County upping heat on electric issues
If the summer of 2009 was our season of discontent, 2010 could make it seem like a summer picnic for the Vero Beach electric utility.
“I’ve been hearing people complain about this electric issue for three and a half years since I fi rst ran for county commission,” said Chairman Peter O’Bryan.
Responding to the endless pleas from constituents asking them to do something – anything — to put pressure on the city over skyrocketing electric bills, the county hammered out two resolutions in November and unanimously approved them on Dec. 1.
At the time, the city was busy ousting a councilman and defending itself in a grand jury probe. What’s clear is that one of the city’s biggest electric customers now is laying the groundwork to become a major player in electric issues.
The first resolution expanded the scope of the county’s Utility Advisory Commission, which handles water, wastewater and solid waste issues, to include electric. It was made very clear in a Nov. 9 memo from Utility Director Erik Olson what the task would be in regard to electric.
“It has been recommended by Dr. Stephen Faherty that the Utility Advisory Committee be directed to review and make recommendations to the Board of County Commissioners relative to the City of Vero Beach Electric Franchise. This is suggested because the County’s electric franchise with the City of Vero Beach will soon need to be addressed.”
The second resolution throws the county’s clout behind the efforts of Faherty and other citizens working with Rep. Debbie Mayfi eld to pass state legislation to bring the City of Vero Beach Electric Utility under the full regulation of the Public Service Commission.
A petition to Mayfi eld urging action on the electric issue began arriving in island mailboxes this week.
The county is clearly serious about assessing rates and service before it decides whether to continue allowing Vero Beach to serve the over 18,000 county taxpayers who now get their electricity from the city utility.
Why is the county stepping into the pile of electric mess? Commissioner Gary Wheeler put it best.
“My goal as an elected offi cial is to make sure that people don’t get ripped off by the government,” he said.
Wheeler said he thinks part of the problem is that the elected offi cials within the City of Vero Beach have bought into the culture of preserving the bureaucracy instead of preserving democracy.
“People tend to get elected and then they start looking out for the structure that they’ve gotten elected to instead of looking out for the people who put them there.”
Paying more than $2 million in electric bills with county tax dollars
The county spent $2.5 million in the 2008-2009 fi scal year on utilities from the city, 90 percent of that on electric, according to Budget Director Jason Brown.
Considering the fact that city customers paid about 58 percent more than FPL customers for the same power last year, county taxpayers spent almost a million dollars more on electric for government buildings than necessary.
Writing those huge checks hurt during a year when the county was forced to trim staff to the bone, cutting 41 jobs, and taking an across-the-board 22 percent cut in its budget.
O’Bryan said that the county recently completed a major effort to go green in all aspects of county government, from recycling to energy effi ciency. With the help of FPL, the county analyzed every building and facility and installed insulation, replaced lighting and appliances, all in an effort to reduce utility bills.
The work was completed just before this spring and summer’s massive rate hikes.
“We had fi gured on saving $160,000 to $170,000 on our energy costs this year and we had all of that eaten up by the increase in the electric bills,” O’Bryan said.
“The budget offi ce saw this coming and was able to go back and adjust for it, but that was money that we had to cut in other places.”
Brown said the rate hikes will cost the county $158,000 this year and that cuts were made in staff and services to offset that difference.
“All of the departments are impacted by this,” Brown said. “If we had another $158,000 in the budget that wasn’t being spent on utilities, we could have lowered taxes, or we could have kept taxes the same and saved some jobs or maybe saved a program.”
Recreation took a beating this budget season, as did public works and the County Attorney’s Offi ce. Vital programs such as childrens’ services and mental health suffered budget reductions.
Even public safety was hit hard, with the funds for lifeguards, fi re rescue and Sheriff’s Offi ce budgets being cut by millions of dollars.
The part that is a travesty, according to Brown, is that of the more than $11 million the city transfers into the general fund from its utility enterprises, either in direct transfers or administrative fees, nearly $8 million of that has been directly derived, through rates and surcharges, from county residents — nearly twice what all of the city’s residents combined pay in property taxes.
Former Vero Councilman Charlie Wilson said he’s looked at these numbers and wants to keep the many ways in which the city’s high rates hurt the local economy on the front burner.
“Currently Vero Beach pays one of the highest rates in the state, costing millions and everyone pays — county residents, Sebastian residents, Town of Indian River Shores residents, Fellsmere residents, South Barrier Island, the Moorings , everybody, not just Vero residents,” Wilson said.
The county’s hand — some important cards
Should the county declare full-out war on the Vero Beach Electric Utility, the city would be severely outgunned in this battle. The county has a slightly larger, but vastly more expert and nimble, legal staff and almost unlimited resources to carry the issue through to completion — without hiring outside consultants.
Meanwhile, the animosity between the city and county has come out into the open, with top city and county offi cials bashing each other publicly. In September, the county launched what was seen by the city as an all-out assault to take over the city water and sewer systems and absorb customers into the county, causing city staff to defend its utility territory.
