VERO BEACH — GAI Consultants sent a report to Vero Beach City Hall Monday evening valuing the Vero Beach Electric Utility at $184.9 million.
This report came on the heels of Friday’s appraisal of the city’s water-sewer system at $105 million.
The appraisal of the electric system was commissioned as part of the city’s due diligence process in preparing to negotiate a sale of the utility to Florida Power and Light. The city agreed to pay GAI $238,000 for work related to the appraisal of the utility.
The appraisal document of more than 250 pages contains various sections, but the one marked “Section 8” provides a clue into why the valuation of the utility might have been so high.
The section, entitled “Caveats to a Sale,” describes an attempt to quantify and possibly recover decades of “lost” income from the electric utility, as it annually pumps nearly $8 million in cash into the city’s general fund to support City Hall operations.
It is unclear how the appraised amount will relate to the fair market value of the system, which would be determined by the terms of a sale — simply, what a buyer would be willing to pay to buy the system.
In early April, FPL sent a letter of intent to Vero offering a package of compensation which included up to $100 million in cash, assumption of approximately $14 million in pension liability and taking on the city’s 113 electric utility employees for at least two years and allowing them to compete for permanent jobs with FPL.
The water-sewer appraisal, as well as an “optimization study” on the water-sewer utility, will be discussed in two committee meetings Tuesday. The Vero Beach Utilities Commission meets at 10 a.m. and the Finance Commission meets at 2 p.m.
Issues surrounding the electric appraisal will be taken up in two separate meetings of those commissions on Thursday. The meetings will be televised and are available via live stream on the internet at www.covb.org.