Firm Closes Innovative Utility Transaction

September 30, 2013

NGN represents the City of Bunnell in its acquisition of the assets of Plantation Bay Utility Company, a private water and wastewater utility serving in Flagler County. Plantation Bay is experiencing significant difficulty meeting its permit obligations, and is out of compliance with both water and wastewater regulations. For a number of years the owner has been unwilling or unable to make the investment in the utility facilities necessary to come into compliance. Should the owner make such an investment, customer rates would increase dramatically.

The City of Bunnell, working together with and premised upon an Interlocal Agreement with Flagler County, entered an agreement to purchase Plantation Bay’s water system. The Interlocal Agreement between the City and Flagler County represents a near unprecedented level of cooperation between local governments to assist the residents in unincorporated areas receiving deficient service and facing large rate increases. The City and County approved the acquisition, which closed in September, 2013, along with a capital improvement program designed to bring the utility system into compliance and improve the quality of water and wastewater service to the customers.

The purchase of the water systems was financed through the Florida Department of Environmental Protection, State Revolving Loan Program. The wastewater system will be donated to the City for no additional compensation.  With the help of the Department’s staff, this was a first of its kind transaction in which State Revolving Loan funds were used for a system acquisition, rather than capital project reimbursement.  Additional financings through the Department are planned to pay for system upgrades.

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