Public attitude toward FP&L sale: Hopeful skepticism
STORY BY LISA ZAHNER - STAFF WRITER
(Week of April 14, 2011)
An event like Sunset Saturday attracts people from all walks of life, people who love Vero Beach and all it has to offer. A sampling of the opinions of people at last weekend’s street festival and free concert provided some insights into how the Florida Power & Light offer to purchase the Vero Beach electric utility is playing around the community.
The general feeling of people willing to talk to us on and off the record was hopeful skepticism -- hopeful that a good deal can be struck with FP&L, but skeptical that the Vero Beach City Council has either the fortitude or political skill to pull it off.
“FP&L should buy us, but I don’t think it will happen,” said Vero Beach resident Kevin Perlman, who works in the utility industry. “It will never happen because the City Council won’t approve it.”
Perlman said he thinks the fairest thing that could happen, from the perspective of the 61 percent of ratepayers who live outside the city limits, would be some sort of co-op or utility authority.
“That’s the only option to me, to have a co-op where the money comes back to the people who contribute,” he said.
Joseph Pacino and Debbie Rinella reside in the South Beach community of Atlantis and are among a cadre of county residents on Vero Electric who are more than anxious for a sale to take place.
“We’re all for lower rates here on the island, so if FP&L could make that happen and get lower rates, we’re all for it,” Pacino said. “We’ve heard about the mismanagement at the power plant and I think it’s a waste of money to hire the consultant.”
Rinella said it seems like her electric bill is more than $200 per month even when no one is home, but Pacino said the bill for their home in New York with Con Edison is only $50-75 per month when it’s closed up part of the year.
“I have two kids, I’m definitely happy about this,” said Central Beach resident Michelle Loutfi. “The electric rates are ridiculous.”
Loutfi represents families with high electric usage, who would benefit the most from the City Council accepting FP&L’s offer.
Central Beach resident Donna Davis, said she wants the deal to go through because she remembers how city rates quickly got out of control.
“I would love to have FP&L. I’m a renter and I’ve been on both FP&L and the city and the City of Vero Beach is treating me well now, for the first time, but I’ve had very high bills in years past,” she said.
Davis is among the group of people who would rather take their chances with state regulators who decide how much FP&L can charge than with the Vero Beach City Council,.
Indian River Shores resident Bette Tsoutsouras has been coming to the Vero Beach area since 1985 and bought property our years ago. She said the offer, if it moves a sale to FP&L forward, is good news for the Shores.
“I get a feeling that everybody where I am would think it was great,” she said. “But I can see where there might be some resistance in the city. People are afraid of change.”
Joel Storey, an FP&L customer at home in Sebastian, has owned the Island Cafe on Ocean Drive for the past three years. “I read about it and if they don’t take it they’re total idiots,” Storey said. “They’re just subsidizing the taxes.”
Storey said he doesn’t like the City Council dragging the decision out in the typical “kick the can” fashion.
“I work about 100 hours a week and I don’t appreciate it when the City Council says they’ll mull it over and take it up after the next election,” he said.
Storey’s customers come from beach tourist foot traffic and from offices along Ocean Drive, many of which are real estate agencies.
“The Realtors tell me that a lot of the people who are looking to buy want to know about the utilities, about whether or not what they’re looking at is on FP&L or the City of Vero Beach,” he said.
Eleven year Vero Beach resident Ralph Capaldo, who owns rental property both on Vero Utilities and on FP&L, said he wants the City Council to strike a better bargain before they sign to sell.
“I think it’s too low,” Capaldo said. “I think they’re doing what they should have done hiring the consultants to find out what the value is. They were quibbling over $200,000 but that’s nothing when you’re dealing with something worth so much.”
Overall, Capaldo said the city should leave its options open.
“I think it’s an offer that we should definitely consider but not take. One hundred million dollars is a good starting point,” he said. “It’s going to take a while for something to happen and we have to turn over all the stones in the meantime.”
“They’ve whittled down the rates that it isn’t as much as it was last year, and you have to take into consideration that we’re going to lose a good amount that’s going into the general fund.”
A few Vero residents who did not want their names in the paper were concerned about property taxes.
But the answer to how much would property taxes go up depends more on what the City of Vero Beach government looks like after a sale than on the terms of the sale itself.
Currently, Vero transfers about $7.3 million in revenues from the electric enterprise fund into the general fund to keep property taxes low. About $5.6 million of that is in direct transfers (more than $3.3 million paid for by ratepayers outside the city limits) and $1.7 million in General and Administrative charges to the electric utility.
Theoretically, the administrative charges of $1.7 million are being levied for services actually rendered to the electric utility, so cuts could be made in staffing and other expenses once those funds are no longer available. The $5.6 million in direct transfers would partially be offset by taxes FP&L will pay on the newly purchased utility assets. FP&L estimates it will need to fork over about $1.7 million in city, county, school board and other taxes. Some of that will go into city coffers.