Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
12/17/2014 (3)
BOARD OF COUNTY COMMISSIONERS IIA` December 11, 2014 ORiph Via email correspondence Carlos Alvarez,Esq. 847 East Park Avenue Tallahassee, Florida 32301 Re: Indian River County-Town of Indian River Shores- City of Vero Beach Florida Governmental Conflict Resolution Mediation Dear Mr. Alvarez: Thank you very much for willing to serve as the mediator in the Indian River County-Town of Indian River Shores-City of Vero Beach mediation as part of the Florida Governmental Conflict Resolution process. Pursuant to your letter to the three primary conflicting governmental entities dated December 2, 2014, please find below Indian River County's mediation statement. 1"W Indian River County Mediation Statement On July 21, 2014, Indian River County ("County") was formally notified that the Town of Indian River Shores ("Town") was intending to file a lawsuit against the City of Vero Beach ("City") and initiate the process set forth in the Florida Governmental Conflict Resolution Act, Chapter 164 of the Florida Statutes. In Town Resolution 2014-05, the Town raised several issues of conflict with the City, including 1) unreasonable electric rates, 2) the City's refusal to comply with the referendum requirements set forth in Section 366.04(7), Florida Statutes, and 3) the removal of the City's electric facilities from the Town upon expiration of the electric franchise agreement with the Town. On August 19, 2014, the Indian River County Board of County Commissioners ("Board") voted to adopt a resolution joining the Florida Governmental Conflict Resolution process initiated by the Town. The County shares these similar conflicts with the City. Over fifty percent of the customers of the City's electric utility are in the unincorporated areas of Indian River County. These customers are forced to pay unreasonable electric rates which are approximately thirty percent higher than those charged to customers in the unincorporated areas of Indian River County served by FPL. Indian River County will also be seeking the removal of the City's electric facilities from the unincorporated areas of the County upon expiration of the City's franchise in March, 2017. Finally, the Board shares the same concerns with respect to the City's refusal to conduct a referendum election as required by Section 366.04(7), Florida Statutes. Background On January 27, 1987, the Board adopted Resolution 87-12, which granted to the City an exclusive electric service franchise (the "Franchise") for certain unincorporated geographic areas IWOW of the County (the "Franchise Area"). The City accepted the Franchise on March 5, 1987. 13 Indian River County Mediation Statement Page 2 of 3 Pursuant to the Franchise, over time the City has erected within the Franchise certain poles, fixtures, conduits, wires, meters, cables, and other such electric transmission and distribution facilities for the purpose of supplying electricity within the Franchise. By its terms,the Franchise expires on March 4, 2017, absent a mutual agreement to continue. On February 22, 2012,the Board properly noticed the City that the County would not renew the Franchise when it expires. It is the Board's position that without the Franchise, the City no longer has the legal authority to occupy or otherwise utilize the roadways, easements, and public property within the Franchise Area. Without this legal authority, City will not be authorized or permitted to provide electric service within the Franchise Area. Additionally,the Legislature adopted Section 366.04(7),for the purpose of allowing electric service customers of an "affected municipal electric utility" the opportunity to choose self- governance. According to the City's own records, the City's customer base was within the customer range set forth in this statute and the City, otherwise met all of the other statutory preconditions for such an election. However,the City failed to conduct the required election. This issue is important since more than half of the City's customers are outside the city limits and these customers have no vote, no voice, and no redress to the Vero Beach City Commission or city officials since they cannot vote in City elections. Finally, in February 2013, the City and FPL agreed to the sale of the entire City electric utility system to FPL, and the sale of the electric system contemplates FPL serving the Franchise Area, as well as within the City limits and the Town. In March 2013, the citizens of the City overwhelmingly voted to approve a referendum supporting the sale. However, since that time the sale as described by City representatives has been "on the backburner" and is prohibited by a condition precedent. It is also important to note that the County is not a party to the lawsuit filed by the Town. The County has filed a Petition for a Declaratory Statement from the Florida Public Service Commission. The County will have filed an Amended and Restated Petition for a Declaratory Statement by the time of this mediation, seeking the Public Service Commission's guidance as to the authority of the County with respect to seeking a successor electric franchisee. Key Interests The County's key interests are as follows: 1) The County believes that the City needs to complete the sale of the City electric utility to FPL. This is the best alternative to providing all electric ratepayers within the County with a utility that is responsive to all customers, has fair and reasonable rates, and is not using electric customers to subsidize City government. 