City’s water and sewer utility a vital asset

Vero Beach Water and Sewer Utility Director Rob Bolton, left, and water treatment plant operator Jeff Howard inspect the city’s reverse osmosis water filtration system
Vero Beach Water and Sewer Utility Director Rob Bolton, left, and water treatment plant operator Jeff Howard inspect the city’s reverse osmosis water filtration system

Editor’s note: This article was first published in July, 2013.  With the pending sale of Vero Electric, City leaders will soon be looking for ways of making up for more than $5 million in lost revenue from the electric utility. Though the City’s water and sewer system contributes to the General Fund to help pay for municipal services, such as police protection, the utility could be sold to raise money short-term to avoid the need to increase taxes or cut municipal services. Opponents of selling the water and sewer system will argue that the short-term gain would not justify the long-term cost of giving up what has been a profitable, and arguably a well-run utility offering competitive rates and quality service.

NEWS ANALYSIS

MARK SCHUMANN

Now that a contract has been signed with Florida Power & Light for the sale of Vero Electric, advocates of limited government, including City Councilwoman Pilar Turner, Taxpayers Association President Glenn Heran and utility activist Dr. Stephen Faherty, contend the city should hand its waters and sewer system over to the county and get out of the utility business altogether.

Just two years ago, the County offered the city $20 million for its water and sewer system, but because the utility is valued at $70 million to $80 million, the County’s off was not well received.

Now serving 22,435 customers in the city, Indian River Shores and the south barrier island, the city’s water and sewer system is generating a 30 percent operating profit of $5 million on $16.6 million in revenue, while charging rates that are competitive with the County. 

A $11 million dollar deep injection well built in 2011 enables the city to operate its water and sewer utility without discharging treated water or brine water into the Lagoon or canals.
A $11 million dollar deep injection well built in 2011 enables the city to operate its water and sewer utility without discharging treated water or brine water into the Lagoon or canals.

Currently, the water and sewer system contributes $1.2 million to the city’s general fund, helping to pay for police protection, parks maintenance, recreation programs and other city services.

Assuming the sale of Vero Electric to FPL can be concluded, the water and sewer system’s contribution to the general fund will become even more important to the city’s financial viability, especially given the current aversion to raising taxes.

When the County made its bid for the city’s Indian River Shores customers last year, the city agreed to match County rates.  That move has led to increased revenues for the city, further debunking the claim that the city’s rates are not competitive.

At the persistent urging of Commissioner Bob Solari, the County now has its sights set on the 3,000 customers the city serves on the south barrier island.  For the County to take on service to the area, though, would require million of dollars in public investment, with no tangible benefit to customers.

As it did with its Indian River Shores customers, the city has offered to charge its south barrier island residents County rates, if County rates is what they want.  City Manager Jim O’Connor estimates the “offer” would actually benefit the city to the tune of some $170,000 a year, still more indication the County’s rates are not lower than the city’s.

Some who are pushing for the city sell its profitable water and sewer system to the County want to see the waterfront site where the sewage treatment plant is located made available for commercial development.

Built in the late 1950s in an area then considered well south of town, Vero Beach’s treatment plant sits on riverfront land that may be increasingly attractive to developers.
Built in the late 1950s in an area then considered well south of town, Vero Beach’s treatment plant sits on riverfront land that may be increasingly attractive to developers.

Concern for the Lagoon is another argument made for relocating the treatment plant off the waterfront.  That argument doesn’t hold water, so to speak, because the city’s system, unlike the County’s, is completely self-contained, meaning there are no discharges into drainage canals or the Lagoon.

In 2011 the city began using a new $11 million, 2800-foot deep injection well, where it disposes of all the discharges from is sewage treatment and water treatment plants.  In contrast, the County’s brine water and treated sewage is filtered through marshes before draining into the Lagoon.

Arguably, for the County to begin treating water and sewage for the city’s customers would only serve to increasing the risk to the Lagoon.

For the estimated $25 million it would cost to relocate the sewage treatment plant from the riverfront to property near the airport, there would be no economic benefit to the city’s customers, who would ultimately be the ones picking up the tab through higher rates.

Spending $25 million to make the city’s riverfront property available for commercial development seems to some a questionable investment.

5 comments

  1. This is a no-brainer. Would you sell a profitable asset out of principle? I think not!

  2. As Mark inferred, moving the Wastewater Treatment Plant (WTP) to a new location is a hercluean proposition. The entire wastewater system drains by gravity, with the help of a minimum number of pumping stations, to the current location. To relocate the plant from the SE corner of the mainland coast to the NW corner of the city obviously defeats the whole flow scheme of an intricate system that was developed over many decades. Even if a move were to be mandated today, that task would take the better part of a decade to accomplish and at tremendous cost. The WTP cannot move until the last household is redirected to the new location.

    In time, as advanced technology becomes more available, the WTP will likely migrate gradually off the coast to an inland location. If the planning of an incremental relocation program were to be initiated, that process could be accomplished in small bites for far less expense, with an even better system and a bit more time.

    In the meantime, the County’s system is not in compliance and has serious development hurdles to overcome. Some claim that Mr. Solari and the county want the COVB system mostly to get our injection well. If the County’s marsh treatment process does not improve, they will soon have to drill their own. Can you imagine the cost of County sewer/water then?

    The COVB water/sewer system is one of very few in the state that does not flow treated effluent into the lagoon. It operates effectively, efficiently and provides funds for a substantial reduction of property taxes with its profit. It is as far from broken as one could imagine. Who would want to fix it and for what reason?

  3. As is the electric utility… I have to laugh when I hear that the city’s electric utility equals “taxation without representation.” And exactly WHAT representation will you have with the goliath FPL? Without stock (and lots of it), you will have no voice, no local office to visit to present your problem/difficulty/complaint. Personally, I place a lot of value on convenience, fairness, and prompt response. If FPL lowered my monthly bill by half, and I had a choice, I’d stick with city power resources. They have always been on-the-spot when needed, even calling to ask of the power is now running. Try that with FPL.

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