As the Gateway Services CDD tries to learn from – and move on from – the problems created by the Water Meter Replacement Project, the district’s Board of Supervisors will have the opportunity put one of the major issues behind them today.
The company that was hired to physically install the new meters is named Fortiline. According to documents obtained by the Gateway Sun, Fortiline was paid $59 by the district for each standard single home (5/8”) meter that they installed.
Rather than do the work itself, Fortiline then turned around and hired Severn Trent as a subcontractor to actually install the meters at $29 apiece.
Some people were astonished at this arrangement, since at the time a different division of Severn Trent was also in charge of managing the entire Gateway district.
This meant that Severn Trent was being paid as District Manager… to oversee itself… installing water meters… for which it was authorizing separate payments… through Fortiline… to themselves… in a project paid for with public funds.
A textbook conflict of interest scenario.
When the meter-installing division of Severn Trent botched the install and had to be fired, it created all kinds of headaches. Some pointed out that the arrangement that was created with Severn Trent double-dipping should have never been allowed in the first place.
At the insistence of Supervisor Ed Tinkle, the GSCDD withheld the final payment of approximately $98,000 to Fortiline and Tinkle had planned to make a case that some or all of that money should be forfeited by the contractor due to the subcontractor’s performance and still ongoing issues with the meters.
However at a recent meeting in June between Fortiline and GSCDD officials, Fortiline made the case that they had fulfilled every requirement of the contract and deserved their money. Tinkle apparently agreed, since he returned from the meeting and explained to the rest of the Supervisors on July 6 that the money due to Fortiline should be released without further delay.
At today’s meeting of the Board of Supervisors, the board will vote on whether or not to pay Fortiline and close that chapter of the Water Meter Replacement Project.
Severn Trent has since been relieved of their duties as District Manager of the GSCDD, although not directly as a result of the water meter issues.
The GSCDD meeting will take place at 13240 Griffin Drive at 3:00pm.
The GSCDD is no-doubt frustrated because they keep having issues with the new smart meters to this day, despite the fact the district was assured this would be a “turn-key project”. Some of the issues are caused by poor installation, and others by faulty equipment. But it’s a nagging problem that doesn’t seem will be going away any time soon.
The main problem these days is that labor costs are adding up for the district as they replace an inexplicable number of failing Stealth Reader Meter Interface Units from Zenner USA. While Zenner has kept their word and are replacing the failed MIUs under the terms of the warranty, the GSCDD still has to pay someone to take the new unit to the location, perform the replacement, then package up and ship the failed unit back to Zenner.
But that isn’t Fortiline’s fault.
And honestly, I hate to change gears on you here – but the GSCDD needs to just move on from Fortiline and their $98,000. What’s done is done. Learn from the past and move on.
They need to focus on the future, and the much larger problem of the water meter connection fee issue.
The district has provided me with documentation that bolster Tinkle’s claim that he’s been making for years which is that each water and sewage connection to a single home is worth $7,000 but the district only charges the real estate developer $1,797.
According to the documentation provided to us by District Manager Chris Shoemaker, the developer also pays Lee County a $5,100 connection fee to be connected to the county-owned water and sewage plants. That was a crucial piece of missing information from our first article on this topic.
If you look at Cape Coral, that city charges $12,100 to developers to connect a standard home to water and sewage.
Tinkle told me that Cape Coral has its own plants and therefore the developers do not pay Lee County the $5,100. They just pay the $12,100.
If you subtract $5,100 from Cape Coral’s $12,100 – what do you have?
Tinkle also said that the water utility has a book value of $45,000,000. I don’t know if that’s right or not but Tinkle’s guess is better than mine. And he’s probably not guessing.
If you divide that $45,000,000 by $7,000 per connection you’d have 6,429 customers. That’s obviously not laser accurate, but it sure does sound like it’s at least in the ballpark. So early indications are that Tinkle has been correct all along: the Gateway CDD has been undercharging developers to connect new homes to the community’s water and sewage system.
And if you think that Gateway is mostly built out and it’s too late to start charging now, consider that according to GSCDD records over new 150 meter connections were installed in the first half of 2017.
So if Tinkle is right and developers are underpaying by about $5,000 compared to other communities, that would be over $750,000 in lost revenue for the GSCDD between January and June of this year alone.
There could be tens of millions since the inception of the district that is gone forever. But there are still millions of dollars on the table that can be collected in the future.
Anyway, only the Fortline issue is on the agenda for today’s GSCDD meeting. This meter connection fee issue is still being researched (at least on my end) but I’m sure it will come up at some point.
The Fortiline problem could (and probably should) be put to bed, today. On the connection issue, the board should direct the staff to investigate and provide a full, official report.