County Utilities: What's The Future Hold For Taxpayers?
The county utilities operation has been a recent subject of discussion at several County Commission meetings. A current hot issue being how to handle rate increases for water services (e.g., Spruce Creek). However, the entire utilities operation has been an ongoing source of problems for the county.
Local historians tell us from the purchase of Silver Springs Shores Utilities (SSSU) several years ago to the present, issue after issue has surfaced. Examples of the problems include inadequate due diligence by a former county commissioner and a consultant on the purchase of SSSU, controversy with a consultant on the substantial costs of upgrading SSSU, inadequate integration planning of newly acquired utilities, replacement of the head of the utilities operation, BCC dissatisfaction with consultant recommendations on customer rates for water, public outcry at proposed increases in the rates for water usage, potential fines to the county for excess water usage in certain areas of the county, etc.
The most significant problem the county faces would seem to be how to make utilities grow and improve financially. They have to expand and that expansion has a lot of dead space between major hookups created by future growth. Adding to the long-range financial issues of running the utilities is a somewhat related issue concerning solid waste disposal.
What creative ideas and suggestions would you give the county commissioners, and others who are responsible for the county’s utilities operation, to address the current and longer-range issues they are encountering? Give us your comments.
posted by Blog Master @ 9:51 AM
32 Comments:
Sign a contract with the City of Ocala's utilities department and let them manage the whole thing.
Who was the Commissioner who screwed up the Silver Springs deal?
Spruce Creek residents are getting a free ride on water use. Fix that!
This comment has been removed by the author.
This comment has been removed by the author.
This comment has been removed by the author.
It’ll be interesting to see if anyone has broad knowledge of this issue and posts it. In the meantime, since I don’t have such knowledge at this point, here’s a comment about one aspect of the county utilities – the debt.
As most of us are aware, some of our county commissioners past and present have created the public perception that they are opposed to debt financing. Remember all the lectures about the virtue of pay-as-you-go and the evils of debt a few years ago in discussing how to finance the county’s capital improvement program? Remember the 2002 Republican primary and how the challenger to one county commissioner was labeled a “bonder” – a term some uttered with the same level of disgust they utter the word “pedophile” -- after he expressed a willingness to do some debt financing to help meet road financing needs? So ingrained is the perception that the county commission hasn’t been borrowing money that a few weeks ago the Star-Banner wrote an editorial saying the county commission might have to start bonding. The editorial led the reader to believe the county commission was strongly averse to bonding and hadn’t been doing any.
Well, guess what folks, the county commission has for years borrowed money to finance acquisition of utilities as a matter of routine. I haven’t looked into it yet, but I wouldn’t be surprised to find them financing upgrades with debt as well.
A few years ago, I was looking at debt financing approved by the county commission and looked into a bond floated to finance county utilities. I got the offering document for the bond from County Finance Director John Garri. The document clearly stated the county commission was pledging utility revenues and not general revenues to back the bond, but Garri had an interesting point. He raised the possibility that a default on utility bonds would harm the county’s rating on general obligation debt and that this could put pressure on the county commission to use general revenues to cure a default on utility bonds even though they were not legally obligated to do so.
Just thought I would mention this for any taxpayers who think they don’t have any skin in the game when it comes to the county’s utilities.
Bonds for financing utilities: another great example of the Randy Harris smoke and mirrors political routine that he used on the unknowing voters for years. Finally the voters saw through him.
I well remember the big fight that insisted we had to pay cash for the Library expansion and could not use bonding for anything. The county used a portion of the state rebate that came from the barge canal right of way for the Greenway and took other excess cash to complete the purchase of the property on the Boulevard. The sales tax provided the funds for the construction.
As I have said before, the biggest mistake the county has made since I have been here was the sale of the Dunnellon Airport and the old Fairgrounds property--actually part of the old Maricamp prison farm. Every city and county in America would “die” to have 300 or so acres “in the center” of town (so to speak), but not Marion County.
David Ellspermann and John Garri had refinanced what general debt we had to very low interest rates, so we sell two extremely valuable pieces of property to pay off those low bonds. The whole idea was stupid, but you learn which fights you can win and this wasn’t going to be one of them.
Marion County has borrowed many times in recent years for various purposes, but only one general obligation issue that pledged direct property tax revenues to finance parks. The rest pledged revenues from MSTU assessments, or enterprise funds like the landfill and/or utilities.
