COMMENTARY

MARK SCHUMANN

Raising taxes to cut electric rates

In a candidate forum hosted by the Taxpayers Association Wednesday, Councilwoman Pilar Turner said she would support raising taxes on city residents to lower electric rates for all 34,000 city, county and Indian River Shores customers of Vero Electric.

If Vero Electric cannot be “competitive,” Turner said, she is prepared to raise city property taxes to cover the cost of cutting electric rates. Since no one in the know believes Vero Beach can match Florida Power & Light’s rates any time soon, the position Turner took Wednesday  amounts to a promise to city residents to increase taxes.

Turner’s promise may have gone over well with out-of-city residents in attendance at the Taxpayers Association forum, but if word gets back to the people Turner was elected to serve – the residents and taxpayers of Vero Beach – there may be a price to pay on election day.

Sixty percent of Vero Electric’s customers are outside the city limits. Inevitably, then, whatever savings city residents enjoy from an electric rate cut not prompted by lower fuel or operating costs, would have to be paid for through higher taxes. Put simply, under Turner’s plan, any savings city residents see in electric rates would be eclipsed by higher taxes.

Cutting spending

Harry Howle, III, said he believes that in any and every budget cycle there is always further room for spending cuts. “In all government, there is always room for savings,” he said.

With the City’s general fund budget down from $22.8 million in 2008 to $19.4 million in 2013, and given the need to respond to the Lagoon crisis and to begin addressing the City’s underfunded post employment benefit liabilities, some contend further cuts would affect the quality of municipal services. Howle insists additional spending cuts are possible and necessary.

Howle’s is certainly a minority view. Candidates Brian Heady, Jay Kramer, Randy Old and Jack Shupe all told the Taxpayers Association they believe the City has cut its budget enough.  In fact, adjusted for inflation, City spending is down 22 percent from 2008.

Howle also said the City’s financial position is “terrible.”  Still, he said he believes that if only the City will practice “zero-based budgeting” it will never have to increase the property tax rate. “We will never see a situation where we have to raise the millage rate, if we go about our budget the correct way,” Howle said.

Electric sale

Howle, who fellow candidate Charlie Wilson claimed is on his “team,” sounded almost as confident as Wilson in his insistence he will be able to “force” the Florida Municipal Power Agency to release Vero Beach from its contracts and commitments to bondholders.  Howle also said the City should go to the Governor and the Florida Legislature for help seeking release from its contractual obligations.

Wilson, who became emotional as he told of a 75-year-old woman on an oxygen machine who would die if she could not pay her electric bill, gave the Taxpayers Association an unequivocal promise that he can sell the electric system to FPL.  “Since 2009, I have been fighting to get us out of the electric business, and if I am returned to the Council, I will have us out of the electric business by the deadline of 2016 – period,” Wilson said.

When Wilson ran for a seat on the City Council in 2009, he told voters the system could be sold within a year.  His basic message, then and now, is “I have a plan,” though he offered no specifics about his plan, other than to wage war on the FMPA, a joint action agency he says poses “a clear and present danger to the City of Vero Beach.”

Reporting to the City Council earlier this week, utility attorney Schef Wright said he sees no legal basis for suing the FMPA.  Wright also said he does not believe the Governor or Legislature will be willing to obviate contracts already validated by the Florida Supreme Court.

In his opening statement, Wilson said that, though there were six candidates in attendance, there are “two teams.” (Brian Heady was not in attendance until later in the forum.) “There is the team of Mr. Kramer, and Mr. Old and Mr. Shupe, who will do absolutely nothing to get us out of the FMPA.  There is the team of Mrs. Turner, and Mr. Howle and Mr. Wilson, who will absolutely get us out of the FMPA,”  Wilson said.

Though Turner and Howle do not seem inclined to openly ally themselves with Wilson, he continues to urge voters to support Turner, Howle and himself as a three-person ticket.

Later in the forum, when Wilson for the second time directly criticized other candidates by name, moderator, John Kistler, reminded him he was not following previously agreed upon ground rules.

Asked for more specifics on how to move the electric sale forward, Shupe said at this point it is up to Florida Power & Light to offer solutions for resolving Vero Beach FMPA contracts.  Shupe, Kramer and Old all agreed suing the FMPA would only alienate the agency’s leaders, making it that much more difficult to resolve the negotiations.

Howle, Turner and Wilson repeated their belief the electric sale is not dead.  The solution, they all say is to go after the FMPA.

“There are things that you’d like to do and there are things that you can do,” Kramer said.  Clearly referring to the power sale, Kramer added, “There are a lot of things that we’d like to do, but the mechanics of which, it just doesn’t happen. Unfortunately, that causes a lot of divisiveness in our community, and one of the things I’d like to work on in the next couple of years is trying to find a solution that everybody can live with.”

Asked what he would do differently from previous City Councils to conclude the electric sale, Old first explained he has meet twice with representative of Florida Power & Light and has traveled to Orland to meet with FMPA leaders and executives at the Orlando Utilities Commission.  Old said he has also read all the available documents dating back to 1979.

Old explained, “I don’t see a way through it. I don’t see an answer to it.  It has got to be an expert that finds their way through this.  Suing is not going to do it.  What happens when you sue, and I have been through many, many, many lawsuits, is that you end up with some people saying not, “no,” but,  “hell no, I’m not going to deal with you.”

