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Guess how much Vero utility bills will be going up

STORY BY LISA ZAHNER (Week of July 28, 2022)

Vero Beach Utilities water-sewer customers will see their monthly utility bill go up when the city’s new one-rate plan takes effect Oct. 1, but they won’t be told how much their rates are going to increase until the last minute. 

Vero hired consultants to perform a rate study that would take into consideration not just the cost of operating the water treatment plant, sewer plant and reuse irrigation water service, but also the cost of designing and constructing a new wastewater treatment plant at the Vero Beach Regional Airport.

That’s not to mention the expense of redirecting sewer pipes to the airport and dismantling the existing plant on the Indian River Lagoon, plus handling any needed environmental cleanup on the sewer plant site so that land can be incorporated into the city’s riverfront development master plan.

Based upon an initial $80 million project guesstimate, Vero’s consultant told city officials in 2020 that rates would increase $17.66 per month, phased in over a 10-year period for the average customer who is hooked up to both water and sewer service.

 But was $80 million a realistic number?  As of today, the only hard number the city has is $2.8 million for engineering and design work which is already underway on the new wastewater treatment plant. That leaves tens of millions of dollars of question marks.

Indian River Shores Councilman and Vero Utility Commission member Bob Auwaerter, who thinks the real total could be more than $100 million, said he was hoping the results of the rate study could be vetted through the Utilities Commission before new rates were announced by Vero in September.

But Auwaerter said he doesn’t think the Vero Beach city council or staff wants the projected cost of constructing the new wastewater treatment plant scrutinized that closely before the new rates are approved.

“I think they will low-ball the numbers,” Auwaerter said. If the cost of constructing the new plant and moving operations off the river is going to be an outrageous number, that likely won’t be disclosed right away, he said.

Having looked at a similar capacity state-of-the art plant in Orange County built before the current inflation, before the construction boom and before the supply-chain problems, Auwaerter predicts the final price tag for Vero’s new plant could total as much as $120 million all-in. “Will they build it at any cost? No matter how much the rates will go up?” Auwaerter asked, rhetorically.

If there’s no new sewer plant, presumably the old plant stays on the river. What happens then to the hotel, dining, shopping and recreation development just north of the 17th Street bridge? Would a developer invest upwards of $100 million to build a hotel virtually next door to an aging sewer plant?

A September release of the new rates does not give customers inside or outside the city limits much time to review or comment before the planned Oct. 1 implementation.

Meanwhile Indian River Shores’ appeal of a court ruling saying Vero has the legal right to set rates that cover the cost of operating the utility is pending in the Fourth District Court of Appeals.

Indian River Shores and Vero executed a franchise agreement in 2012 tying the Shores’ rates to Indian River County Utilities’ rates through October 2027, but Vero Beach City Manager Monte Falls has said that all ratepayers – inside and outside the city – will be shifted to the one-rate plan.

South barrier island customers have no valid franchise agreement, as Vero and county officials have been unable to agree on legal wording in the document. The previous 30-year franchise agreement expired several years ago, but Vero continues to serve the unincorporated island south of the Vero Beach city limits to the Indian River-St. Lucie County line.