Assuming facts matter Reply

COMMENTARY

MARK SCHUMANN

The conventional wisdom today holds that attention spans are short, distraction are many, and the average news consumer wants to receive information in small doses. So, here are just two facts relevant to the proposed sale of Vero Electric. Some will argue, and they may be right, that the debate over the sale has become so toxic and so distracting to other, larger issues facing the community that it is now time to hand the utility over to Florida Power and Light at any cost.

Other contend that while it is important to sell the utility, the City Council still has a responsibility to negotiate the best deal possible for the City and for the people of Vero Beach.

Still others wonder if the people of Vero Beach would be as supportive of the sale, if, rather than serving as a propaganda arm for FPL and local utility activists, the media were reporting all relevant facts.

Two numbers worth considering, numbers not reported or discussed by the island weekly or the local daily, are the shifting rate differential between Vero Electric and FPL, and the amount Vero Beach will net from the sale of its largest asset.

Vero Beach’s electric rate peaked at $158.82 per 1000 kWh in June, 2009, at which point FPL’s rate was $104.37.  Allowing for a 6% franchise fee, FPL’s rate in June, 2009 would have been $110.63, for a difference of 30%. As of January, 2017, FPL’s rate for 1000 kWh was $98.77. Accounting for a 6% franchise fee, FPL’s bill would be $104.69.  Compared to Vero Beach current rate of $116.08, that is a difference of 10%.

When Glenn Heran, Stephen Flaherty, FPL, the island weekly and the Press Journal began building interest in and support for a sale of Vero Electric, the rate differential was 30%. Today it is 10%

Fact: The rate differential between Vero Electric and FPL is one-third of what it was when the majority of Vero Beach voters first bought into the idea of selling the utility.

Some eight years ago, when the local media, FPL and pro-sale advocates first stoked interest in a sale of Vero Electric, the promised the public the deal would net the City some $180 million dollars. This money, they said, could be used to ensure tax increases would not be necessary to maintain municipal services.  It is clear now that the City and its rate payers will be lucky to avoid having to bring money o the table to close the deal. Further, as a result of the sale, cuts in municipal services and/or increases in taxes are all but inevitable.

Fact: Despite what was originally promised, the sale of Vero Beach Electric utility will lead to tax increases, further cuts in services, or both.  Indirectly, the sale may also lead to higher water and sewer rates, as the City’s remaining enterprise funds will have to cover more of the fixed costs for administrative services. 

One can be reasonably be for the sale, against it, or indifferent. Either way, the facts should matter, and certainly they should be reported.

Concerns over possible sale of old Dodgertown course raise larger questions about City’s future 2

COMMENTARY

“Reisman quoted former Vero Beach mayor Mary Beth McDonald as questioning if the City is really so desperate that it can longer afford to hold on to the Dodgertown property. The larger question everyone should be asking is whether, after the sale of Vero Electric and the forced takeover of its water and sewer utility, the City will be able to continue to exist as an incorporated municipality.”

MARK SCHUMANN

Related Story: Should Vero Beach sell old Dodgertown course?

Press Journal opinion columnist Larry Reisman today addressed a proposal for the City of Vero Beach to sell for $2.7 million 35 acres of land it purchased in 2005 for $10 million.

At the time the City acquired the old Dodgertwon golf course, supporters of the purchase argued that the move would prevent further residential development in an already congested area, and would provide for more public open space. If the City Council accepts the offer it has received from a Palm Beach Gardens developer, it will be taking a net loss of $7.3 million. Further, the Council will be paving the way for 280 new homes to be built on what was once a nine-hole golf course open to the public.

Reisman argues that selling the property for just $2.7 million will “compound the problems associated with a bad investment made 12 years ago,” concluding, “Quality of life is our No. 1 asset.”

If Reisman truly believes quality of life is the community’s “No. 1 asset,” then his unquestioning and unqualified support for selling Vero Electric to Florida Power & Light is, to use his words, “a sick irony.” More…

Status of power sale from the FMPA’s point of view 1

MARK SCHUMANN

In addressing the Vero Beach City Council earlier this week, Florida Municipal Power Agency General Manager Jacob Williams explained the FMPA’s position on the City’s proposed sale to Florida Power & Light.  Williams addressed both a partial sale of just the City’s Indian River Shores customers, as well a sale of the full system.

Williams explained that while the final numbers need to be worked out through more analysis and negotiations, the FMPA believe it can relieve Vero Beach of all its contractual obligations to the agency for approximately $108 million. Leader in Vero Beach, including councilman Richard Winger, see promise in the FMPA’s proposal.  Winger now believes that, rather than sell just the Shores portion of the City electric system, it is time to renew negotiations with FPL for selling the full 34,000-customer system.

FMPA Assistant General Manager Mark McCain today released a summary of the agency’s take on Tuesday’s Council meeting. Following is the full text of McCain’s report.

FMPA representatives were present at the Vero Beach City Council meeting last night. FMPA made a presentation on its review of Vero Beach’s proposed sale of its customers in Indian River Shores as well as explained FMPA’s preliminary option to help Vero Beach exit FMPA projects. The meeting went very well. On behalf of Jacob Williams, this email provides a description of key points in the meeting and provides corresponding video excerpts.

Below are eight highlights from the meeting with links to short video clips. The entire video of the meeting can be found online at: http://verobeachfl.swagit.com/city-council. FMPA’s portion starts early in the meeting and lasts approximately two hours. 

