Letter: Selling Vero Electric is Un-American 2

Editor’s note: The following letter received by InsideVero yesterday was also sent to City Council of Vero Beach, Town Council of Indian River Shores and Board of County Commissioners, Indian River County.

“I believe in municipal ownership of all public service monopolies… because if you do not own them, they will in time own you. They will rule your politics, corrupt your institutions and finally destroy your liberties!” – Thomas L. Johnson, Mayor of Cleveland, Ohio, 1908

 

Selling Vero Electric to FPL is Un-American!

Please acknowledge about Florida Power and Light’s (FPL) upcoming multiple rate increases, surcharges and more increase(s) and surcharge(s) to come later.

Please acknowledge about FPL’s SurgeShield program is ripping off their customers. Vero Electric already have surge protections in all places and does not charge.

Please acknowledge about local media blackout (Indian River Press Journal/TCPalm and 32963/VeroNews) on FPL’s multiple rate increases and surcharges. InsideVero and out of town newspapers reported the increases.

Please acknowledge about Bob Brunjes, Indian River Press Journal/TCPalm publisher is married to Amy Brunjes, FPL executive.

Please acknowledge the current rates between Vero Electric and FPL is now less than 8% – greatly reduced from 34% in 2009. More…

Press Journal columnist misstates electric rate comparison Reply

The Indian River County Commission assesses a 6% franchise fee on the electric bills of country residents who are customers of Vero Electric, and of FPL. Similarly, If an when the become customers of Vero Electric residents and businesses within the city will also pay a 6% franchise fee, yielding an effective FPL rate of $108.69, compared to Vero Beach’s current rate of $116.08. The difference between the two rates is 6.4%, not 20%, as many continue to claim.

COMMENTARY

“Reisman and his colleagues at Treasure Coast Newspapers persist in presenting the rate differential between Vero Electric and FPL in a way that shows how much more FPL customers would pay, if they switched to Vero Electric. This is a misleading and meaningless comparison. The relevant percentage is the savings Vero Electric customers could expect by switching to FPL. At 1000 kilowatt hours, that number is 8.7% for county customers and 6.3% for customers within the city. At 1200 kilowatt hours, based on today’s rates, the savings would be 14.3% for county customers and 9.1% for customers within the city.” 

MARK SCHUMANN

For years, in comparing rates between Vero Electric and Florida Power and Light, the FPL-friendly Press Journal has followed FPL’s lead in quoting 1000 kilowatt hour rates.  Probably because this measure now yields the least favorable comparison from FPL’s perspective, the Press Journal is quoting rates at 1,200 kilowatt hours.

On the mainland, inside and outside the city limits, some 90 percent of Vero Electric’s residential customers use an average of less than 1000 kilowatt hours per month. Based on the most recent information available from FPL and the City, at 1000 kilowatt hours, the rate differential between the two utilities is 8.7 percent, $116.08 for Vero Electric and $102.64 for FPL. Reisman seems not to want to use these numbers, probably because he has for the last 7 years been telling his readers they could save 25 percent or more, if the City would only sell its electric system to FPL. In fact, the FPL-friendly Press Journal has played key role in leading the public to embrace an exaggerated sense of the benefits of the proposed power sale.

Not only has Reisman taken to using a different rate level for comparison, he misstates the delta. As of March, FPL’s rate for 1200 kilowatts of residential power was $122.40. Vero Beach’s rate was $142.87.  The difference between those two rates is 14.3 percent, not 17 percent, as Reisman claimed when he wrote, “That’s about 17 percent more than FPL rates.” The simple, undeniable, indisputable fact is that at 1200 kilowatt hours customers of FPL are paying 14.3 percent less than customers of Vero Electric, not 17%. More…

In the face of shifting facts, will opinions on power sale remain unchanged? 4

Vero Beach FPL* Differential
March, 2017 116.08 105.98 8.7%
October, 2016 116.08 94.63 18.5%
November, 2013 130.93 98.29 24.9%
June, 2009 158.82 104.37 34.3%
COMMENTARY

“If the residents of Vero Beach who continue to support the power sale believe the deal will lead to significantly lower electric rates, they are going to be disappointed. If they think the move will not result in higher taxes, cuts in services, and major setbacks for the City, they are sorely misguided.”

