Vero City Council skirts rate hike issue

By Lisa ZahnerVERO BEACH — In what should have been an earnest meeting Tuesday, taking a hard look the utility rate crisis facing customers of the City of Vero Beach electric, water and sewer systems, the City Council avoided focusing on the pain that the current electric bills and proposed water and sewer hikes are causing local residents.The purpose of the meeting was to review recommendations made by Henry Thomas of Public Resources Management Group, the consultant in charge of conducting the first rate study in 18 years for the utilties. No matter how pretty the color graphs and charts, the news was somber. Rates are going up, at a time when the user — neither the average family nor the average business — can afford it. The base rate, called the customer charge, will be going up by about 10 percent for residential customers, which the consultant predicts will be offset by decreased power costs when the City switches to the Orlando Utilities Commission as its power broker in January. The City is expecting a 20 percent decrease from summer 2009 rates, but those rates are up about 21 percent from this spring. One problem facing the City is that it cannot control fuel costs — the main driver of the price increases — any more than the average driver can control the price of gasoline at the pump. Currently, the average Vero Beach electric customer is paying 50 to 58 percent more for the same amount of power than a Florida Power and Light customer. Under the proposed rates, City customers would be paying a little less than 20 percent more than FPL. For the 1,000 kWh customer, that’s about $20 per month more than FPL.While the Council avoided addressing why the electric utility is virtually broke when it started out the year with $14.5 million in its coffers or why the water and sewer utilities have been running a “cash negative” operation for months, according to Finance Director Steve Maillet, council members did urge residents to conserve energy to reduce their bills.”I saved $85 on my electric bill by going up one degree to 79 and by turning off four of the five fans,” Abell said.Councilman Tom White asked Electric Utility Director R.B. Sloan to investigate whether the City could offer a rebate program to customers for installing energy-efficient appliances or enhancements in their homes. Sloan said he would come back to the council with arguments for doing so, and that the new rate structure would support such efforts as it includes a lower price for 1,000 kilowatt hours to encourage conservation.With regard to water and sewer, the Council raised combined rates by 37 percent starting in October, with substantial increases planned out for the next five years, to meet the costs of operating and maintaining the system, and maintaining the cash that the utilities pay into the general fund. Nearly $11 million from utility bills is sent to general City coffers each year for uses other than maintaining the utilities or to help contain those costs.Tom Rhodes II came to the meeting, urging council members to provide some relief from soaring rates. He is the father of two and said his family budget will be hit hard by the water and sewer increases. “It’s not a family-friendly rate structure or increase,” he said.He is also a small business owner who will be severely injured by a more than 50 percent increase in his water and sewer bills over the next five years. Unfortunately, he doesn’t have a choice but to stay put in his two current locations.”With a laundromat, you have so much investment in plumbing and electrical, sewer and the air-conditioning units, you don’t pick up and move a laundromat,” he said. “With the 37 percent increase in water and sewer going into effect this year, I’ll have to raise the prices by 50 cents per load on the washers.”Rhodes, who runs the family business with his mom and dad, said the rate increases will hurt the people who are his customers, working-class folks. “The members of the City Council obviously don’t use a laundromat very often,” he said. “It’s the people who make less than $35,000 per year, have large families and a lot of them rent their homes and don’t have a washer and dryer. Asking them to pay an extra 50 cents per load is a lot for them, on top of the increase they’re going to be paying in their utility bills, but I have to keep making a profit or I can’t stay in business.”Rhodes said he will set up meetings with the council members individually to explain the plight of the small business owner in dealing with the prospect of these huge blows to the bottom line.Public hearings will be held on the rate increases later this month.

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