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FP&L rejects Vero revision

(Week of May 5, 2011)

City of Vero Beach attorneys and consultants -- in proposing extensive revisions to Florida Power and Light’s letter of intent to purchase the electric utility -- appear to be trying to pave the way to turn over only Vero Electric’s outside-the-city-limits customers to FP&L, keeping the city in the electric business.

Last week, before a scheduled vote to move forward on FP&L’s April 4 offer to open negotiations to buy Vero Electric, language was added broadening the deal to encompass the possibility of a partial sale. This idea, pushed by Mayor Jay Kramer, sheds the 61 percent of electric customers who live in Indian River Shores and the County, leaving the city to run a Vero-only system.

The intrigue around the manner in which city staff kept the proposed revisions from the City Council is mind-bending.

In private business, what would happen if you had an important document – a literal game changer – at 1:15 p.m. Thursday that your boss needed for a Monday morning meeting, but you didn’t hand it over before the meeting, allowing your boss to be blind-sided? Then, you gave the document to the company you’re negotiating the deal with before your boss got to see it? Then you gave it to the press, still before your boss had seen it?

“The people responsible would be fired,” said Councilman Brian Heady, when presented with the scenario.

That scenario is not hypothetical. That’s basically what happened at Vero Beach City Hall on Monday and it nearly killed the deal with FP&L.

The City Council, as far as anyone can tell, is still the boss of the acting city attorney and interim city manager. Both had a heavily revised version of the FP&L letter of intent, prepared by their consultants and outside lawyers, on April 28 or April 29th.

But City Council members were told they would have a copy  by 5 p.m. on Monday.   FP&L officials got a copy of the proposed revisions around lunchtime Monday.  Vero Beach 32963 and its sister publication had copies shortly after 1 p.m.

The proposed revisions to the FP&L letter of intent were much more than tweaks or clarifications, and opened the doors for major policy changes never discussed or specifically authorized by the City Council.

The changes also went way too far for FP&L.

“I just got out of a meeting with (Acting City Attorney) Wayne Coment, (FP&L executive) Amy Brunjes and Patrick Bryan, the attorney for FP&L, and the revised letter of intent will not go forward for a vote,” said Councilwoman Tracy Carroll on Monday. “It’s off the Tuesday agenda.”

Carroll said FP&L said the changes made by Tom Cloud of Gray Robinson raised “a number of big concerns” and they hurt the company’s negotiating position, when FP&L’s original intent in submitting a letter of intent was simply to open up negotiations.

One “big concern” was the language which gave the City Council the ultimate power to sell off certain customers and keep certain customers.

“FP&L is not interested in a partial sale,” said Carroll, who had been appointed by the City Council as chief point person to deal with FP&L.

By the end of the day, FP&L spokeswoman Jackie Anderson gave a statement painting a slightly more hopeful picture.

“Because the new version of the letter of intent we received from the city this afternoon had significant changes, we have requested that the city defer discussion of the letter of intent (LOI) during tomorrow’s City Council meeting,” she said Monday. “We believe that we can modify our version of the LOI to address the city’s concerns without significantly delaying the process. We plan to provide a new draft of the LOI by the end of this week.”

Starting April 14, numerous versions of the letter of intent were e-mailed back and forth between Coment, the Gray Robinson law firm and Gerry Hartman of GAI Consultants.

In the shuffle, sentences were included that expanded FP&L’s letter of intent to encompass not only negotiations for a complete sale of the utility, but also a partial sale – the idea being pushed by Kramer to sell off outside-the-city customers and run a Vero-only system.

“According to the color coding it appears GAI added the bulk of the language regarding potential partial sale. Do not know who if anybody may have instructed who to put that in, just know it did not come from me,” Coment responded by e-mail Monday.

After hearing of the changes inserted by GAI, Gray Robinson and the city staff and the fact that the document was kept from the City Council until after Monday’s meeting with FP&L, utility activist Glenn Heran noted that on April 5, he cautioned the City Council from the public podium it should not to trust GAI or its legal team.

“It wouldn’t surprise me that staff and consultants would seek to put roadblocks up, that at the last minute they need to change the letter of intent after they’ve been sitting on it for a month,” Heran said. “The question needs to be asked as to whose fingerprints are really on this. Is it Jay Kramer? The Florida Municipal Electric Association? (FMEA) Or maybe the Florida Municipal Power Agency?”

A call to Mayor Jay Kramer was not returned by press time.

The FMEA represents municipal electric utilities and in the past has opposed a sale to FP&L.

The next regular meeting of the Vero Beach City Council is 6 p.m. Tuesday, May 17. There is a special call meeting scheduled for 3 p.m. Friday but the FP&L letter of intent is not on the agenda at press time.