Lake Osborne Waterworks - $1,000,000.00

One way to get rid of a lawsuit--just buy the plaintiff's assets in the area of dispute. And ever since the bond was voted in by the residents of Lake Worth and the penny sales tax was approved by the voters, the city government is having a field day. But as our city attorney has said, lawsuits are always 50/50. So, if that is the case, why aren't they settled sooner?

A little over two years ago, the City Manager entered into an agreement not to exceed $25,000 with Manson Bolves Donaldson PA (“Firm”) to defend the City against a lawsuit filed by Lake Osborne Waterworks, Inc. (“Plaintiff”). The claim relates to the City’s provision of potable water to Plaintiff (formerly known as Lake Osborne Utilities Company and once known as Aqua Utilities), a regulated utility company under Florida law. Legal fees must be escalating now by all the lawyers involved, thus this proposal that is on the consent Agenda.

Lake Osborne Waterworks, a company that buys water from Lake Worth and distributes it through their pipes, sells it to Lake Osborne Estates.  The single family residences in Lake Osborne Estates are charged as if they are multi-users and the rates they pay are astronomical. The company reached a settlement with Lake Worth on June 1, 2017 and the city is just now telling us about it with NO discussion.

TITLE: Resolution 42-2017 extending the City’s water utility system and providing the proposed service area to be included in anticipation of the purchase of the Lake Osborne Waterworks.

The City's SUMMARY:

The Resolution will extend the City’s water utility system and provide for the purchase of this utility as part of a litigation settlement at a later date.

BACKGROUND AND JUSTIFICATION: In 2014, Lake Osborne Waterworks, Inc., a private utility provider serving 466 homes in unincorporated Palm Beach County, initiated litigation against the City of Lake Worth contesting the rate that the City charged Lake Osborne Waterworks for water service. After attending several mediation sessions, the parties have conditionally agreed to terms for the purchase of the utility by the City, subject to Commission approval. The parties have prepared and seek approval to enter into purchase and sale agreement between Lake Osborne Waterworks, Inc. and the City of Lake Worth for the purchase of the utility.

This transaction has been negotiated and reviewed by the City’s water utility department including Director Brian Shields and former director Larry Johnson, as well as outside counsel, Brian Bolves, outside consultant Andrew Burnham and City Attorneys Glen J. Torcivia and Carolyn Ansay. The agreement provides that the City will pay one million dollars and acquire the water system owned and operated by Lake Osborne Waterworks, Inc. on or about October 1, 2017. It is anticipated that the Purchase and Sale Agreement will be set for a public hearing on the Commission’s September 19, 2017 agenda.

Procedurally, prior to considering the Purchase and Sale Agreement, the City must comply with the statutory process to extend the City’s water utility system and service area. The attached Resolution sets forth the proposed service area and provides the public with an opportunity to file written objections prior to the Commission’s August 15, 2017 meeting and provides for a public hearing on that date if any objections

Lake Osborne Waterworks vs. City of Lake Worth

Last night, Glen Torcivia, city attorney, announced that he would be having a closed session on June 20th regarding the "Lake Osborne Water, lawsuit." This involves a bulk water agreement.

This is a suit that was first filed  in July 2014 on what the plaintiffs believed to be unreasonable and discriminatory water rates. The Plaintiff said they were filing for damages to compensate for overcharges dating to October 2008 that involved Lake Osborne Estates. Prior to them servicing that community, Aqua Utilities Florida Inc. was the company involved between the City and Lake Osborne Estates.

Lake Osborne Waterworks, a company that buys water from Lake Worth and distributes it through their pipes, sells it to Lake Osborne Estates.  The single family residences in Lake Osborne Estates are charged as if they are multi-users and the rates they pay are astronomical.

A non-jury trial was scheduled for June 5, 2017 but now the parties have apparently agreed to settle as of June 1, 2017..


Blog from August 2015...

