NOT A FLUID TRANSITION

Fluid Dynamics Holdings is a Delaware-based company that wants to save the residents of Jacksonville’s apartment complexes thousands and thousands of dollars in water bills.

The city of Jacksonville and its Jacksonville Electric Authority, while initially supporting the effort, have now done everything they can to sabotage the project, Fluid officials say, including bribing a company that runs thousands of apartment units across the country and threatening contractors and even St. Johns County with severe repercussions if they continue to do work for or do business with Fluid Dynamics, according to a $75 million lawsuit filed in federal court in December.

At issue is the company’s purported less-expensive water usage method for residents of apartment complexes in Jacksonville, as well as others who live in multi-residential communities, officials said. The system reduces water flow, which generally would lead to lower pressure, but Fluid Dynamics’ technology is designed to maintain the same pressure while decreasing the amount of water consumed.

Despite the intentions of the design, the city and JEA decided the system was a hazard to safety (firefighting) and health. But they didn’t decide that until well after initially approving it in 2012, even opening the water system for contractors to do the work. A burgeoning business and thousands and thousands of dollars saved in water bills went straight down the drain, the lawsuit says.

The city and JEA have denied any wrongdoing, but officials decline to comment, referring those with questions to read recent court filings.

“Due to the ongoing litigation, the documents that we filed with the court speak to the case and stand alone,” says city public affairs officer Bill Spann. In their responses, the city and JEA denied all allegations cited by Fluid Dynamics in the lawsuit.

According to Fluid Dynamics, the company already had systems installed in about eight of 15 Jacksonville complexes run by Mid-America Apartment Communities Inc., which has a contract with Fluid for numerous complexes and have installed hundreds of others in MAA complexes elsewhere.

“Pursuant to the Lease Agreement, FLUID installed 564 Precision Flow System valves on 100 different MAA properties, including 8 MAA properties in Jacksonville, Florida,” the lawsuit says. “JACKSONVILLE and the JEA were aware of the business relationship between FLUID and MAA and the installation of the Precision Flow System valves on the 8 MAA properties in Jacksonville … MAA met with representatives of the JEA at MAA properties … to discuss the Precision Flow System. Employees of the JEA opened utility vaults on MAA properties and permitted FLUID to assess and survey the plumbing and install the Precision Flow System.”

But mistakes were made.

“In November 2012, MAA informed FLUID that the JEA had identified two Precision Flow Systems installed on fire lines at MAA properties,” the lawsuit says. Fire lines, which require as much water pressure as possible, were not part of the deal.

Fluid Dynamics spokesman Jeff Weiner says the two sides met to discuss the mistake.

“They were aware that MAA had contracted and installed the systems. We got a call that there were two on fire lines on two different properties. We had a meeting with fire marshals, the city and JEA. It was a very collegial meeting. We presented an independent test of how our system works. If there was something installed, we were unaware, and we will take them off,” Weiner says. “We were going to work together. They were interested and wanted to do further testing and so on. It was friendly.

“The next day we got blasted in the media.”

In a First Coast News TV newscast on Dec. 4, 2012, city and JEA officials said Fluid Dynamics was putting apartment complex residents in danger by trying to trim water bills and lowering water pressure.

Fluid Dynamics saw that as a 180-degree turn they knew nothing about until the newscast. They also claim in the lawsuit that the defendants libeled their company and its efforts. And they question possible other motives in the new stance.

JEA saw that the new technology might cut into its revenues, which already were being raided by a city decision to use some of that money to help fund city pension shortfalls, Fluid Dynamics claims in the lawsuit. Though the city cited safety and health concerns for not allowing the new system’s installation, Fluid says the real reason is that JEA revenues could have suffered.

So JEA pulled out the new equipment and that was that, until Fluid filed the suit.

Weiner says the defendants are violating the No. 1 rule for utility providers.

“All utilities are mandated to conserve,” Weiner says. “Whether it’s electricity or water. Our system services water. The difficult part is that utilities, like any other organization, want to make more money.”

Fluid Dynamics ultimately lost its agreement with the city and then with MAA, a major client loss. Fluid Dynamics says the city and JEA paid off MAA to end its relationship with its company with an “incentive and subsidy package provided by JACKSONVILLE to MAA [that] included a contribution of $1,800,000 in infrastructure work and $5,150,000 in tax refunds.”

Fluid Dynamics is not tucking tail and running. It’s suing the city and JEA not just for blocking its installations, but for libel and slander and interfering with its business opportunities in St. Johns County.

The lawsuit argues Fluid, the city and JEA had agreed to let longtime Northeast Florida contractor W.W. Gay Mechanical Contractor Inc. test the system independently to determine if it was safe. But later, “JACKSONVILLE and the JEA threatened W.W. Gay, by stating that it would blackball W.W. Gay and take away future work from W.W. Gay if it worked with FLUID,” the lawsuit says.

IT DIDN’T STOP THERE. 

Fluid entered an agreement with St. Johns County to install its system on single residential homes as a test run, but, “When they learned of the burgeoning relationship between FLUID and St. Johns County, JACKSONVILLE and the JEA threatened to remove municipal and utility cooperation and assistance from St. Johns County if St. Johns County continued its business relationship with FLUID. Because St. Johns County heavily relies upon the JEA for utility support and services, St. Johns County terminated its business relationship with FLUID. It was the threats from JACKSONVILLE and the JEA which destroyed the business relationship between FLUID and St. Johns County.”

St. Johns County officials have denied they terminated the agreement because of pressure from Jacksonville officials, saying they approved only one installation and did not plan on allowing more.

Weiner says the city and JEA have continuously stalled since the lawsuit was filed, denying requests for information they believe will bolster their case.

Other than written responses to the allegations in the complaint, the city has dragged its feet on providing Fluid Dynamics with documents and other information they think will support their case, he says.

“It’s certainly been delayed by the city and the JEA,” Weiner says. “They’ve been less than responsive on the discovery requests.”

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