COMMENTARY

“Anyone who doubts this assertion need only read House Bill 813, filed by State Representative Debbie Mayfield.  By proposing an unprecedented expansion in the exercise of eminent domain, Mayfield’s bill will pit city and county governments against each other.  Mayfield, whose constituents include the residents and taxpayer of Vero Beach, has essentially drafted a death warrant on the city and other municipalities that have been willing to serve customers beyond their city limits.  In attempting to write a bill that will further the objectives of local limited-government extremists, Mayfield has drawn the attention, if not the ire of municipal leaders across the state.  Will Mayfield’s fellow lawmakers agree to sign this death warrant? Likely not, but Mayfield’s move is instructive of what her Taxpayers Association/Tea Party patrons are thinking.”

MARK SCHUMANN

“I don’t care about the city.  I just want lower rates,” a frustrated caller said to me recently.

The gentleman, a customer of Vero Electric who lives just 15 blocks outside the city limits, claims to have no thought for the city.  I cannot help but wonder if the caller’s lack of concern for the city’s welfare is reflective of growing frustrations over the stalled power sale.

The caller’s the-city-be-damned statement followed my attempt to explain that in my commentary I have not opposed a sale in principle so much as I have raised questions about this specific agreement, with its 3-year closing window, its many unresolved issues having to do with the city’s membership in the Florida Municipal Power Agency’s All Requirements Project, as well as the power purchase agreements that never stood a chance of being approved by the Internal Revenue Service.

The clearly angry caller wasn’t hearing any of my argument that the city has followed out-of-city utility activists and later transactional attorneys, all of whom have ties to Florida Power & Light, down one rabbit hole after another, with each detour costing time and money. Ironically, the lower rates the caller said he wants might have come to him sooner if the out-of-city utility activists he seems to trust had not so adamantly opposed a partial sale.

What my friend is missing, of course, is the other dimension to this story. Some who are pushing for the sale of Vero Electric, including Councilwoman Pilar Turner, want more than lower rates.  Their next step will be to force the city to hand its profitable water and sewer system over to the county in hopes of helping the county stem the tide of losses with its over-built system.  I suspect these ultra-right, extremist libertarians, including Glenn Heran and County Commissioner Bob Solari, have as their ultimate objective the disincorporation of the City of Vero Beach.  At least a few north county politicos fear the City of Sebastian is now also in the sights of those who think municipal governments below the level of county commissions are inefficient and unnecessary.

Anyone who doubts this assertion need only read House Bill 813, filed by State Representative Debbie Mayfield.  By proposing an unprecedented expansion in the exercise of eminent domain, Mayfield’s bill will pit city and county governments against each other.  Mayfield, whose constituents include the residents and taxpayer of Vero Beach, has essentially drafted a death warrant on the city and other municipalities that have been willing to serve customers beyond their city limits.  In attempting to write a bill that will further the objectives of local limited-government extremists, Mayfield has drawn the attention, if not the ire of municipal leaders across the state.  Will Mayfield’s fellow lawmakers agree to sign this death warrant? Likely not, but Mayfield’s move is instructive of what her Taxpayers Association/Tea Party patrons are thinking.

But I digress.  The gentleman who called to register his objection to my commentary further asserted that the city has no right to expect anything from the sale because the electric system was built and expanded with revenue bonds.  FPL also issues bonds, which, like the city’s bonds, are paid off through revenues.  Yet, the caller never suggested FPL’s customers have earned an equity interest in the company.

There is a tale being told by those with 20/20 hindsight about how city leaders over the past few decades have made one wrong move after another in their management of the electric system.  Another irony, of course, is that many of the decisions that have not worked out so well were only necessary because Vero Electric is serving 22,000 out-of-city customers.

The city’s decision to enter the FMPA All Requirements Project, its participation in three power projects, as well as the signing of a 20-year wholesale power agreement with the Orlando Utilities Commission, may not have worked out as planned, but neither has the proposed sale of Vero Electric.

Back in 2008 and 2009, out-of-city utility activists Glenn Heran and Stephen Faherty, along with then city council candidate Charlie Wilson (residence in question) and others, told the public the city could sell the electric system for $150 million in cash, netting $90 million it could then invest.  At least according to the plan they presented to voters, the investment earnings on the sale proceeds would offset the $5 million plus annual transfer to the city’s general fund.

That rosy scenario hasn’t panned out any better than the city’s past decisions about which Heran, Faherty, Wilson and others remain so critical.  Yet, the failure of a promised $90 million in net sale proceeds to materialize has in no way diminished the righteous indignation of these utility activists.

Not only will the city net next to nothing from the sale — perhaps $3 million as compared to a promised $90 million – but rate payers, it appears, are going to be asked to swallow a surcharge “tax” to help pay for the sale.

As least for the customers within the city, once a surcharge tax is added to a 6 percent franchise fee, the rate differential between Vero Electric and FPL will narrow significantly.  Take into consideration the savings that could come from decommissioning the power plant and renegotiating with the OUC, and at least for city residents and taxpayers the benefit of the sale wane significantly.

When all the claims and promises are set next to reality, it would seem the utility activists who have pushed for the full sale, while dismissing the potential benefits of a partial sale, have been little more than noisy gongs and clanging cymbals in what could otherwise have been a rational debate about how to move forward in the best interest of all stakeholders.

If the residents of Vero Beach are going to be asked to pay a surcharge tax, they should at least be given another opportunity to weigh in on whether they want to turn their $180 million electric system over for nothing, or instead try to go it alone with a smaller system.  This vote should come, not in next August’s primary election, but in the November general election, when the highest number of voters will have an opportunity to participate.  In the end, the collective wisdom of an informed public should be honored.