Okaloosa Waterworks, Inc. (Blackman Community Water System)

Okaloosa County, FL

On February 12, 2020, U.S. Water Services Corporation purchases the Blackman Community Water System (BCWS) from the U.S. Marshall’s office through a public auction at the Okaloosa County Courthouse. The initial purchase was through U.S. Water Services Corporation, which subsequently entered into an asset purchase agreement with Okaloosa Waterworks, Inc. Okaloosa Waterworks, Inc. is a Florida company that was established specifically to provide water service to the Blackman Community.

BCWS is a not-for-profit corporation and starts as a Co-Op on December 13, 2004. BCWS was granted authority to provide water service by Okaloosa County in March 2007. The community is comprised of single-family residences, in the small, rural community of Blackman, FL. The community is in northern Okaloosa County. No other water systems provide water services to the community. Prior to the construction of the water system, Blackman residents relied solely on private wells for water service. More than half of BCWS customers lived at or below the poverty level at the time BCWS qualified for grants and loan financing for the water system.

The physical water system consists of two 400 gallons per minute deep wells and pump houses, a 150,000 gallon elevated storage tank, 40 miles of six-inch and eight-inch mains, valves, 177 fire hydrant, 320service connections with electronic read meters. The utility also owns two parcels of the property where the wells and pump houses reside. As evidenced by the fire hydrants and distribution main size, in addition to providing the community potable water, the system was designed and constructed to meet the fire flow requirements mandated by Okaloosa County.

Prior to construction of the physical components of the water system, a private engineering and design company estimated that the water system would eventually provide water utility service to more than 300 customers. In May 2007, BCWS applied for a loan and a grant from USDA/Rural Development (USDA). To qualify for a loan, BCWS provided income information regarding the anticipated users of the system to demonstrate that the users met the income guidelines for that approval of the loan and grant. USDA approved the loan application. The established need for the application was that the residents and other developments in the area relied upon private and limited use community wells that had a history of testing positive for coliforms constituent a public health risk. On November 19, 2010, BCWS executed a real estate mortgage and a Security Agreement granting USDA a lien on all of its real and personal property.

Construction of the water system costs approximately $5.1 million. BCWS received approximately $3.8 million in grant funds and approximately $1.961 million in loan proceeds from the USDA. Later, BCWS received additional grants of $229,068 from Okaloosa County to complete the construction of the water system. Construction of the system was complete in February 2012, and water service commenced in March 2012.

BCWS was unable to make timely payments to the USDA because the water system had fewer customers than projected by the private engineering and design company and did not generate the expected revenues. BCWS failed to make payments to the USDA loan since July 2014. USDA accelerated the loan in August 2015, and BCWS then filed for bankruptcy.

On March 27, 2019, the United States Direct Court Northern District of Florida entered into an order appointing a receiver. This receiver was the National Rural Water Association (NRWA). A final Judgement of Foreclosure was rendered on December 5, 2019, in the case of United States v. Blackman Community Water System, Inc., Docket No. 3:19cv158-TKW. A notice of sale was given and the final sale takes place through the United States Marchal on February 12, 2020.

Subsequently, the water system was transferred to Okaloosa Waterworks, Inc. through a closing held on March 31, 2020. Okaloosa Waterworks, in conjunction with the enterprise of the utility operations company known as U.S. Water Services Corporation, is responsible for operating and maintaining the utilities; as well as providing billing, collection, and customer service.

The owners of Okaloosa Waterworks are water and wastewater industry professionals. They have over 32 years of experience in providing water and wastewater services to customers throughout the State of Florida. U.S. Water Services Corporation is a Florida based contract operating company providing services to more than 1,000 systems statewide, with the customer such as; McKill AFB, the FGUA, City of North Lauderdale, Hillsborough County, Crystal River, Yankeetown, and a hose of other systems.

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