“I think you’ve got to back up and start again,” he added.  “This is a very tricky situation and I don’t see any way through it right now, but I am not against trying hard to do that.”

When asked for more specifics on his position on the sale, Shupe said, “The City of Vero Beach has demonstrated that they are a willing seller, and Florida Power & Light is the only buyer that is interested…They (FPL) have a document produced by us, a sales agreement, that is valid until December 2016. I’m not saying I’m gong to sit on my laurels and wait until then, but clearly Florida Power & Light has to take the next steps. They know what we know.  If they are really interested, they’ve got to come back and demonstrate to the City of Vero Beach how they want to move it forward…I think it’s in the hands of Florida Power & Light right now.”

All Aboard Florida

Asked if it would be better to spend taxpayer money to hire attorneys and consultants to try to stop All Aboard Florida, or, instead, work with the company to mitigate the impact of the high speed trains, Kramers said spending public money for lobbyists is a “dangerous and slippery slope.”

“All Aboard Florida really doesn’t give us any benefit whatsoever here in Indian River County, and there are a lot of groups out there that are going to fight this thing.  However, we have got to be ready, if it does come…We’ve got to get with the other communities, because this will be decided at the Federal level. We have got to have a big voice so that we can make a difference,” Kramer said.

Old said a number of groups are reviewing the impact study are are preparing proposals and requests for mitigating the impact of All Aboard Florida.

“A lobbying effort just in the city would not be enough,” Shupe agreed.  “This is clearly a regional problem.”

Turner sounded a more combative tone. “We have got to go with everything we have to fight this train,” she countered.

Wilson agreed. “We should use every tool we have to stop this awful, awful, awful train,” he said. “They want us to believe the electric sale is dead and the train is alive and can’t be stopped. Well, I think we’ve got that backwards. The electric sale should be alive and the train should be dead.”

Actually seeming to agree with Kramer, Old and Shupe that the proposed high speed train is more than Vero Beach can turn back on its own, Wilson said the best hope of stopping the train is for Republicans to take control of  the United States Senate.  “You wanna stop the train?  Elect a Republican Senate,” he said.

Howle said All Aboard Florida has, from the beginning, not been honest with the public and with local officials and cannot be trusted.

Moving the wastewater treatment plant

In answer to a question that clearly suggested the Taxpayers Association has concerns over a proposal to spend $25 million or more to move the City’s wastewater treatment operations to property near the airport, Shupe said he is not opposed to the move, but that it would be best to wait five to six year.  “Everyone, I think, would like to have those two utilities off the river, so I am in favor of moving it when and if it is economically feasible and I don’t think now is the time,” Shupe said.

“Yes, I would like to get the eyesore off of our river,” Turner said. (Turner’s barrier island home is located directly across from the wastewater treatment plant.)

“I agree that if we can financially do it, that obviously would be a good idea to do,” Wilson said.

“I would like to see it off the Lagoon. I’d like to look at our options and see what’s most cost effective, and perhaps go back to the County and see if they even still want to talk to us,” Howle said.

Howle seemed to suggest the City should have accepted an earlier proposal from the County to take over the water and sewer system for $20 million.  By some estimates, the utility, which is contributing more than $1 million a year to the general fund, is worth closer to $80 million.

Kramer clearly sees it differently from Howle. “Right now we don’t need to move that plant unless there is someone willing to pay us the $25-$26 million it would take to move it.  Before putting that kind of a burden on our taxpayers for aesthetic reasons, somebody’s got to come up with a $26 million aesthetic reason to move it,” Kramer said.

Kramer said that, rather then spending revenue from the profitable water and sewer utility to move the wastewater treatment plant, the money could be used to help pay the cost of converting septic tanks to the sewer system. “Had we sold that system three or four years ago, the STEP system would not have been possible,” Kramer added.

Old said he is in favor of moving the wastewater treatment plant, but that it is not a priority now.  “If we do a long rang plans, and this comes up as something we’ve got extra money for, and it makes sense combined with some of the other things we are trying to do for the Lagoon, OK, but at this particular time, it doesn’t make sense,” he said.

Responding to the Lagoon crisis

All seven candidates said they support addressing the Lagoon crisis, but not all of them are equally enthusiastic about the proposed hybrid system for converging current septic tanks near the lagoon to the City’s water and sewer system.  Howle raised the most questions about the current science on the source of nitrogen that is killing off the Lagoon.

Old said it is clear the nitrogen is coming from at least one of three sources, septic tanks, runoff and fertilizer.  He insisted the Lagoon cannot wait for more conclusive science, and that the time is now to move forward with converging septic takes to some form of sewer system.

Brian Heady

Brian Heady, who was unable to participate in most of the forum because of a prior commitment, did make a brief appearance, during which he addressed the key points covered in the wide-ranging questions posed by Taxpayer’s Association.

Heady said All Aboard Florida should not receive government guaranteed loans.

The solution to the stalled electric negotiations, and to ending what he described “outrageous” legal action by Indian River Shores and the Indian River County Commission, is to sell the 22,000 customers outside the city limits to the Shores and to the County.  The City could then, he said, operate a smaller utility.

Heady said he would not be in favor of consolidating City services, such a the solid waste department and the water and sewer system, with the County.

Addressing the question on the millage rate, Heady said, “We need to raise enough in taxes to cover the expenses. If that means we have to raise taxes a little bit, so be it….I think we need to run an efficient government, and we need to run it as inexpensively as possible.”