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No fix yet for McHenry Shores subdivision water hassle

Published: Sunday, April 21, 2013 5:30 a.m. CDT

McHENRY – Stefanie Ledet has lived on and off in the McHenry Shores subdivision since she was 5 years old.

But as the 29-year-old looks for a new home for her husband and four boys, she isn’t sure whether living near her family, neighbors and her husband’s workplace is worth the hassle and frustration caused by the water situation in the subdivision.

She’s especially frustrated by the city of McHenry’s decision not to pursue the purchase of the private water company, McHenry Shores Water Co., that supplies the 500-plus homes.

“We were angry [when we found out],” Ledet said. “We were frustrated. We thought, ‘Where do we go from here?’ We don’t know where to go from here. The city was pretty much our only hope to get a new water system in here.”

The city of McHenry had looked into buying the water system when it found out its owner, T.P. Mathews, had filed for bankruptcy and the company was for sale.

It sent out a survey to residents to gauge their interest in the city buying the company.

Of the 535 households that received the survey, 285 responded positively and 30 responded negatively.

However, the city “acting with the best financial interests of McHenry Shore residents” did not purchase the company, avoiding entering into a “bidding war,” the city informed the residents in a letter dated March 22.

The city of McHenry made an initial offer of $200,000 for the system, City Administrator Derik Morefield said.

Morefield decided not to make another offer based on the consensus he received from city council members during a closed session. The council did not take a formal vote, which would have had to have happened during an open session.

“There was no cap amount from the residents,” he said. “We didn’t ask them ‘How high do you want us to go?’ All of them would probably have to give a different price.”

The intent was to keep the purchase price low because the city would have to spend an estimated $1.5 million to connect McHenry Shores to the city’s water supply and install water meters, he said.

Both the purchase price and the cost of improvements would have been passed on to McHenry Shore residents, who likely would have paid it through a property tax established through a special service area.

In spring 2011, the city offered Mathews $2,000 per household, or about $1 million, trying to negotiate down from Mathews’ asking price of about $4,050 per household, or about $2.1 million.

The two offers are very different, Morefield said. In the bankruptcy process, the city was bidding “blindly,” not receiving a counteroffer and not knowing whether it had the highest bid or not.

In a sale with Mathews, the city could have come to a deal and then run it by the residents for approval before going ahead, something that was not an option in the bankruptcy case, Morefield said.

City officials do not know who the potential new owner is or how much they offered. The buyer is in the due diligence stage of the purchase, Morefield said.

“It’s scary to think whoever bought this water company is just going to leave this the way it is,” Ledet said, adding that she’s sick of water that’s yellow and ruins clothing and appliances.

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