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Legal disputes over water-sewer utilities are moving into the mediation phase

STORY BY LISA ZAHNER (Week of December 16, 2021)
Photo: Retired Judge Paul Kanarek will mediate the discussion at the Indian River Shores Community Center Jan. 20.

While the City of Vero Beach moves forward with a water-sewer rate study aimed at establishing a “one rate” system in 2022 to fund operations and improvements, including the planned $70 million wastewater treatment plant relocation, two legal disputes over utilities move into the mediation phase.

The Indian River Shores Town Council will host the Vero Beach City Council at 9 a.m. Jan. 20 in the Indian River Shores Community Center with retired Judge Paul Kanarek mediating the discussion. The Shores filed a federal antitrust lawsuit against Vero alleging that Vero’s claim to a permanent water-sewer service territory gives the city what amounts to monopoly power over the town in providing an essential service.

Vero argues that a 1989 territorial agreement with Indian River County split the county up into water-sewer territories that were intended to be permanent. It is the legality of that 1989 agreement that will be challenged in federal court.

The Shores wants the ability to pursue competitive options, and the option to leave Vero’s utility system when the town’s franchise agreement with Vero ends in October 2027. The contract requires the town to give Vero notice by October 2023 should the town intend not to renew.

Prior to the mediation session, which will be open to the public, Vero Beach Mayor Robbie Brackett and Indian River Shores Mayor Brian Foley will also meet informally to see what solutions they might be able to work out.

Meanwhile the town’s utility consultant is expected to soon be ready to present the findings of a feasibility study of what it would take for the town to contract with a provider other than Vero – specifically with Indian River County Utilities.

“They are reviewing the new agreement between John’s Island and the City of Vero Beach,”

Shores Town Manager Jim Harpring said on Friday, referring to a planned project in which Vero Beach will pipe reclaimed stormwater from canals to the barrier island to irrigate John’s Island, instead of using treated reuse wastewater from the city’s plant.

Harpring said he hopes to have the consultant’s report in late December or early January, but he’s confident the town can find a way forward. “Like I’ve said about this before, we put a man on the moon in the Sixties. Look, we can definitely do this. It’s just a matter of how much time it will take and how much it will cost,” Harpring said.

The town’s consultants relied heavily upon information provided by the county’s engineers and utility employees to determine how the Shores might connect with county utilities. “I have confirmed with our utilities team that we have provided all the requested information to the Town’s consultant for the study,” Indian River County Legislative Affairs and Communications Manager Kathleen Forst said on Monday.

The county’s participation with the Shores’ consultants got the county into hot water with City of Vero Beach officials, who viewed the county’s role in the study of the Shores’ utility options as an affront to Vero’s claim of a permanent service territory which includes Indian River Shores. That sparked a separate conflict resolution process involving Vero and Indian River County.

After numerous meetings of staff and the two elected boards failed to reach common ground, Vero declared an impasse, but the county wanted one more meeting. The matter stalled for more than a month until last Tuesday. “The board authorized us to move forward with the mediation phase of the Chapter 164 process. I am working with the city to set dates for the mediation,” County Attorney Dylan Reingold said.

Vero has not filed a lawsuit against the county yet, and the county maintains that it has no interest in going after Vero’s customer base, that it only provided the information to the Shores’ consultant as a service to a constituent municipality. The county has made no pitch to the Shores for the town’s water-sewer service.

A breach of contract lawsuit filed by Indian River Shores against Vero Beach is still pending. In that case the Shores takes issue with the reuse irrigation rates Vero is charging town customers, as those rates relate to a clause in a 2012 franchise agreement saying Vero would match Indian River County Utilities’ rates.

Vero has filed a motion for Circuit Court Judge Janet Croom to issue a summary judgement in the case. A Dec. 3 hearing on that motion was canceled.