2) In the event the sale cannot be completed, the City needs to provide a functional equivalent of such a sale based upon the following three principles: a. Rates substantially similar to those of FPL. Since the mediator has requested that the parties be as specific as possible, the County would expect such rates to be in a range of plus or minus 5% of FPL rates; ly Indian River County Mediation Statement Page 3 of 3 b. Cessation of the subsidy of the City of Vero Beach general fund by the City of Vero Beach electric utility. In fiscal year 2013, the City transferred roughly $5.4 million from the electric utility to the City's general fund. As a comparison,the property tax revenues in fiscal year 2013 were approximately $4.1 million; and c. An electric utility that is controlled by a governing board that fairly and proportionally represents the geographic makeup of the City electric utility customer base. Such a board must have full and complete authority including the right to set rates, operational control, assets,budgets, subsidy flows, and sale of the electric utility. Settlement Offers I am unaware of any settlement offers proffered by any of the parties. Although the parties have had a dialogue of the various issues at the two conflict assessment meetings and the joint public meeting, no formal settlement offer has been made in this matter. County Representatives The County will be represented by the following individuals at the mediation. • Peter O'Bryan, County Commissioner • Floyd Self • Dylan Reingold, County Attorney • Joseph Baird, County Administrator Please let me know if there is any additional information you need from me. I look forward to seeing you on December 17th Sincerely, Dylan Reingold County Attorney Indian River County cc: Joseph A. Baird, County Administrator, Indian River County D. Bruce May Jr., Esq. Wayne R. Coment, Esq. Robert Scheffel "Schef' Wright, Esq, Floyd R. Self, Esq. Chester Clem, Esq. 15 Gardner, Bist, Wiener, GBW Bowden, Bush, Dee, LaVia & Wright, P.A. ATTORNEYS AT LAW Michael P. Bist 1300 Thomaswood Drive Bruce I.Wiener** Garvin B. Bowden** Tallahassee, Florida 32308 Wendy Russell Wiener Benjamin B. Bush Bedford Wilder David S. Dee www.gbwlegal.com Robert Scheffel'Schef'Wright Erin W. Duncan Charles R. Gardner Telephone Facsimile John T. LaVia, III 850-385-0070 850-385-5416 **Board Certified Real Estate Lawyer December 12 , 2014 BY ELECTRONIC MAIL ONLY Carlos Alvarez, Esquire 847 East Park Avenue Tallahassee, Florida 32301 Re: The City of Vero Beach's Non-Confidential Mediation Statement Dear Carlos, The pending disputes between the Town of Indian River Shores and Indian River County, on the one hand, and the City of Vero Beach, on the other, are scheduled to be mediated by you at the City of Vero Beach Community Center at 9 :30 A.M. on Wednesday, December 17, 2014. The City will be represented at the mediation by The Honorable Richard G. Winger, Mayor, James R. O'Connor, City Manager, Wayne R. Coment, Esquire, City Attorney, and me. Consistent with your Mediation Retention and Scheduling Letter of December 2, 2014, the City provides the following information regarding the facts and law applicable to the pending disputes, the City's interests in these disputes, and the City's past proposals and its ongoing efforts to resolve the issues in dispute. Procedural Background of the Disputes The mandatory procedures of the Florida Governmental Conflict Resolution Act, Chapter 164, Florida Statutes ("Act") , were invoked by the complaint filed by the Town of Indian River Shores ("Town") in the Circuit Court in and for Indian River County on July 18, 2014. As provided for by the Act, Indian River County ("County" ) has joined these dispute resolution proceedings as an additional "conflicting governmental entity. " As discussed briefly below, the County has also 1 f(D filed a petition for declaratory statement to the Florida Public Service Commission ("PSC") raising issues similar to those raised in the Town's Complaint. Indian River Shores' Complaint The Town's Complaint raised four counts, summarized here: 1 . For declaratory relief that the City's electric rates "are unreasonable, unjust, and inequitable in violation" of law, and injunctive relief enjoining the City from charging such rates; 2 . For declaratory relief that upon the expiration of the existing franchise agreement between the Town and the City, "the City has no legal authority to provide extra-territorial electric service to customers residing within the corporate limits of the Town, " and that upon "expiration of the Franchise Agreement on November 6, 2016, the Town has a legal right to seek substitute electric service from other providers; " 3 . For declaratory relief that the City is subject to and must comply with the provisions of Section 366. 