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IRC to address: 1) whether the rates were reasonable or prudent, and 2) whether the City was <br /> being "unjustly enriched" on the backs of the Town and other non-resident customers as a result <br /> of this utility revenue transfer. <br /> Mediator Alvarez felt it was not in the advantage of anybody to go to trial. Attorney May <br /> agreed, and felt that before the Town went down that road, which they were prepared to do, they <br /> would make a good faith offer to settle this dispute in a way they felt was fair. <br /> Attorney May presented the "Settlement Structure Offered by the Town of Indian River <br /> Shores' Mediation Team" and offered to summarize the settlement terms. Attorney Wright <br /> wanted a copy of the settlement offer to be able to discuss during lunch. <br /> Attorney May stated the settlement structure would be for the purpose of settlement and <br /> in return for the Town continuing abatement of its lawsuit against the City for five months to <br /> allow the Town to exercise its statutory rights to explore all lawful options to provide electricity <br /> to its citizens (either by itself or contracting with another utility). He added as part of the <br /> evaluation process, the Town would invite and strongly encourage the City to submit a proposal <br /> to provide electricity to the Town citizens for the next 30 years, as well as solicit proposals from <br /> other utility providers. He continued, if the City was not selected to continue, then the settlement <br /> structure would be the City and the Town could enter into good faith negotiations to determine <br /> and agree upon the most appropriate means to discontinue the provision of electric service with <br /> the Town after the Franchise Agreement expires. He concluded on June 1, 2015, if the Town <br /> would agree, that the City should continue to provide electricity after the franchise agreement <br /> expires, then they would dismiss the lawsuit. If the Town and the City do not reach a formal <br /> agreement, the Town could proceed with its lawsuit against the City. He said this would give the <br /> Town and the City time to look into the matter, and to submit a proposal to give those efforts an <br /> opportunity to crystalize before the November 2016 deadline. <br /> Attorney May handed out the proposed "Settlement Structure Offered by the Town of <br /> Indian River Shores' Mediation Team" to all parties, and a copy was given to the Indian River <br /> County Clerk to the Board. <br /> Attorney May inquired if the City had done a fiscal analysis of the impact on taxes and <br /> rates, if the Town were to leave the City's Electric system. <br /> Jim O'Connor replied in affirmative and pointed out the Town represents between 7 to <br /> 8% of the City's customer base. He indicated the analysis did not focus on sensitivities, for <br /> example, the stranded costs involved in that transaction and the impact was not really significant <br /> because the Town represents primarily residential customers as opposed to having major <br /> commercial customers. He offered to provide the Town with a copy of the analysis. <br /> A discussion ensued on the Settlement Proposal regarding rate structure; risks such as an <br /> increase in the price of gas; the three scenarios: the existing contract, the 15-year contract <br /> extension or the 9-year contract extension; the scenario where no funds obtained from the <br /> customer go into a general revenue fund and the impact to the electric rates; franchise fees; the <br /> Town of Indian River Shores - City of Vero Beach - Indian River County <br /> Electric Utilities Mediation Page 7 <br /> December 17, 2014 <br />