1.       Vero Beach’s Goal, and Good Working Relationships: Jacob Williams states Vero Beach Mayor Laura Moss has done a good job focusing on Vero Beach’s goal of selling its electric utility. Jacob says she understands that all 19 FMPA cities must approve any potential deal, so it is worth having a good relationship. Likewise, Rep. Erin Grall representing Vero Beach has been helpful facilitating positive efforts toward the same goal of selling Vero Electric. Jacob emphasized that if we can all focus on the goal, and not be distracted by other efforts, we can make good progress. [watch video]  More…

Mayfield advocating 2-part sale of Vero Electric 4

MARK SCHUMANN

In her most recent newsletter, State Sen. Debbie Mayfield signaled she has lined up with Indian River Shores officials, who insist best way to sell Vero Beach’s entire electric system to Florida Power & light is to first carve off the Shores portion of the customers base.  Without question, a bifurcated sale will be more costly and more complicated for the City. This reality seems to be of little concern to Mayfield, or the Shores officials. Vero Beach City Council members Harry Howle, Laura Moss and Lange Sykes also contend a partial sale for the Shores is their first priority, and is being pursued “in the context” of a full sale.  Moss and Sykes, in particular, have strong ties to the Shores. In the recent municipal election, they received nearly all of their campaign contributions from Shores residents.

From Mayfield’s newsletter:

FMPA/Vero Electric Press Release

“After discussions with the Florida Municipal Power Agency (FMPA) and local government officials in Indian River County, tangible progress towards the sale of Vero Electric is taking place.  In a letter the FMPA provided to the City of Vero Beach, the estimated exit cost from three All-Requirements Projects that the city is currently involved in is $108 million.  Although completing this complicated transaction may take up to a year, it is the second phase of a two-part process which also includes the partial sale of Vero Electric’s Indian River Shores customers to FP&L in the near term.”

Sale of Vero Electric now a real possibility 2

NEWS ANALYSIS

MARK SCHUMANN

The Florida Municipal Power Agency’s executive committee yesterday authorized General Manager Jacob Williams to begin discussions with Vero Beach officials to enable the City to exit the power agency. As a point to begin negotiations, the FMPA is suggesting it might be able to assume all of Vero Beach’s power purchase and power supply contracts, as well as contingent liabilities, for approximately $108 million. Williams is to address the City Council next Tuesday evening.

With yesterday’s development, what has long been an insurmountable wall of contractual obligations to the Florida Municipal Power Agency may soon be reduced to an intermediate hurdle, one that can easily be cleared, if Vero Beach leaders focus their efforts and work together to achieve the sale of Vero Electric to Florida Power and Light. Though $108 million may seem to many like a lot of money to exit contracts, it is significantly less than the $200 million to $300 million some had speculated would be needed to ensure other FMPA cities are not negatively impacted by Vero Beach’s exit from the joint action agency.

Some Vero Beach officials, including Councilman Richard Winger and Finance Commission chairman Glen Brovont, believe that, based on the price FPL had previously been willing to pay for the full electric system, it might now be possible to sell the electric system in a way that will not require tax increases for the people of Vero Beach. More…

Winger sees hope for power sale 3

MARK SCHUMANN

Following last week’s announcement by the Florida Municipal Power Agency that it is now proposing a price at which Vero Beach can exit the

Jim O'Connor

Jim O’Connor

Richard Winger

Richard Winger

joint action agency and sell its utility to Florida Power & Light, Vero Beach City Councilman Richard Winger wrote City Manager Jim O’Connor urging the City to begin renewed negotiations with FPL.

“Selling the entire utility is what we must do,” Winger wrote, adding, “Full speed ahead!”

Winger is calling on the Utilities and Finance Commissions to move quickly to review and asses the FMPA’s tentative offer of $108 million.

“It would look like the number can now work,” Winger wrote, citing the structure of the original purchase an sale agreement.  He pointed out that some of the value in the original deal was assigned to costs FPL would have to have paid to upgrade transmission lines and to decommission the power plant. Because the City has already taken on those costs, Winger suggested FPL’s cash offer can now be higher, thus helping the City to afford to exit the FMPA.

 

FMPA provides option for Vero Beach to exit power projects 1

Preliminary idea could enable Vero Beach to exit FMPA for $108 million

Editor’s note: The original 2013 purchase and sale agreement between Vero Beach and Florida Power and Light included a provision for $50 million to be paid to the Orlando Utilities Commission to assume Vero Beach’s position in three FMPA power projects. Subsequent negotiations called for a payment of $52 million to the FMPA to absorb Vero Beach’s power purchase commitments for several years, before they were to be assumed permanently by the OUC. Left unresolved in the original agreement was how Vero Beach would settle its commitments to the FMPA’s All Requirements Project (ARP). The preliminary proposal announced by the FMPA today would address all of Vero Beach’s commitment to the FMPA, including contingent liabilities. Today’s preliminary proposal, with a total price of $108 million, will at least be a starting point for renewed negotiations between Vero Beach and FPL. Vero Beach will still need to negotiate and end to its wholesale power purchase agreement with the Orlando Utilities Commission. 

NEWS RELEASE

Florida Municipal Power Agency (FMPA) provided preliminary information to its member cities today on an option for Vero Beach to transfer its FMPA power projects to other cities so that Vero Beach can sell its electric system.

Vero Beach currently participates in three FMPA power projects—two coal units and one nuclear unit—for a total of 51 megawatts (MW) of electricity. The 13 cities in FMPA’s All-Requirements Project (ARP) have excess generation capacity but would consider taking the additional power if compensated for the increased costs and risks. More…

Reader Comment: Half the experience for twice the price? What gives? Reply

Being both a resident of the City of Vero Beach and thus an owner of Vero Electric, I am writing in hopes that you could straighten out this “Sale situation of Vero Electric”.

#1- The former city council of Turner, Fletcher and Carrol signed an agreement to sell to FP&L some years back.   After spending several $MILLIONS by Vero Electric on attorneys they found no way forward, neither did FP&L’s attorneys.  Attorneys the City hired said we should get $185,000,000, but they accepted and offer for $85,000,000 less.  

