Board General Island Services

LGI Sewer Project – Update

Sewer Project Update

From LGPOA Director, Barb Dwyer:

By now, most of you are aware that Charlotte County (CC) is planning on bringing a wastewater system to the area. Environmental Utilities LLC (EU), a company wholly owned by Diane & Jack Boyer, is in the process of applying to be the provider of this service. The scope of the project includes LGI, Cape Haze (CH), Don Pedro Island & Knight Island aka Palm Island (PIE). This is expected to be about 1164 customers. EU entered into an agreement with CC in July 2020 to accept the wastewater at the Rotunda Wastewater Treatment plant. EU filed a request for a Certificate of Authorization to install the system with the Public Service Commission (PSC) in Oct. (Docket 20200226-WS) At that time, they submitted a confidential financial statement. They also requested a bifurcation of rate/cost info from the certificate.

To date, LGPOA has contacted CC Utility Director Rudy, CC Commissioner Truex, the PSC, the Office of Public Council (OPC) and our FL State Representatives looking for information & guidance. We have also been in contact with the PIE group & the CHPOA.

Since the last website update in December, EU mailed out a notice on Dec 18, 2020 to all affected homeowners of the plan to install the wastewater system. This notice gave homeowners 30 days to comment or object to the EU plan to the PSC.

The PSC meeting to determine if bifurcation was to be allowed was held on January 5, 2021. There were 144 pieces of correspondence filed prior to New Years. Over 100 additional pieces came in over the weekend that the PSC did not have time to review before voting. This large number of consumer concerns had a big influence on the PSC decision. In the end, the PSC denied the motion to bifurcate. EU’s has not demonstrated that establishing initial rates and charges in its application for an original certificate demonstrates a substantial hardship. This means the cost of the system & the rates will have to be submitted prior to approval of the certificate. The full transcript of this meeting can be found in the document filings for Docket 20200226-WS.

After this decision, the LGPOA tried to determine what our next steps should be. A few different lawyers were called to get information. The consensus was we didn’t need to hire a lawyer unless we wanted to fight the whole process. There were a couple of suggestions given by the lawyers. A few that were mentioned:

  • Hire an outside provider to perform an open book audit to review the wastewater systems.
  • Form our own Not for Profit Utility. Contact the Rural Water Association which is a good resource for small utilities. The Florida Government Utilities Association (FGUA) can also help.
  • Form a Community Development District – a special group for managing & financing infrastructure required to support development.

CHPOA had their members meeting on Jan 9th. They have decided to fight the whole project. They have hired a lawyer and have requested administrative hearing with the PSC. Their reasons include the financial capability of EU, the lack of experience for a project of this scope, the character of EU’s owner, their low population density & the lack of detailed studies of the area. Complete information on their concerns can be found in the PSC document filings for Docket 20200226-WS.

PIE and 2 other persons have also filed official complaints and requested administrative hearings with the PSC with similar concerns. These letters are also found in the docket filings.

Knight Island Utilities is in support of moving forward with this project with EU. This letter can also be found in the docket filings.

Another LGI resident (& lawyer) indicated that LGPOA should also file an objection & piggyback on the administrative hearing request that the others have submitted. It was suggested if we weren’t a part of the objection, we might not be considered when the objections were ruled upon.

EU has not provided any financial documentation for the public to view. They have not provided any engineering studies that have shown they have taken LGIs unique characteristics into the design of the wastewater system. They have not provided any realistic costs for construction & installation (impact fees) as well as costs for ongoing operation & maintenance (monthly rates).

We do disagree with one point from the other groups. LGPOA board acknowledges that we are part of the problem regarding the nutrient runoff into the gulf and the bay. Sewers are inevitable to address the declining water quality in the area.

Because of these reasons, LGPOA board has decided to file an objection with the PSC & ask for an administrative hearing. As of 2/4/2021, our objection has been officially accepted by the PSC.

