The Board of Directors has decided to sell Deer Creek Utilities to CSWR. Founded in 2014, Central States Water Resources (CSWR) is the 11th largest investor-owned water and wastewater utility in the United States. Since 2018, CSWR has invested more than $400 million to acquire and transform critical water infrastructure using technology and innovation to bring safe, reliable and environmentally responsible water resources to nearly 300,000 customers across 11 states: Arizona, Arkansas, Florida, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Texas. CSWR uses private investment to acquire and revitalize water systems that are often woefully outdated and dangerous, typically unbeknown to end users.
- What are we selling?
We are not selling our water, only the equipment that produces and moves the water/wastewater, the components of our wastewater and drinking water systems. This consists of the meters, backflow prevention devices, tools/shop equipment associated with utilities, pumping equipment and approximately 800 existing customer connections for water and wastewater services plus any future connections needed.
The Board has consulted with the corporate attorney, Mortgage holder and auditors regarding this decision. All have approved of the decision to sell the utilities.
- What happens to our current inventory?
CSWR receives all movable property used in connection with the ownership and/or operation of the utilities.
- Does land need to be sold?
CSWR will have use of all easements. They will need access to property from the main line to the meter in order to maintain and repair the lines. After signing the purchase agreement and prior to financial closing, CSWR will complete surveys and conduct title searches to confirm and verify ownership of any property that needs to be transferred to them.
- Why are we considering selling utility systems now?
The objective is to secure the future of Deer Creek for all our owners. Our utilities infrastructure is currently in fair condition but is more than 30 years old. Typically, the useful life for many of the water assets we use is 30 years, while most sewer assets are obsolete after 20 years. As our water and sewer continue to age, Deer Creek Utilities will require more maintenance, expertise, and incur higher costs, as well as increasing risk of an age-related major component failure. In addition, environmental regulations have changed significantly over the last 20 years and future changes are anticipated. These regulations make it increasingly more expensive for smaller systems to maintain compliance and require expertise that challenges smaller utilities (like Deer Creek) to find and keep qualified personnel to manage and operate the systems.
- What can we do with any proceeds?
The funds will be placed in savings to strengthen any underfunded projects/savings.
- What is the biggest risk in keeping the system?
There are both operational and financial risks. Operational risks include the challenge and cost to keep Deer Creek’s aging utilities system in compliance with current and future EPA, Federal Clean Water Act and standards given DC limited staff and financial resources. Financial risks include the increasing potential for a major component failure. The expenses far exceed Deer Creek Savings and drive a large cost to all owners. If a utility were to become non-compliant, at a minimum, a disclosure of noncompliance would be required for anyone trying to sell their property. These actions most certainly reduce property values.
- How much is Deer Creek being offered?
$138,696.00. There is no “wiggle” room, the offer consists of the assets (depreciated) on the annual report filed with the PSC.
- How does a sale make sure our systems are kept in compliance?
As federal and state compliance standards are becoming more stringent and increasingly difficult to meet, the cost to Deer Creek and pressure on Deer Creek staff will also increase. Our ability to stay in compliance depends on our financial ability to make system repairs and required updates. Additionally, Deer Creek shoulders the cost to hire, educate, and retain certified staff. CSWR is a technology-driven professional utilities company with substantial financial resources to upgrade DC equipment. They have highly trained full-time professional utility operators whose sole focus is to maintain utility systems like Deer Creek’s in full compliance with federal and state regulations.
- How will homeowner’s utility rates be impacted?
CSWR expects DC current rate will stay unchanged for up to 2 years until CSWR files and the PSC approves new rates based on completion and proof needed capital improvements to our system. CSWR is regulated by the PSC for fees as we are. CSWR will arrange a meeting to answer questions regarding their rates.
10. What can DC customers expect as regards to service?
CSWR stated they provide a 24/7 customer service call center and seeks to respond to all emergencies within a 2-hour window. Non-emergency calls are generally responded to the next business day. When a customer calls the customer service center, a log of the call and the service issue is documented, generating a work order, and provides a record by which the customer, along with CSWR can track the response and response time.
CSWR has a customer escalation process where customers can speak with the Internal Manager of Customer Experience.
If a customer response is not satisfactory, the customer may file a complaint with the FL Public Service Commission.
11. What are the next steps?
- Engineers/others will be 3-6 months preparing application to PSC (Will visit site and obtain details regarding all operations/equipment, etc.)
- Submit to PSC and wait an anticipated 8-10 months.
- Closing date-hand over keys/30 days after PSC approval.
*NOTE: Current utility workers will have the opportunity to submit an application/interview for positions with CSWR. They have the opportunity to transfer to a new position within Artemis, if they are interested to. They are provided with the opportunity to stay with us until then if/when they decide to leave.
If there are further questions or concerns, please reach out to your board Representative.
Respectfully,
Stan Staude
Board President – Deer Creek RV Golf & Country Club Inc.
Do not reply to this email. Please send questions regarding this communication to Samantha Jewell at sjewell.pmdeercreek@artemislifestyles.com
QA-Deer-Creek-Utilities-to-CSWR.pdf