BY MARK SCHUMANN
Out of yesterday’s nearly one-hour presentation by Finance Commission Chairman Peter Gorry, a headline writer for the local daily newspaper chose to highlight a side comment by Councilwoman Tracy Carroll about exaggerated claims of looming budget cuts for recreation. “Officials: Rumors hurting electric sale,” reads a lead headline on the front page of today’s Press Journal.
Notice that at least publically, though, Carroll takes no exception to the wildly exaggerated claims being made by proponents of the sale.
Recently, I was visiting with friends when they received a call from a woman who said she was calling on behalf of Citizens for a Brighter Future, a political action group advocating the sale of Vero Electric to FPL.
Incredibly, the caller said, “FPL will pay the city about $179 million, which will help keep taxes low.”
That claim is outlandish, but it doesn’t seem to bother Carroll.
First, FPL has offered $111.5 million in cash, of which the city will be lucky to have $4 million left over after paying off debt and buying its way out of wholesale power agreements.
Second, no one with a straight face claims the sale will not lead to higher city taxes. As recently as yesterday, Finance Commission Chairman Peter Gorry confirmed for the Council that the city will be facing a $3 million budget shortfall if the sale goes through.
The city now collects $4 million in property taxes, so it is hard to fathom how it will be possible to close a $3 million budget gap without increasing taxes and cutting vital services.
The caller went on to say the deal was endorsed by both the Utilities and the Finance Commissions. She did not bother to explain that the members of those commissions who questioned the wisdom of selling the city’s most valuable asset, were sacked by Councilmembers Tracy Carroll, Craig Fletcher and Pilar Turner. Ousted commission members were replaced by others more willing to let the Council troika have their way with the city.
A mailer sent out recently by Citizens for a Brighter Future claimed, “FPL will pay the city millions of dollars and provide yearly revenues through franchise fees.”
FPL’s rates are what they are. A six percent franchise fee will be added to those rates and will be paid by city customers, not by FPL.
Next, Citizens for a Brighter Future claimed the rate savings will be 24 percent. Period. Well, they know many businesses will save less than 24 percent. After adding the six percent franchise fee, even residential customers will be saving no more than 18 percent, less after FPL’s recently approved rate increases go into effect over the next few years.
The less-than-forthright mailers also suggested the sale of the electric system will not require the city to reduce or eliminate vital services. The kindest assessment of that can be made of that claim is that it is naive and unrealistic.
Indian River Guardian 
Exactly right, Mr. Schumann, the rumors and guessing on the part of even the finance chair is shockingly allowed to stand without challenge. The city cleaned out anyone who wouldn’t put their spin on this deal, so the paper headlines don’t reflect the actual meeting or the reporting. It was a much more interesting meeting than they reported, too, with intelligent challenges of the “facts” being shot down angrily by the council 3-some while saying nothing about the ridiculous claims being made by the Feheranty group.
Lynne Larkin
In a cover story of today’s edition of the Vero Press Journal there is a quote from Peter Gorry that states the budget shortfall can be trimmed by $3 millon by adding a franchisee fee and a sales tax on the COVB electrical service charges.
It is important to remember two things about any potential increase in taxes:
1. Any increase on electric taxes would need to be approved by the Public Service Commission.
2, Property taxes are deductible and utlity taxes are not.
It is no small matter to discount the fact that the sale will allow COVB to eliminate the city employee pension shortage, If the sale does not occur, everyone’s taxes will have to be raised in order to satisfy that obligation. So the issue is really whether or not you want to increase the property taxes in the near-term or the long-term. Property taxes will go up regardless of any sale of the electrical service to FP&L.
Just a few points of clarification and correction.
1. Gorry’s model projects franchise fee revenue of $1.65 million, not $3 million.
2. Florida city’s are free to assess utility franchise fees without PSC approval.
3. A full sale or a partial sale would enable the city to pay off its underfunded pension obligation.
4. The city is currently catching up on its underfunded pension obligation to the tune of $3.5 million a year at the current tax rate. Your statement that “everyone’s taxes will have to be raised in order to satisfy that obligation,” is simply not true.
