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Credit Crunch Hits Utility Department

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By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: March 22, 2009

Three years into a deal with state environmental officials, Pasco County has run into problems trying to upgrade its network of troubled sewage-treatment plants.

The problem is rooted in the failure of giant financial institutions, such as Lehman Brothers, Bear Stearns and AIG, that have unraveled in recent months.

Without those Wall Street firms, it has become nearly impossible for Pasco and other governments to borrow money by selling municipal bonds or for investors to insure those bonds, county officials say.

"The biggest problem is some of the largest purchasers of municipal bonds just don't exist any more," said Michael Nurrenbrock, the county's head of management and budget.

That has left the county's utility department unable to borrow the money it needs to satisfy its $1.8 million deal with the state Department of Environmental Protection. That deal was struck in 2006 to fix the county's aging and overtaxed sewage-treatment system.

The county has begun work on a new treatment plant in the Shady Hills area of northwest Pasco. Under the DEP deal, that plant will consolidate wastewater treatment now handled by plants in Deer Park, Embassy Hills and Hudson.

But the troubles in the bond market have prevented the county from borrowing $30 million or more to build new sewer lines and a pump station needed to replace the Deer Park sewer facility near Little and Trouble Creek roads in west Pasco, said Bruce Kennedy, assistant county administrator for utility services.

The 2006 deal gave Pasco until the end of 2010 to shut down the Deer Park facility - a deadline the county is likely to miss if it can't borrow money on the bond market, Kennedy said.

"We've actually had to put the DEP on notice that we may need a time extension due to situations beyond our control," Kennedy said.

DEP spokeswoman Pamala Vazquez said recently that her agency is willing to help Pasco find a solution to its problems.

"The ability to secure bonds is not a valid excuse," Vazquez said. "However, the department has some discretion."

It helps that the delayed work isn't critical to the health and safety of the wastewater system, Vazquez said.

The same bonding problems forced the county last month to seek an $8 million loan so it could start work on a new water line linking the central and northwest parts of the county.

That work was supposed to start last year. It rose higher on Kennedy's list of priorities after county commissioners named the widening of U.S. 41 as their top priority for federal stimulus money headed to the state.

That widening will force the county to relocate existing water lines. While that work is under way, Kennedy hopes to install the other water line.

"If they're going to widen the road, I need to do it now," he said.

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

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