04 (7) , Florida Statutes, which would require municipalities meeting certain criteria to hold a referendum of their customers regarding the establishment of a utility authority to operate the business of the electric utility; and NOW 4. For declaratory relief that the City's denial of the rights of co-plaintiff Michael Ochsner to vote in the referendum constitutes a Constitutional violation of Mr. Ochsner's rights to due process and equal protection of the law. Indian River County's Petition for Declaratory Statement On July 21, 2014, Indian River County ("County") filed a petition for declaratory statement ("Petition") with the Florida Public Service Commission ("PSC") , in which the County requested 14 separate declarations from the PSC. Generally, the requested statements seek the PSC's declaration that upon expiration of the existing franchise agreement between the County and the City, the City will no longer have the right or authority to provide electric service to customers located in the unincorporated areas of the County outside the City limits . The County's Petition also asked the PSC to declare its status as either a "public utility" or an "electric utility, " defined terms with certain regulatory implications, under the PSC's governing statutes, mentioned the referendum issue raised by the Town, and asked for the PSC's advice regarding potential County liability for the City's contract obligations, continuing PSC jurisdiction, or lack thereof, over what are now the City's electric distribution 2 �l facilities, and certain transitional issues . The City responded by filing both a motion to dismiss and a response in opposition to the requested statements; Florida Power & Light Company ("FPL" ) , Duke Energy Florida ("Duke") , Tampa Electric Company ("Tampa Electric" ) , the Florida Electric Cooperatives Association, the Florida Municipal Electric Association ("FMEA") , and the Orlando Utilities Commission ("OUC" ) also filed responsive pleadings in opposition to the County's requested statements. On November 13, 2014, the PSC Staff issued its recommendation to deny the County's Petition, which the PSC was scheduled to consider at its agenda conference on November 25, 2014 . On the morning of November 25, however, the County requested and was granted a deferral of its Petition from the PSC's scheduled agenda. The PSC is now expected to hear the matter at its agenda conference on February 3, 2014. Historical Background The City of Vero Beach was initially incorporated in 1919 as the City of Vero, and reincorporated as the City of Vero Beach in 1925. (Coincidentally, Indian River County was also created in 1925. ) The City has operated a municipal electric utility system since 1920, when it purchased the original small power plant, poles, and lines from the Vero Utilities Company. Naturally, the City's service area has grown since 1920, and during the intervening 94 years, the City has served customers inside and outside the City limits, pursuant to its own ordinances, pursuant to requests by customers living outside the City limits, pursuant to its powers under Florida Statutes, and, since at least 1972, pursuant to orders of the Commission approving the City's service area in territorial agreements with ("FPL") . Today, the City serves within the service area described in its territorial agreement with FPL, which agreement has been approved, with amendments over time, by the following Commission orders : In re: Application of Florida Power and Light Company for approval of a territorial agreement with the City of Vero Beach, Docket No. 72045-EU, Order No. 5520 (August 29, 1972) ; In re: Application of Florida Power & Light Company for approval of a modification of territorial agreement and contract for interchange service with the City of Vero Beach, Florida, Docket No. 73605-EU, Order No. 6010 (January 18, 1974) ; In re: Application of FPL and the City of Vero Beach for approval of an agreement relative to service areas, Docket No. 800596-EU, Order No. 10382 (November 3, 1981) ; In re: Application of FPL and the City of Vero Beach for approval of an agreement relative to service areas, Docket No. 800596-EU, Order No. 11580 (February 2, 1983) ; and In re: Petition of Florida Power & Light Company and the City of Vero Beach for Approval of Amendment of a Territorial Agreement, Docket No. 3 Ig 871090-EU, Order No. 18834 (February 9, 1988) (collectively referred to as the "Commission's Territorial Orders") . The City's service area, as approved by the Commission's Territorial Orders, includes the area within the City limits, areas outside the City limits in unincorporated Indian River County, and most of the Town of Indian River Shores. On information and belief, the City asserts that it has served areas outside the City limits since as early as the 1930s, and probably since the 1920s . The earliest known documentary evidence of the City serving outside the City limits is found in Chapter No. 599 of the City's ordinances, enacted on October 21, 1952 . This ordinance clearly shows that the City was serving outside the City limits at least as early as that year. In 1974, the Legislature enacted the Grid Bill, Chapter 74-196, Laws of Florida, which among other things made the Commission' s "implicit authority" over territorial agreements and territorial disputes explicit, Public Service Comm'n v. Fuller, 551 So. 2d 1210, 1212 (Fla. 1989) , and also gave the Commission express jurisdiction over the "planning, development, and maintenance of a coordinated electric power grid throughout the state of Florida" and the "responsibility of avoiding the uneconomic duplication of facilities . " Id. ; Fla. Stat. § 366 . 