City to discuss closing down power plant at special call meeting

VERO BEACH — In response to outrage over this summer’s electric bills, city officials will put all options on the table pertaining to the electric utility at a special call meeting Monday.

The Council and concerned citizens will gather at 9:30 a.m. in Council chambers for a wide-open meeting to explore possibilities and answer questions about the electric utility, the pending Orlando Utilities Commission contract and the way funds have been used. Newly elected Council member Charlie Wilson said he wants to get everything “out in the open” so the Vero Beach City Council and the public can have the information to make the best decisions. He has proposed selling the power plant for about $150 million, paying off the $68 million in debt on the electric utility and using the investment returns from the remaining money to support city functions.

The proposal, which has also been put forth by grassroots advocates Steve Faherty and Glen Heran, met stiff resistance from the city, which has published white papers to show why the option of selling the plant is not viable. Faherty and Heran will give a full presentation of their plan on Monday, at Wilson’s request.

One of the key elements of Wilson’s proposal (which has never been fully vetted), is that it continues to generate the $5.9 million the city now takes out of the utility fund and transfers to the general fund, in part to keep down Vero Beach property taxes.

Each month, according to Finance Director Maillet, one-twelfth of $5.9 million (about $492,000) is transferred out of the electric utility and into the general fund. Annually, this exceeds the estimated $5.1 million collected in ad valorem taxes from property owners.

The utility also makes monthly payments of what amounts to more than $20,000 annually per employee, into the general fund to cover administrative costs.

“If we got out of the electric business, in theory, those administrative costs would go away,” Wilson had said during his campaign.

Maillet takes issue with the way critics of the city have characterized the administration transfers.

“The utilities use people from the finance department as cashiers and people from the human resources department,” Maillet said. “We have to pay those people and if you didn’t have all the utilities, we wouldn’t have all those cashiers. They would have no work left to do and the staffs of those departments would have to start shrinking.”

The finance department employs nine full-time plus two part-time people and five of those (three full-time and two part-time) work as cashiers, processing payments for electric, water, sewer and solid waste bills for 33,000 or so customers. Human resources employs three people for the entire city government. The utilities also use some office space at City Hall, some furniture and office supplies.

“There is the cost for actual services the city provides to the utilities and for all the postage they use, there is a cost of doing business in operating the utilities, costs that people don’t see,” Maillet said. “The utility takes up a certain amount of the City Manager’s time and the City Attorney’s time and my time and our staffs’ time. The utilities also use the Information Technology personnel and systems and the purchasing department.”

It is not clear whether top managers who now spend a substantial amount of time on work relating to the electric utility would be forced to take a pay cut or cut their support staffs based on decreased workload if the city get out of the electric business.

If the city were to sell out to FPL, Maillet said customers would still pay for the administration of a utility.

“FPL has all those costs and they pass those costs along to customers, they have to pass along the General and Administration charges,” he said.

But the expenses for running FPL are already covered in the base rates that FPL customers pay and those rates are less than the City of Vero Beach because, some say, FPL operates on an economy of scale with millions of customers in Florida.

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