#2-Then when a new city council came in they hired new attorneys and also spent $MILLION or so to find out that out prior $MILLION attorneys were right. This attorney also advised us not to sell a $47,000,000 asset for $30,000,000 because this would lead to higher rates. That city council took his advise.

#3- Now the new city council majority of Howle, Moss and Sykes fired that attorney that advised us not to take the deal  because they want to sell it for $30,000,000, because somehow that’s the neighborly thing to do. They then interview new attorneys, one of which knows all the details of all these bonds and contracts, but because this very knowledgeable of the facts attorney says a sale will NEVER be able to go through for the entire system, they do not hire him.  Instead they hire an attorney that knows none of the facts and details of all the contracts and bonds, but at $500.00 per hour he will gladly get educated in all the sales agreements that we have already paid other attorney $MILLIONS and who have all come up with the same conclusion that we will never be able to sell the entire system and that we are losing $17,000,000 on the sale of Indian River Shores and that our rates will be increasing.

If this is not the case, could you please tell me what really happened?

Thanks

John Wester.

Editor’s note: At a special call meeting of the City Council Jan. 10, Harry Howle, Laura Moss and Lange Sykes voted to hire the law firm of Carlton Fields at a rate of $495 an hour.  The firm will head the City’s negotiations to sell the Indian River Shores portion of Vero Electric to Florida Power and Light.  Councilmen Tony Young and Richard Winger preferred the firm of Gray Robinson, which has worked in utility and municipal law for some 38 years, and has handled utility sales.  In contrast, the lead attorney for Carlton Fields had not represented a municipal utility in a sale. Gray Robinson’s proposed fee was $250 per hour. Howle and Sykes were so sure they wanted to hire Carton Fields, that they moved to dismiss attorneys from Gray Robinson before even hearing their presentation. “I think it would be a complete outrage for the City of Vero Beach to invite a law firm here and then dismiss them without listening to their presentation,” said Young.  

FMPA offers possible path for sale of Vero Electric Reply

NEWS ANALYSIS

MARK SCHUMANN

A solution may be on the horizon to overcoming impediments that have so far blocked the sale of Vero Electric. To date, the absence of a qualified utility willing and able to assume Vero Beach’s long-term commitments to three Florida Municipal Power Agency projects has stood in the way of the deal. However, at a meeting of the FMPA board of directors in Orlando today, FMPA General Manager and CEO, Jacob Williams, outlined steps the agency is willing to take to help facilitate the sale of Vero Electric to Florida Power and Light.

Williams indicated the FMPA’s All Requirements Project, made up of 13 municipally owned utilities, could assume Vero Beach’s position in the Stanton I and II coal-fired power plants in Orlando, as well as Vero Beach’s share of the FMPA’s fractional ownership in the Saint Lucie nuclear plant. Because the average cost of Vero Beach’s power from these three projects is more than twice the current short-term price for wholesale electricity, Vero Beach will have to pay the FMPA’s ARP to “buy” the City’s position in the power projects. “Vero Beach will have to pay other municipal utilities to take its shares,” Williams explained to the FMPA board. More…

FPL seeking yet another rate hike Reply

MARK SCHUMANN

In addition to the $6.93 per 1000 kilowatt rate increase recently approved by the Florida Public Service Commission for Florida Power and Light, the utility giant is now asking the PSC for permission to rase rates another $318.5 million, or $3.36 per month on the average residential customer. Together, the increases would bring FPL’s rate for 1000 kWh to $99.56.

In comparison, Vero Electric’s rate is $116.08 per 1000 kWh, for a difference of 14.2 percent. Vero Electric’s rate includes a 6 percent payment in lieu of tax to the City’s general fund. If the residents of Vero Beach were served by FPL, the City would instead assess a 6 percent franchise fee, brining FPL’s rate to $105.53, for a difference of 9 percent.

Proponents of the proposed sale of Vero Electric to FPL have long argued the move would save city residents 30 percent or more on their power bills. In truth, if the sale of the utility system to FPL ultimately requires a substantial and long-term surcharge on the current customers of Vero Electric, there may be no measurable savings to the city’s utility customers.

Moss departs from her own ‘decree’ that all communication must be ‘cordial and positive’ 1

COMMENTARY

MARK SCHUMANN

Laura Moss - "Team Shores"

Laura Moss – “Team Shores”

Departing from the published agenda for Tuesday’s City Council meeting, Mayor Laura Moss opened by publicly berating Councilman Richard Winger for writing a guest column in which he shined a light on instances when previous City Council’s have made major decisions and commitments that have not turned out well for the taxpayers of Vero Beach and for the customers of Vero Electric.

Winger’s central point was that previous Councils have not alway taken the time necessary to properly “vet” important decisions. Winger said he wants to avoid making that same mistake with the proposed partial sale of Vero Electric’s Indian River Shores customer base to Florida Power & Light.

The original wholesale power agreement with the Orlando utilities Commission and the purchase of the old Dodgertown golf course for $10 million were to example Winger sited. In his column, Winger went on to urge the current Council to carefully consider and fully understand the implications of selling Vero Electric’s Indian River Shores customers base to Florida Power & Light for $30 million. (A team of 5 independent utility experts hired by the City concluded a sale for less than $47 million will expose Vero Beach taxpayers and the remaining customers of Vero Electric to higher taxes and higher electric rates. When the team reported its recommendations, their conclusions were supported buy City Staff.) More…

Howle’s Press Journal guest column simplistic, misleading 5

COMMENTARY

“The people of Vero Beach must decide for themselves if Howle is lying to them. At the very least, he is, intentionally or otherwise, misleading them into believing that what good for Indian River Shores is necessarily good for the taxpayers of Vero Beach.”

“If the customers of Vero Electric are not to be hung out to dry, it is critical that the Council first determine under what terms a sale of the remainder of the system could be possible.  To take this so-called “first step” without fully understanding what the next step will be is nothing short of foolish.”

