City’s legal and consulting bills for utility sale at $337,386 and counting

NEWS ANALYSIS

MARK SCHUMANN

Randy Old
Harry Howle

To prepare the previous and now defunct purchase and sale agreement between Vero Beach and Florida Power & Light, the City paid more than $1 million in legal fees. That contract, which was signed by Tracy Carroll, Craig Fletcher and Pilar Turner, failed to address and account for the City’s contactual obligations to the Florida Municipal Power Agency and its bond holders.

In the latest push to sell Vero Electric to FPL, the new council majority of Harry Howle, Laure Moss and Lange Sykes, all elected with significant support from FPL, has run up an additional $337,386 in legal and consulting fees.  Since May of this year, the law firm of Carlton Fields has charged the City $332,710. And additional $4,675 has been paid to the firm of Nabors Giblin and Nickerson for counsel on bond issues.

Any sale of the full system must still receive unanimous approval from the member cities of the FMPA’s All Requirements Project.  As it is being written, the current purchase and sale agreement will commit the City to sell the Indian River Shores portion of the electric system, even if one or more FMPA ARP members block the full sale.

As a candidate for re-election last fall, then City Councilman Randy Old said he believed a sale of the full system at the price proposed would not be good for the City, its residents, or the remaining customers of Vero Electric. To approve the partial sale at the price offered by FPL, Old said, would be a violation of a Council member’s fiduciary responsibility to the City and to the people of Vero Beach.

Old was defeated for re-election, loosing by 27 votes to Lange Sykes. Sykes received 90 percent of his campaign contributions from Indian River Shores residents. During the election, as he was seeing support for Sykes among wealthy Shores residents, Shores Mayor Brian Barefoot described Sykes as “a member of the Shores team.” Sykes was also supported by a political action committee that received half of its $100,000 in contributions from FPL.

This year Harry Howle is running for re-election. Like Sykes, he too was first elected with support from a political action committee funded in part by FPL.

As a candidate this year, Old now supports the partial sale. If the retired banker was right last year, then the legal fees now being passed on to the customers of Vero Electric will prove just a fraction of the negative impact on rates that will result from handing Shores portion of the system over to FPL.

 

4 comments

  1. Hhmmm….let’s see, I wonder what the legal fees would have been if, after the end of the 30 year contract, the city would not have fought Indian River Shores’ desire to leave the city’s service. How much did that court battle cost? I wonder what legal fees would have been incurred if, after the city of Vero Beach residents voted to SELL the service, the city had taken the steps necessary to move forward in that effort. Would the city have worked through the FMPA’s roadblocks by now and be enjoying the proceeds from a sale years ago? Would the city be earning interest on the proceeds? Would the city still be saddled with the legacy debts for retired employees who worked at the plant?How much did campaigns against the sale and against pro-sale candidates cost?

  2. For starters, you are conflating the full sale and the partial sale. The “steps necessary to move the sale forward” essentially involved FPL giving enough money to enough state legislators to bring sufficient pressure to bear on the FMPA. Quite simply, FMPA leaders have been told by leaders in the Legislature to “save the Vero Beach problem,” or the Legislature will solve it for them, and in a way they will not like. This was not something the City could accomplish. It is with good reason that the Tampa Bay Times editorial board has recently described the Florida Legislature as “a wholly owned subsidiary of FPL.”

  3. So the city needed to fight Indian River Shores when the 30 year contract was up and not let the Shores deal with the FMPA issues? I’m not conflating both. The City has fought both – the partial sale and the total sale. The vote on the entire sale came first and later IRS wanted out.

  4. Now you are conflating the 30-year franchise agreement with the Florida Public Service Commission’s service territory orders. The City has not fought the total sale. In fact, the City has worked within its means to seek release from the FMPA obligations. You have bought into a myth on this issue, just as you have bought into the misguided notion that the City seeks to promote “transit-oriented” housing. I’m not going to try to figure you out, though, for I learned a long time ago that one can go crazy trying to make sense out of the nonsensical.

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