“Sponsored and supported by FPL, aided by a power-hungry County Commission, and advised by Indian River Shores Mayor Brian Barefoot, what Howle, Moss and Sykes most lack is loyalty to the City and to the people of Vero Beach. Bathed in blissful ignorance, and supported by outside interests, they are prepared to drive the City to the brink of financial disaster.”

MARK SCHUMANN

In 2009, utility activists Glenn Heran and Steven Faherty began making presentations throughout the community to build support for the sale of Vero Electric to Florida Power and Light. At the time, the rate differential between the two utilities was 34.3%. Not only did Heran and Faherty promise impressive savings on electric bills, they assured everyone the sale would net the City more than $180 million. The money, they reasoned, could be invested, with the earnings used to make up for the $7 million that is annually transferred from the electric fund to the General Fund. That money helps pay for municipal services, such as police protection, recreation programs, life guards and parks maintenance.

It has been eight years since the two utility activists, encouraged and aided by FPL, began persuading the public of the supposed benefits of selling Vero Beach’s electric utility. Over the past eight years much has changed. FPL’s rates have risen, but more importantly Vero Electric’s rates have continued to decline. As a result, customers of Vero Electric stand to save far, far less than originally promised. Based on information available through the Florida Municipal Electric Association, for Vero Beach residents, the effective rate differential is now 8.7%. According to rate information quoted on FPL’s website, the differential is just 6.3%. (According the rates currently being quoted by FPL on its website, the after residential customers using 1000 kWh per month is paying $102.64, this is $2.66 more than the 1000 kWh rate listed on the FMEA website. The difference may have to do with peaking charges, but suffice to say FPL’s rate structure is complicated.) More…

Candidate Randy Old releases statement on proposed power sale 3

Editor’s note: Former Vero Beach City Councilman Randy Old will be running again for a seat on the Council this coming November. Old today released a statement supporting the sale of Vero Electric on the terms recently proposed by FPL.  

FPL’s offer to buy the full utility system is coupled it with agreement to a partial sale of the City’s Indian River Shores customers for $30 million. If the board of the Florida Municipal Power Agency does not approve the deal, or if for any other reason it cannot be completed, Vero Beach will be obligated to sell its Shores customers and infrastructure to FPL for $30 million.

While running for re-election last fall, Old said agreeing to sell the Shores portion of Vero Electric for $30 million would have been a violation of his fiduciary responsibility to the City and to the people of Vero Beach. The statement Old released today does not make clear whether he now supports a partial sale at $30 million, though he did indicates some points in FPL’s proposal may “need to be altered or negotiated.”

Florida Power and Light Makes Offer to City Electric Business

Randy Old

FPL’s offer to the City to buy the entire electric business was announced yesterday. Simply put, FPL is offering to pay $185 million leaving the City with $37 million in cash after the City pays to exit its contracts with FMPA ($108) and OUC ($20), and pays off electric business debt ($20). This should be accepted by the City Council.

The agreements are long and detailed, and there may be some issues that need to be altered or negotiated, but most seem straight forward and reasonable. There are some key issues included. FMPA’s board must unanimously approve the transaction. One City voting against the sale could stop it. I believe that FMPA will approve the transaction and the full sale will be achieved. However, the other key point is, that if the full sale does not go through then, there is a commitment to sell the Indian River Shores portion of Vero Electric to Florida Power and Light.

FMPA reduced its price for Vero to exit its obligations from over $350 million to $108 million, or a 70% reduction. This reduction which happened in the fall, allowed the transaction to become viable. FPL’s past offer was similar to this in size but included our existing plant and other issues not appropriate in this offer. However, had past City Councils agreed to take FLP’s offer of $185 million, and had to pay $350 million to get out of FMPA, plus pay OUC $20 million to exit its contract, and repay its debt of $20 million, the City would have had a net loss on the transaction of $205 million ( +$185 – $350 -$20-$20 = – $205). An impossibility. With the reduced cost to exit FMPA, the transaction is not only possible but attractive.