04 (5) . In sum, in the 1980 and 1987 dockets, the Commission exercised its jurisdiction under its Grid Bill authority, codified in Chapter 366, to approve the territorial agreements between FPL and Vero Beach in order to prevent the uneconomic duplication of facilities and to provide for the most efficient service to the area in question. In 1986, following on the already considerable history of the City serving outside its corporate boundaries, the City and the Town of Indian River Shores entered into a 30-year franchise agreement. In 1987, the City and Indian River County also entered into the 30-year franchise agreement discussed in the Board's Petition (the "County-City Franchise Agreement" or the "Franchise Agreement") . Neither Indian River Shores nor the County had ever had a franchise agreement with the City before 1986 or 1987, respectively. Although facially obvious, it bears noting that the Commission's express statutory territorial jurisdiction had been in effect for more than a decade before either franchise agreement was executed, and that the Commission's jurisdiction and power to approve territorial agreements had been in effect, as upheld and approved by the Florida Supreme Court, for two decades before either franchise agreement existed. Although authorized to do so, the Town has never asked the City to collect and remit franchise fees to the Town. Pursuant to the County-City Franchise Agreement, the City has consistently collected and remitted franchise fees to the County. 4 �� In February 2013, the City entered into an Asset Purchase and Sale Agreement with FPL, pursuant to which the City agreed to sell the City Electric System (as defined below) to FPL, subject to a number of conditions precedent to closing the planned system sale. As events have unfolded, at the present time there are doubts as to whether the proposed sale can be consummated, because it appears that a specific condition precedent to closing the sale cannot be fulfilled. The City and FPL, however, are continuing their discussions to determine whether another path to closing the sale can be found. In furtherance of the City's efforts to reduce its retail electric rates, the City, FPL, and the Orlando Utilities Commission ("OUC, " which supplies roughly 40 percent of the City's wholesale power needs pursuant to a Power Purchase Agreement entered into in 2008) have executed a three-party letter pursuant to which the City will be working with both FPL and OUC to identify and implement measures to reduce the City's electric rates. Today, pursuant to the Commission's Territorial Orders, pursuant to its home rule powers, pursuant to its powers under Chapter 166 and Chapter 180, Florida Statutes, and pursuant to other legal authority, the City operates an electric generating plant, transmission lines and related facilities, and distribution lines and facilities (collectively the "City Electric System" ) , which serves approximately 34, 000 customer accounts (meters) , of which approximately 12, 900 accounts (meters) are located within the City limits and approximately 18, 400 accounts (meters) are located outside the City limits . Approximately 3, 000 of the outside-the-city-limits customer accounts (meters) are located in the Town of Indian River Shores, with the balance located in unincorporated Indian River County. Some of the City's transmission and distribution facilities in the unincorporated areas of the County are located in County road rights of way; the balance are located in State rights of way, on private roads, and in private easements . The City's preliminary estimates indicate that approximately 20 percent of the City's transmission and distribution lines in the unincorporated areas of the County are located in County road rights of way. In reliance on the Commission's Territorial Orders and in exercising its home rule powers, as well as in reliance on its powers under Section 180 . 02 (2) , Florida Statutes, and other legal authority, including reliance on the fact that both Indian River County and Indian River Shores knew of and allowed the City to use their rights of way for decades before any franchise agreements ever existed, the City has for nearly 100 years provided safe, adequate, reliable, and sufficient service to its customers both inside and outside the City limits . In fulfilling this necessary public purpose, the City has invested tens of millions of dollars, borrowed tens of millions of dollars, and entered into long-term power supply projects and related contracts, also involving millions of dollars of long-term financial commitments, in 5 ao order to serve all of the customers in the City's service area approved INOW by the Commission's Territorial Orders. Legal Background The PSC's statutes applicable to the key issues in this case include Sections 366 . 04 (1) , 366. 04 (2) (d)&(e) , and 366. 04 (5) , Florida Statutes . Section 366 . 04, Florida Statutes, sets forth the Legislature's grant of jurisdiction to the Commission, and Section 366. 04 (1) articulates the Legislature's clear mandate that the Commission's jurisdiction is exclusive and superior to that of all other state agencies, political subdivisions, and other entities, specifically including counties and towns, providing in pertinent part as follows: The jurisdiction conferred upon the commission shall be exclusive and superior to that of all other boards, agencies, political subdivisions, municipalities, towns, villages, or counties, and, in case of conflict therewith, all lawful acts, orders, rules, and regulations of the commission shall in each instance prevail . Sections 366. 