Vero mounts case for permanent water-sewer service territory

In the lead-up to this Wednesday’s scheduled meeting with County Commissioners, the Vero Beach City Council heard its negotiating team defend its claim to a permanent water-sewer service territory which Vero says includes the unincorporated south barrier island and the Town of Indian River Shores.

Vero’s City Attorney John Turner, hired in part for his skills as a litigator, and City Manager Monte Falls, who benefits from more than three decades of institutional knowledge of city business, did the majority of the talking last week during the City Council discussion. They are both confident that a 1989 territorial agreement signed by Vero and Indian River County will stand up to legal challenges.

“The language of the contract is clear and unambiguous. It commits the county to refrain from providing utility service inside the city’s service area without the city’s consent. There are documents throughout the history of our service that speak to the permanence of our service territory,” Falls said.

The city planned to give its presentation at a Sept. 8 conflict resolution meeting but it did not get the opportunity because county officials, with Chairman Joe Flescher taking the lead for the county’s side, said the territorial matter was pending in the courts and not for the commissioners to decide or to speculate on the outcome of that dispute.

An impasse in staff-level negotiations was declared in July. Since then Vero officials have tried to speak with the county commissioners individually about the matter but could not, the county citing pending litigation. Turner emphasized that the city is not in active litigation with Indian River County over the territorial agreement – only with Indian River Shores.

Turner said the county and the Shores have been “dealing through back channels,” referring to correspondence between the Shores’ outside utility attorney Bruce May, County Attorney Dyland Reingold and County Administrator Jason Brown, as well as the sharing of a draft proposal written by the county with Indian River Shores Town Manager Jim Harpring before it had been shared with Vero. All these documents are in the public record.

“It’s unequivocal from the evidence that the county and the town have been working hand in hand to thwart this process and to have this agreement declared unenforceable,” Turner said.

Turner said the town has been trying to interfere in the city’s agreement with the county, and the county has participated in a Shores feasibility study looking at getting service from the county – without Vero’s consent, in violation of the 1989 territorial agreement.

“We say permanent, and the county says expired,” Falls said, referring to the 1989 territorial agreement. He said there is a long history of the county attempting to provide utility service to the barrier island, but time and time again the county decided it was not economically feasible.

Falls said the permanent territories were designed to avoid duplicate or overlapping utility infrastructure to keep rates low.

Turner and Falls said they have dug up the complete history of the drafting of the 1989 agreement, including a series of internal city and county memos, and that it was clearly intended to divide the county up into permanent service territories. They and outside utility attorney Thomas Cloud of the Orlando-based Gray Robinson law firm included 12 “exhibits” in the meeting backup packet.

Among the included documents are an excerpt of the 1989 agreement, letters and utility agreements dating back to 1984, and aerial photographs comparing development on the barrier island north and south of the city limits to development in 2021, to argue that level of development would not have been possible without city-provided utility service.

Falls said city utility service allowed for the closing of individual developments’ “package plants” to treat sewage, and for the island communities to flourish and expand, creating a $5 billion property tax base much sooner than if those areas would have had to wait until Indian River County developed the capacity to serve them.

“The county continues to receive enormous benefits from city utilities because of that tax base, because of that tax base and the taxes that created,” Falls said, not to mention the 30-plus years of franchise fees remitted to the county from unincorporated south barrier island residents’ utility bills.

“If the county wants to keep receiving these benefits, the board can agree that the 1989 territorial agreement is permanent, as otherwise agreed by the parties,” Falls said. Vero continued to serve South Beach customers after its franchise agreement with the county expired.

The packet also contains a two-page citation from Chapter 153 of Florida Statutes pertaining to the powers granted to counties. Taken in its totality, the city thinks these documents make their case. “Florida law in this area has been in existence for decades, and recognizes territory agreements all over the state,” Turner said, with Falls stating Chapter 153 was approved in 1955.

“It’s our position that the language is not ambiguous or unclear. In fact, the word permanent is used seven times in the documents,” Turner said.

In addition to the memos and correspondence from people who are no longer available to testify, Falls said there are two people still alive who were involved in the 1989 talks – one being former county commissioner Gary Wheeler, who is on record saying that he does not remember the agreement but feels making territories permanent is “logical.”

Would Wheeler’s opinions 32 years removed from the signing of the agreement mean anything to the court? The other person still around who was involved with the transaction is former Vero city attorney Charles Vitunac, but Vitunac was serving as Indian River County’s attorney at the time the 1989 agreement was negotiated. Turner said both Wheeler and Vitunac have said the territorial agreement was intended to be permanent.

Vero needs the legal matter settled soon because it needs to construct a new $71 million sewer plant at the airport.

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