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Shores residents could save on water and sewer

(Week of March 31, 2011)

Indian River Shores Town Council members would each save on average $20 a month on their home water and sewer bills if the water was coming from Indian River County utility services instead of being provided by Vero Beach.

And if the utility bills of Town Council member are representative of those of residents as a whole, Shores residents could save almost a half million dollars a year if they were getting their water and sewer service from the County, according to utility activists Dr. Stephen Faherty and CPA Glenn Heran.

Will Indian River Shores change to County services?

Overall, Heran said he thinks showing Town Council members their own bills raised eyebrows, but he’s not sure if it would constitute a “game changer” in which provider is ultimately chosen to service the town for the next 30 years.

“I hope we moved the Council,” Heran said. “In my opinion, the Shores would be better served and face significantly less financial risk if they choose Indian River County Utilities as their service provider.”

The numbers were revealed as part of a recent presentation by Faherty and Heran about regionalization of services. The five Shores officials were shown individual March bills and how much each could save under current County rates. All Vero and County utility customers’ bills are public record.

The savings per council member ranges from $11 to $36 per month, the men said, making this sampling of Shores bills anywhere from 16 per cent to 45 per cent higher than County rates. The annual savings for council members, if March was an average month, would be $121 to $432 per year under current rates

“These two gentlemen have done an outstanding job of bringing the public attention to two important issues,” Shores Mayor Tom Cadden said.

Displaying five typical Shores customer bills seemed to take the issue out of the realm of theory and bring it into the reality of ratepayers’ pocketbooks. Rate projections based on Vero’s own 2009 rate study show the city needing to raise water and sewer rates to a level  51 per cent to 108 per cent higher for the five town council members.

“Even with the 10 percent surcharge currently tacked on the Shores bills removed, Indian River County Utilities will still be cheaper than Vero. And if the Public Resources Management Group 2009 rate study is right, City of Vero Beach Utilities rates will be unaffordable by 2013,” Heran said.

In the fall of 2010, the Vero City Council repealed $13 million in rate increases based on a plan to cut expenses and delay capital projects. It has been widely questioned whether or not the City can sustain its current rates, especially if the County pulls its South Beach residents off the city system, reducing revenues by more than 20 per cent.


Vero Beach Mayor Jay Kramer, who has repeatedly criticized the County’s financial position and said that Vero has the superior balance sheet, took issue with Heran and Faherty’s assertions about the projected rate disparities and the financial data.

“It’s kind of frustrating for us for volunteers to get up and give presentations without having the opportunity to respond,” Kramer said. “The hypothetical numbers in here make us look worse than the County.”

Kramer and Vero Utility Director Rob Bolton were asked to come back and present arguments in April, by which time the Shores should have solid proposals in hand from both the County and Vero.

County Utility Director Erik Olson told the Shores Town Council that the Board of County Commissioners is expected to approve an offer to serve the Shores in the next few weeks. Olson also gave a plug for the County, reiterating that the County is financially secure, flush in operating cash and has the capacity to serve the Shores.

Olson reminded Shores officials that the County has invested $104 million in capital projects and major maintenance over the past five years, all paid for in cash.

Kramer has said the County is bleeding cash every year and that they’re trying to sell the City of Vero Beach “snake oil.” Kramer called a meeting of the Vero Finance and Utilities Commission, which was set to meet Tuesday, to make sense of 10 years worth of Vero and County balance sheets, in an effort to poke holes in Heran and Faherty’s water-sewer model and do a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of Vero’s utility options.

Shores Councilman Mike Ochsner said he was concerned that the County and Vero can’t seem to agree on what the budgets and financials say. “I’ve never seen entities with financial statements so much in dispute,” said Ochsner, a retired corporate chief financial officer.

Kramer has also said he has private buyers interested in purchasing and running the Vero water and sewer system -- possibly as a utility authority. “I have other people who will offer a heck of a lot more than the County is offering,” Kramer told the Shores council.

“We don’t need to take on the risk of the housing boom,” Kramer said, referring to the influx of funds into the County system from builder impact fees. “The cash position of Vero Beach is much better than that of Indian River County. You need to ask for a professional position. Ask your consultant.”

Vero officials have asserted that Vero rates are cheaper for certain customers who are very large users of water, but that assertion didn’t seem to apply to the Town Council members’ bills.

Councilmember Richard “Dick” Haverland questioned Heran and Faherty as to whom the duo was representing. Faherty and Heran responded that they were volunteers working on an issue each thought was important.

When the topic of conversation was the sale of the Vero Beach Electric Utility to Florida Power and Light, Heran and Faherty were often accused of working for or having a financial interest in FP&L, though both men have denied any involvement with the power provider.


Councilman Ochsner had no issues with the presentation by Faherty and Heran.  However, he questioned why the men had done what in fact Indian Shores has been asking the County to do.

“To me, the obvious question is why isn’t the County making this presentation to us? We’ve been asking for this,” Ochsner said.

Olson said later in the meeting that it was his intention to present the financial strength of the County, but not to make a direct comparison to Vero Beach. Olson said the Shores should focus on the probability of rates remaining steady from each of the two systems.

After the meeting, Heran agreed with Ochsner that it’s time for the County to take over making its own pitch, that he and Faherty are basically “out of it” now.  It’s up to the Shores, the County and Vero to figure out what to do, he said.

The Shores must give notice to Vero by November whether or not the Town intends to renew or terminate a 30-year franchise agreement.

The Town Council approved a draft agreement last week which would cut a 30-year deal with Vero for utility service and for the purchase of water-sewer infrastructure from the Town. That agreement is now on its way back to the Vero Beach City Council for approval.

Meanwhile, Vero and the County are set to have a joint meeting about regionalization of their utility systems in late April.