The emperor has no clothes


Editor’s Note: Dick Winger is a former three-term City Councilman and Mayor.


The City of Vero Beach has no Budget Plan in place for 2018-2019 because the July 10th and 11th provisional Budget Sessions funded City spending with a $2,500,000 deficit, utilizing sales proceeds from the Florida Power & Light Sale.  NOW those funds are not there October 1st because the four appeals to the Florida Public Service Commission delay the sale.  No matter how much each of us supports the sale, (and we all do), it will not take place by October 1st, and then after that, who knows?

Since the City Budget cannot legally be changed after the last meeting in September, Council cannot just hope we complete the sale.  They have to have Plan B financial and legal plans in place.  The PSC or Court rulings may put off the sale a long time; or even do the unthinkable, and endanger the entire Sale.  There has to be planning visible to the public.  This is our City and our money!

Further, this City Council, in the two abbreviated half-day sessions (normally it is three full days), did not cut headcount or one dime out of the budget despite a reduced workload with Electric gone.  Instead, they raised expenditures $400,000 above staff recommendation, further spending Sale proceeds.  This Council underfunded streets paving.  In the 17/18 five year capital plan, Public Works and stormwater are underfunded by $8,347,000. A portion of the Vero Electric Sale proceeds was to be applied to infrastructure. Now the City is faced with an October 1 pay raise and increased expenditures, and no Plan B.

There have been four appeals to the PSC to be heard October 9th and 10th.  One, from the Florida Industrial Power Users Group, is a potential game changer.   This group represents many businesses using much more FPL power at much higher FPL rates than homeowners, so they have a major stake. Their claim is this Sale exposes them to an added cost burden of $200,000,000.

The PSC ruled 3:2 to overturn their own staff recommendation and ruled Vero Beach could make the Sale we all want.  PSC Staff is saying what the major appellant says, any premium should be paid, either by FPL’s stockholders or the ratepayers of Vero Beach.  In all probability, a cost recovery Surcharge to our FPL power bill would increase homeowner power bills above where they are now.

So what will happen?  Nobody knows what the PSC will do.  Will they amend their ruling, will they require further staff work causing more delays, or will they affirm their ruling?

If the PSC affirms their ruling, each appellant can appeal to the Florida Supreme Court, and that takes time.  For the Florida Industrial Power Users Group, not only is the money an issue but with the continued merging of power companies in Florida, it is an important precedent applying to many future cases.   Jacksonville Utilities is considering selling to FPL, and the Vero Beach Sale will impact that deal.  This writer’s bet is there would be appeals if the PSC affirms in our favor.  The likely result is the City of Vero Beach FPL Sale will be stalled.

If the Sales contract is stalled beyond December 31, 2018, then it automatically terminates unless Vero Beach and FPL extend.  If Vero Beach and FPL don’t extend, then the harmful partial sale for $30,000,000 of the Indian River Shores customers to FPL occurs.  The people of Vero Beach are then stuck with the least desirable portion of the Electric utility.  A partial Sale will result in higher rates for all remaining Vero Beach and Indian River County customers. FMPA/OUC will still be owed over $120 million, making a future full Sale much more difficult.

The Vero Beach/FPL Sales Contract was accomplished, not by this City Council, but by the prior Council.  This Council has done nothing sustentative to ensure it is accomplished and instead has drifted along planning how to spend the proceeds, and how to divest City parks and property.

It is time this City Council bucks down and has a real plan to represent our interest in getting this Sale done!  It is time this City Council fixes the disastrous 2018-2019 Budget with streets and so much unfunded.  MOST IMPORTANTLY IT IS TIME THIS CITY COUNCIL HAS A PLAN B FOR WHAT HAPPENS TO CITY FINANCING NEXT YEAR IN LIGHT OF THESE APPEALS.

Bottom line, the City of Vero Beach Electric Sale to FPL will not close on 10/1/2018.  Therefore, the budget and the five-year capital plans have to be revised.  The possibilities of the deal closing at a later date in 2018, extending the existing contract termination date past 12/31/2018, or a partial sale to Indian River Shores are all possibilities that need be planned for.

The bottom line is the current proposed 2017-2018 Budget and Capital Plan have imploded.   The City has no Clothes!

The Mayor must immediately call an Emergency Session of City Council.

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