04 (2) (d) & (e) , Florida Statutes, which set forth the Commission's jurisdiction over territorial agreements and territorial disputes, provide in pertinent part as follows: (2) In the exercise of its jurisdiction, the commission shall have power over electric utilities for the following purposes : (d) To approve territorial agreements between and among rural electric cooperatives, municipal electric utilities, and other electric utilities under its jurisdiction. However, nothing in this chapter shall be construed to alter existing territorial agreements as between the parties to such agreements. (e) To resolve, upon petition of a utility or on its own motion, any territorial dispute involving service areas between and among rural electric cooperatives, municipal electric utilities, and other electric utilities under its jurisdiction. In resolving territorial disputes, the commission may consider, but not be limited to consideration of, the ability of the utilities to expand services within their own capabilities and the nature of the area involved, ..Wr 6 a � including population, the degree of urbanization of the area, its proximity to other urban areas, and the present and reasonably foreseeable future requirements of the area for other utility services. Section 366 . 04 (5) , Florida Statutes, codifies the Commission's jurisdiction over the State's generation, transmission, and distribution grid, and provides in pertinent part as follows: (5) The commission shall further have jurisdiction over the planning, development, and maintenance of a coordinated electric power grid throughout Florida to assure an adequate and reliable source of energy for operational and emergency purposes in Florida and the avoidance of further uneconomic duplication of generation, transmission, and distribution facilities. Additionally, Section 366 . 04 (7) , Florida Statutes, is also invoked by the Town as a basis for its Complaint; the County has also mentioned this statute in one of the requested declaratory statements in its Petition. That section, as originally enacted in 2008, 1 provided as follows : (7) (a) As used in this subsection, the term `affected municipal electric utility" means a municipality that operates an electric utility that: 1. Serves two cities in the same county; 2 . Is located in a noncharter county; 3 . Has between 30, 000 and 35, 000 retail electric customers as of September 30, 2007; and 4. Does not have a service territory that extends beyond its home county as of September 30, 2007 . (b) Each affected municipal electric utility shall conduct a referendum election of all of its retail electric customers, with each named retail electric customer having one vote, concurrent with the next regularly scheduled general election following the effective date of this act. (c) The ballot for the referendum election required under paragraph (b) shall contain the following question: "Should a separate electric utility authority be created to operate the business of the electric utility in the affected municipal electric utility?" The statement shall be followed by the word "yes" and the word "no. " 1 Subsection (e) of this statute was repealed in 2014. 7 as (d) The provisions of the Election Code relating to notice and conduct of the election shall be followed to the extent practicable. Costs of the referendum election shall be borne by the affected municipal electric utility. (e) If a majority of the affected municipal electric utility's retail electric customers vote in favor of creating a separate electric utility authority, the affected municipal electric utility shall, no later than January 15, 2009, provide to each member of the Legislature whose district includes any portion of the electric service territory of the affected municipal electric utility a proposed charter that transfers operations of its electric, water, and sewer utility businesses to a duly-created authority, the governing board of which shall proportionally represent the number of county and city ratepayers of the electric utility. Section 37, Laws of Florida, Chapter 2008-227 . The specific Commission orders that are directly applicable to the City's right to provide retail electric service in its existing service area are the Commission's Territorial Orders identified above. Legal Issues Ultimately, the Town's and County's complaints ground in their desire for lower electric rates. For example, the Town's representatives have repeatedly stated that, if the City cannot provide service at the rates charged by FPL, the Town intends - assuming that it has the legal right and power to do so - to evict the City from the Town and thereafter to either set up its own electric utility or to choose another supplier. Similarly, the County has asked the PSC to declare that once the franchise agreement between the City and the County expires in 2017, the territorial agreements approved by the PSC will become invalid, and that there will be no limitations on the County's ability to grant another successor utility an exclusive