Vero Beach is now on a 90-day clock to correct what Town of Indian River Shores officials say is the overcharging of its residents, violating a 2012 utility franchise agreement for reuse water.
The Shores’ attorney, Louis B. “Buck” Vocelle, sent a Notice of Default to Mayor Val Zudans on Friday after responses from city officials to Shores’ requests for rate relief amounted to nothing more than the city politely digging in its heels.
The Shores’ 15-year franchise agreement with Vero ties the Shores’ rates for reuse irrigation water to Indian River County Utilities’ published rates. But on March 1 when Indian River County’s rates went down from 67 cents per 1,000 gallons to 21 cents per 1,000 gallons, Vero refused to reduce rates for its reuse customers in the Shores. To date, the city is still charging the higher 67-cent rate.
The difference amounts to about $272,000 per year.
“During said 90 days, the town will continue to negotiate in good faith with the city towards resolution, and would welcome the opportunity to participate in a non-binding mediation with a Florida Circuit Court Certified Mediator,” Vocelle wrote.
The city’s position, as stated by Vero Water-Sewer Utility Director Rob Bolton, is that Indian River County only provides non-pressurized reuse irrigation water to its customers, while Vero supplies reuse irrigation water at a guaranteed volume and pressure, setting up an apples-to-oranges comparison.
This distinction did not come up in 2012 negotiation of the franchise agreement, when the city agreed to match county rates in a bid to keep the Shores as a customer, nor did it surface for more than six years until December. That is when Indian River County decided to better align its rates with costs to encourage the environmentally friendly practice of reusing treated wastewater for irrigation.
The city has commissioned a $30,600 study to look at Vero’s costs for providing pressurized reuse water and determine a fair rate to charge customers in Indian River Shores. Conducted by Raftelis Financial Consultants, the study is slated for completion in the next month or so.
But Indian River Shores officials have said all along that whatever rate Vero’s consultants come up with is irrelevant because “the Town believes any study has no effect on the subject agreement,” Vocelle’s letter states.
In other words, the 2012 franchise agreement requires Vero to match county rates, period.
Vero Vice Mayor Harry Howle couldn’t discuss the city’s legal strategy and said he certainly didn’t want to say anything that would weaken Vero’s negotiating position, but he emphatically wants to resolve the issue so he can serve his final six months on the City Council in relative peace.
“I don’t want to go to war with Indian River Shores; they are our neighbors and our friends. We were just all getting along well after the electric utility sold and enjoying our new, low Florida Power & Light rates,” Howle said on Sunday.
If the dispute is not resolved within 90 days of Vocelle’s letter, the franchise agreement mandates that the city and town go to arbitration.
