Vero electric contract with OUC sparks discussion at city, county

VERO BEACH — The legality and long-term impacts of the City of Vero Beach’s new electric contract with the Orlando Utilities Commission spawned debate at two simultaneous public meetings Tuesday — one at City Hall and one at the Indian River County Administration Building.

At the Vero meeting, City Attorney Charles Vitunac offered up a preliminary report listing nine pages of changes his staff found between the April 7 “redacted” version and the April 21 “unredacted” version of the OUC contract.

This was in response to a Dec. 1 request by the city council, prompted by questions raised by former Councilman Charlie Wilson, who was removed from office on Dec. 7. “This started as I was preparing for the Nov. 16 special call meeting about electric issues. I read the contracts and saw things that were different, I found about 25 changes myself,” Wilson told VeroNews.com on Tuesday.

Vitunac had publicly stated there were no changes made and City Manager Jim Gabbard told an investigator from the State Attorney Bruce Colton’s office that there were only two changes of the contract and those were at the request of the City Council.

Council members had asked that a clause be inserted to protect themselves and also members of the Orlando Utilities Commission from any personal legal responsibility for the contract.

An independent review by our sister publication, Vero Beach 32963, found 115 changes made sometime between the issuance of the redacted and unredacted contracts.

On Dec. 1, the council had also asked for Vitunac’s opinion about the materiality of any changes he found and Heady said he still wants those answers.

“They were material to somebody or they wouldn’t have made the changes,” Heady said.

Vitunac explained the nature of the changes, in his opinion.

“They’re all material in that they make the contract better, but they don’t change the meaning of the contract,” Vitunac said. “These are just things that make the contract clearer.”

Then-Mayor Tom White signed the OUC contract on behalf of the city on April 21, 2008. Heady asked White whether or not he was told that changes had been made to the contract when he was asked to sign it and White responded in the negative.

Councilman Brian Heady directed Vitunac to come back with a full report on the changes by the Jan. 19 regular City Council meeting. Heady asked for several things to be included in that report.

“I want to know who made the changes, why they were made and when they were made,” Heady said.

Heady added that he wants to make sure that the contract is completely legal going forward.

“The contract that was signed was not the same contract that the council reviewed and that could mean that the contract was not valid,” Heady said. “We now know that there were changes and that he (White) was not told that there were changes when he signed the contract. If they want to go forward with the contract, I think that we need to re-approve the contract.”

Meanwhile, at the Indian River Board of County Commissioners meeting, Wilson made a presentation to commissioners about the economic implications of the 20-year, $2 billion contract with OUC.

It has been estimated, and conceded to by City of Vero Beach staffers, that electric rates for city customers may still be around 20 percent higher than FPL customer in Indian River County for the duration of the OUC contract. Wilson presented charts showing the commissioners how much, over time, this difference in rates would drain out of the local economy.

Wilson also pointed out to commissioners that there had been a substantial number of changes made to the contract after it was shown to the City Council and that the contract might not stand up to a legal challenge.

“We must act,” Wilson said. “You must act now,” later adding, “We need the commission to help us.”

Commissioners deferred immediate action on Tuesday, voting to refer the issue to its Utility Advisory Committee to be examined and brought back to them with recommendations.

Wilson urged the county to study the contract and mount that legal challenge in circuit court, if necessary.

Commissioners, especially Gary Wheeler, were not comfortable spending county money to launch a legal assault on a contract to which the county is not a party.

“I share the same concerns,” Commissioner Joe Flescher said in response to Wheeler’s comments, adding that he’s wary that Wilson’s prediction of what higher electric rates compared to FPL would cost the county’s residents over the next 20 years — $550 million extra on monthly bills, might not be totally accurate. Flescher said he fears that mounting a legal battle could cost 10 times that amount.

“He takes a lot of liberties” with facts, Wheeler said of Wilson after the commission meeting. Wheeler added he is sure there are financial figures within Wilson’s presentation that could be picked apart.

What figures wouldn’t hold up, Wheeler said he didn’t know because he had not had time to fully review Wilson’s presentation.

The commission also directed the County Attorney to look into the county’s franchise agreement with the city for electric and to work with the Utility Advisory Committee on the issue.

The scope of the county UAC was expanded on Dec. 1 to empower the group to tackle electric issues in addition to water, wastewater and solid waste. Also on Dec. 1, the county threw its support behind efforts to bring the City of Vero Beach Electric Utility under full Florida Public Service Commission regulation.

Chairman Peter O’Bryan emphasized that the county should be focused on working with FPL and with the Public Service Commission to get FPL’s territory expanded to include county customers now served by the Vero electric utility.

Commissioner Wesley Davis said Wilson’s presentation was intriguing and that he was “kind of amazed” by the comments from his fellow commissioners.

“I’m not afraid to move forward,” Davis said, but he wants to make sure they move forward on the right path.

“We took the City of Fellsmere to task on fire hydrants,” he said, pointing out that the stakes regarding electric are much higher to county residents.

Wilson said he looks forward to working with the county UAC to get to the bottom of the electric issues.

“We made the transition from the city being able to solve the electric problem to the county being able to solve the electric problem,” Wilson said. “At the county, one thing that was accomplished that the County Attorney is going to be looking into a variety of documents.”

VeroNews.com online editor Debbie Carson contributed to this report.

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