I do find it interesting that proponents of the sale seem given to exaggerations and misstatements of fact.
Paying for the electric you use is not a “tax,” and you won’t be deducting anything that FPL charges you. There are many legitimate scenarios, not made up numbers, that say the taxes will at least increase by double, and it was made very very clear that these are “projections” by the city.
BTW, writing off local taxes on your federal tax return sure isn’t a dollar for dollar trade-off, and not even an issue for those who don’t itemize.
The truth is the FPL claims, parroted by the sell crowd, are not provable and most are downright wrong. with the economy on the upturn finally, it makes no sense to walk blindly away from something that is locally controlled, responsive to consumers, and there are many other ways to discuss county participation than throwing the baby out with the bathwater. Lynne Larkin
It is not a misstatement or exaggeration that the sale of the electrical services would also be beneficial for reducing other tax burdens on the citizenry. The fact that the hospital, school district and government buildings would see a reduction in their costs which would allow more money to be in the pockets of the current ratepayers.
It is not a misstatement or exaggeration that the COVB would still have unfunded pension obligations if the sale of the electrical service to FP&L does not occur. It is my understanding that the financial offer made by FP&L contains two separate components. One for the acquisition of the system itself and the other for FP&L acquisition of the unfunded electric employee pensions. The sale of the electric system will eliminate the need for any “catch up.”
My statement that all property taxes will go up is based on experiences from having lived on this planet for many decades. I have never seen any government entity willingly decrease property taxes and property taxes are always the first consideration when elected officials see budget shortfalls.
Lynn Larkin has responded to my statement that property taxes are deductible and utility costs are not by implying that I stated that the rates paid to FP&L would be deductible. I did not make such a statement.
I have seen no reliable data from an objective source to validate that taxes would “double.” This statement is clearly an exageration.
It makes all the sense in the world to sell the utility system when the economy is on the upturn. This is the most likely time period to find a buyer.
No one is walking blindly into the discussion about the sale. It has been the subject of intense debate for years. There is no dollar value to the individual customer merely in having something “locally controlled.” As the sale process has shown, there is little local control because of the involvement of FMPA,OUC and other entities that are not responsive to Vero Beach residents. There is no indication that COVB is any more responsive to consumers than FP&L would be. The issue of reliability is also greatly exaggerated. I personally have experienced hours long electrical outages for no discernible reason.
BOTTOM LINE: FP&L rates are considerably less than those of COVB and there is also potential that those rates could be reduced even further when two additional things occur: (1) Florida legislature no longer allows consumers to pay into an account for a future nuclear power plant that is not likely to be built, and (2) formerly tax exempt transmission lines will be owned by FP&L and this burden on property owners would be eliminated and the costs could be reduced even further.
No one is advocating throwing the baby out with the bath water. The real cliche is that the NO crowd is being penny wise and pound foolish.
It is, in fact, a misstatement and an exaggeration to say that the city would still have unfunded pension obligations if the full sale to FPL does not occur. In fact, as a result a partial sale, which would have you and other county customers enjoying FPL rates sooner, the city would have more proceeds with wich to do things such a restructure its pensions.
How is your final point related to the proposed sale of Vero Electric?
I am all in favor of a partial sale.
The reduction in electrical costs for the hospital, public schools and government buildings should reduce those portions of the tax bills that residents now pay.
Unfortunately Patricia you seem to mis-read a lot of things. And you assume a great deal if you think FPL rates will be considerably less, even in the short term, than ours, since there is NO guarantee anywhere that they won’t add on all sorts of fees and charges in which you will have no say whatsoever.
The No crowd is trying to get all the information instead of guessing about all the things you think are fact. They are not. Insisting on getting fully informed before you throw away any say in the matter is just smart business, smart all around. You are jumping from the frying pan into the fire, to use another old saying.