Indian River County and the City of Vero Beach are at odds over who will provide water and sewer service to residents in the unincorporated area of the south barrier island after the current franchise agreement expires in 2017.

Unable at the time to provide utility services, the county in 1987 signed a 30-year franchise agreement with the city.  Two years later the city and county approved a territorial agreement clarifying and established service boundaries.

In its effort to regain the right to provide water and sewer service to the south barrier island, the county is asking the Florida Legislature to approve changes in a 1935 law governing the extension of municipal utility services beyond city limits.

In its chess game with the city, the county next month will also mail surveys to south barrier island property owners.  Residents will be asked whom they would prefer to have as their water and sewer provider.   The county hopes the results of the survey will strengthen its case.

At a recent gathering with the county’s legislative delegation sponsored by the Indian River County Chamber of Commerce, County Attorney Alan Polackwich explained why the county wants changes to the 1935 law governing utility service areas.

Currently, cities in Florida are free to extend utility services beyond their municipal boundaries without first seeking approval.  Back when few counties were in the utility business, but instead depended on cities to provide those services, the law seemed to make sense.  Today, Polackwich said, in order for the law to be fair to both cities and counties it should be reciprocal.

The City of Fellsmere recently proposed and then backed away from a plan to establish a natural gas service area that would have covered nearly half the county.  More than 80 percent of the originally proposed service area was outside Fellsmere’s city limits.  Given that the 1935 law also allows cities to impose surcharges of up to 25 percent on customers outside their municipal boundaries, Polackwich said unilateral decisions by municipalities to expand the utility services often lead to what amounts to taxation without representation.

City officials, though, see the county’s request of the legislature as nothing more than an effort to force the city to give up utility infrastructure in built specifically to serve the south barrier island.  One City Council member characterized Polackwich’s remarks at a Dec. 19 legislative luncheon as “a slanted appeal to change state law so they can raid south beach.”

Despite the county’s willingness to appeal to the legislature, the courts and the public, the question of who will provide utility service to the south barrier island after 2017 is far from clear.

The city’s position is that it owns the water and sewer infrastructure in the area.  Further, city officials say, the 1989 territorial agreement established the city’s right to provide utility services to the south barrier island “in perpetuity.”

They contend that the city’s willingness over the years to invest in water and sewer infrastructure in the area was predicated on the understanding that the 1989 territorial agreement superseded the franchise agreement signed in 1987.

“All the franchise agreement does,” said City Manager Jim O’Connor, “is give the city the right to collect a franchise fee which we then remit to the county.  The territorial agreement establishes the city’s right to provide water and sewer service to the south barrier island.”

Again, the county sees it differently.  According to Polackwich, the purpose of the 1989 territorial agreement was simply to clarify service boundaries.  “There was,” he said, “no intent to create a perpetual service area.”

While the county’s January survey may prove an interesting exercise, the city hardly seems ready to vacate its utility assets and surrender its 2,000 water and sewer customers on the south barrier island.

Discussions between the city and county are ongoing.  And even though participants are careful not to describe the talks as formal negotiations, offers and counter offers are being made.  The city, for example, has offered to charge customers in the unincorporated areas of the south barrier island the same rates they would pay as county customers.

Not everyone will be pleased with that deal, though.  At some levels of use county water and sewer rates are higher than city rates.  Put simply, if and when south barrier island residents begin paying county water and sewer rates there will be winners and losers.

The city has even offered to let the county handle billing.  In effect, the city would be providing wholesale utilities services to the south barrier island.

One City officials speaking off the record said it is impractical for the county to try to provide service to the south island.  To do so, the county would first need to negotiate a resource sharing agreement with the city.  Failing that, the county would have to invest $4 million to $5 million boring under the Indian River Lagoon to connect its system on the mainland to the south barrier island.

Some have questioned the logic of the county investing $2,000 to $2,500 per customer just to take over service to the south island, especially if the $4 million to $5 million total cost would have to be born by all of the county’s customers.  Annual utility charges for the 2,000 customers on the south barrier island totals just $3 million.

Polackwich says making that kind of investment would be a last resort, and would not be necessary if the city and county can agree to share infrastructure.

Again, city officials disagree.  They say such a sharing arrangement is not practical because the city’s and county’s systems are so incompatible the two sources of water cannot share the same pipes.

According to Polakwich, the county’s last alternative may be to eventually go to court seeking a declaratory judgment as to who should be providing water and sewer service to the south barrier island.