ORLANDO, FL – April 14, 2017 – Orlando attorneys Rachael M. Crews, Thomas A. Cloud, and Kent L. Hipp scored a bullseye victory for the City of Bushnell on April 7, 2017 when a final arbitration panel, in a historic decision, sided with the City in its valuation of electric utility assets it has the option to purchase under a Franchise Agreement with Sumter Electric Cooperative, Inc. (SECO). SECO’s valuation exceeded the City’s valuation by more than $11 million. For only the second time in firm history, a utility valuation arbitration panel awarded the number presented by the City.
The City of Bushnell is located in Sumter County, Florida, and has approximately 2,500 residents. In 1981, the City and SECO entered into a 30-year Franchise Agreement for SECO to provide electric service to a portion of the City’s residents. At the end of the 30-year term, the City had the option to purchase SECO’s electric facilities located within the city, after an arbitration panel determined the value of the assets. The City valued the assets at $4.8 million; SECO valued them at $16.1 million. The arbitrators rejected SECO’s expert testimony and valuations and instead adopted the City’s expert valuations. This was only the fifth arbitration in Florida history to determine the value of electric utility assets for the purpose of a municipality exercising a purchase option. The final arbitration was held on February 20-24, 2017 in Bushnell, Florida. The arbitrators were George W. Greer, Manuel Menendez, Jr., and Michael R. Carey.
This marked the third straight legal victory for Bushnell in as many cases involving SECO since 2015 when SECO sought to block the sale. SECO was represented by three different law firms in the three proceedings; Crews quarterbacked all three proceedings for Bushnell. Cloud, who has been involved in all but one of the past Florida franchise option valuation arbitrations, said "while all of these cases have been hotly contested, it is rare that one side’s valuation is completely adopted by an arbitration panel."