MARK SCHUMANN

Harry Howle

Harry Howle

In 2015, when he won a seat on the Vero Beach City Council, Harry Howle promised the voters of Vero Beach he had a solid, five-point plan for selling Vero Electric to Florida Power and Light. More than a year has passed since Howle took an oath to serve the best interests of the City of Vero Beach and its residents, and yet he has not followed through on a single one of the five steps he once claimed were necessary to sell the system.

Instead of fulfilling his promise to bring rate relief to the people of Vero Beach and to all 34,000 customers of Vero Electric, Howle now claims selling just the Indian River Shores portion of the system is “an important first step.” (Howle offers no explanation for why selling off the Shores portion of the system now will in any way improve the prospects for selling the remainder of the system.)

What makes this “first step” so important?  As puppets of the Indian River Shores Town Council, Howle, and two new members of the Vero Beach Council, Laura Moss and Lange Sykes, have made it clear they intend to give Shores leaders what they want, regardless of the likely negative impacts on the taxpayers of Vero Beach and the customers of Vero Electric. More…

Civic Association calls for referendum on partial sale 9

Editor’s note: In a letter addressed to the Vero Beach City Council, the Civic Association of Indian River County last week raised questions about the proposed sale of Vero Electric’s Indian River Shores customer base to Florida Power & Light.

Further, the group urged the Council to hold a referendum before going forward with the deal. While the voters of Vero Beach were asked in 2013 to weigh in or a sale of the full system, they have not been given a say in the carving up of the system at the request of the Shores. 

All of the offered $30 million sale price would need to remain in the electric utility for debt service and capital projects, and could not be used to buffer resulting tax increases or likely hikes in electric rates. During the recent municipal election, a political action committee funded by FPL and Shores residents placed advertising, funded robo calls and mailed post cards promising the sale proceeds would be a windfall to the people of Vero Beach.

The Shores-FPL funded PAC, which supported candidates Laura Moss and Lange Sykes, went so far as to propose that from the proposed sale every resident of Vero Beach could receive a check for some $1,900. 

Civic Association of Indian River County, Inc.

Dear Council:

The Board of Directors of the Civic Association of Indian River County wishes to voice strongly its urgent recommendation to delay the question of selling a portion of the City’s electric utility. This is a monumental step to take, especially in light of the many experts, both financial and legal, who have counseled against putting the City and its taxpayers at risk by such action. More…

Partial sale of Shores customers tops tomorrow’s City Council agenda 1

NEWS ANALYSIS

“Last year, Howle argued a sale of the full system is possible, if only the Council would, with resolve, implement his proposed five-point plan. Now Howle seems more interested in providing immediate rate relief for Shores residents, leaving his own constituents to wait in hopes a partial sale does not make a sale of the remainder of the system more difficult.”

MARK SCHUMANN

Winger

Winger

Howle

Howle

Vero Beach City Council members Laura Moss and Lange Sykes, whose campaigns were funded almost entirely by Indian River Shores residents and by Florida Power and Light, seem set to join with Harry Howle tomorrow in pressing ahead with the proposed sale of Vero Electric’s 3500 Indian River Shores customers to FPL.

The City now has in hand a letter of intent from FPL to purchase the Shores portion of the electric system for $30 million, including $3 million to be paid by Shores residents through a three-year surcharge. The Shores Town Council last week approved the surcharge, which would be assessed by FPL. More…

FMPA summary of Nov. 22 Vero Beach City Council meeting 3

Laura Moss

Laura Moss

FPL Logo

Lange Sykes

Lange Sykes

Editor’s note: Newly elected Vero Beach City Council members Laura Moss and Lange Sykes received the vast majority of their financial support from Indian River Shores residents. Seventy percent of Moss’ contributions came from Shores interests. Sykes received 90% of his campaign funds from residents in the neighboring community. Both Moss and Sykes were supported by a political action committee that received $55,000 from Florida Power and Light, and another $60,000 from Shores residents. Moss and Sykes have now joined with Councilman Harry Howle in supporting a sale of Vero Electric’s Shores customers to FPL for $30 million. A team of five independent utility experts determined it will take, not $30 million, but $47 million to keep the proposed sale from leading to higher electric rates for the remaining customers and higher taxes for the residents of Vero Beach.

MARK SCHUMANN

In a memo written Nov. 22, Florida Municipal Power Agency staffer, Amanda Swindle, summarized the Vero Beach City Council’s discussion of a partial sale of the City’s Indian River Shores customer base to Florida Power and Light, as well as the termination of special utility counsel, Schef Wright.

Unlike the local press, namely the Press Journal, Swindle took note of Councilman Richard Winger’s effort to persuade the new Council majority to submit the proposed sale to the Finance Commission for review.

Below is the full text of an internal FMPA memo distributed to staff and members of the association’s board of directors and executive committee. The memo is a pubic record.

Vero Beach City Council Meeting – 11/22/16

The Vero Beach City Council met on Tuesday, November 22, at 9:30 a.m. This was the first City Council meeting after the November election. Laura Moss was nominated to serve as mayor, with Harry Howell designated as vice-mayor, for the 2016-2017 term. Later in the meeting Laura Moss was named as the Vero Beach representative to the FMPA Board. Two items on the agenda were of relevance—(1) “Discussion of Partial Sale (Vero Electric),” and (2) “Discussion to consider halting the service of Schef Wright.”

(1) Discussion of Partial Sale More…

Press Journal seems set on aiding Shores, FPL 1

COMMENTARY

“To whom is the Press Journal editorial board referring when it references those who supposedly object to the sale of Vero Electric? All six City Council candidates have made clear they support the sale, and all have pledged to continue working to find ways to complete the deal, including supporting legislative initiatives.”

