Bay residents noticed great improvements in their water quality.

Now that the county has admitted defeat in the battle to fix Plantation Bay’s water woes, commissioners are hoping to get out of the utility business altogether.

Homeowners hope that FGUA can do a better job than a real estate developer and a county commission that lacks the technical knowledge to manage a utility. ♦

Note: Flagler County’s utility also serves the Beverly Beach and Eagle Lakes communities.


Flagler in talks to sell utilities
By Aaron London | Daytona Beach News-Journal
Posted Dec 13, 2019 at 12:01 PM

6 Years Late, $13 Million in Debt, County Concedes Incompetence Running Utility as It Seeks Plantation Bay Bailout DECEMBER 17, 2019 | FLAGLERLIVE

Water woes: County agrees to $10M request after Plantation Bay residents demand action
By Shaun Ryan | Daytona Beach News-Journal
Posted Feb 12, 2019 at 2:25 PMUpdated Feb 14, 2019 at 1:08 PM

Catastrophic’ Plantation Bay wastewater plant gets more design work
Residents propose a less expensive solution, but Flagler County officials are skeptical.
by: Brian McMillan Executive Editor | Palm Coast Observer
Updated 11:24 a.m. March 20.

$6M water plant project OK’d for Plantation Bay
By Shaun Ryan, The Daytona Beach News-Journal

“So Happy You Guys Have Come Along,” Plantation Bay Residents Tell County and Bunnell

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