A major characteristic of a good City Council candidate is that person's desire, before making major statements on an issue, to carefully review the facts of that issue and, if not having been personally involved in that issue, to get input from those that were; namely do their due diligence.
In a recent MICA survey all nine candidates for City Council were asked what they thought was the one change in past decisions they would have made, the one thing that had a negative impact on our Island community. The answers by some of the candidates clearly demonstrate a complete lack of due diligence.
For Larry Sacher and Duane Thomas it was the purchase of the water and sewer company. Mr. Sacher stated that the purchase was done with a "lack of planning and foresight", that plagued our community with unnecessary debt. Mr. Thomas simply stated that the purchase of the water company was "over-priced, not vetted or proper due diligence taken to insure the right price was paid."
Since neither of these candidates were involved, in any way, in the 2003 purchase of the water utility nor have they received input from any of those directly involved with the purchase, they are demonstrating the type of misinformation that has resulted in divisiveness in the past. Since I am sure this issue of the purchase of the water company will be a common theme of these candidates throughout the campaign, I felt it worthwhile to summarize the facts associated with that purchase. Since I lived through the entire purchase process I knew that the real facts would reveal a much different picture.
First, Florida Water Services (FWS), a Minnesota based company that owned our water and sewer systems, decided in late 2001 to sell off all of their Florida assets. It wasn't the City of Marco Island that initiated any purchase action. FWS wanted out.
In 2002, FWS announced they were selling our water systems to the towns of Gulf Breeze and Milton, located 600 miles away in the panhandle of Florida. These towns also announced to their residents that this purchase of Marco Island's system would result in significant profits that could be used to pave their roads and build their buildings. They also announced that the purchase price, around $120 million, would require an immediate and significant increase in water rates for Marco Island and that there would be no plans to upgrade or improve our water and sewer systems.
Marco Island's water systems were about to be purchased by other municipalities leaving our community with absolutely no regulatory or political power or influence. These municipalities would have total control of rates and programs. Of even greater concern was the fact that they had no intentions of spending any money to improve our system. Failed systems leading to flooding, water shortages and beach closures on Marco Island were of no interest to their residents.
To avoid these horrendous problems, the city had no choice but to block that sale and take over ownership itself. The sale to Gulf Breeze and Milton involved dozens of other municipalities in Florida that had FWS assets. Marco Island, having the largest stake in this issue, had to take the lead in trying to block the sale and then try and reduce Marco Island's price.
The city's first action prior to purchase was to complete an intensive and thorough review of the condition of the system and the need for repairs and upgrades. We knew that the Marco Island's water systems had not been adequately maintained or upgraded for several years. The City hired one of the world's leading companies on water and sewer systems to inspect the system and identify needed actions. After months of review, they submitted a 200 page report (available at City Hall) outlining all of the needed actions and the estimated costs. The City was able to use this report to demand a lower purchase price than the original allocation of around $120 million. The end result was an agreed upon price of $85 million. Professional and complete due diligence work by the City saved $35 million in the purchase price.
Prior to purchase the city also had to assure that they could buy the system and complete urgently needed repairs and upgrades without raising rates (other than cost of living adjustments) for five years. It was estimated that some $20 million in immediate work would be required. The city hired a well known rate analyst that did a twenty year financial pro forma and concluded that the five year commitment to hold off rate increases could be met even with the addition of the $20 million repair and upgrade plan. This commitment was met.
To assure that there was public support for the purchase, City Council held numerous public hearings on the matter and it was clear that the community was solidly behind taking control of the systems. Not one organization opposed the purchase.
It was only after the city was convinced that they knew the condition of the system, were able to reduce the price by 30 percent, could make the urgently required repairs, had public support and were assured that rates would be stable for five years, did the city move to purchase the system. This certainly was not a case of lack of due diligence as Mr. Sacher and Mr. Thomas allege.
The alternative to purchasing the water company ourselves would have been having Gulf Breeze and Milton own our systems. That "plan" would have resulted in total loss of control by Marco Island, massive rate increases, disastrous failures of our water and sewer systems and water shortages. In addition, I am sure that all voices of input, objection or protest, would have been scoffed at by the local city councils. Who would have cared? I am anxious to see what positive, constructive alternatives Mr. Sacher and Mr. Thomas have.
As Bernard Baruch once said: "Every man has a right to be wrong in his opinions. But no one has a right to be wrong in his facts." One fact that cannot be refuted is that past members of our City Council and other community leaders worked hard in blocking the sale to others, reducing our purchase price and assuring that our system worked and that we controlled our own destiny on this vital resource. Since 2003 there have been no utility related major spills or water shortages and the utility has received numerous state-wide awards for operational excellence and environmental compliance. Sure there are significant growing pains and unexpected factors that occurred, but untrue, unfair and totally negative bashing is unfair.
In 2008, the last time our community voted for a majority of City council, they overwhelmingly rejected the tactics of misinformation and negativism. Mr. Sacher and Mr. Thomas should heed that warning.