“The people of Vero Beach must decide for themselves if Howle is lying to them. At the very least, he is, intentionally or otherwise, misleading them into believing that what good for Indian River Shores is necessarily good for the taxpayers of Vero Beach.”
“If the customers of Vero Electric are not to be hung out to dry, it is critical that the Council first determine under what terms a sale of the remainder of the system could be possible. To take this so-called “first step” without fully understanding what the next step will be is nothing short of foolish.”
In 2015, when he won a seat on the Vero Beach City Council, Harry Howle promised the voters of Vero Beach he had a solid, five-point plan for selling Vero Electric to Florida Power and Light. More than a year has passed since Howle took an oath to serve the best interests of the City of Vero Beach and its residents, and yet he has not followed through on a single one of the five steps he once claimed were necessary to sell the system.
Instead of fulfilling his promise to bring rate relief to the people of Vero Beach and to all 34,000 customers of Vero Electric, Howle now claims selling just the Indian River Shores portion of the system is “an important first step.” (Howle offers no explanation for why selling off the Shores portion of the system now will in any way improve the prospects for selling the remainder of the system.)
What makes this “first step” so important? As puppets of the Indian River Shores Town Council, Howle, and two new members of the Vero Beach Council, Laura Moss and Lange Sykes, have made it clear they intend to give Shores leaders what they want, regardless of the likely negative impacts on the taxpayers of Vero Beach and the customers of Vero Electric.
In the original purchase and sale agreement negotiated in 2013, FPL offered $111 million in cash for Vero Electric. If FPL now pays $30 million for the Shores portion of the system, will the company then offer $81 million for the remainder of Vero Electric? If it takes more than $81 million to pay another municipal utility to assume Vero Beach’s obligations to the Florida Municipal Power Agency, then Howle, Moss and Sykes are going to be hard pressed to sell the remainder of the system, despite the promises they are now making. If the customers of Vero Electric are not to be hung out to dry, it is critical that the Council first determine under what terms a sale of the remainder of the system could be possible. To take this so-called “first step” without fully understanding what the next step will be is nothing short of foolish.
In a guest column published in the Press Journal Jan. 3, Howle claimed selling the Shores portion of the electric system to FPL for $30 million will improve the profitability of Vero Electric. Howle is either ignoring or glossing over the fact that the sale will take several years to complete, that maintenance, capital improvements, fixed costs and most other operating expenses will not go down proportionately, that Vero Electric’s bond debt cannot be paid off immediately, that the Shores customers, while they represent 8.7 percent of Vero Electric’s power consumption, also represent far more than 8.7 percent of the system’s revenue, that the sale will mean a loss of some $600,000 to the City’s General Fund, and that Vero Beach is sure to net less than $30 million from the deal. (Expect FPL to alter the terms of its initial offer, and not to the benefit of Vero Beach.)
For all of these reasons, a team of five independent utility experts hired by the City concluded it will take $47 million, not $30 million, to insure the proposed partial sale does not lead to higher taxes and higher electric rates. When the work of these independent experts was first presented to the Council, City Staff concurred in the conclusions. Now Staff is under pressure to pretend $30 million is a great deal for the City, when in fact they know Howle, Moss and Sykes are simply catering to the wishes of the Indian River Shores Town Council.
Howle is careful to avoid discussing the fact that Vero Electric’s Shores customers, because they are high-volume users, contribute significantly more than 8.7 percent of the system’s total revenue. Assuming the number is close to $10 million, the City will save $6 million by not having to buy wholesale power to sell to the Shores. But what about the other $4 million? Given that all other electric system expenses will not go down anywhere near $4 million if the Shores customers are sold, the difference will have to be made up in rate increases for the remaining customers.
Well, there is another option. Vero Beach could simply stop earning a return on its investment in Vero Electric. Rather than earning 6 percent on the electric system’s revenue, and using that money to help pay for municipal services such a police protection, guarded beaches, subsidized land leases for the Vero Beach Museum of Art and the Riverside Theatre, and other services enjoyed by Shores residents, Vero Beach could instead significantly raise taxes, or drastically cut services by laying off personnel. (Eighty percent of General Fund expenses are in salaries and benefits.)
The people of Vero Beach must decide for themselves if Howle is lying to them. At the very least, he is, intentionally or otherwise, misleading them into believing that what good for Indian River Shores is necessarily good for the taxpayers of Vero Beach.