If I get a chance I will try to come up with the total debt we have. It will shock those who have believed we were on a pay as you go basis. Marion County should have borrowed to finance road improvements through the years, pledging gas taxes of the figure. We were told on the political stump that it cost three times to repay revenues like this.
The result is we do not have roads, those we have are falling apart, and had we borrowed for roads a dozen years ago, our cost would have been 40-50 percent of today’s costs and we would have used some of this two and three percent money and it would not have cost three times the amount borrowed to pay off.
Those of us involved knew this was a lie, but the political noise supporting it was too loud for anyone to prove they were wrong. The result is we will now have to borrow for a number of things, and the interest rates will be higher, but the costs are 25-40 percent higher!
Way to go GOP. --pwf
Yesterday someone asked: "Who was the Commissioner who screwed up the Silver Springs deal?"
The answer: former County Commissioner Judy Johnson. At the time, the only Democrat on the Commission.
True, but it takes at least three votes, and while Judy was a Dem, the other 4 were Reps. While it is not a reason, the consultant was involved too because all commissioners were depending on the full and complete analysis of the condition of the utility. It was not until later that the full story came out. She gets plenty opf the blame, but it must be shared by the GOP members too. --pwf
This comment has been removed by the author.
I agree with pwf. All five county commissioners receive what by local standards is healthy compensation for their work. All five are paid enough to carefully consider major outlays and are responsible for their votes. That’s probably why no one on this blog I can recall claimed only Jim Payton, the county commission liaison on the E-One deal, was responsible for how individual county commissioners voted on E-One. Sorry guys, it takes at least three county commissioners to buy a utility, not one, even when one of the commissioners involved is a woman.
A few relevant questions: Which consultants has the county commission used in its utility decision-making over the years? Was the consultant on the Silver Springs Shores utility deal the same one they just discharged? What has been the quality of the work of these consultants? How much money has flowed from consultants and related entities to county commissioners through campaign contributions or other avenues? I know an owner of several local utilities who has charged in the past this has been an issue? Has it?
It looks to me like by the time the county came to grips with the utilitie issue, they were in a damned if you do, damned if you don't situation. They bought pig in the pokes.
Looking back, although provoking some thought and finger pointing, will not serve much of a purpose.
[Although I must admit I enjoy seeing PWF assail his own party and Brian hinting that there may have been a little hanky panky ]
At this juncture, rather than go into A Carl Hiasson observation about corruption and back scratching in Florida politics,especially rural politics, I will just say : "Boys will be boy's or more to the point "good old boys will be good old boys ". And they were.
Obviously the county is in a hell of a mess at a terrible time, unable to seek extra funding without really knowing what revenues are going to be.
I doubt that any thing will be done except letting things slide and postponing remedies to other Commissions down the road. No answer at all.
Clayton Ellsworth
Government needs to be run more like a business. Successful businesses regularly evaluate employee performance and take corrective action with underperformers up to and including termination.
We have three county commission seats up next year and a county administrator who serves at the pleasure of the county commission. Gathering information related to their job performance, which requires looking back at what’s been happening with the county utilities, is an important and useful activity.
Clayton, while registered as a Republican, I am not a partisan. If you are wrong, you are wrong as a Dem or a Rep. I warned Parnell 11 years ago the county's landfill and utilities departments were powder kegs waiting to blow, along with Parks and fire. We have since gone through at least three utilities directors and at least two consultants and the new utilities chief looks like he is a straight shooter who will tell them what needs to be said even if it hurts, and boy is it hurting!
The parks was the easiest to clean up and even that took three years of almost weekly battling against the former county administrator who would not listen. Only when the old parks boss got caught misrepresenting a situation to the assistant county and did he have the "opportunity to seek other employment." He took over the Humane Society and left there just ahead of another "opportunity to seek other employment" Most recently he has been the number two guy at a west Florida parks dept and is just had the "opportunity to seek other employment."
Even when it was proven to the old county and the landfill guy was not leveling with them and the county commission, they wouldn't make any more to get rid of him. He had the "opportunity to seek other employment" I think in West Virginia and it didn't take long there before he was moving on.
Fire is a very well run department and they have done marvelous things in providing service, but there are problems there, such as misspending grant money that has bitten them, but the biggest problem is they are shooting for the sky -- trying to provide immediate (or almost) fire service where it may be cheaper to let a house burn since they have no water. They are doing good things in rescue and nothing sounds better when you need it than a siren. I know from personal experience.