What cards does the county have in its hand to play? First of all, it is the holder of a 30-year franchise agreement with the City of Vero Beach for electric service.
By the spring of 2012, the county must decide what to do about renewing that agreement. Indian River Shores also has a franchise agreement with the city for electric and the town must notify the city of its intentions by 2016.
Secondly, the county can pursue what O’Bryan calls a “parallel path” with FPL and the PSC to seek to expand FPL’s territory, so it can sign a new franchise agreement with FPL to provide power to county customers.
“The City has asked FPL to come to the table and to look at the electric utility and that’s a positive step, but the county needs to be on a parallel path,” O’Bryan said. “Say it doesn’t work out and the city can’t get out of the contract to sell the utility. We need to have a Plan B to address the concerns of the county customers of the City of Vero Beach Electric.”
The city has justifi ed higher rates in the past by touting the benefi ts of local control and keeping the power plant. Commissioner Joe Flescher said he’s heard the arguments and he’s pretty sick of it all. To him, electric is simply and strictly an economic issue.
“Oh, I hear that the city came back on sooner after the hurricanes and they pay a premium for that. Get real, this is electric we’re talking about,” he said. “There is no brand-name preference with electricity, when you plug something into an outlet, nobody says, ‘Oh, I’m so glad I have FPL’ or ‘I’m so glad I have Vero electric.’ You just want it to work. The tragedy is when the bills come at the end of the month. The premium being paid is not worth it.”
A third road that the county could take, as is being suggested by former Vero Councilman Charlie Wilson, is to direct the County Attorney to examine and potentially challenge the legality of the city’s contract with the OUC. Wilson has contended that changes made to the contract after the council considered it possibly nullify the agreement.
And while City Attorney Charlie Vitunac and his staff have examined the contract, Wilson would rather have the county’s legal staff take an objective look, on behalf of all the electric customers, but especially the nearly 18,000 county customers which Wilson has described as being “held hostage” by the electric utility.
Challenging the contract would require a civil suit and the county — as a customer and as the grantor of a franchise — would most likely have standing to fi le such a suit.
“I haven’t read the contract, but I really do believe that if there’s an opportunity there to get help to county residents, we should look into it,” said Commissioner Wesley Davis. “My reading it wouldn’t be as productive as having our trained attorneys looking at it to see what they think.”
Though O’Bryan stated that he didn’t see the need for the county to “poke its nose” into the OUC contract and called it a “moot point” if the county customers can get out from under the city’s electric utility, Davis said he doesn’t see a contract review as overstepping the BCC’s bounds, as its members represent Vero city residents as well as those in the county and Indian River Shores who may be locked into the 20-year deal.
“Obviously we have a fi duciary responsibility to the electric customers to look into the contract,” Davis said. “In this particular situation, the most prudent way to go is to trust but verify.”
Davis, who generally approaches issues with an open mind, said it doesn’t bother him that the idea to review the contract would be coming from Wilson, who has declared a run for the District 2 Commission seat.
“I find that, a lot of times, some of the best ideas come from people outside the bureaucracy,” he said. “Just because someone is running for office doesn’t mean they can’t make a suggestion.”
Finally, the commissioners could direct Collins and his staff to examine and potentially join the complaints fi led with the Florida Public Service Commission by county residents Dr. Stephen Faherty and Glenn Heran to see if the county could piggy-pack onto the citizen complaints to strengthen the case when it comes before the PSC.
The complaints have already been accepted by the PSC but on Dec. 24, Faherty and Heran fi led a letter of abeyance giving the city a temporary stay to work things out with the county for the good of all the electric customers.
Should the county join in on the complaints as a customer, this would give Faherty and Heran some muchneeded legal support to battle against the Tallahassee law firm the city hired to fight the complaint.
Commissioner Bob Solari, who served one term on the Vero council and represents the South Barrier Island residents, has spearheaded efforts to get county customers off the Vero Beach water and sewer system. He’s spent a great deal of time with constituents who have organized and coalesced behind Faherty and his efforts.
Solari said he realizes the urgency and gravity of the problem and he knows that the commissioners are unanimously behind doing something to rectify the situation, so he’s not opposed to taking some fi rst steps or to having the legal staff look into a variety of options.
“I’m opposed procedurally to taking actions on things that come out of public comment or to things that are not on the agenda and don’t have backup for us to read, but it would be appropriate to direct the County Attorney to look into these things and come back to us with some direction as to what we can legally do,” Solari said.
“Then we could take it up at a later meeting when it was on the agenda and we had the facts in front of us.” Wheeler said he’s in the process of gathering information, listening to people knowledgeable about the issues and determining the best way to move forward. He said he believes the county has taken bold steps toward protecting the county customers and he looks forward to seeing how the issue develops, as FPL is engaged in the conversation.
Wilson has also met with School Board Superintendent Harry LaCava, who runs the organization which pays the largest electric bill in the county, and on Jan. 26 will ask the school system to join in with the PSC complaints as well.
