No one can serve two masters
Editor’s note: Last fall, as a candidate for re-election to the Vero Beach City Council, Randy Old said he believed agreeing to Florida Power and Light’s proposed acquisition of Vero Electric’s Indian River Shores customers would be a violation of a Council member’s fiduciary responsibility. Old, a retired banker, said carving up and downsizing Vero Electric for the $30 million FPL has offered would lead to higher electric rates for the remaining customers, and higher taxes for the resident of Vero Beach.
Old lost his re-election bid by less than 30 votes to Lange Sykes. Sykes received 90 (NINETY!) percent of his campaign contributions from Indian River Shores residents. He, along with Laura Moss, was also supported by a political action committee that raised $100,000 from Shores residents and from FPL. The money was used to pay for an unprecedented misinformation campaign. In postcards and advertising the PAC made outlandish claims about how the proposed “partial sale” would benefit the people of Vero Beach. Quite simply, it was a campaign of lies. Proceeds from a partial sale cannot be used in any of the ways the FPL-Shores sponsored PAC promised.
All along, Moss has claimed she is pursuing a partial sale “in the context” of a full sale. Over the past two months, Moss has been working behind closed doors to negotiation a sale of Vero Electric on terms exceedingly favorable to FPL. The current offer is worth some $25 million to $30 million less than the previous offer. Even worse, it will obligate to City to conclude the partial sale at $30 million, if all the necessary approval for a full sale cannot be concluded. In no uncertain terms, Moss and Sykes, along with their fellow Council member, Harry Howle, are preparing to shaft the people of Vero Beach.
A fairer deal for everyone may be to offer the Shores a renegotiated franchise agreement that includes two concessions. First, based on the fact that the City’s distribution system within the Shores is undergrounded and is less expensive to maintain, Shores resident would receive a rebate on their electric bills. Second, upon the expiration of the renegotiated franchise agreement the Shores would be free to either buy the City’s Shores customers and infrastructure at the prevailing market price, or to find a buyer, presumably FPL. Such an agreement might be a win-win for everyone. Shores customer would have the FPL rates they think they want, including two PSC-approved increases to go into effect later this year and next, and the remaining customers of Vero Electric would be spared the significant negative consequences of the proposed partial sale. If at the end of the new franchise agreement the Shores wants to go its own way, then so be it.
The following story was published last fall, when the FPL-Shores funded PAC was in the midst of its misinformation campaign.
During the recent Vero Beach City Council election, a political action committee headed by Dan Stump and funded by Indian River Shores residents and by Florida Power and Light promised voters a sale of Vero Electric’s Shores customers would result in a $30 million windfall that could be used to:
“Completely suspend ALL Ad Valorem taxes for the next 5 years”
“Lower the current Ad Valorem tax rate by 20% for the next 25 year”
“Suspend Utility Taxes for Vero Beach residents for the next 14 years”
“Pay for Vero Beach’s 4th of July Celebration for the next 2,000 years”
“Write a check to every single Vero Beach resident of Vero Beach for $1,941.09: for a family of four that’s $7,884.36”
“Pay off 80% of the $37 million that Vero owes in unfunded pension liabilities”
“Fully fund Vero Beach’s Police Department for the next 4 years”
As Vero Beach resident Steven McDonald explained during last week’s City Council meeting, the City’s bond covenants require that any proceeds from a sale of Vero Electric’s assets must be kept in the electric fund, and cannot be used to subsidize operating expenses. Further, and just as importantly, the proceeds from a partial sale can certainly not be used in any of the ways promised by the FPL-Shores-funded deception machine known as “Clean Sweep For A Brighter Future.”
Newly elected Council member Laura Moss and Lange Sykes seem determined to join Harry Howle in pushing the partial sale forward. Like Howle, they are prepared to reject the advice of five independent utility experts. Hired by the City to determine a “break-even” price, this group concluded that any partial sale of Vero Electric’s Shores customers for less than $47 million would lead to higher electric rates and higher taxes.
Accepting FPL’s offer of $30 million will certainly benefit FPL and Shores residents, but it also seems certain to disadvantage the remaining customers of Vero Electric and the residents of Vero Beach. Given that Moss and Sykes received nearly all their campaign contribution from Shores residents, and considering that they were supported by an FPL-Shores-funded PAC that flooded local mail boxes with political flyers full of lies and misinformation, it should come as little surprise that the Council’s newest members are willing to join Howle in selling out their own constituents in order to appease their patrons in the Shores and at FPL.