MARK SCHUMANN

 Press Journal opinion columnist Larry Reisman’s fingerprints are all over the newspaper’s puzzling editorial endorsing Bob Solari for the Indian River County Commission.

To be sure, Solari is the obvious choice to represent District 5, especially given that his opponent is Brian Heady. Grandstanding Heady has run 20 times for elective office. Chaos is his constant companion. On his worst day, Mr. Solari is sure to do a better job for the people of Indian River County than Heady could ever do.

What does not ring true in the Press Journal’s endorsement of Solari is the claim that he has made “enemies” with those who the newspaper characterizes as supporting the status quo – “including not selling the city’s power operation or moving its sewer plant.” More…

City, FPL both quickly restore power 2

COMMENTARY

MARK SCHUMANN

As of early this morning, the vast majority of the customers of Vero Electric and Florida Power & Light had power restored following Hurricane Matthew.  FPL had reestablished connections for all but 6 percent of its Indian River County customers by early today.  By this morning, Vero Electric had the lights back on for all put 0.3 percent of its customers.  In Indian River Shores, where Town leaders claim they receive inferior service from Vero Electric, all customers has power by Saturday evening.

TCPalm.com today posted an editorial from the Daytona Beach News Journal congratulating FPL on its storm preparations and response.  This recognition is appropriate, but it would be negligent in not also acknowledging the Vero Electric also did a stellar job in restoring power to its customers. Vero Beach was aided and assisted in its emergency response by crews sent from other municipal utilities. This assistance was coordinated by the Florida Municipal Electric Association, an organization demonized by some in local government.

If Shores leaders appeal their case to the Florida Supreme Court, as they have said they will do, then they are going to have to fine some reason other than service to justify their claims that they are being wronged by Vero Beach.

Vero Beach voters should brace for the fine art of the lie 1

Cover illustration, Set.. 10-16 issue of "The Economics"

Cover illustration, Set.. 10-16 issue of “The Economics”

COMMENTARY

MARK SCHUMANN

The three Vero Beach City Council candidates supported by Shores leaders, Laura Moss, Lange Sykes and Norman Wells, will likely be armed with sizable campaign war chests bolstered by contributions from wealthy Shores residents. It will be for the voters of Vero Beach to sift the truth from a mountain of lies. Bracing for an onslaught of campaign mailers paid for with Indian River Shores money, many may wonder exactly which are the biggest lies being told by the Town’s leaders. Here they are:

Shores lie number one: Vero Beach’s electric rates are oppressive, and an abuse of monopoly privileges.

Truth: Down from a high of $158 per kWh in 2009 to $117 this year, Vero Electric’s rates are well below those approved by the Florida Public Service Commission for several of the state five investor owned utilities.  The PSC allows investor owned utilities an 11 percent rate of return. Vero Beach’s rates yield the City what amounts to a 4.5 percent rate of return, or approximately 6 percent of total billings. This money is transferred from the electric fund to the General Fund to help pay for municipal services, such as police protection.  In contrast, profits for FPL and other investor owned utilities are typically not returned to the communities they serve, but rather are paid out in dividends and in generous executive bonuses. (Vero Beach has a contractual right to charge Shores customers a 10 percent surcharge, but City leaders dropped that fee years ago.) More…

Shores residents attack Old, while soliciting campaign contributions for Moss Reply

COMMENTARY

“These accusations against Old have no basis in fact, and serve as further evidence Shores leaders are willing to abandon truth and decency in pursuit of their political objectives.”

“Given that a partial sale of Vero Electric’s Shores customers at FPL’s proposed price would benefit only Shores residents, while disadvantaging the remaining customers, what Grealis and McCord have begun with their email solicitation for Moss is a ‘Welfare for the Wealthy’ campaign.”

“For Grealis and McCord, the singular focus is to find three puppets who will do the Shores’ bidding on the Vero Beach City Council.” 

MARK SCHUMANN

Bill Grealis

Bill Grealis

Perhaps the most important question Vero Beach voters must consider this year is whether they have had enough of wealthy Indian River Shores interests seeking to buy control of the Vero Beach City Council.

An email fundraising letter sent today by Indian River Shores residents Bill Grealis and John McCord on behalf of Vero Beach City Council candidate Laura Moss falsely accuses Vice Mayor Randy Old of “publicly disparaging” the Utilities Commission and of serving as a “veritable cheerleader for the Florida Municipal Power Agency.”

These accusations against Old have no basis in fact, and serve as further evidence Shores leaders are willing to abandon truth and decency in pursuit of their political objectives. More…

Sole PSC member who voted with Shores not seeking reappointment Reply

COMMENTARY

MARK SCHUMANN

Lisa Edgar

Lisa Edgar

After a 4-1 vote by the Florida Public Service Commission yesterday denying Indian River Shores’ petition to redraw Vero Electric’s service territory to exclude the Town, the best Shores leaders and their high-priced attorneys can now do is prepare for an expensive appeal, hanging their hopes on the fact that one Commission member “agreed” with them.

The sole Commissioner who supported the Shores’ petition, (and ultimately FPL), was Lisa Edgar. On Jan. 1, Edgar will end her third 4-year, $131,000 a year assignment on the Commission. Edgar has not said publicly what is next for her, but if she follows in the footsteps of other former PSC members, she will move on to a much higher paying job as a lobbyist working for the utility industry. With her eyes perhaps on a pot of gold at the end of the rainbow ahead of her, Edgar may not have been listening closely yesterday when Vero Beach’s special utility counsel Schef Wright eviscerated Shores attorney Bruce May’s many unfounded assertions.

