Staff ReportVERO BEACH — As public anger mounts over sky-high electric bills, the Vero Beach City Council – while reviewing the electric utility’s budget requests for 2009-2010 at a meeting last week – passed up the opportunity to talk about possible ways of lowering this summer’s record bills, which are having a crippling impact on residents and businesses alike.One item that was expected to draw discussion was the way the City of Vero Beach each year allots $5.9 million off the top of electric bills – more than half from non-city residents who get their electricity from Vero Beach — and uses the money to subsidize other city expenses, enabling the City Council to hold down Vero Beach property taxes. “We’ve had this conversation over the last year, and obviously a lot of conversation in public is about what’s fair,” Vero Beach City Manager Jim Gabbard told the five council members. “I think over the course of at least the history that I am aware of with the electric system, there’s been a reliance on the transfer to offset tax rates. And we’ve continued to drop our tax rate. We’ve … received lots of acclaim and so forth from the public for doing that. “But is that fair to the people outside the city?” Gabbard asked. “The whole discussion is about that. This is one of those things that is really philosophy, and it’s the direction of the Council.”Gabbard said he believed “some measured increase in taxes with a corresponding decrease in the transfer” might be worth consideration, but Vice Mayor Tom White was against such a move.”The purpose of owning the electric company was to relieve some of the tax base of Vero Beach residents,” White said. “They only pay $1.93 millage right now and if they did not have money coming in from (electric and other) enterprise funds, it would be $4, $5 or $6. You are going to pay it one way or the other.”However, by diverting electric funds to the Vero Beach general fund, the City Council has found a way to get the 61 percent of Vero Beach utility customers who do not live in the city to subsidize artificially low property taxes for Vero Beach city residents.While White and others contend that eliminating the electricity subsidy would force a big property tax increase, it might more likely force serious look by the City Council at meaningful cuts in the city budget.Only two City Council members, Bill Fish and Debra Fromang, seemed even slightly interested in possibly reducing transfers from the electric fund to the general fund – but their interest seemed to lie in seeing the money used for capital improvements to the electric system.The city for years has been financing electrical system projects with debt, which currently stands at $58 million, and is proposing to borrow another $6.5 million in the coming year to pay for electric system capital requirements.”Is there ever a discussion about not transferring as much to the General Fund, and using some of the revenues (for capital projects that are) necessary?” Fromang inquired.”This is a fundamental question we really ought to look at,” agreed Fish. “We can probably spend a lot of time kicking that around,” Gabbard said. “I think probably, this is something again that we should really take seriously,” Gabbard said. “This might be a valuable discussion and we could talk about a lot of things.”To date, no meetings have been scheduled to consider foregoing some of the $5.9 million budgeted from the electric rates and using that to help lower the electric bills of hard-hit homeowners and businesses.