FMPA changed its mind, was is the new CEO, was is the amount of legislative pressure in Tallahassee, or just a change of heart. But it doesn’t really matter; this is a reasonable transaction that should be accepted.

Next steps, be sure the city uses the proceeds of the sale wisely to minimize the adverse effect on Vero’s finances and its taxpayers. Also, it goes without saying, that it will be a huge relief to the community to have this issue not dominate and divide the city, as it has for the past several years.

Randy Old

Facebook comments on power sale reveal that some, perhaps many are misinformed, or uninformed 1

COMMENTARY

“If the general belief is that electric rates are going to come down 20% to 30%, and if the widespread assumption is that the sale will not results in tax increases, and/or cuts in municipal services, then pressing ahead with the sale amounts to malicious obedience.” 

MARK SCHUMANN

This past weekend, I took exception to a commenter’s assertion that, despite the unprecedented level of outside money that poured into last fall’s municipal election, the results were a fine example of democracy in action. In truth, the election of Harry Howle, Laura Moss and Lange Sykes to the Vero Beach City Council is a sad example of how money can buy power, especially when the press fails to do its job.

Last fall, more than $100,000, half of it given by Florida Power and Light and half contributed by Indian River Shores residents, funded a political action committee supporting Moss and Sykes. The committee used the money to carry out an extensive disinformation campaign of truly outlandish claims and promises. Further, Sykes received 90 percent of his financial support from Shores residents. Moss took in 70 percent of her campaign contributions from outside Vero Beach. Without question, outside money bought their seats on the Council.

The commenter wrote, “Their paths to office are in accordance with their constitutional rights, and now the City’s decisions rest in their hands.”

In a response titled “A failure of the fourth estate,” I wrote: More…

Meter running of City’s legal bills – $49,498.25 for first month 3

MARK SCHUMANN

Florida Power and Light officials yesterday submitted a letter of intent containing proposed terms for the sale of Vero Electric.  Today, attorneys with the law firm of Carlton Fields, all of whom charge $480 per hour, today submitted an invoice to the City totaling $48,498.25 for work done through the end of March in helping preparing and review FPL’s offer.

Next Tuesday, the Council is to consider, and will likely vote to accept, FPL’s proposed terms. At that point the expensive work of hammering out a formal contract will begin. The previous purchase and sale agreement between Vero Beach and FPL expired at the end of last year. The City’s outside counsel charged more than $1 million to write that now defunct contract.

Is Moss misleading public about ‘financial review’ of power sale? 3

Editor’s note: During last Tuesday’s Vero Beach City Council meeting, Mayor Laura Moss claimed City Staff has been conducting an ongoing financial review of the likely terms FPL will propose in a letter of intent to be presented to the Council at a special call meeting on May 16. When Vero Beach resident Brian Heady asked for the release of any documents related to Staff’s review and analysis of FPL’s pending offer, Moss claimed the information is proprietary and had Heady removed from the Council chambers. The information Heady sought is not proprietary, as Moss claimed. Saturday, InsideVero requested the information. Yesterday, apparently after the Press Journal weighed in, City Staff began releasing documents. Attorneys with the law firm of Carlton Fields, who are acting as agents of the City, appear to have informed City Manager Jim O’Connor that they will not release documents in their possession until FPL’s letter of intent is made public. 

Unless members of City Staff are withholding other documents in their possession, the information released yesterday makes clear Moss is not telling the truth in claiming Staff has conducted a financial review of the proposed deal. In fact, all Staff appears to have done to date is respond to requests from FPL officials for information the company needs to prepare an offer to acquire Vero Electric. What this means is that by the time FPL presents its letter of intent, company officials will have had months to consider the terms they are proposing. 

