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bring its rates down comparable to FPL because of the City's predecessors who have locked the City into a long-term power supply; and 3) the City continues to set its rates at a level which caused the Town and other captive non-resident customers to produce millions of dollars of surplus electric revenue, which the City transfers to its general operating fund. Attorney May said that faced with those three realities, the Town believes the City no longer has the power or the will to independently manage its electric utility business and thus unable to assure that the Town and its citizens would receive fair and reasonable priced service over the long term. He said the City to date has not acknowledged that the Town has an equally independent fundamental interest and responsibility to protect its citizens from unfair rates and utility prices. He continued that the legislature has given the Town specific expressed statutory powers to provide electric service to its inhabitants by either providing the service itself, or by contracting with other utility providers. He said the core issue was not the high rates, but municipal law and whether the City had the right to assert extra -territorial monopoly electric powers and abstract monopoly rates after the franchise agreement expires in November 2016. He referred to Florida Statutes Section 180.02, Powers of Municipalities. Attorney May indicated the Town had been working on ways to solve this issue for the interest of all parties. He asked the City to consider respecting the rights of the Town to furnish electricity to its residents, pursuant to the express powers granted to the Town in the Laws of Florida, Chapter 29163. Indian River County's Opening Statement Peter O'Bryan, Indian River County Board of County Commissioners, stated the County's long held best solution in the City's electric issue was the full and complete sale of the utility to FPL. He opined the City showed a lack of will to make a 100% commitment to complete the sale, or to explore all options due to their reluctance to pass along tax increases to the citizens of Vero Beach, or to give up their subsidies to the general fund. The County felt with the restrictions of the Florida Municipal Power Agency (FMPA), the City had no leverage being under contract with the FMPA, or bargaining position, and was forced to accept these contracts that continue to perpetuate additional costs passed on to the ratepayers and not the taxpayers. The City of Vero Beach's Opening Statement Robert Scheffel "Schef ' Wright, the City's Outside Counsel, stated the City's electric rates were higher than they wished. He said the decisions by the City throughout the years had put them in the position they were in today in terms of electric rates. He reiterated the City was committed to doing everything they could to reduce the electric rates. Attorney Wright pointed out the City signed a contract to sell the whole electric system to FPL and he expounded, "you just cannot walk away from a contract". He explained that the City and the Orlando Utilities Commission (OUC) had an agreement with FMPA, of which OUC Town of Indian River Shores - City of Vero Beach - Indian River County Electric Utilities Mediation December 17, 2014 Page 3