E-Coli in Lake Osborne Estates

MEDIA ADVISORY

FOR RELEASE UPON RECEIPT

Water Utilities Department

301 College Street

Lake Worth, FL 33460

561.586.1710
lakeworth.org

Contact:               Timothy Sloan, Water Plant Manager

Phone:                 561.586.1710

Email:                    tsloan@lakeworth.org

Drinking Water Notice

The Lake Osborne drinking water system – aka US Water Services - purchases their drinking water from the City of Lake Worth.  A water line repair was made last week by US Water Services in the Lake Osborne Subdivision (a consecutive water system of the City of Lake Worth). Following the repair, bacteriological samples were collected and the samples tested positive for the ecoli bacteria.  US Water is collecting additional samples to determine the extent of the problem.  Although the Lake Osborne water infrastructure system is not within Lake Worth jurisdiction, the City – in the upmost of caution – wishes to inform its end-users of this issue.  US Water Services will be informing their customers via public outreach. 

The City of Lake Worth Water Utility constant goal is to provide safe and dependable drinking water. Lake Worth monitors the drinking water well field and distribution system routinely throughout the month. All bacteriological samples have tested absent this month, including the most recent bacteriological samples collected on November 11, 2016.  The City of Lake Worth will inform our customers of any change in water quality.

This affects LAKE OSBORNE residents that utilize US Water Services ONLY.

For more information, please contact US Water Services at 866.753.8292 ext. 207 

For general guidelines on ways to lessen the risk of infection by microbes are available from EPA Safe Drinking Water Hotline at 1-800-426-4791 or at https://www.epa.gov/ground-water-and-drinking-water/safe-drinking-water-hotline

Lake Worth over-charging its neighbors for water?

Comment Up

Is Lake Worth over-charging its neighbors for water or is it just good business? He who controls the water, controls the world.

Tonight under New Business is an agreement for legal services:

EXECUTIVE BRIEF TITLE: Agreement for Legal Services with Manson Bolves Donaldson P.A

SUMMARY: The City Attorney recommends entering an agreement for legal services with Manson Bolves Donaldson P.A.

BACKGROUND AND JUSTIFICATION: Several months ago the City Manager entered into an agreement not to exceed $25,000 with Manson Bolves Donaldson PA (“Firm”) to defend the City against a lawsuit filed by Lake Osborne Waterworks, Inc. (“Plaintiff”). The claim relates to the City’s provision of potable water to Plaintiff (formerly known as Lake Osborne Utilities Company), a regulated utility company under Florida law.

I guess he didn't realize, at the time, the seriousness of the charges or he didn't want to have it come before the commission. Now he has to get their approval to spend more money on a trial that begins in less than two weeks.

On or about 1974, the City entered into an agreement with Lake Osborne Utilities Company to furnish potable water from the City so that Lake Osborne Utilities Company could provide water services to its retail customers, all of whom lie outside the City limits. Plaintiff subsequently acquired Lake Osborne Utilities Company. Plaintiff claims that the agreement with the City expired in 2008 and since that time the City has charged and collected excessive rates. The Plaintiff asks the court to invalidate the City’s fees, rates and charges and award it damages for all overcharges dating back to October 9, 2008, along with all attorney’s fees and costs to bring the claim. Currently, the case is scheduled to go to trial beginning on August 31st. Due to the specialized nature of Plaintiff’s claim against the City, the Firm was retained to provide its expertise in utility rate cases involving a regulated utility.

I reported on this suit a little over one year ago where Lake Osborne Waterworks, (remember Aqua Utilities?) a company that buys water from Lake Worth and distributes it through their pipes, sells it to Lake Osborne Estates (just down the road from me) filed a suit against Lake Worth. The single family residences in Lake Osborne Estates are charged as if they are multi-users.  Bill Coakley, president of Lake Osborne Estates Civic Association, says that Lake Worth is playing "hard ball."

Plaintiff claims are true.  Lake Osborne Heights is serviced by this company that buys the water from us. The residents are paying nearly double our rate and our rate is enormous.  As the president of this neighborhood says, "Lake Worth Utilities refuses to offer a bulk water deal.  It's quite unrealistic for us to be paying nearly double what a LW resident pays for the same water.​"

So I ask again, is Lake Worth taking advantage of its neighbors or is this just a smart business decision? We have spent multi-millions on our water plant. Are people who are not serviced by Lake Worth entitled to better rates or the same rates that we pay?  This is a question that will be decided in the courts.