Vero News

Price tag on Vero Beach’s electric operation upped to $400 million

VERO BEACH — In the midst of negotiating with Florida Power & Light about a potential sale of the city’s electric utility, the city has conducted an informal survey that puts the operation’s value at $350 to $400 million.

“This asset is worth almost $400 million,” said Councilman Tom White in an interview with sister publication Vero Beach 32963. “The City Manager was told this when we had an appraisal done of the system.”

A public records request for such an appraisal was denied by the city.

“I have no knowledge of any appraisal, or study, or inventory, either official or unofficial, that has been done to determine worth or value of the electric system,” replied John Lee, the acting director of the Vero Beach Electric Utility.

Yet the details of such a massive tabulation seemed well-known to White, though the undertaking was never brought up in public or voted on by the City Council.

“We are talking all our transmission distribution, all our substations, all the telephone poles, all the concrete poles, all wiring between $350 million and $400 million,” White said.

He added the appraisal was done in the last six months, and that it changes the expectations of what might constitute a “decent offer” from FPL.

The only previous estimate was $200 million to $300 million, offered in public by City Manager Jim Gabbard in an August 2008 appearance before the Board of County Commissioners.

Gabbard said, at that time, those were numbers compiled by former Electric Utility Director R.B. Sloan, based upon his decades of experience in the industry.

Gabbard said Sloan had told him the under-grounding of lines on the barrier island alone was worth $100 million.

It is not clear whether the “new” appraisal value is the replacement value of the system, the depreciated value of the physical assets or the fair market value.

City officials and electric consultants have said the “fair market value” is a figure that can only be determined by actually cutting a deal to sell the system or paying consultant Sue Hersey another $300,000 to devise a valuation.

Though the public wasn’t informed or consulted about this appraisal, the figures have been out in public discussions, usually followed by a warning that the city can’t let the system go for less than it’s worth – that Vero Beach can’t let itself get “taken” by FPL.

For months, city staff and local gadflies have buzzed about an appraisal underway.

Each time Vero Beach 32963 has made a request for any documents related to any valuation of the utility, it has been told none exists.

FPL readily admits that it’s not yet convinced it should buy the utility system.

“We’re continuing to conduct a detailed financial analysis of the electric system,” said FPL Spokesperson Jackie Anderson of the Juno Beach office.

Anderson said FPL has received all the documents and data it requested from the city back in the spring and is conducting a review of those documents.

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