The utilities mess stems from two things: lack of correct and timely information to the commission, and one of the biggest problems we have in this county -- the lack of a press that understands government and that will W O R K. You can not wait for someone to pitch a story idea to you. If you are doing your job, you know the questions to ask and you know many of the answers before asking the question. Unfortunately, we have a lazy press that knows neither the questions or the answers and frankly when they get a good reporter -- like Bill Thompson -- they need help inside so he gets a promotion.
Even though I spent 25 years as a newspaperman and have been in private business for 40 years now, I am not the brightest star when it comes to business, but I think I may have been good enough at both business and newspapering that I could have looked at some of the utilities information and figured out (a) they did not have the revenue to back up the expansion they needed to do, and (b) the information getting to the commission did not tell the whole story, and I hope I would have written it.
Better yet, I would have listened to some of the other department heads and started digging, because the department heads always talk about the other departments and they tipped me off first about the landfill and utilities. But a private citizen (as I have been since 1979) shouldn’t have to spend all his time trying to do the job of the press or the job of an elected official.-- pwf
The more I see, the more I hear about the county's inability to provide the basic services of water, sewage,and waste disposal; the more I see of the irrational developement of Marion County; the more I am convinced that a moritorium be placed on development until these problems can be rectified permanently.
If it is impossible to fund and correct the problems which PWF has illuminated with the utilities, for example, then Marion County will have to go No Growth.
Exceptions would be made for OTOW that has it's own sewage and water and is a model of planned, controled growth. [ There may be others as well]
As far as news coverage is concerned, I agree. The Star Banner seems content with wire service content, minimalizing the importance of real journalism. All newsprint is struggling to maintain relevantcy . One of the best ways I can think of is good sound local coverage that can't be obtained any other way.
We have an obligation to make certain to those who live here, and those that move here in the future,that they have adequate public services that can be maintained well into the future.
Clayton Ellsworth
The Parks Dept. and the Sheriff’s Dept. have Citizen Advisory Committees, I think. Does the county Utilities Dept. have one?
Don
(OTOW)
Don, they do not. The Parks committee does not have near the authority that it had before it was reconstituted. Prior, PELAC (Parks and Eenviomental Lands Aadvisory Committee) had lots and lots of authority including budgetary and it assumed investigatory authority that while not specifically granted, was allowed by the county commission trying to get a handle on inefficient and ineffective administration.
The change to PRAC (Parks and Recreation Advisory Council) came afte a chairman began to assume staff authority, and has worked pretty good under the chairmanship of Stan Hanson.
The other Bureau Chiefs do not want advisory committees, frankly, because if you get a good one, it makes the staff work, and a good committee can uncover lots of problems that are being papered over until staff retires or leaves.
One of the best ideas John Lund has evr had is that each commissioner needs a full time staff person not to be a secretary, but to bird dog and investigate stuff for the commissioner. Had anyone been looking at the Landfill five years ago we would never have built the expensive transfer station. Had anyone been really looking into utilities they could have seen below the first layer of paper the problems we now have. But then we have known for 15 years we had road problems, yet we allowed the population to more than double and did nothing about maintenance or much new capacity. --pwf
The more I read from this section, and a few others, the more it seems to raise a question: do the county commissioners have the right person in the County Manager job?
FYI
From Taxpayer,
This County Commission as well as previous County Commissions have had their noses so far up the posterior of developers and special interests for so long it is the only way they know how to conduct themselves.
They have zero desire to manage growth. How do we know this? Good grief just open your eyes! Look around you! Your tax bill would be even higher had they come clean with all the money that is needed for other critical items that have been neglected. Like maintenance of infrastructure, and other assets.
They sopped up the windfall tax income due to higher property values like a bunch of drunken sailors. They continue to do so each and every day.
First we need to fix this problem.
How?
Follow the money, shine a big bright light under the rocks and watch the critters scatter. Investigate all of the sweetheart deals and channeling of funds, the hiring of relatives with reciprocal contracts, etc. Let’s clean up the mess down there and restore confidence in the county government.
Make county managers, consultants testify under oath and identify all of the county needs. That includes maintenance and preventive maintenance. Yes, including trash, water, roads, lights, etc. If they need help remembering all of the things it takes to run a county we can all pitch in and buy them a SIM CITY game. If it is uncovered that they lied under oath then good bye to job and pension. Let us really see what the total un-funded needs are for the county. This should go out for at least 5 years.