When the Council meets next Tuesday City officials will have had little, if any time at all to thoroughly review FPL’s terms. Despite this handicap, Council members Harry Howle, Moss and Lange Sykes have all indicated they will be prepared next Tuesday to accept the terms in FPL’s letter of intent. In short, there will be no negotiation on the terms of the sale. FPL’s offer will be a take-it-or-leave-it deal, and Howle, Moss and Sykes, all of whom were elected to the Council with significant support from FPL, show no inclination to negotiate the best deal possible for the people of Vero Beach.

BRIAN HEADY

Brian Heady

If there are no meaningful consequences for violating the Sunshine Laws then we have no real access to public records.

Our mayor said at the last meeting being mayor was like being queen.  In the current example the queen has wrongfully violated the constitutional rights of citizens by having me taken into custody and removed from meetings. Last Tuesday was not the first time.  

Her argument the information I requested is privileged is not legally defensible,  and the notion that no notes or written records of the FPL offer exist is impossible to take seriously.  A business entity such as our electric utility valued at over $200 million being offered for sale without a shred of written documentation is just not believable. If true this is completely and wholly irresponsible.  

More likely and more believable is there is a criminal conspiracy to hide the records from public view.  

Why?

 

Rate difference between Vero Electric and FPL now down to 6.4% Reply

 

The Indian River County Commission assesses a 6% franchise fee on the electric bills of county residents who are customers of Vero Electric and of FPL. Similarly, if and when they become customers of FPL, residents and businesses within the city will also pay a 6% franchise fee, yielding an effective FPL rate of $108.69, compared to Vero Beach’s current rate of $116.08. The difference between the two rates is 6.4%, not 20% as some continue to claim.

MARK SCHUMANN

According to Florida Power and Light, the company’s typical residential customers using 1,000 kilowatt hours per month is now paying $102.54.  Vero Electric’s rate for the same level of use is $116.08. One might conclude a move from Vero Electric to FPL will save the average Vero Beach residential power customer 11.7%.

However, anyone following the story of the proposed power sale knows Vero Beach’s rate includes a 6% transfer to the City’s general fund. Further, anyone seeking to report the story truthfully will account for the fact that the City will begin assessing a 6% franchise fee on FPL’s new Vero Beach customers. In short, accounting for an inevitable 6% franchise fee, Vero Beach residents would today be paying an average of $108.69 per 1000 kilowatt hours, if they were customers of FPL. That amounts to a rate differential of just 6.4%.

When the power sale was first sold to the public, the rate differential between Vero Electric and FPL was closer to 30%.  Further, the public was told the sale would net the City some $180 million dollars, and would not require cuts in services or increases in taxes.

Today, the rate differential between the two utilities is down to 6.4%, and it is obvious the sale of Vero Electric will lead to tax increases and cuts in services. More likely, the sale will leave the City unable to develop a balanced budget.

In spite of these undeniable facts, the Press Journal continues claim the rate differential between Vero Electric and FPL is 20%.  Further, the newspaper has yet offer any enterprise reporting on the likely impact of the sale on taxes and services. Assuming the newspaper’s staff is not intentionally misleading its readers, but is simply misinformed, I wrote the following letter today to reporter Colleen Wixon, local columnist Larry Reisman, editor Adam Neal and editorial page editor Eve Samples. More…

Is City delaying release of public records? O’Connor says ‘yes,’ and ‘no’ 1

NEWS ANALYSIS

“In part that is right,” and, “No,” cannot both be accurate answers to essentially the same question.  O’Connor’s equivocation regarding the City’s rationale for not releasing the requested public records until May 16 further suggests City Staff is being pressured by Moss to conduct the public’s business in the shadows.

MARK SCHUMANN

Jim O’Connor

Contradictory answers City Manager Jim O’Connor gave yesterday regarding recent public records requests suggest the City is delaying the release of documents in order not to complicate efforts to negotiate terms of the Vero Electric sale in secret. Mayor Laura Loss claims the information requested is “proprietary.” It is not.

Moss, (who in the most recent election received $50,000 in support from Florida Power and Light), along with members of City Staff and attorneys with the law firm of Carlton Fields have been holding private discussions with FPL representatives on the proposed sale of Vero Electric. According to Moss, members of City Staff, likely O’Connor and Finance Director Cindy Lawson, have been conducting “a thorough review” of the terms of FPL’s pending offer.

