Vero Beach City Council votes to meet with County about a regional water-sewer utility

VERO BEACH — On the eve of a Town of Indian River Shores utility workshop to mark up a 30-year deal with the City of Vero Beach Utilities for water-sewer service, the Vero Beach City Council voted to meet with the Board of County Commissioners to talk about joining forces on utilities.

The unanimous decision followed a a presentation by utility activists Dr. Stephen Faherty and CPA Glenn Heran laying out a financial analysis of a takeover of the Vero water-sewer system by Indian River County.

Councilman Brian Heady said the presentation was “food for thought” and that it was important to listen to citizens. Talks about the issue began in October 2009 but broke up after about six months of joint meetings of Vero, County and Indian River Shores officials when a stalemate arose over the direction of efforts to study regionalization.Heran and Faherty propose that the best deal for all the ratepayers would be for the County to not only take over Vero’s infrastructure and customers, but also its approximate $27 million in debt.Customers outside the Vero Beach city limits, such as ratepayers in Indian River Shores and on the South Barrier Island, according to projections from Heran and Faherty, would be charged substantially higher rates than Indian River County Utilities rates by 2017 if they remain on the Vero system.

“You are going to lose the South Beach and you are possibly going to lose the (Town of Indian River) Shores,” Heran said to the council. “If you lose 40 percent of your customers, how are you going to spread that to the other 60 percent of your customers?”

Heran referred to water-sewer franchise agreements with the Shores and the County which expire in November 2016 and March 2017 respectively

Mayor Jay Kramer and Heran sparred briefly about the financial data, which Heran said he took directly from the Vero and County audited financial statements. Kramer has disputed the financial health of the county utility system, as he has questioned the county’s numbers for the past few months.

Despite the friction with Kramer, Heran said he was pleased with the City Council’s attentiveness and with the result.

“I think it’s very positive. This is precisely what the community needs is having these two boards coalesce around the idea that regionalization is the path forward,” Heran said after the vote. “They need to come to the understanding mutually, based on the hard numbers, without a spin from the city staff.”

Last week, the Board of County Commissioners heard the same presentation from Heran and Faherty and it was the consensus of the commissioners that the County could take no action, but would need to find out if Vero was interested in such an arrangement.

“I think it’s a great thing that the City is going to meet with the County about regionalization,” said County Commision Chair Bob Solari, after listening to the presentation at City Hall.

“But I am chagrined by the mayor’s skepticism displayed throughout the Heran-Faherty presentation,” Solari said. “County staff presented good numbers to the city with no questions from the city. Now we’ve had independent citizens confirm the numbers from the county and confirm the numbers of the city’s consultant.”

The numbers Solari refers to from the city’s rate study in 2009 preformed by Maitland-based Public Resources Management Group. That rate study predicted steep hikes in water-sewer rates. The City Council voted to implement those $13 million in rate increases and then repealed them.

Former Councilman Ken Daige, seeing the Faherty-Heran presentation on the agenda, had spoken during public comment about why the rate increases were repealed in 2010 when he was on the council.

“Bills can’t go up. We want guarantees that the rates aren’t going to go up,” Daige said, adding that the city needs to “put all options on the table.”

Speaking of options, Mayor Kramer revealed that he has been in negotiations with a private company which might be interested in purchasing the Vero water-sewer utility. The other council members did not know about Kramer’s talks with this company, as the council had not previously discussed privatization of the utility.

Kramer said the interested company has the capacity to “bond out” for $50 million to purchase the utility.

Councilwoman Tracy Carroll asked that any information about Kramer’s efforts be shared with the rest of the City Council.Much later in the meeting, Kramer gave the name of the company, Government Services Group. Kramer said his talks were “just conversation,” but that the company is in the business of utility authorities and may be interested in both the electric and the water-sewer utility.The company’s website says it’s headquartered in Tallahassee with an office in Longwood and specializes in “administration services and utility operations.”

The City Council instructed City Clerk Tammy Vock to schedule a meeting with the Board of County Commissioners no sooner than three weeks “to give staff time to get together.”

Kramer also said he would like to see the issue of regionalization go before the city’s Finance and Utilities Commissions.The Indian River Shores Town Council meets in workshop session to review a proposed franchise and purchase agreement with Vero and to update on a County proposal at 3 p.m. Wednesday at the Indian River Shores Town Hall.

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