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Lending Crisis Delays Aloha Deal

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By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: December 13, 2008

NEW PORT RICHEY - The public purchase of privately owned Aloha Utilities has been put off until the end of February to help the Florida Governmental Utility Authority secure financing for the deal.
FGUA also is waiting for final results of testing on water from Aloha's system, authority attorney Brian Armstrong told the utility authority's board Friday morning during a meeting at the West Pasco Government Center.

At the urging of Pasco County and Aloha's customers, the FGUA struck a deal this year to buy Aloha, known in west Pasco County for its smelly black water, for $90.5 million. That money will be raised by selling bonds.

That deal was scheduled to close this month, but troubles in the banking industry have forced the authority to delay action until it finds a lender to back the deal, Armstrong said.

"We held out the possibility of doing it until today Friday," Armstrong said. "We have evaluated and pursued every line of financing we could think of."

The FGUA typically relies on Bank of America to finance its purchases of private utilities across the state, Armstrong said. The Charlotte, N.C.-based bank declined to finance the entire purchase, Armstrong said.

This week, Bank of America announced plans to lay off 35,000 workers.

Other banks, including Bank of America rival Wachovia, have told FGUA officials they may be able to finance the deal if it could close early next year, Armstrong said.

Even with the Aloha deal in limbo, the FGUA board approved a financial plan for managing Aloha after the deal closes.

That plan envisions spending $14.1 million to run the utility, which serves customers in Aloha Gardens and the Seven Springs area of west Pasco. It also includes $12 million to link Aloha to the county's public water supply and to improve the quality of water from its wells.

Members of the citizens group Committee for Better Water Now said they were disappointed that the deal could not be finished on time, but are optimistic that FGUA would find financing for the deal.

"It's a good secure loan for whoever makes it," said Wayne Forehand, spokesman for the group.

Reporter Kevin Wiatrowski can be reached at (813) 948-4201.

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