FPL is to submit a letter of intent to City Council on May 16. That letter, Moss says, will become a part of the public record this coming Wednesday when it is included in the agenda packet for the May 16 special call meeting.

If the documents are not released until May 16, that will be fully 8 days after the initial request was submitted by Vero Beach resident Brian Heady. More…

Kept in the dark, Winger seeks attorney’s time sheets Reply

NEWS ANALYSIS

“FPL’s determination to acquire Vero Electric is evidenced by the hundreds of thousands of dollars the company has spent pushing referendums and sponsoring council candidates friendly to its cause. The larger objective, of course, is FPL’s desire to expand its customer base by acquiring additional municipal utilities in Florida. Vero Beach is just the first move in a much broader, state-wide chess game. FPL President and CEO Eric Silagy admitted as much in public statements made at an investor conference in March, 2013.” See: FPL president tells investors Gov. Scott is urging other municipal utilities to sell to FPL (Since 2013, FPL’s rates have risen steadily and significantly. Accounting for a franchise fee, the rate differential between Vero Electric and FPL at 1000 kilowatt hours per month is now less than 10%.)

MARK SCHUMANN

Richard Winger

Laura Moss

The law firm of Carlton Fields, engaged by the City three months ago, has yet to submit invoices for work the firm has done and is doing to negotiate a sale of Vero Electric to Florida Power & Light.

Absent invoices and itemized time sheets with which to assess the work of Carlton Fields, Councilman Richard Winger today submitted a public records request seeking those documents.  Even though Carlton Fields may be holding back on submitting invoices, surely the firm is keeping detailed records of time spent and work done. Those records will be needed to eventually prepare invoices. In his records request Winger wrote, “Such sheets, (time and billing sheets), should include time billed, or to be billed, and who acted or was “Present” (in person or on the phone) and on what specific day. “Present” means all personnel, whether from the City, Carlton Fields, FMPA, FPL, etc.”

Given Mayor Laura Moss’s secretiveness about discussions she has had with representatives of FPL and with Carlton Fields, it seems likely Moss may have requested Carlton Fields to delay submitting invoices and billing records.  Her goal would be to keep from public view as long as possible the nature of the discussions and of the work being done to craft a deal acceptable to FPL, to the Florida Municipal Power Agency and to the Orlando Utilities Commission. More…

O’Connor: No documents, no notes 1

On proposed power sale” “no documents, no notes.”

Claims City Staff has been conducting “an ongoing financial review.”

Following receipt today of InsideVero’s latest public records request, City Manager Jim O’Connor replied, “My office has no documents related to the proposed sale, but I have been involved in discussions, but there were no documents passed between parties in the discussion where I participated.”

When asked how staff could be conducting an ongoing financial review of FPL’s proposed terms without putting any information in writing, O’Connor replied, “I know better than to take notes in fact I usually will not carry a pen.”

O’Conner’s explanations make it unmistakably clear he and just one member of the City Council, Laura Moss, are negotiating the sale of a public asset and are doing so behind closed doors. Further, his comments raise questions about the veracity of Moss’s claim that members of City Staff have been conducting “an ongoing financial review” of the deal.

Moss, along with fellow Council members Harry Howle and Lange Sykes, seem set to accept FPL’s terms on May 16, the day the offer is scheduled to be presented. Based on what she has claimed so far, Moss seem likely to argue that the deal has already been carefully reviewed by Staff.

See: Power sale being negotiated behind closed doors

Power sale being negotiated behind closed doors 3

COMMENTARY

“Florida’s open government laws are intended to insure that the public’s business is conducted in the public, not in secret.  Moss appears to be flaunting, if not violating those laws. (In her recent election to the Council, Moss benefited from a $50,000 contribution FPL made to a political action committee supporting her.)”

