Vero Beach has paid electric consultants $3 million since 2003

VERO BEACH — A Boston consultant and her handpicked Boston lawyers were paid more than $840,000 by Vero Beach electric customers for their work on locking the city into the new 20-year contract with the Orlando Utilities Commission, city records show.

In reporting from our sister publication, Vero Beach 32963, by far the biggest moneymaker in this deal was Sue Hersey, who was hired to lead this effort even though earlier she had led Vero Beach’s losing multi-million-dollar battle with the Florida Municipal Power Agency.

In fact, over a six-year period starting in 2003, Hersey, her former employer Navigant Consulting, and a group of out-of-state lawyers have  billed Vero Beach $3 million for their work on these electric projects. Hersey served as project manager and “expert witness” on the ill-fated FMPA case. At that time, she was employed by Navigant Consulting, which billed the city $910,000 for battling FMPA. Then, right after the FMPA arbitration was over, she started her own company, and the City of Vero Beach soon became her major client.

During this period, Hersey herself billed more than $60,000 for the time she spent driving to the Boston Airport, flying to Orlando and driving to Vero Beach, in addition to the nearly $40,000 billed for airfare, hotels, parking and tolls.

On some occasions, Hersey generously paid for meals with Vero Beach’s top brass – and subsequently filed for and obtained expense reimbursement from the city.

During the latest round of work on the Orlando Utility project, the City of Vero Beach paid $244,031 through Hersey to Boston law firms LeBeouf, Lamb, Greene & MacRae, and its successor, Dewey and LeBeouf. The firms were not required to submit time sheets directly to the City of Vero Beach detailing the work they had performed in support of hourly fees that ranged from $470 to $550.

Instead, Hersey simply included their total fee each month on her invoices, as if the attorneys were working as a subcontractor to her. LLGM was also used in the failed FMPA arbitration effort in 2003-2005, but during that time it billed the city separately for the $1.1 million in legal costs.

All of these fees were paid out of Vero Beach Electric Utility funds. The invoices were signed off on by top staffers and approved piecemeal on the City Council’s Consent Agenda, where the amounts were not provided – just a summary of whom the city was paying and for what project.

To put the consulting costs in perspective, over six years they totaled a little less than the city spends annually for the entire Recreation Department employing 34 people and maintaining all the city’s parks, pools, fountain, tennis courts, recreation buildings, classes, and beaches.

And the consultant tally is still mounting. Most recently Hersey and attorney Meabh Purcell were called into town to meet with investigators from the State Attorney’s office as part of a grand jury probe into the OUC contract. Those detailed bills have yet to be brought to the council for payment.

The lead-up to the FMPA arbitration began in the summer of 2003 and the case was finally ruled on in September of 2005. In response to citizen outrage over soaring electric bills, the city made a costly gamble that it could win a feud with its power provider, the FMPA. Records show the City Council was repeatedly told by top staffers that the city’s position was a good one and it could win its fight.

Despite spending $966,000 in consulting and attorney’s fees the city lost the case, and then was forced to wait out the five years it had to fulfill before exiting the FMPA contract.

Just a few months after Vero Beach lost the FMPA mediation and was left with a tab of more than $2 million in consulting and legal bills, the City Council again hired Boston consultant Sue Hersey to embark upon the next expensive adventure – deciding what to do after the FMPA contract would end on Jan. 1, 2010.

At one point in 2006, the city briefly considered contacting Florida Power and Light about contracting for power transmission and even finding out how much the utility was worth, but those talks seemed to have dropped off a cliff after Hersey put a $300,00 to $500,000 price tag just to place a value on the utility.

Regarding the next three years of consultant work that led the City into its contract with FMPA, the total comes to $842,000 that Vero Beach was billed for her services and legal fees between March 2006 and November 2009.

While she charged Vero close to a cool million dollars for her services related to the FMPA mediation debacle, the City Council appears to have made no effort to see if alternative, possibly less costly consultants were available.

The question of why the City of Vero Beach went all the way to Boston to hire a consultant and lawyers- and then kept them on the payroll after they lost a very important case – remains a matter for speculation.

What do you think? Did the city get its money’s worth from their electric consultants? Provide your thoughts in the comment section below.

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