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Palm Beach Post: Private firm courting West Palm Beach’s water system

Monday, September 22, 2014

A New England-based firm says it wants to be the water provider for West Palm Beach, building a new plant on the coast to replace the city’s 120-year-old complex.

New England-based Poseidon Resources, in talks with both elected officials and city staff, has proposed building a plant on property near the Florida Power & Light Co. power plant just north of the West Palm Beach line in Riviera Beach.

West Palm Beach Mayor Jeri Muoio and assistant city administrator Scott Kelly, the point man on water supply, said this past week that they worry they might not get enough in selling the current water plant property, at Tamarind Street and Banyan Boulevard — as prime a site as that is — to justify the tremendous cost of building a new water treatment plant from scratch.

No problem, a Poseidon official said Friday.

“Our proposal is a public-private partnership which basically removes the financial burden and development risk from the city,” Guillermo Espiga, Poseidon’s senior vice president and head of development, said from Boston. “We will design, finance, build, operate and maintain the new facility. We’re taking all the financial risk.”

He said the city could own the complex. And he said Poseidon even would cover the cost of running pipes the 5 miles to Clear Lake and Mangonia Lake to pull the water, then send treated water back to transmission points. Which, not coincidentally, are near where the water plant is now.

Espiga said Poseidon is convinced it can produce water with enough productivity and efficiency to sell it to West Palm Beach for what the city’s spending now to produce it, and still recoup its private investment. He said Poseidon also could offer the option of adding desalinization later.

The discussions between Poseidon and the city come as the Department of Health of Palm Beach County wrote West Palm Beach on Sept. 17 to remind it that the clock is ticking on its 2008 consent order.

In 2007, the Palm Beach County Health Department cited the city for 23 violations after fecal coliform contamination forced residents to boil water before drinking it. Facing more than $1 million in fines, the city agreed the following year to pay $445,195 in fines and costs and to pay the salaries of health department workers to oversee operations in the city’s water plant. The city’s biggest and costliest commitment was to build a new water treatment plant by 2018.

“With less than four years remaining before the compliance deadline, no permit obtained for the construction of the enhanced treatment systems, or approval of alternative water supply, it is imperative that the city understand that the health department has full intent to enforce the order,” Director Alina Alonso wrote. She said that would mean a $1,500-a-day-fine after the Sept. 2, 2018 deadline.

“We feel it will be difficult for that plant to meet the consent order,” Posiedon’s Espiga said Friday. He said he could “absolutely” build the plant in time to meet the deadline.

Espiga said he’s “identified a piece of property where we could develop the project” but would not give the exact location of the tract except to say it was “very close” to the FPL plant. He would not say whether Poseidon already has bought it.

Espiga said he hasn’t talked numbers yet with the city but hopes to make a formal presentation at a future city commission meeting.

Assistant City Administrator Scott Kelly told commissioners at their Sept. 15 meeting that he’d met with Poseidon as recently as that day.

Kelly said he’ll put together a formal presentation in the next month or two detailing all the options for long-term water supply. Others: Upgrading or completely overhauling the current plant, or closing it and building another one on 200 acres just south of the East Central Regional Water Reclamation Facility, operated by West Palm Beach in partnership with Palm Beach County, Lake Worth and Riviera Beach.

“Our plan is to look at alternatives and what it’s going to cost,” Mayor Jeri Muoio said Sept. 17 at her weekly news briefing. “Ultimately, it’s going to be on the back of our taxpayers.”

But, she said, “I don’t think we should have our blinders on. We have to look at all options.”

Kelly said after Monday’s meeting, “It’s been studied before. We’re going to study it again.”

And Commissioner Kimberly Mitchell said that with the consent order looming, “it has to reach a point where the juice is worth the squeeze. If we have to go back in and make a bunch of new improvements there (the current plant), does it make sense to look for another place?”

Poseidon also has met with leaders in Palm Beach; its contract with West Palm Beach runs through 2029.

Poseidon soon will start on a $900-million, 50-million-gallon-a-day desalinization plant in Carlsbad, Calif., near San Diego. It already is building a complex of the same cost and output in Huntington Beach, just south of Los Angeles. Poseidon was the original developer of the 25-million-gallon-a-day desalination plant in Tampa Bay, but was not part of the picture by the time the plant eventually was built. It’s since been criticized for not generating enough water to pay for itself.

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