Editor’s note:  Following receipt today of InsideVero’s latest public records request, City Manager Jim O’Connor replied, “My office has no documents related to the proposed sale, but I have been involved ini discussions, but there were no documents passed between parties in the discussion where I participated.” When asked how staff could be conducting an ongoing financial review of FPL’s proposed terms without putting any information in writing, O’Connor replied, “I know better than to take notes in fact I usually will not carry a pen.” O’Conner’s explanations make unmistakably clear he and just one member of the City Council, Laura Moss, are negotiating the sale of a public asset and are doing so behind closed doors. Further, his comments raise questions about the veracity of Moss’s claim that members of City Staff have been conducting “an ongoing financial review” of the deal.

MARK SCHUMANN

When it comes to Mayor Laura Moss’s negotiations with FPL, no one knows what is said behind closed doors.

During last Tuesday’s Vero Beach City Council meeting, Mayor Laura Moss acknowledged that the City’s outside attorneys have in their possession “complete information” on a pending letter of intent from Florida Power & Light. That letter is to be presented to the Council at a special call meeting scheduled for the morning of May 16.

At least based on public statements they have made to date, Council members Harry Howle, Lange Sykes and Moss intend to accept FPL’s letter of intent at the May 16 meeting. Unlike Howle, Moss and Sykes, Councilmen Richard Winger and Tony Young have said they will be reluctant to accept even an outline of FPL’s offer until the terms can be reviewed by the Finance and Utilities Commissions.

According to Moss, member of City Staff have access to at least the outline of FPL’s pending offer. The information, Moss said, has been the subject of “an ongoing financial review by Staff.” Despite Moss’s public admission that the specifics of FPL’s pending offer are in the hands of the City’s outside counsel, as well as Staff, no one at the City has yet been willing or able to provide the information in response to public records requests. More…

Will FPL’S political investments in Howle, Moss and Sykes pay off? 2

And who is looking out for Vero Beach?
COMMENTRY

“Certainly a majority of Vero Beach voters have more than once expressed support for selling Vero Electric. What voters have never approved, however, is the kind of determination Howle, Moss and Sykes are showing to hand over the City’s largest asset on terms that are not carefully reviewed, and that might be terribly unfair to the City, its residents and taxpayers.”

MARK SCHUMAN”N

Laura Moss

At the Council meeting scheduled for Tuesday, May 9, representatives of Florida Power and Light are expected to present a letter of intent to acquire Vero Beach’s municipal electric utility. Except perhaps for Councilwoman Laura Moss, who has been in direct discussions with FPL representatives, no one knows exactly what terms FPL will offer.

When Richard Winger first ran for a seat on the Council in 2011, his campaign theme was “A Fair Deal” for Vero Beach. Winger’s concern at the time was that the Council not simply cave to FPL’s terms, but instead negotiate terms that would be fair to the City. As it turned out, the Council majority of Tracy Carroll, Craig Fletcher and Pilar Turner approved a fatally flawed, unworkable contract that expired last December.

Now the new council majority of Harry Howle, Moss and Lange Sykes, all of whom were elected with significant financial support from FPL, seem set to swallow hook, line and sinker the utility giant’s new offer.  So determined are Howle, Moss and Sykes of concluding the sale on FPL’s terms that they have, over the objections of Winger and Councilman Tony Young, muzzled the Finance Commission by instructing it not to discuss the proposed deal. More…

Florida Senate advances bill to let FPL charge customers for fracking costs Reply

Intended to overturn a 2016 Florida Supreme Court ruling, the legislation will allow FPL to place the financial risk for fracking and exploration on the backs of its costumers. In 2015, FPL lost $5.6 million on a fracking venture in Oklahoma.

Editor’s note: Tuesday, May 9 the Vero Beach City Council is to receive, and presumably accept a letter of intent from FPL to buy Vero Electric.

MARY ELLEN KLAS/MIAMI HERALD

Florida Power & Light’s quest to have customers pay for natural gas fracking projects in other states overcame a key hurdle Tuesday as the Senate Rules Committee passed the controversial measure and overlooked opposition from residential and commercial customers.

The proposal, SB 1238 by Sen. Aaron Bean, R-Fernandina Beach, now goes to the Senate floor. A similar measure in the House, HB 1043, has made it through one of three committees in that chamber. Continue reading…

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 7

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…