Edgar was first appointed to the PSC in 2005 by Gov. Jeb Bush, then subsequently reappointed by Gov. Charlie Crist in 2008 and by Gov. Rick Scott in 2012.  When it came time for Edgar’s third confirmation by the Senate, she faced some still opposition.  FloridaPolitics.com reported, “…Edgar came under fire during her last appointment, with tea party groups and others urging Scott to replace her, saying she wasn’t aggressively defending the state’ utility customers from rate hikes.” More…

Public Service Commission hands Shores another setback 2

NEWS ANALYSIS

MARK SCHUMANN

Vero Beach special utility counsel Schef Wright

Vero Beach special utility counsel Schef Wright

After hearing three hours of input from Indian River Shores officials and residents, as well as from attorneys representing the Shores and the City of Vero Beach, the Florida Public Service Commission today denied the Town’s request to modify long-standing territorial orders establishing Vero Electric’s service within the Town. Shores leaders sought to have the area within the Town served by Vero Electric reassigned to Florida Power & Light.

Shores’ special counsel, Bruce May, argued that Vero Beach’s authority to continue serving within the Town ends when the franchise agreement between the Shores and City expires in November. The Indian River County commission made a similar argument in appealing a PSC decision to the Florida Supreme Court earlier this year.  The County’s argument was rejected by the state’s highest court. Notwithstanding, May insisted it will be unconstitutional for Vero Beach to continue serving its Shores customers after November. More…

Who, if anyone, is really opposed to the power sale? Reply

Utility activist Steven Fahert has taken it upon himself to read the minds of the six Vero Beach City Council candidates regarding their enthusiasm for the proposed power sale. Three candidates Faherty describes as "anti-sale," three as "pro-sale." In truth, none of the candidates have expressed opposition to the sale. The differences between the candidates on this issue has more to do with honesty and integrity. Some seek to fool voters into believing they can conclude the sale by somehow miraculously persuading the Florida Legislature and the Florida Supreme Court to set aside long-established contract law solely for the benefit of Vero Beach.

Utility activist Steven Faherty has taken it upon himself to read the minds of the six Vero Beach City Council candidates regarding their enthusiasm for the proposed power sale. Three candidates Faherty describes as “anti-sale,” three as “pro-sale.” In truth, none of the candidates have expressed opposition to the sale. The differences between the candidates on this issue has more to do with honesty and integrity. Some seek to fool voters into believing they can conclude the sale by somehow miraculously persuading the Florida Legislature and the Florida Supreme Court to set aside long-established contract law solely for the benefit of Vero Beach.

COMMENTARY

“Given these realities, I am left wondering what Faherty meant when he recently labeled three Vero Beach City Council candidates “pro-sale,” and three “anti-sale.”  Such simplicity may play well in a time when the public has little interest in details, and even less interest in hearing more about the power sale issue. But the fact is Faherty’s labels mean absolutely nothing. Given that none of the candidates, if elected, are going to be in a position to move the power sale forward, and given that some of them are claiming otherwise, you have to wonder what their promises really mean. Maybe it is more useful and relevant to determine which candidates are committed to standing up for the interests of the people of Vero Beach and the customers of Vero Electric.”

MARK SCHUMANN

Just yesterday, a friend asked me, “Why are you against the power sale?”

“In principle, I am not opposed to the sale,” I told him. I went on to explain that the all-important underlying issue has always been how to structure the sale, and plan for its consequences, in a way that does not result in a significant decline in the quality of Vero Beach’s municipal services.

My friend lives on the south barrier island, so I took his question as an opportunity to remind him that he and his fellow south barrier island residents cannot buy so much as a roll of toilet paper without driving into the City of Vero Beach to shop.  “Imagine how uncomfortable you would be, and how difficult it would be to carry out commerce, without police protection,” I said.

For that matter, imagine trying to run any successful business, real estate brokerage for example, if Vero Beach were not able to offer such excellent services and amenities – plentiful, well-maintained parks and green space, guarded public beaches, recreation programs, clean streets, not to mention the Riverside Theatre and the Vero Beach Museum of Art, both of which occupy land leased from the City for just $1 a year. Without question, my friend and thousands of others who live in the unincorporated areas of Indian River County and in Indian River Shores benefit in countless ways from the quality of life made possible, at least in part, by the City’s exceptional services. More…

An open letter to Stephen Faherty 2

 

Dear Mr. Faherty,

When you and your fellow utility activist, Glenn Heran, first built support for selling Vero Electric to Florida Power & Light, you made presentations to community organizations in which you projected the sale would net the City of Vero Beach some $170 million dollars. You also claimed the sale would not necessitate budget cuts or tax increases.  I know these were your claims, because I was in attendance at a Rotary Club meeting held at the Quail Valley Club when you presented your case for a sale. The numbers and rational you and Heran convinced many to believe have proven to be greatly wrong, yet you persist in regularly publishing an email newsletter, “The Utility Update,” in which you make exaggerated claims about the savings lost because the sale has not been concluded. More…

A simple guide to understanding the lingering electric issue 2

With decommission of the power plant, options for improving the look of Vero Beach's riverfront are wide open. For the foreseeable future, though, Vero Beach will continue to own its electric utility.  The following article by Milt Thomas explores why the proposed sale to Florida Power & Light has not gone forward.

With decommissioning of the power plant, options for improving the look of Vero Beach’s riverfront are wide open. For the foreseeable future, though, Vero Beach will continue to own its electric utility. The following article by Milt Thomas explores why the proposed sale to Florida Power & Light has not gone forward.

COMMENTARY

MILT THOMAS

There are many aspects of this issue that are important to the City of Vero Beach’s future, but to customers of Vero Electric, the only issue is what they pay each month for electricity. While the City continues to reduce electric rates, (down 8 percent since 2013, and 26 percent since 2009), people are still asking, “What happened to the sale of Vero Electric we were promised?” The following article is written to answer the question as simply and directly as possible without all the nuances and political intrigue.

