Electric rates would go up 30 percent, property taxes 50 percent
NEWS ANALYSIS
MARK SCHUMANN
Out on the campaign trail, City Council candidates Harry Howle, III, Pilar Turner and Charlie Wilson are assuring voters they can find a way force the Florida Municipal Power Agency to let Vero Beach out of contracts that have been validated by the Florida Supreme Court. Failing that, Howle, Turner and Wilson can be expected to give in to the demands of the Indian River County Commission and the Indian River Shores Town Council, both of which are seeking to force Vero Beach to abandon its customers and electric utility infrastructure outside the city limits.
In a memo sent to Turner today, City Manager Jim O’Connor explained that the loss of earning on 62% percent of current electric revenues would require 50 percent increase in property taxes. The alternative to higher taxes, O’Connor explained, would be to further cut municipal services.
The additional $2 million in property taxes, though, pales in comparison to a $12 million, or 30 percent increase in electric bills O’Connor expects city residents who see as a result of a partitioning of Vero Electric.
“If we lost 60 percent of the customers and potentially 62 percent of your sale and we are left with all the fixed costs, since in the IRS (Indian River Shores) demand it appears they are not willing to accept any stranded cost, the impact could exceed a 30 percent tin crease in rates to inside city customers and if services remain the same a 50 percent impact on property taxes,” O’Connor wrote.
Indian River Shores customers would presumably get lower rates, if their Town prevails in its court case against the Vero Beach, while city residents, taxpayers and electric customers would pay the price in higher taxes and higher electric rates.
During the Oct. 7 City Council meeting, Mayor Richard Winger countered Turner’s suggesting the City can or should turn over its customers outside the city limits to Indian River Shores and to the Indian River County Commission. Winger explained that one third of the City’s power comes from the FMPA and two-thirds from the OUC. OUC power is less expensive that FMPA power; so if the city were left with just 40 percent of it customers, and just FMPA power, rates, as a result of a so-called “partial sale,” would go up for city residents and businesses.
Indian River Guardian 
Don’t you just hate it facts get in the way? Just like the mirage $156,500,000 Glen Heran promised from the sale and the $90,000,000 that Charlie Wilson promised from the sale, the idea that we should let the out of city customers walk away with out payment for our business assets it just plain crazy.
Shame on Jim O’Connor for playing into this hypothetical.
http://m.veronews.com/news/vero_beach/utilities/vero-beach-electric-customers-could-see-some-relief-on-bills/article_c394b0a8-58ba-11e4-b6a7-001a4bcf6878.html?mode=jqm Here is a totally different article written yesterday about the city utilities and is way different than what this says. Can’t have it both ways so which way is it?
Michael, The veronews.com story to which you referenced, and the story on tcpalm.com this morning both report on news of likely rate reductions that will result from negotiations between Vero Beach and the Orlando Utilities Commission. We have already reported on these negotiations. See: http://insidevero.com/2014/10/14/time-is-proving-kramer-right-solari-faherty-and-other-pro-sale-fundamentalists-wrong/
IF the city continues to own the electric system, is appears significant rate reductions are possible and likely. IF the city is forced to partition the system, if appears city residents and taxpayers will see a 30 percent increase in their electric rates and a 50 percent increase in their city property taxes, for a total negative impact of $14 million a year.