The breach of contract suit filed by the Town of Indian River Shores against the City of Vero Beach is plugging along, with the parties exchanging interrogatories and providing documents, but win or lose, the Shores seems focused on ending its water and sewer utility arrangement with Vero in 2027.
While the lawsuit proceeds, the Shores and a consultant hired by the town are examining whether it’s feasible to switch water-sewer providers, getting services from the county once its franchise agreement with Vero expires.
If the Shores wants to make the leap, town officials must give notice by October 2023, so everything being done now backs up from that date.
Because the $121,000 feasibility study by the Arcadis consulting firm would require the cooperation of county employees and data from county systems, the Indian River Board of County Commissioners discussed the Shores’ efforts and voted 4-1 to approve the use of staff time to participate in the study.
That is an encouraging sign for the Shores. If the county had no interest in having Indian River Shores as a utility customer, a ‘no’ vote would have ended the process.
In anticipation of the county hearing this issue, Vero City Manager Monte Falls sent County Administrator Jason Brown a letter on March 24 intended to thwart the Shores’ hopes of getting out of its deal with Vero when it expires in 2027. Falls attached a copy of a 1989 utility territorial agreement the city thinks prevents the Shores from contracting with Indian River County Utilities.
“Paragraph three of the agreement states, ‘The County shall not provide water or sewer service within the City Service Area without the written approval of the City,’” Falls quoted from the document.
County Attorney Dylan Reingold said the county earlier obtained an outside opinion that the county had the ability to legally serve the unincorporated South barrier island customers now on Vero’s utility system once the county’s franchise agreement for the area with Vero expired.
“Consistent with that opinion, I do not see where we are prohibited from serving the town of Indian River Shores at the expiration [of the town’s franchise agreement with Vero],” Reingold said.
Reingold said he did not see county staff working with the Shores to examine its options as taking sides in the Shores-Vero dispute, because county staff did the same for Vero Beach when it was looking at options for its wastewater treatment facility.
“We don’t plan to insert ourselves in the battle between the city and the town. We believe it is important for them to resolve that issue,” Reingold said.
Shores Mayor Brian Foley said the town has obtained an outside opinion from the Holland and Knight law firm on the service territory issue that concurs with the county’s separately obtained outside legal opinion.
Foley said the city’s assertion of a permanent service territory to the exclusion of the county utility competing to provide water and sewer services raises “serious antitrust issues,” and said if the City of Vero Beach wants to try to enforce that, the town would need to litigate it.
Foley summarized the Holland and Knight opinion on the 1989 service territory agreement, saying “if anybody attempted to enforce that provision, they’d be in a boatload of trouble.”
Commissioner Laura Moss does see the county’s involvement as taking the Shores’ side in the breach of contract lawsuit, so she voted against approving the staff time the Shores’ consultants need to do their work.
Prior to the vote earlier this month, Vero Water Sewer Director Rob Bolton urged commissioners to table the vote until the next meeting when Falls could attend, as he needed to be at a Vero council meeting going on at the same time across town. Moss also pressed for the item to be delayed but she was outvoted.
Chairman Joe Flescher, Vice Chairman Peter O’Bryan and Commissioner Joe Earman all said that since Shores residents are residents of the county, it’s perfectly fine for county staff to assist the town with staff time to provide the information the Shores needs to make a decision.
“The proposal is for a feasibility study,” Flescher said. “It is not taking sides.”
Flescher pointed out that the study might come out in favor of Vero, or in favor of the town staying with Vero Beach Utilities.
“If we don’t do this, we’re taking the side of Vero Beach because the town has a deadline,” O’Bryan said, referring to the notice of termination the Shores must give Vero by October 2023 if the town decides to get water-sewer service from the county.
Moss asked that county staff keep track of all time spent on helping with the feasibility study, but Flescher shot back that this is “not a matter of billable hours” and that county staff cannot be asked to do anything that is not requested of them by the county commission.
Meanwhile on the pending breach of contract lawsuit filed by the town against the city, attorney Paul Berg said he asked the city for a bit more time to turn over portions of the massive request for correspondence and public records documenting utility decisions and issues back to the 1980s.
Vero has already handed over its first batch of documents to the Shores to comply with the town’s narrower discovery request. No hearings are set in the case.
