COMMENTARY

“The day following Wright’s report to the City Council, Howle, Turner and Wilson told the Taxpayers Association they can get the deal done.  One has to wonder if these three politicians are uninformed, or if they are simply being dishonest with the public.”

MARK SCHUMANN

We hear a lot of talk about low information voters, the ones who tell national surveyors they do not know which political party controls the House or the Senate, and who tell local telephone surveyors they have never heard of Vice Mayor Jay Kramer or Councilwoman Pilar Turner.

Voters who fail to become informed of the issues and the candidates are doing themselves, their community and their county a disservice.

But voters are not the only ones operating on limited information.  Take, for example, the Vero Beach City Council race, where at least three candidates believe it will be possible to “force” the Florida Municipal Power Agency to let Vero Beach out of its contractual obligation to its fellow FMPA members and their bond holders.

One candidate who still believes the sale of Vero Electric to Florida Power & Light is possible acknowledged last week he was unaware that both Fitch and Moody’s credit rating agencies recently warned that if the FMPA does not enforce its contracts, it may face a downgrading of its credit.  Worse, if they set aside their contracts to let pro-sale utility activists in Vero Beach have their way, FMPA leaders could find themselves in court defending themselves against bond trustees for failing to protect the interests of bondholders.

If Vero Electric is to be sold, the deal will have to be structured within the four corners of the City’s contracts with the FMPA, It is not that FMPA will not amend those contracts. Quite simply, they are not free to set aside their contracts simply to let Vero Beach do its own thing.

Just as those who still believe the earth is flat and just 5000 year old have a right to hold to their opinion in complete disregard of the facts, Harry Howle, III, Pilar Turner and Charlie Wilson are free to believe they will be able to persuade the Governor and the Florida Legislature to help them “force” the FMPA to set aside contracts already validated by the Florida Supreme Court.  The problem is these three city council candidates are disregarding the facts.  In short, they are low information candidates.

Reporting to the City Council last Tuesday, attorney Schef Wright said, “In practical terms, the deal as structured will not get done,” because, Wright said, the OUC (Orlando Utilities commission) has determined it cannot take Vero Beach’s legal positions in the FMPA power purchase contracts and project support contracts.

Wright explained that because OUC determined its existing bond covenants prevented it from being a party to the deal, the City needs to find some other qualified and willing partner to take its place.  At this point, no one is interested.

Asking the Florida Municipal Power Agency to assume Vero Beach’s obligations would put other cities and towns at risk. “FMPA is an organization of cities just like us, some bigger, a fair number smaller. The costs are what they are . The risks are what they are. If one member drops out – Vero Beach in this analysis – all the other member cities and towns have to be willing to take on the cost risks and the other long-term risks; and they just don’t seem to be willing to do that. If you changed shoes and…if a city came to you and said we want you to take over our cost responsibilities because we want to go something else, and we want you to take on our long-term risks, I don’t know what you would say. It is not an easy proposition,” Wright said.

Wright said there is no legal basis for suing the FMPA. Further, he said he believes it is highly unlikely the Florida Legislature would be willing to interfere with the City’s contracts with the FMPA, contracts that have already been validated by the Florida Supreme Court. Wright said that if the Legislature were to obviate the contracts, the move would “send a chilling message to Wall Street.”

The day following Wright’s report to the City Council, Howle, Turner and Wilson told the Taxpayers Association they can get the deal done.  One has to wonder if these three politicians are uninformed, or if they are simply being dishonest with the public.