The LGPOA has been told that EU has hired Giffels Webster Engineering firm. They are currently completing a study to compare the vacuum system versus the low pressure grinder pump system. Once that is determined, the project will go into the preliminary engineering stage, which will determine the cost factors. The proposed impact fees as well as the annual operating expenses will be projected. This will take approximately 2 months to put together for the PSC. The PSC will then make all findings public knowledge & set a date to review the proposal.

One of the LGPOA Board members questioned the OPC regarding the review of Jack Boyer’s personal financial documents, LGWU’s business financials & EU’s business financials. The response from Anastasia Pirrello at the OPC was
“An accountant from OPC evaluated the unredacted version of the financial documents filed with the application. We did not evaluate the financial integrity of any other utility. Hope this clarifies your questions.”

Two members of the Board met with CC Commissioner Bill Truex & CC Utilities Director Craig Rudy along with other residents of CH, PIE & Don Pedro Island to discuss the wastewater project. The meeting began with a presentation by Dr Mary Lusk to describe the coastal septic system & drainfield and how it contributes to water quality issues. It was a very informative discussion. I encourage anyone who would like more information to go to the website for a good explanation of how a septic system works.

The meeting proceeded with most of the group expressing their concerns about the sewer project and about EU. CCU director Rudy fielded the majority of questions. He gave a lot of background information about CCU & the issues they are currently dealing with. CCU is limited with the number of projects they can run at any one time based on the FL state budget allocations to the county. They have had to bail out other small utilities that have failed or walked away from their obligations. He indicated they wouldn’t be able to fund this project until 2029.

There were a number of questions asked about why EU was given the contract, why it wasn’t put out for bid, what role CCU would have with the utility & the oversight of the project. In the end it came down to first come, first served. EU was the first company to ask for the agreement. It is not a contract. There was no financial review or technical evaluation of EU. That is for PSC & the DEP to evaluate before the certificates or permits are issued. CC responsibility ends where the EU lines connect with the existing CC sewer system.

The meeting progressed with people pressing for CC involvement. Many different scenarios were presented & many questions about oversight & easements were raised. Rudy was also asked about the project timeline. As time moves on, it is more unlikely that EU can get the work done in the timeline stated. Rudy was asked what effect this would have on CC being able to step in and take over? In the short term, it would have no effect, but if the certificate or permits were denied, then it might be a different story. But, it did not appear that Rudy was interested in this prospect.

Both Truex & Rudy were asked about the absence of CC representation at the PSC meeting. It was discussed that if the time frame did move out 3-5 years, having CC as an interested party would be helpful. They were asked if CC would file an Amicus Brief in the matter (to become an interested party in the PSC proceedings without being a litigant).

The final discussion was on the character of Jack Boyer. Concerns were raised about numerous complaints raised by LGWU customers, unlawful activities he has admitted, & the lack of oversight to ensure best business practices are followed. Both Truex & Rudy were aware of Jack’s history.

Truex was very receptive to the discussions but admitted he needed to get more information on the matter from FL State Reps, the legal department & about EU finances. He offered to keep us informed if we were interested.

The responsibility of septic system oversight is being moved from the Dept of Health to the DEP. It is just speculation at this point, but it is thought that the rules and enforcement of septic system operation will become more strict with this change. Please note: when each homeowner filled out the on-site wastewater disposal system application, the following statement was included “This declaration of Restrictions/Utility Easement shall be deemed a covenant running with the land & shall be binding upon the undersigned, their lessees, successors & assigns until sanitary sewers are made available to & accessed by the property, at which time the restriction shall be terminated & released.”

Finally, there is a group of people from each of the project areas that are going to research what it will entail to start a Utility Board. A Utility Board would buy out all utilities involved with our islands in a phased process. Meaning it would own all water and sewer for the project area after 5-10 years as a guess. Homeowners would each own a share of the utility. It would not be set up as a non profit, it would be its’ own governmental entity. Because it would be a governmental entity, it takes more time, legislative support and a committee to start. A meeting with our state representative, Mike Grant, is scheduled later this month. It will help the team be able to get a better grasp of Florida law and the steps necessary for the Utility Board by attending.

To all membership, please contact your representative on the Board of Directors, in writing by email, to let the board know your thoughts and/or concerns.