INDIAN RIVER COUNTY – County Commissioners and Vero Beach City Council members were nearly unanimous in their support of exploring a possible merger of their respective water and sewer utility systems.
For not quite two hours, both governing bodies discussed the potential of a merger, one that county staff and commissioners could be a win-win for all county and Vero Beach utility customers. Vero Beach Mayor Jay Kramer was the lone dissenter in moving forward with the exploration, saying that before he could support setting city policy to direct staff to work with the county, he needed more information on the details.
Commission Chair Bob Solari said that Kramer seeking information now “is a little disappointing” considering he and the county have repeatedly asked the city if there were any questions or issues that needed to be addressed and he had not received a response.
Commissioner Wesley Davis said that while he could agree to explore the options, the price involved is up for debate, depending on what the Town of Indian River Shores decides to do with its water-sewer agreement with Vero Beach.
“They’re like the silent elephant sitting in the room,” Davis said, adding that if Indian River Shores were to not renew its agreement with the city and instead turn to the county for service, then the county’s current proposed purchase price would be too much.
The discussion circled around current and projected rates for both the county’s and the city’s customers and what the county would need to do in order to tie the city’s system into its own.
County Utilities Director Erik Olson, along with County Administrator Joe Baird, explained that there would be no anticipated rate increase from adding infrastructure to tie into Vero Beach’s system.
“We do not see a rate increase at all,” Baird said.
The city’s future rates remain in question, though, according to Councilwoman Pilar Turner.
“I’m convinced the city’s rates are not sustainable,” Turner said, especially over the next 10 years.
She said that despite comments to the contrary from city staff, the staff itself isn’t convinced the rates can hold as they have conducted their own rate study.
During the presentation from the county, it was mentioned that some of the cost estimates would hinge on Vero Beach’s cooperation.
“Just because we don’t agree with you does not mean we’re not going to cooperate,” Councilman Craig Fletcher interjected.
Some of the assumptions include a willingness from the City of Vero Beach to share certain pieces of infrastructure.
The county has estimated that the cost to lay the needed pipes and other infrastructure necessary could be about $28 million. The current proposal from the county includes assuming approximately $25 million of Vero Beach’s utility debt, as well, bringing the estimated total to over $50 million.
That expense could be absorbed through efficiencies and economies of scale of the merger, according to Olson, or through a bond issue, as Baird explained.
What remains in question is the future of the city’s sewer treatment plant located next to the 17th Street bridge on the Indian River Lagoon.
The county has suggested that if a merger were approved, the plant would not be needed and could be decommissioned – the property being converted to parkland or other civic use.
Who would pay for the dismantling has yet to be decided.
One projected down-side to the merger would be the elimination of jobs, Baird said.
He explained that the merger would mean the shut-down of one of the city’s two water treatment facilities and a consolidation of utility management and other staff.
“We don’t want to dump them on the street,” Fletcher said.
Baird said that he predicts a 50 percent reduction in the city’s water utility staff if a merger were approved.
Fletcher said that he appreciated the straight-forward answer.
Commissioner Gary Wheeler reminded both boards that they need to look out for the rate payers, the customers – stockholders.
He likened the utilities merger to that of two companies merging.
“It’s not about our employees,” he said. “It’s about our stockholders.”
Councilman Brian Heady said he was not ready to discount the city’s employees, as they, too, are stockholders.
As a government, it should be the city’s responsibility to be concerned for its employees, he later added. He agreed, though, that a decision to merge or not merge should not be based solely on the fate of the employees.
Baird said county staff would work with city staff to craft a calendar for moving forward, setting benchmarks for collecting information.
That calendar is expected to be presented to both governments on Tuesday, May 17. The Board of County Commissioners meets that morning, while Vero Beach will meet that evening.
Councilwoman Tracy Carroll recommended that someone from both staffs report back to each board on the third Tuesday of each month to provide an update on the progress.