Indian River County is currently served by two electric providers, Florida Power & Light (a publicly traded major corporation) and Vero Electric (a local, city-owned utility). Due to its size and financial resources, FPL offers electric rates that in recent years have been consistently lower than Vero Electric (or most other municipally-owned electric providers) rates. A fair analogy would be a major chain like Walmart offering lower prices than local merchants for the same products.

Many of Vero Electric’s customers live outside Vero Beach city limits, an arrangement agreed to many years ago when Vero Electric was the primary source for electricity in Indian River County. That agreement is due to expire next year. However, the state’s Public Service Commission has affirmed Vero Electric’s right and responsibility to continue serving its customers. The County Commission appealed the PSC’s ruling to the Florida Supreme Court, but lost.  

Back in 2009, When Vero Electric’s rate was $158.82 per 1000 kWh,  a local effort was undertaken to convince voters and ratepayers they should agree to sell Vero Electric to FPL. ‘Sell’ advocates Glenn Heran and Steve Feherty developed an analysis and presented it around town and in the media that showed the city would gain close to $180 million from the deal. This projected “profit” from the sale would, they said, more than make up for the revenue lost to the city by selling its biggest asset. More…

Old raises “fiduciary duty” in decision on partial-sale offer 6

MARK SCHUMANN

Vice Mayor Randy Old

Vice Mayor Randy Old

In an email sent from his campaign yesterday, Vero Beach Vice Mayor Randy Old pointed to his “fiduciary duty” in explaining why he voted not to accept Florida Power & Light’s $30 million offer for Vero Electric’s Indian River Shores customers. Old, who is running for re-election, joined Mayor Jay Kramer and Councilman Richard Winger in rejecting the $30 million offer. Instead, Kramer, Old and Winger approved motion informing FPL they would consider a a sale $47 million. More…

When changes in facts do not lead to altered opinions 2

Calcified minds are impervious to new information

COMMENTARY

“The difference between 30 percent and 3 percent is not a rounding error. Sykes, Solari, Gilmore, Moss, Turner, Howle and other so-called pro-sale advocates did not arrive at their exaggerated numbers by touching the wrong key on a calculator. No, theirs is an intentional effort to push for the sale by misleading the public into believing it would significantly benefit the local economy. Just as importantly, their claims of being able to find a way around the contractual obligations that have so far prevented the sale are nothing more than empty promises.”

MARK SCHUMANN

Bob Solari

Bob Solari

Testifying before the Florida Public Service Commission this week, Florida Power & Light attorney R. Wayde Litchfield said that, if approved, the FPL’s proposed $1.3 billion rate increase will bring the utility giant’s rates closer to the statewide averages.

FPL’s willingness to justify its latest rate hike request on the basis of Litchfield’s argument signals a radical departure for the company, for FPL has spent heavily on a years-long marketing, advertising and public relations campaign positioning the Juno based, investor owned utility as the lowest cost electric provider in the state.

If approved, FPL’s rate hike request will bring the company’s monthly charge for 1000 kWh to $107.29 in June 2019. Adding a 6 percent franchise fee to $107.29 yields an average monthly bill of $113.73.  If Vero Electric’s rate remain the same, (all indications are the City’s rates will continue to decline in the coming years), that would leave a FPL-Vero Electric rate differential of 3.2 percent. More…

Barefoot, island weekly attack Kramer for representing his own constituents 4

Shores leaders don’t do well when things don’t go their way
COMMENTARY

“Surely Kramer is not surprised by these assaults from Barefoot and the island weekly. When Kramer voted to protect the interests of his own constituents, he knew full well the attacks that would follow. Kramer’s vote will likely cost him support from Shores residents in his Aug. 30 primary contest against Solari. Win or lose, Kramer is an example of political courage in a time when selfless public servants are not easy to be found.”

MARK SCHUMANN

Randy Old

Vice Mayor Randy Old

Mayor Jay Kramer

Mayor Jay Kramer

Imagine that someone approaches you asking to buy your home, or if you are a wealthy resident in Indian River Shores, imagine receiving an unsolicited offer from someone wanting to buy your second or third home. You weren’t planning on selling, but you inform the prospective buyer you will, at your own expense, hire a professional appraiser and will then get back with them.

After completing his work, the appraiser informs you your home is worth $470,000.  When you share this number with the person wanting to buy your home, he balks. A few days later he comes back with his own figures showing your home is worth just $300,000. You weren’t looking to sell your home. The professional appraiser you hired believes it is worth $470,000. The person who has made an unsolicited offer insists the home is worth just $300,000. What would you do?

This scenario is not much different from the recently concluded negotiations between the City of Vero Beach, the Town of Indian River Shores and Florida Power & Light.  After spending more than $1 million on a lawsuit that sought to strip Vero Beach of its service territory in the Shores, and fearful the Florida Public Service Commission will reject their latest petition, Shores leaders, working through FPL, made an offer of $30 million to buy Vero Electric’s Shores customers and electric utility infrastructure located within the Town.

In an effort to accommodate the Shores’ request to be served by FPL, Vero Beach leaders hired a team of five utility consultants to determine how much it would take to keep the City, its taxpayers and remaining customers from being exposed to potentially higher rates.  The consultants came back with a number of $47 million. It is, admittedly, an estimate, but one calculated to protect the residents of Vero Beach and the customers of Vero Electric.

To justify the Town’s $30 million offer, the Shores representative on the City of Vero Beach Utilities Commission, Bob Auwearter, came up a set of numbers showing the City needed no more than $27 million.  Auwearter is a resident of Indian River Shores, and was appointed by the Town to represent the Town’s interests on the Utilities Commission.  To be sure, Auwearter does not wake up each day asking himself what he can do to protect the taxpayers of Vero Beach and the 34,000 customers of Vero Electric. Auwearter is a Shores man looking out for his own interests and those of his fellow Shores residents. More…

Media Watch: What constitutes a raise? No one at the Press Journal seems to know. 4

COMMENTARY

“Vero Beach’s ‘break-even’ number has been public for weeks, if not months. For Wixon and her editors to characterize the City Council’s action this week as “upping the price” is just more propaganda aimed at aiding FPL.”