franchise to serve where the City now provides service in the unincorporated areas of the County. Petition at 31 . The County also complains that the City's rates are higher than FPL's, Petition at 21-22, and about the City's transfer of 6 percent of its electric revenues to the City's General Fund. Petition at 21. Contrary to the Town's and County's positions, the Florida PSC has "exclusive and superior jurisdiction" over what utilities serve in what areas, and the existence, absence, or expiration of a franchise agreement is irrelevant to the PSC's jurisdiction and to the City's right and obligation to serve in its PSC-approved service area. „400„ 8 a3 The issue of the reasonableness of the City's retail rates is indeed one for the courts of Florida. Storey v. Mayo, 217 So. 2d 304, 308 (Fla. 1968) . Regarding what does or does not constitute "unreasonable" rates, in Rosalind Holding Co. v. Orlando Utilities Commission, 402 So. 2d 1209 (Fla. 5t DCA, 1981) , the Fifth DCA articulated the standard for complaints regarding the alleged unreasonableness of rates charged by municipal electric utilities, such as the Town's claims in the current dispute, as follows : A person seeking to attack in the courts the rates charged by a utility has the burden of showing that the rates are outside or beyond the "zone of reasonableness, " as established by the evidence, and not necessarily by the PSC, so as to be confiscatory or discriminatory. Absent a controlling statute, a municipal utility, like any other utility, is entitled to earn a reasonable rate of return on its capital and its rates may be set so that it earns a rate of return on its equity comparable to other similar businesses . Id. at 1210-11 . In Rosalind, the Fifth DCA ultimately affirmed a circuit court's decision that OUC was entitled to earn a return in the range of 13 .5 percent to 16 percent; the actual percentage value was disputed by the parties' expert witnesses, but the court held that even the higher value did not violate the applicable standard. As applied to Vero Beach, the City believes that, per the holding of the Fifth DCA in Rosalind, its rates are reasonable. The City further believes that its underlying costs - while higher than the City wishes they were - are reasonable and prudent, as well as based upon decisions made by previous City Councils that were reasonable and prudent based on all facts known to the City at the time the decisions to incur those costs were made. Objectively, as of October 2014, the City's current rates (using the standard benchmark of the cost for 1, 000 kilowatt-hours of residential service) are slightly above the average of Florida's municipal utilities; relative to the rates of Florida's investor-owned utilities, whose rates are regulated by the PSC, the City's rates are less than those of Gulf Power Company and Florida Public Utilities Company, within 1.5 percent of Duke Energy Florida, and greater than those of FPL and Tampa Electric Company. Additionally, the City transfers 6 percent of its revenues to the 2Copies of the Storey v. Mayo and Rosalind Holding Co. decisions are . � included as Attachment E to this mediation statement. 9 aq City's General Fund. This is well below the average and the median for Florida's other municipal utilities. As shown on Attachment A, of 32 Florida municipal electric utilities, only 5 utilities transfer less than 6 percent of their revenues to their general funds, while another 6 also transfer at the same 6 percent rate as Vero Beach, and the remaining 20 utilities transfer at rates between 7 percent and 26 percent. Accordingly, the magnitude of the City's General Fund transfer cannot be said to be unreasonable by any standard, and certainly not relative to the standard articulated by the Fifth DCA. With regard to the Town's and County's assertions that they may evict the City from their rights-of-way (or from their geographic limits altogether) , the City firmly believes that this issue - who, as between the Town and County, on the one hand, and the Florida Public Service Commission, on the other, may say what utility serves what customers - belongs before the Florida Public Service Commission. In the Grid Bill, the Florida Legislature expressly gave the PSC the exclusive and superior jurisdiction over service territories, and over the "planning, development, and maintenance of a coordinated electric power grid throughout the state of Florida" and the "responsibility of avoiding the uneconomic duplication of facilities. " Public Service Comm'n v. Fuller, 551 So. 2d 1210, 1212 (Fla. 1989) ; Fla. Stat. § 366.04 (5) . Further, the PSC has exercised its exclusive jurisdiction with respect to the City's service area by approving the territorial agreements through its Territorial Orders. As discussed briefly below, the City believes that the referendum provisions of Section 366 . 