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Three out of four want to switch to county for water

STORY BY LISA ZAHNER, (Week of March 7, 2013)

Survey results just released confirm an overwhelming number of Vero Beach water and sewer customers outside the city hope to become Indian River County Utilities customers in 2017.

Of the surveys mailed to Vero Beach Utilities customers who live on the South barrier island or on the mainland, 77 percent of those who responded want Indian River County to take over providing their water and sewer service. 

Of the 1,276 people who answered the survey, 978 said they wanted to be served by the county. Those who wish to stay with Vero numbered 298, according to County Attorney Alan Polackwich. “Forty-eight returned the survey form, but did not vote for anyone,” Polackwich said in an e-mail.

Utility activist Stephen Faherty, a member of the now defunct county Utility Advisory Committee, has worked on this issue for nearly five years. After first asking the county commission to vote in September 2009 to take back its utility customers in 2017, Faherty said the survey results are “fantastic news.”

“We’re one step closer to cheaper water, sewer and irrigation (WSI) services and county representation for current county customers on city WSI services,” Faherty said.

Faherty and his fellow members of the South Beach Property Owners Association pushed hard to get utility customers to respond to the survey, offering up expert speakers and rate comparison data at meetings and via e-mail updates.

Now that the ratepayers’ wishes have formally been heard, what’s next could take the next four years to sort out.

The county’s franchise agreement with Vero expires in March 2017 and county officials have put the city on notice that they will not renew that franchise. This decision has Vero and county officials and their attorneys spoiling for a potential court battle which could have statewide implications.

The two areas of contention are Vero’s right to continue serving those customers and the question of who owns the utility assets after the franchise expires.

Vero water and sewer director Rob Bolton, bolstered by advice from GAI Consultants and their attorney, Thomas Cloud of the Gray Robinson law firm, assert that the city has the rights to a perpetual utility territory that trumps the franchise agreement.

The county hired the law firm of Nabors Giblin and Nickerson to give an opinion on the matter and those lawyers confirmed what Polackwich determined from the public record – the county commission that granted the franchise to Vero in 1987 never intended to give the city a permanent territory.

At the time, the county government had no utility infrastructure to serve the South Beach customers with water and sewer, but the island was being developed and the widespread use of wells and septic tanks was not sustainable. State law permits the city to serve utility customers who live within a five-mile radius of the city limits. It is that clause, referred to as Section 180 of the Florida Statutes, that the city hinges its legal argument on. If challenged in court, county officials can now show that 77 percent of residents who responded desire to be served by Indian River County.

In addition to being assured county water and sewer rates, infrastructure ownership issues need to be resolved, Faherty said.  

He said city consultants, GAI, valued nearly all of the utility infrastructure in the South Beach area as the city’s but he said documents show developers and people who bought lots paid for nearly all of that infrastructure.

Vero has had the utility assets on the South Beach appraised at more than $10 million, but the county argues that most of those assets were built on county or developer right of way or with utility impact fees, and therefore revert to the county at the end of the 30-year franchise agreement.

In other words, Vero wants the county to buy the pipes, pumps and lift stations that the city used to make money – a lot of money – off South Beach and mainland county customers for 30 years.

One reason utility franchises are so long in duration is to give the provider time to recoup the cost of the capital investment in the system. Upkeep of that system, called renewal and replacement, could be considered a cost of doing business.

Former Indian River County Utilities Director Erik Olson had said prior to his retirement last year that the county has more than enough capacity to serve the South Beach and mainland county customers, but would most likely need to bore pipes under the Indian River Lagoon to service The Moorings and other south barrier island communities. 

The county already serves the Town of Orchid, the unincorporated north barrier island and the northern part of the Indian River Shores. Vero serves the southern part of the Shores.