We already had a multi-million dollar “surprise” from a department. How many other departments have not been forthcoming? When you have culture of kill the messenger for so many, many, years do you really think that bad news is reported? When we have this data purchase a big ad in the paper, take the show on the road, and let all of us see the projected income vs. the projected budget including the un-funded for the next 5 years. Then we can all stand around that hole and look in.
Just to bring home the point I made above that the Board of County Commissioners finances with debt, here is an excerpt from Marion County’s Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2006 available at the Marion County Clerk of the Court’s website at http://www.marioncountyclerk.org/:
“At the end of fiscal year 2006, the County had total bonded debt outstanding of $115,857,225. Of this amount, $10,595,000 comprises debt backed by the full faith and credit of the government and $5,668,225 is special assessment debt for which the government is not liable in the event of default by the property owners subject to the assessment. The remainder of the County’s bonded debt ($99,594,000) represents bonds secured solely by specified revenue sources (i.e., revenue bonds). Additionally, the County had notes payable of $7,808,862 at the end of fiscal year 2006.”
Elsewhere in the report, the utility system portion of the $99,594,000 revenue bond figure is reported as $74,260,000. This amount outstanding for utility system revenue bonds represents an increase of about $50 million over the past ten years, a period during which the county increased its utility system assets.
I am not characterizing these numbers at this time other than to point out they are not zero.
Brian,
Good stuff.
Just to let you know, the "county utilities" that have been purchased over the last few years need an immediate $70+ million capital imrovement. As you pointed out in an earlier post about govt running more like a business, some of these utilites wouldn't have been purchased if that kind of thinking had been in place.
The county is searching for the $70 million which is why the news is full of "rate hikes" by the county.
I would appreciate citation, in as specific terms as possible, to a source for the $70 million figure for needed capital improvements to county-owned utilities. Is this in the public record such as a document or on a tape of a regular meeting or workshop?
Also, the questions I asked above about utility consultants were not rhetorical. It would be nice if someone had some specific answers to them and posted them. I don’t have such answers, yet, so I can’t post them.
The question raised about whether we have the right person in the county administrator position is an interesting one. As many of us noted at the time, the 2002 county administrator search began as a search for someone with private sector experience and ended with the hiring of a lifelong government employee.
Brian,
Follow this link.
star banner article on a workshop a few weeks back. You can find in the archives on ocala.com, search "county utilities". Record of the workshop is public record.
http://www.ocala.com/article/20070629/NEWS/206290339&SearchID=73286679224168
Thanks for the article. It lays out the financing problems and confirms the need for more than $70 million in fix up money for the county utilities.
If you are interested, our neighbors up in Gainesville also have to deal with the increased cost of their utilities. They are projecting a 7% increase in residential rates for the utilities provided by Gainesville Regional Utilities. The City expects the increase trend to continue for the next several years to keep up with capital and operations needs.
http://www.gainesville.com/article/20070710/LOCAL/707100324/-1/news
I’d hope the County Commissioners would give Utilities Manager Andy Neff some support on his plan to put the county utilities operation in better shape. I’ve watched a couple of heated meetings and felt the Commissioners were too focused on the personal political fallout of what needs to be done. The Spruce Creek group is wrong on the water issue, but loud and that gets them the attention.
Neff seems to know what he’s talking about and has a handle on the situation. He’s hung out all alone on the utilities problems and is the man in the middle and on the hot seat. Let him go forward with his plan and support him.
Leadership. This county needs some commissioners who only want 1 term and make decisions based on what is good for the whole and not cower down to the spruce creeks of the world. A splash of political incorrectness would be refreshing
Gun Nutt says...
I agree. I'm for a little more political incorrectness from our politicians. In fact, we used to like and value "policial incorrectness." In those days we called it telling the truth. These bufoons we have running things now seem to think sensitivity is more important than truth. I guess we shouldn't expect much from a bunch of people who babel constantly about diversity but never even mention excellence. This nation was built by people who believed in truth and excellence and will be destroyed by those who push sensitivity and diversity.
You obviously haven't seen Commissioner Payton in action!!!
Gun Nutt says...
No, I haven't seen him in action. What does he say and do that I would like? Please brighten my day with a story about a good politician.
Post a Comment
<< Home