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Plan for cutting Vero budget due in just six weeks

STORY BY LISA ZAHNER, (Week of May 30, 2013)

The fact that the City of Vero Beach is soon going to need to bring expenses and personnel costs in line with the diminished revenues that will result from the sale of Vero electric finally seems to be making an impact on officials, but no workable plan yet exists for cutting the municipal budget.

City Manager Jim O’Connor has ordered department heads to propose across-the- board cuts of 10 to nearly 15 percent, similar to the cuts that Indian River County made in the early days of the recession.

If implemented, those budget reductions could save the city of Vero Beach more than $2 million annually.

O’Connor has not, however, set any deadlines for proposed departmental budgets reflecting the cuts to be put on his desk.

O’Connor said he has no thoughts yet on what would be done with any short-term windfall that might exist if the savings kick in while Vero electric is still pumping money into city coffers.

“We do not have an exact list of positions [to be eliminated]. This very early look into budget process is more of an overview by each department,” O’Connor said. 

“Conclusions on which positions will be affected at this stage would be misleading.”

When will the budget cuts be more concrete?

“We have not set a firm timeline,” he said.

Meanwhile, at least one of O’Connor’s bosses, Councilman Dick Winger, thinks the city – if run more efficiently – can cut operating expenses in ways that do not reduce vital services to residents and those who use city amenities.

If the sale of the electric utility goes through in early 2014, the savings from the budget cuts will be used to offset what Vero will no longer be skimming off the electric utility.

Councilwoman Pilar Turner said she’s operating under the assumption that the sale will close sometime in 2014, and she thinks now is the time to get the budget in line.

“I had hoped that we would prepare the budget so that we would assume the sale would go through in January,” she said.

But if the sale is delayed to 2016 due to regulatory concerns, or protracted negotiations with the Florida Municipal Power Agency over the cost and terms of getting out of the electric co-op, the city would have to decide what to do with up to $2 million in annual budget-cut savings.

Would the money be used to reduce electric rates for the balance of the time the city owns the utility? Probably not, according to Turner.

The rate increases that are being proposed now for sometime this summer, she said, would most likely only compensate for guessing wrong about fuel costs back in December.

“When we did the rate increase in December, Jim O’Connor chose the low range of power costs from Orlando Utilities,” Turner said.

“Assuming the sale does not close in January 2014, we could wean the city off the transfers,” Winger said.

“I would start reducing the transfer, if the savings is really there, but if there are some particularly tough measures in the budget cuts, I would delay them.”

Before the city slices funds for things like recreation and police, Winger said, management needs to look at all the ways the city wastes cash on facilities and redundant bureaucracy.

"I will take a look at cuts to city services only after all the rest of the foolishness has already been done away with," Winger said.

Winger outlined his concerns and some of his ideas for addressing the budget in an op-ed article on page 35.

Turner said there is a hard and fast deadline for the departmental budgets and it is a month away.

“They do have to get a budget together by the end of June. We have to have it at least a week before budget workshops and those start July 8,” she said.