Consortium acquires Arredondo Estates water system as part of $50 million deal
Published: Thursday, January 3, 2013 at 12:10 p.m.
Last Modified: Thursday, January 3, 2013 at 12:10 p.m.
A government utility agency has announced it will acquire Aqua Utilities’ water system in Arredondo Estates in southwest Gainesville as part of a nearly $50 million deal.
The Florida Government Utility Authority, a consortium of six county governments based in Longwood, announced on Dec. 28 that it will purchase most of the Florida assets held by Aqua Utilities Florida and Crystal River Utilities.
Those companies are subsidiaries of Aqua America, one of the largest private water utilities in the country, serving 3 million people in nine states.
The FGUA, as the authority is known, paid $49.2 million for systems in 12 Florida counties, including Alachua, Marion and Putnam, according to a news release.
The Arredondo Estates system has about 250 accounts and 738 people, according to FGUA.
In a statement, Robert Sheets, the FGUA’s system manager, said the transaction would provide many direct benefits to the former Aqua America customers.
Without providing further details, FGUA said it intends to stabilize rates, continue to improve customer service and be “far more” transparent in its water and wastewater services.
The authority, barring any unforeseen circumstances, also will hold rate increases to match the upward tick in the inflation rate for the next five years, Sheets said.
Documents posted on the Sumter County government’s website indicate that Aqua America wanted out because it had been forced to raise rates beyond what its customers would tolerate.
In a Sept. 20 letter to the FGUA, Christopher Franklin, president and chief operating officer of the company’s regulated operations, noted that since 2003 Aqua America had pumped $55 million into new infrastructure to improve the Florida systems it had acquired.
The spending, although necessary, also had led to “several significant rate requests,” Franklin wrote, and those, in turn, “caused some customers and regulators to react with concern.”
“The result of our efforts to seek justified infrastructure recovery has been a relationship with our customers that is less than ideal and does not represent the positive relationships we enjoy with our customers elsewhere,” Franklin said.
Aqua America announced in September that it sought $95 million for its Florida holdings, or almost double the sales price announced by the FGUA.
At a Dec. 13 public hearing, the FGUA board was scheduled to consider the acquisition of all 82 Aqua America systems.
But eight of those facilities, located in four counties, were not part of the package sale that FGUA announced on Dec. 28.
Business editor Anthony Clark contributed to this report.
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