VERO BEACH — The Vero Beach City Council has approved in concept a proposal to provide the Town of Indian River Shores with water, sewer and reuse water for at least the next 30 years.
The 4-1 vote in favor of the deal, with Councilman Brian Heady dissenting, means that the proposed contract for sale of the Town’s utility assets and a draft 30-year franchise agreement will now go back to the Shores for continued negotiations.
“What we’re really saying is we want to talk to the Shores, this is just a framework but there’s still a lot of moving parts,” said Mayor Kevin Sawnick.
The final agreement with the Shores will most likely be considered by the new City Council after the Nov. 2 election where four seats are up for grabs, 11 candidates are running and Councilman Heady is the only incumbent guaranteed to be there, as he is not up for re-election until 2011.
“By you voting on this today, you’re not voting on the contract,” said Vero Water and Sewer Director Rob Bolton. “I don’t see that we would be taking any further action until after the election.”
Vero made several revisions to the agreement, including the addition of a clause stating that it reserves the right to sell or assign the assets and the franchise rights to a “qualified provider” of utility services. Vitunac said this loophole would “keep options open” for a possible consolidation or collaboration with Indian River County on water, wastewater or irrigation water production or treatment.
“I’m happy with everything that we have here, people think we’re rushing into this, but we’re not,” said Councilman Tom White, who is not running for re-election.
“Everybody is trying to Monday-morning quarterback this,” White added.
Prior to the council meeting, Vero’s Utilities and Finance Commissions met and the volunteers on those boards discussed the proposal and heard comments from the public, but only after voting to recommend approval to the City Council. The joint committees, chaired by Lee Everett, were criticized for not listening to public input before making their decision.
Critics have said that the city is rushing into the deal without looking at what may happen with the city’s utility rates in the future. Some harsh words were exchanged over whether or not the City of Vero Beach would need to raise its water and sewer rates substantially going forward and about what rates are today for different levels of consumption.
“If you look at the rates, we’re considerably higher for 6,000 gallons,” Councilman Heady said, referring to information that was brought forward by utility activist and CPA Glenn Heran at Monday’s meeting.
A household with an average usage of 6,000 gallons per month now pays $55.94 on the county system, while Vero residents pay $61.96 and Shores and county residents on the Vero system pay $68.20 as they are subject to a 10 percent surcharge.
A household with small usage of 3,000 gallons per month now pays $40.10 on the county system, while Vero residents pay $46.75 and Shores and county residents on the city system pay $51.45 with the out-of-city surcharge. The difference, depending upon usage and location for the average or small user ranges from 11 to 28 percent.
Bolton argued that for large consumers of water using 12,000 or 13,000 gallons per month, the city is slightly cheaper by a couple of dollars, and that the city provides customers who use potable water for irrigation a meter that doesn’t charge sewer fees for that water, further reducing their costs.
Earlier this year, the City Council repealed $14 million in rate increases that were to be implemented over the next five years. Those rate increases were recommended after an extensive rate study performed by Public Resources Management Group of Mailtland, Fla., a study which cost the city tens of thousands of dollars to perform. Indian River County Utilities Director Erik Olson has said publicly many times that the county is not slated to raise rates for at least the next five years and that rate would most likely remain flat for the foreseeable future.
Heady said he felt that Vero should continue to look at whether or not consolidating with the county would bring lower rates to all its customers — whether they be in the city limits, the Shores or in the unincorporated county served by the city, such as the South Barrier Island customers. Heady said the city should have a “meaningful discussion” about this before it ties itself to what really amounts to a 30-year commitment and buying the Shores assets.
Also in question is how the city plans to make up for the $306,000 per year in lost revenue — a total of nearly $4 million over 13 years — that the city will forego as consideration to purchase the Town’s utility assets. Heady was concerned that the city ratepayers would shoulder the extra cost and would not receive any benefits, except the city’s right to continue serving the Town with utilities.
Heady was told that the $306,000 would be absorbed by the enterprise fund of the utility, meaning that it would have to be made up in either higher rates or cuts in expenses.
