BY MARK SCHUMANN

The transactional attorneys are already into the city for $1.1 million, and yet they have hardly begun to resolve key issues regarding the city’s contractual obligations to the Florida Municipal Power Agency and its bondholders.  Before approving the latest request for an additional $300,000 for legal services, the City Council should demand specific answers to some vexing questions about how the transactional attorneys plan to “clear a path forward.”

“It was a good college try,” attorney Rick Miller said several months ago, describing his firm’s attempt to circumvent the FMPA’s All Requirements Project notice provision.  Miller and his colleagues attempted to persuade the FMPA that Vero Beach is not selling its electric system to Florida Power & Light, but is merely abandoning it.  They may have concocted a clever argument, but the exercise proved to be an expensive waste of time.

Though the transactional attorneys are more than a year into their work, a long-promised legal opinion on the private use exemption associated with the sale of the city’s FMPA power entitlements to Florida Power & Light remains on their to-do list.  Even when they finally do produce the document, it may prove to be a mute point, for the FMPA has made clear it cannot approve the deal without first receiving a definitive ruling from the Internal Revenue Service.

Insisting on this assurance that the sale of FMPA power to an investor-owned utility will not endanger the tax-exempt status of its bonds is much like the purchaser of real estate demanding title insurance.   And yet, the transactional attorneys plan to charge the city for their opinion on the advisability of the FMPA submitting a request to the IRS for a private use ruling.

If the transactional attorney’s are attempting to build a case against the FMPA, they are flirting with folly, for they may well lose, and at great expense to the Vero Electric’s ratepayers.  Everyone should be clear about this – all of the city’s legal costs are being charged to its 34,000 electric customers.

We are now four months into the year, and according to transactional attorney John Igoe his firms is still “in the process of scheduling a meeting with representatives of the City, FPL the OUC (Orlando Utilities Commission) and the FMPA.”

That statement reminds me of the southern expression “fixin’ to get ready.”   For Pete’s sake, just do it. Sit down face to face with FMPA representatives and figure out what the deal is going to be.  The time for cleverness and Hail Mary passes is over.

It is also time for the transactional attorneys to present the Council with a full accounting of the city’s potential liabilities associated with power purchase agreements between the city, FPL and the OUC and its membership in the All Requirements Project.  How much should the city expect to pay to cover these contingent liabilities – $5 million, $10 million, $20 million?  It is time to put some numbers on the table.

If the $30 million in electric system reserve funds will be needed to cover these contingent liabilities, the city needs to know now.  Otherwise, city leaders will continue assuming the money will be available to restructure the pension plan, and they will continue building financial models based on that assumption.

Finally, it is time for the transactional attorneys to be specific about what the city’s options will be, if and when a waiver to exit the All Requirements Project before October 2016 is denied.

Without some progress on these issues, it could be that clearing a path toward an eventual sale of the electric system will require finding transactional attorneys who are willing and able to do more than talk about finding a path forward.