Venture Out sues FKAA, county over sewers
By Steve Estes
Resort seeks takeover of park infrastructure
Venture Out Resort on Cudjoe Key has filed a declaratory action in the local circuit court against the Florida Keys Aqueduct Authority and Monroe County over the resort’s treatment in development of the Cudjoe Regional wastewater system.
Venture Out, with 659 individual homeowners as part of a more massive resort, has been operating its own wastewater system for years.
Now, the park is slated to become part of the county’s Cudjoe Regional system.
To do that, plans are to tie into the existing park wastewater lines at the lift stations into a single pipe running along Spanish Main Drive. It will require two connections to the street. And for those two connections, the county is only going to charge Venture Out about $3 million.
Under county rules for system development fees, each individual residential property is assessed one equivalent dwelling unit at $4,500. Then the common areas of the resort are charged as a commercial entity based on the average rate of water usage against the typical single-family home.
Just in residential hook up fees, the money to the county for assessments is just under $3 million. It’s over $3 million with the commercial assessment added in. In the overall financing plan for the Cudjoe Regional, Venture Out covers about 10 percent of the anticipated revenues from hook up fees.
For two pipes.
“If we were a standard RV park that owned the land and rented the spaces, the fee would have been about $500,000 total,” said Stan Bowers, President of the Venture Out Homeowners.
But the amount of the assessment isn’t what has resort owners up in arms.
“We are all pretty much in agreement that the $4,500 individual assessment is a done deal and we’re OK with that,” said Bowers.
Where the two sides diverge and the reason for the declaratory action, is how FKAA has structured future payments for the eventual users of the Cudjoe Regional system.
Venture Out owns and currently maintains its own wastewater treatment plant and collection system inside the park. It also, however, serves as its own water utility, pumping in FKAA water through central meters and distributing that to the individual homes and common areas through a piping system owned by the park and maintained by dues from the residents.
“FKAA wants us to continue that practice,” said Bowers.
With no changes in current philosophy, Venture Out will be responsible for the maintenance of its internal wastewater collection system and water distribution system. FKAA will charge the resort, at a commercial water rate rather than the lower residential rate for the water used, and also use that water flow rate as a base charge for sewer bills. The resort management will then have to bill the individual properties for their pro-rated share of the bill.
“We have no individual FKAA meters so that the utility can assess each property their fair billing in water usage and sewage flow,” said Bowers.
That raises several legal issues, he believes, the most prominent one being that if residents don’t pay the sewer bill, they can’t lose service because FKAA can’t prove how much they owe without individual meters. The same holds true with water.
“That’s not even legal,” said Bowers.
He said the resort, FKAA and county officials have been in negotiations about the issue for more than eight months.
Once those negotiations reached a loggerhead last month, the suit became a reality.
Venture Out made what Bowers and the rest of the resort board felt was a fair and profitable—for FKAA—proposal to FKAA to avoid some long-term issues.
“We offered to let FKAA take over our treatment plant at no cost to them. They can keep it operational or dismantle it, their decision. In return, they will install a new water distribution system inside the resort with individual FKAA meters,” said Bowers.
The intent, he said, is to ensure proper billing for the individual properties.
“Many of our residents are seasonal. For most of the year they will pay nothing but the base facility charge under our proposal. Those who rent their units, or live here full time, will pay higher monthly bills based on water flow. That makes it more equitable and ensures that everyone must pay to keep their service,” said Bowers.
What Venture Out gets is a new water distribution system at the expense of the FKAA.
“But that’s a money maker for the utility,” said Bowers. “It also gives us some value for our infrastructure that we paid for.”
Bowers says that FKAA will make money in the long run because it will be able to fairly charge individual properties for their actual usage of the system.
The sticking point, he says, is that FKAA says it doesn’t have enough capital money in its coffers right now to install a full water distribution system inside Venture Out to service the 659 units and the common areas.
“As a utility, FKAA can borrow money against the revenue stream we produce, or bond money against general revenue,” said Bowers. “This would be a seven-year payback of capital for them, after which they make money.”
Bowers said the resort board thought this agreement was a done deal after a FKAA report said that the treatment plant on the property could serve as a stand-alone treatment plant if necessary, and actually hook up 200 more surrounding homes.
FKAA has the authority under state regulations to develop water distribution systems, and even wastewater collection systems, on private property. They used that authority, said Bowers, when they installed the collection system on Shark Key. The fee for that system was the $4,500 paid by the individual properties.
“We feel this is a fair and equitable solution to the issues,” said Bowers.
He said county officials, who the resort board once thought were comfortable with the agreement, have now said they don’t want to use county funding as part of the Cudjoe Regional financing plan to get into the water business as well for FKAA.
“We just aren’t getting our money’s worth,” said Bowers. “We already have the pipes for sewer collection. They are fairly new and they are regularly tested.”
The water pipes are another story, somewhat older and more prone to failure, thus the request for a new system that the FKAA would install and service for the usual fee, just as it would for any other residential user.
“This issue should have been sorted out years ago,” said Bowers. “How to handle the issues of Venture Out should have been part of the initial planning process.”
Now, he says, the resort is looking for the courts to decide the issue.