04 (7) , Florida Statutes, do not apply to the City. Notwithstanding the City's position, however, as a gesture of good faith to address the concerns of its customers, the City has authorized its Staff to work cooperatively with the Town, the County, and other interested customers toward holding a referendum and toward developing an ordinance to establish a utility authority with geographic representation to "operate the business of the electric utility" as contemplated by that statute. The City's Interests The City of Vero Beach endeavors to provide reliable electric service to its customers at the lowest reasonable cost, consistent with maintaining reliability, operating its system in accordance with good utility practice, and, like most municipal utilities in the United States and in Florida, earning a reasonable return on its investment, which the City's Electric Utility transfers to support its General Fund. The City's service is highly reliable; in fact, the City's service is better than Florida's investor-owned utilities by virtually every standard reliability metric. 10 0 ,-Mw Accordingly, the City' s interests are to maintain its highly reliable service and to earn a reasonable return on its investment, consistent with the standard articulated by the Fifth DCA in Rosalind. Consistent with those interests, the City will continue its active and ongoing efforts to reduce its rates, but the City will insist on its ability to charge rates that generate sufficient funds to pay for the capital and operating expenses necessary to do so. The City's Efforts to Resolve the Pending Disputes While not styled as "settlement offers, " the City of Vero Beach has undertaken extensive action to address the concerns of all of its customers, including the concerns raised by the Town and the County. As noted above, in its ongoing efforts to address the desire of the Town, the County, and other customers for lower rates, the City spent more than two years and expended substantial sums - in excess of $1.7 million - in its efforts to consummate the sale of its electric utility system to FPL. Further, the City remains willing to sell its system to FPL, but at this time, neither FPL nor the City have been able to identify a way forward to consummate that sale. Again, the insurmountable obstacle to closing the sale to FPL is the failure of a critical, necessary condition precedent to the sale, which is finding another municipal utility willing and able to take assignment of the City's rights and responsibilities under the project contracts for the Stanton Project, the Stanton II Project, and the St. Lucie Project of the Florida Municipal Power Agency, through which the City has obtained virtual ownership interests in the named power plants . After it became apparent, at the beginning of June 2014, that this critical condition precedent would be difficult if not impossible to meet, the City turned its attention to addressing the concerns of the City Council and the concerns of the City's electric customers. The most important of those concerns is to lower the City's electric rates, and additionally, the City has moved forward with efforts to hold the referendum sought by the Town and also to work collaboratively with the Town and the County to establish a utility authority. The City's Efforts to Lower Electric Rates. In its efforts to lower its retail rates, City representatives have met several times with OUC senior management to discuss ways in which the pricing under the OUC-Vero Beach PPA might be adjusted in a fair way that would enable the City to reduce its retail rates. Those efforts and discussions are ongoing; they are summarized in a memorandum dated December 1, 2014, from the undersigned to the Vero Beach City Council. See Attachment B. In short, OUC has proposed two different sets of potential amendments: one set would provide greater cost savings but would entail keeping the PPA in place through 2029 and other value 11 a (O items in favor of OUC, while the other set would provide lesser cost savings to the City but would keep the PPA in place only through 2023 . The City is in the process of evaluating the various terms, with its goal being to select the option that provides maximum value to all of its electric customers. Beyond those efforts, the City has also entered into a contract with Public Resources Management Group, Inc. , to perform a comprehensive "Rate Study, " which will include, among other products, an evaluation of the feasibility of financing transmission and distribution capital expenditures with debt, rather than with current funds, as potential means of lowering rates. The Rate Study is expected to be complete by April 2015. Additionally, the City issued a Request for Proposals and received several responses for a study of ways to improve the electric utility's efficiency, including ways to lower costs. The City expects to execute the contract for that study in January 2015, and expects that study to be complete by July 2015 . The City's Referendum Initiative. Following enactment of the original version of Section 366 . 