MILT THOMAS

A front page story in this morning’s Press Journal carries the headline “Council raises electric offer.” According to reporter Colleen Wixon, “The City Council all but killed a potential $30 million deal with Florida Power & Light Co…..by upping the price by $17 million.”

As a reporter, Ms. Wixon could have easily found out the city’s position for some time now was that it needed at least $47 million for the Shores portion of Vero Electric in order to protect the remaining  customer base from continent liabilities related to that portion. As a community publication, the Press Journal and its editors should know that publishing a misleading story (on the front page) is not in the community’s best interests, especially with an election coming in 13 days.

The only possible excuse for the Press Journal getting this story so wrong is that its employees so seldom receive raises that they have forgotten the meaning of the word.The real reason for this morning’s misreporting is the Press Journal’s persistant bias in covering FPL’s efforts to acquire Vero Electric. We all know that the Press Journal has sided with FPL from the beginning (and we all know Treasure Coast Newspapers president is married to an FPL executive). More…

Fitch Ratings affirms Vero Electric’s ‘A+’ bond rating 1

MARK SCHUMANN

Vice Mayor Randy Old

Vice Mayor Randy Old

Critics of Vero Beach, including Council members Pilar Turner and Harry Howle, contend the City is on the verge of bankruptcy. Vice Mayor Randy Old, a retired banker, among others, sees the numbers differently. Old argues the City, and its enterprise funds, are on solid financial ground.

Just yesterday, Fitch Ratings of New York affirmed the ‘A+’ rating for Vero Electric’s $32.3 million revenue bond. Revenue bonds are secured by net revenues from Vero Electric.

Fitch’s report noted improvement in Vero Electric’s financial. “Financial performance has steadily improved after reaching a low point in fiscal 2011.”  (The year 2011 was when Turner, along with former council members Tracy Carroll and Craig Fletcher were in the majority; and it was the year the Turner, Carroll and Fletcher first began serious negotiations to sell Vero Electric to Florida Power & Light. Over the next two years, the City’s electric customers bore the cost of some $2 million in legal fees.)

The report also addressed Vero Electric’s rate issues. “The utility’s rates remain slightly higher compared to the statewide average for municipally owned utility systems,” according to Fitch.

Fitch noted Vero Electric debt ratio “compares well” to other municipal utilities, and is likely to continue to improve.

The favorable credit rating report did, however, raise a concern about the proposed sale of Vero Electric’s Indian River Shores customer base. “Indian River Shores, despite high wealth levels, has continued its efforts to cease being served by Vero Beach, because of the utility high rates…Until fully resolved, Vero Beach’s sale of the wealthiest portion of its customer base remains a credit concern that will continue to be monitored,” the Fitch report reads.

Yesterday, by a 3-2 vote, the City Council rejected a $30 million offer from Florida Power & Light for Vero Electric Shores customers and related infrastructure. Turner and Howle supported accepting the offer, but Mayor Jay Kramer, Vice Mayor Randy Old and Councilman Richard Winger instead voted to counter at $47 million, the price a team of consultants hired by the City has calculated would be needed to protect the City, its taxpayers and remaining electric customers from higher rates.

FPL spokeswoman, Pamela Rauch, said FPL’s offer is “final” and will expire August 25.

Shores strong men descend on Vero Beach 4

…and other observations

COMMENTRY

“Though they (Pilar Turner and Harry Howle) were prepared to sell Vero Electric’s Shores customers for $30 million, at least based on their vote today, they appear unwilling to accept $47 million. Theirs is a curious position, indeed.”

“Beware, though, Weick and his wealthy Shores colleagues, with financial assistance from FPL, may now be preparing to stoop to even lower lows in this coming election. Who knows what they will be prepared to do, or how much they will be prepared to spend, to influence the outcome of yet another Vero Beach municipal election. Weick and Barefoot would do well to keep in mind that the people of Vero Beach are smart enough to realize not all neighbors are good neighbors.”

MARK SCHUMANN

Weick

Weick

Brian Barefoot

Barefoot

Moss

Moss

As she does at nearly every meeting of the Vero Beach City Council, candidate Laura Moss was before the public and the cameras today to put in her two cents worth.  I’ve lost track of how many times Moss has made the point that the Utilities Commission voted in one accord to recommend the City Council accept Florida Power & Light’s offer to buy Vero Electric’s Shores customers for 63 percent of the City’s asking price.

Every time Moss reminds us of the unanimity with which the Commission made its decision, I am reminded of the story of a corporate board meeting at which the members were asked to weigh in on a major strategic decision, one that would commit significant resources and, for better or worse, alter the future of the company. Following a brief discussion, the chairman asked each member in turn to cast their vote.  When it became clear everyone was in full agreement on a course of action, the chairman said, “Since we all see this the same way, I suggest we table our decision until we understand it better.”

So much for unanimity. What the chairman wanted was the depth and breath of understanding that comes from and honest airing of competing views.  We saw none of that at the most recent Utilities Commission meeting.

Differing opinions were hardly in short supply this morning, though.  From FPL executives, to candidates for the Florida House of Representatives, to north county candidates for the Indian River County Commission, to even a candidate for the Florida Senate, it seemed everyone running for public office wanted their free three minutes of television time. Ostensibly, all were there to offer the City Council advice on the proposed partial sale. Panderers one and all, these candidates urged the City Council to accept FPL’s offer, never mind the fact that the City’s consultants have estimated it would take closer to $47 million to protect the City, its taxpayers and remaining electric customers. More…