Out-of-city electric surcharge may soon be terminated

By Lisa ZahnerVERO BEACH — In a bid to quell mounting anger over soaring power bills, the Vero Beach Finance and Utilities Committees next week will consider recommendations that the city eliminate the 10 percent surcharge currently levied on the bills of non-city residents who are forced to rely on the Vero Beach utility for their electricity.R.B. Sloan, director of electric utilities for the city, said the orders he had been given were to come up with proposals for eliminating the current surcharge — paid by the 60 percent of utility customers who live in Indian River Shores or the unincorporated county — which added $3.3 million to their electric bills in 2008-2009. The surcharge has been a particular irritant to many non-city residents, who view it as a form of taxation without representation since they do not get to vote for Vero Beach City Council members and thus have no voice in the setting of electric rates.  Our sister publication, Vero Beach 32963, has been crusading against this surcharge for more than a year.Sloan said that when he met with consultant Henry Thomas of Public Resources Management Group for six hours last week about recommendations for electricity rates, continuation of the 10 percent out-of-city surcharge was not on the table.Sloan said that to make up the revenue that would be lost by abolishing the controversial surcharge, Thomas will be proposing to the Finance and Utilities Committees changes to the rate structure which would take effect when the City ends its power-buying arrangement with the Florida Metropolitan Power Agency and goes online with the Orlando Utilities Commission on Jan. 1.The final decision on ending the surcharge would ultimately have to be made by the Vero Beach City Council, and there was no immediate indication whether it would support such a proposal even if it is approved by the Finance and Utility Committees.


“The question with the rates is how you collect it,” Sloan said. “We’re looking at two, hopefully three alternatives of utility rate structures, all of which will will generate the same amount of revenue, but in different ways.”

When asked specifically if one or more of the options left the out-of-city surcharge in place, Sloan said, “every proposal that we talked about making is doing away with that.” Other than the recent 20-plus percent hike in the fuel cost adjustment seen this summer, the surcharge has been one of two major bones of contention that County residents have with the electric utility.  The other major factor that provokes ire from customers outside the city is the fact that the city subsidizes its low 1.94 millage rate on property taxes (which brings in about $5 million in revenue annually) with $5.9 million from the electric utility to the general fund for undisclosed uses and $1.793 million to the general fund supposedly to pay for administrative costs incurred by the Vero Beach Human Resources department for handling the payroll and benefits for the electric utility’s 88 employees, which works out to a whopping $20,375 per employee.

The total transfers to the general fund top $7.6 million dollars and Sloan confirmed that those line items are in the proposed budget for 2009-2010.

“It’s in there,” he said.

The rate adjustment alternatives will be presented to a joint session of the City of Vero Beach Utilities and Finance advisory commissions on July 30.


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