By MATTHEW WAITE and CARY DAVIS
NEW PORT RICHEY, Nov. 21, 2000 (St.Petersburg Times)—A lawsuit against Lindrick Services Corp. over $1.5-million in repairs could hurt the chances of the county, or New Port Richey, buying one of Pasco's largest — and most controversial — private water utilities.
"It doesn't help," Lindrick owner Joseph Borda said on Monday. "Maybe that's why the lawsuit was filed. It might be one of these opportunistic things."
H2O Utilities owner Gary Deremer filed suit Friday in Pasco Circuit Court against Lindrick, alleging that Borda still owes $1.5-million, plus interest, for repairs that H2O has made on Lindrick's water transmission lines since 1998.
Lindrick already has paid H2O at least $1.4-million for the project, but unless Borda can make up the difference, Deremer's attorneys are asking a judge to place a lien on the utility and order it to be sold at public auction.
Lindrick is one of the largest private utilities in Pasco, serving nearly 10,000 people in the Gulf Harbors and Shamrock Heights area. The service area is bounded roughly by Green Key Road to the north, U.S. 19 to the east, Shell Stream Boulevard to the south and the Gulf of Mexico to the west.
The suit comes after Borda and Lindrick customers had been trying to clear a path for a potential sale of the utility. In September, customers signed an agreement with Borda essentially freezing their water rates for three years in exchange for residents dropping their dispute of a past rate increase.
Pat Gorecki, a member of the group of neighborhood associations that signed the deal, said Monday that the lawsuit could either complicate the sale, or maybe push Borda to sell quicker.
"I just wonder if that would make him any more eager to sell the thing," Gorecki said. "But no one is going to take it as long as there is this lawsuit."
Borda would not comment specifically on the allegations in the lawsuit, saying neither he nor his attorneys have had a chance to review it. But he did acknowledge there was a dispute over payments.
"There's no question there's a difference of opinion of what's owed to whom," Borda said in a telephone interview from his company's Merchantville, N.J., headquarters. "We've been disputing bills for several months, and before we had a chance to settle it, I guess they just went ahead and filed suit."
Deremer did not return a call for comment. His attorneys at the Tampa firm of Annis, Mitchell, Cockey, Edwards & Roehn also did not respond.
County commissioners decided in June to launch a private utilities acquisition program. County officials estimate that the purchase price for all utilities in the county could top $100-million, which the county would raise through revenue bonds.
The total cost for the four companies that have named a price so far is $17.5-million. The lion's share is the $16.8-million Lindrick Service Corp. is asking for its system. Part of the value of the system, Borda has said, is the repairs that were done to improve Lindrick's water quality.
But any sale isn't so easy.
Borda and New Port Richey are still in court over a disputed right of first refusal Lindrick gave to the city in exchange for the forgiveness of some debts. A right of first refusal would give New Port Richey the first shot at buying Lindrick.
New Port Richey city council members have said they were interested in buying Lindrick — and not interested in giving up their right of first refusal. Council members have met with county commissioners briefly about the value of their right of first refusal and who would buy the utility.
The city and the county agreed to put off any discussions of who was going to try to buy Lindrick until after the county finished soliciting utilities interested in selling.
Relations between New Port Richey and Lindrick have been contentious. Lindrick first shopped the utility to New Port Richey in 1996, asking for $7-million. The city offered around $3-million, and Lindrick never responded.
Then, while Lindrick negotiated a sale with Port Richey that ultimately failed, New Port Richey stopped a company run by people with ties to Borda from drilling wells that would have provided Lindrick with water. Pasco Reserve sued the city, and that case is pending in a Dade City court.
In June, New Port Richey voted to cut off bulk water service to Lindrick after the utility fell behind in paying bills to the city. The bills were paid before the water was turned off.
And Deremer's role with Lindrick has been controversial.
Critics of the Port Richey deal with Lindrick pointed out that Deremer, the city's utilities consultant/director, had a conflict since he was also under contract with Lindrick. City officials kept Deremer from speaking at meetings about the deal.
In 1997, Borda asked the county to sponsor $15-million in bonds. Under the deal, Borda, county lobbyist Clyde Hobby and Deremer would have incorporated as directors of West Pasco Utilities, a non-profit corporation that would buy Lindrick. Once the bonds were paid, ownership of the utility would have reverted to the county.
Had county officials agreed to back the bonds, they would have opened a tax loophole for the utility's directors, enabling them to offer potential investors tax-free interest on the bonds, the county's bond lawyer said at the time.
That deal also failed.
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(c) St. Petersburg Times, published November 21, 2000
