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Goodbye Aloha: Deal Approved To Buy Utility

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By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: February 20, 2009

NEW PORT RICHEY - The days are now officially numbered for the smelly, black water flowing from taps in the Seven Springs and Aloha Gardens communities.

The state-chartered Florida Governmental Utility Authority, meeting Thursday in New Port Richey, approved a 400-plus-page plan to buy Aloha Utilities. The $90.5 million sale is expected to close Feb. 27.

The utility authority was created by legislators to put troubled private utilities into public hands. Aloha is its eighth purchase.

The authority had planned to seal its deal for Aloha in December, but chaos in the financial markets put that plan on hold.

The deal approved Thursday will be financed by a $105 million loan from Wachovia Corp. - a figure that includes the purchase price and $12 million to upgrade Aloha's facilities over the next two years.

Aloha customers will repay the loan starting next month, when their water rates go up in anticipation of improvements to the system. Increases will vary from 6 percent for Aloha Gardens customers to 59 percent in Seven Springs.

The rate increase - about $33 per household in Seven Springs - will be significantly less than Aloha had expected to impose.

Aloha's customers have said they're willing to pay more for better service.

"They have been instrumental in making this happen," said utility authority attorney Brian Armstrong.

The loan with Wachovia allows the utility authority to pay interest only for the next three years in the belief the utility can refinance the loan as a more traditional government bond issue before the principal payments come due in 2012, said Craig Dunlap, the authority's financial adviser.

After it formally takes over Aloha's system, the utility authority plans to upgrade the utility's plumbing and close down wells that are the source of its toilet-staining water.

Ultimately, the utility authority plans to tie Aloha into the county's water system, which gets its supply from a mixture of wells and surface sources through regionwide Tampa Bay Water.

West Pasco-based U.S. Water will run the Aloha system on behalf of the utility authority.

Armstrong has said in the past that the authority may be willing to sell the system to the county.

For now, however, Aloha customers are just looking forward to the day their water won't make them wrinkle their noses in disgust.

Customer John Andrews, head of the Committee for Better Water Now, a group of Aloha customers that pushed for the utility authority to make the purchase, thanked the agency for sealing the deal.

"It's going to be a great closing for us when we no longer have to deal with Aloha Utilities," Andrews said.

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

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