MILT THOMAS

Brian Barefoot, mayor of Indian River Shores,  yesterday gave an update on the town’s activities to John’s Island residents at the JI Five O’clock Hour meeting. A packed house of an estimated 200 attendees were mainly interested in hearing about the status of the Town’s lawsuit against the City of Vero Beach.

Barefoot went through each of the Town’s four primary complaints against Vero Beach, three of which have been already dismissed by Judge Cynthia Cox “with prejudice,” meaning they cannot be raised again in court. Barefoot explained the Town’s suit was then amended to focus on home rule, the right of Indian River Shores to put in its own utilities infrastructure (lines and poles).

As to Vero Electric electricity rates, Barefoot did say though they are high, there are other municipal electric systems in Florida charging higher rates. (Several regulated investor-owned utilities in Florida also charge rates higher than Vero Electric.) However, Barefoot said Vero Beach’s rates are 30 percent higher than Florida Power & Light rates and gave several examples of what that 30 percent means in dollars and cents. (According the the latest available statewide bill comparisons, FPL charges $94.30 per kWh. Vero Electric charges $121.93 per kWh, a difference of 23 percent.)

The most animated audience response came when Barefoot explained that the City of Vero Beach turned down a $15 million offer from FPL to buyout the Indian River Shores portion of Vero Electric’s customer base. (The Indian River Shores customer base represents 8 percent of Vero Electric customer base, and 15 percent of its residential billings.)

Vero Beach, Barefoot explained, made a counter offer of $64 million. Barefoot said Vero Beach officials gave no explanation as to why the counter offer was so high, nor was there any reference to the stranded costs and contingent liabilities Vero Beach faces that FPL was not willing to cover. (According to Vero Beach City Manager Jim O’Conner, in meeting with FPL representatives, he did in fact explain the City’s considerations in arriving at the $64 million number.  O’Conner stressed that the City’s priority was to arrive at the price for selling Shores customer base that would not negatively impact the remaining customers of Vero Electric.)

Barefoot also told the JI Five O’clock Hour gathering Vero Beach officials rejected a $170 million offer for the full system. He did not explain the offer also called for a $26 million surcharge to be assessed the customer of Vero Electric. Barefoot explained the agreement between Vero Beach and the Orlando Utilities Commission (OUC) would reduce the length of its contractual obligation by eight years, but in return, the city offered its natural gas pipeline to OUC. (The deal also saves the Vero Beach’s electric customers an average of $750,000 a month.)

Barefoot claimed Vero Electric has been a virtual cash cow to the city, generating $5.6 million “profit” toward the $20 million annual budget. Barefoot said that number did not include the $4 million in administrative costs also deducted from Vero Electric’s revenue, for a total, he said, of almost $10 million per year paid for by Indian River Shores and unincorporated Indian River County ratepayers. This, he said, is essentially “taxation without representation.” (The total transferred from Vero Electric to the City’s general fund is closer to $7 million, and is paid by all customers of Vero Electric, not just those located outside the city limits – $1.7 million, not $4 million is transferred from Vero Electric to the City’s general fund to pay for administrative services provided the electric utility. In addition to reimbursing itself for administrative services provided Vero Electric, the City “earns” six percent on electric revenue. City officials describe this transfer, not as a “profit,” but as a return on investment.)

When questioned afterwards about his best assessment on the town’s chances of winning its lawsuit, Barefoot expressed “hope” that it would be successful. In a  Powerpoint presentation on the Town’s activities, Barefoot indicated legal fees have jumped from about $59,000 in FY 2013 to a projected $600,000 in FY 2016. He said at some point Town leaders will have to assess whether they should continue investing in the lawsuit.

Barefoot also suggested that those Johns Island and other Indian River Shores residents who provide financial support to Vero Beach city council candidates choose carefully the candidates who support the Town’s objectives, like Pilar Turner and Harry Howle. Barefoot said he hopes that with Jay Kramer as mayor of Vero Beach, there will be a shift in the Council’s voting patterns this coming year. (Kramer is running for the County Commission seat now held by Bob Solari, who was in attendance at this meeting.)

After presenting the status of the Town’s lawsuit against Vero Beach, Barefoot commented on All Aboard Florida. The town council approved a resolution last year asserting that All Aboard Florida should pay all costs for their project including rail stations, quiet zones and all other corridor improvements and maintenance without any financial participation from any government agency. Indian River County is fighting the project, which Barefoot said he hopes does not happen in the end.