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Shores Town Council to finally get water proposal from County

(Week of April 21, 2011)

The Indian River Shores Town Council will finally get to see a concrete proposal from Indian River County for water-sewer services April 28, but the Board of County Commissioners got a preview this week.

County Utility Director Erik Olson prepared a draft for Tuesday’s County Commission meeting of what could be molded into a 30-year franchise agreement with the Shores.

Depending upon what commissioners decide, Shores residents could be asked to pay a surcharge on their water bills for 12 years starting in 2016 to help the county recover the costs of hooking the Shores onto the county system.

He said if the county had to start from scratch to connect the town, the infrastructure cost would be about $6.5 million.  It would take an 8 percent surcharge to recover the net cost.

“This is a worst-case scenario assuming zero cooperation from the City of Vero Beach,” Olson said.

But “by working with the city to cooperate with existing lines, this cost can be reduced to $2.3 million,” the memo to the County Commission said.

Olson said last week he expects commissioners might choose to absorb the costs of connecting the Shores to the county system.  On the eve of the vote, County Commission Chairman Bob Solari said he was hopeful that the County would be able to offer Shores customers County rates with no surcharge.

The deal that’s on the table with Vero Beach would remove a 10 percent surcharge the city currently charges the Shores in exchange for the 30-year extension and a turnover to Vero of the estimated 10 percent of the utility assets that do not belong to the city.

Shores Mayor Tom Cadden has advocated staying with Vero Beach, arguing – among other things – that signing a new deal with Vero Beach could get the town’s rates down immediately.

One sticking point in the Vero Beach proposal, however, is the lack of guarantees that rates would not go up significantly once the Shores signed on for another 30 years.

Shores Town Councilman Richard “Dick” Haverland has said publicly he will not vote for any deal which leaves long-term utility rates to chance.

If rate projections from a 2009 study on the Vero Beach system are correct, Vero Beach rates could be up to 110 percent higher than county rates by the time the Shores can exit the franchise agreement with Vero Beach in 2016.