04 (7) , Florida Statutes, the City considered whether that Act applies to the City at a City Council meeting in August 2008 . The City concluded that, by the express terms of the Act, the City was not subject to the Act for two reasons: (1) the number of "named retail electric customer[s] " as of September 30, 2007, who were to be the electors franchised to vote in the referendum prescribed by the Act, was 27, 854, which is less than the lower bound of the range (30, 000 to 35, 000 customers) set forth in the Act; and (2) the City served customers outside its home county (in St. Lucie County, whereas the City's home county is Indian River County) on September 30, 2007, and accordingly, by this criterion, the City was also outside the applicability criteria in the Act. Notwithstanding its determination that the Act does not apply to the City, the City has stated publicly, at the previous meetings in this dispute resolution process, that the City will work toward holding the referendum sought by the Town (and perhaps by the County) . To that end, the City contacted the Indian River County Supervisor of Elections, The Honorable Leslie Rossway Swan, to inquire as to her ability to conduct the referendum; she replied that she cannot, because the electors are "named retail electric customer[s] " as opposed to registered voters, and also because her office can only conduct elections involving entire districts, e.g. , County Commission districts, Florida House Districts, and the like. Further, the City engaged Mr. Ronald A. Labasky, the General Counsel for the Florida State Association of Supervisors of Elections, to advise the City as to how the sought-after referendum may be conducted. On December 2, 2014, the Vero Beach City Council adopted its Resolution No. 2014-41 (Attachment C hereto) , by which it authorized City Staff to work , 12 al cooperatively with representatives of the Town and the County, with other interested customers, and with the Indian River County Supervisor of Elections toward such referendum. The City stands ready, willing, and able to move forward with the referendum. The City's Utility Authority Initiative. Notwithstanding the City's determination that the Act does not apply, City representatives stated at the earlier meetings in this dispute resolution process that the City would work with the County and the Town toward the establishment of a utility authority or similar body with geographic representation of customers inside and outside the City limits to operate the business of the electric utility, as contemplated by the Act. To that specific end, at its meeting on December 2, 2014, the Vero Beach City Council adopted its Resolution No. 2014-40 (Attachment D) , by which it authorized City Staff to work in consultation and collaboration with representatives of City electric customers, including the Town and the County, to develop a "proposed ordinance that would provide for establishment, structure, powers, operational matters, and other necessary attributes of a separate utility authority to operate the business of the City's electric utility system. " Thus, as described above, the City has undertaken to address the specific concerns raised by the Town and the County - a desire for lower rates, to hold a referendum pursuant to Section 366.04 (7) , Florida Statutes, and to work cooperatively with the Town, the County, and other customers to develop an ordinance for the establishment of a utility authority with geographic representation of all of the City's customers, both inside and outside the City limits, to operate the business of the City's electric utility system. In short, the City has taken major steps to address the issues in dispute here, in good faith, to the maximum extent reasonable. Beyond these steps, the City has no additional suggestions to settle the disputes . The disputes in this mediation center on the desire of the Town of Indian River Shores and Indian River County to have lower electric rates . Because the Town brought its complaint against the City in the Circuit Court in and for Indian River County, the mandatory procedures of the Florida Governmental Conflict Resolution Act, Chapter 164, Florida Statutes ("Act") , are invoked, and this mediation is the last step in the dispute resolution processes prescribed by that Act. Relative to the Town's and County's desires to choose different electric suppliers, the PSC's jurisdiction over what utilities serve what service areas is "exclusive and superior" to that of all other entities of Florida government, specifically including towns and counties . Moreover, as the Florida Supreme Court has held, 13 a� An individual has no organic, economic or political right to service by a particular utility merely because he deems it advantageous to himself . Lee County Elec. Co-op. v. Marks, 501 So. 2d 585, 587 (Fla. 1987) (quoting Storey v. Mayo, 217 So. 2d 304 (Fla. 1968) , cert. denied, 395 U.S. 909 . ) The City's mediation team and I look forward to seeing you and the parties next Wednesday. If you have any questions, please call me any time. Cordially yours, 1 Robert Scheffel W t Counsel for the City of Vero Beach COPIES: Members of the Vero Beach City Council James R. O'Connor, City Manager Wayne R. Coment, City Attorney Bruce May, Esquire Chester Clem, Esquire Dylan Reingold, Esquire Floyd Self, Esquire 14 a� Vero Beach Mediation Statement Attachment A Florida Municipal Electric Utilities October 1,2012-September 30,2013 Electric Utility Electric Utility Electric Utility Gross transfer to city's transfer as a%of Revenues generalfund Gross Revenues Alachua $14,602,687 $1,621,117 11% Bartow $35,306,567 $9,256,751 26% Blountstown $4,493,375 $1,094,866 24% Bushnell $3,446,171 $336,059 10% Chattahoochee $4,175,000 $975,000 23% Clewiston $7,970,215 $873,922 11% Fort Meade $3,949,000 $422,945 11% Fort Pierce $65,077 988 $3,670,165 6% Gainesville $258,635,068 $20,144,128 8% Green Cove Springs $13,945,440 $900,000 6% Havana $2,919,381 $628,800 22% Homestead $63,791,508 $7,968,878 12% Jacksonville Beach $99,931,547 $3,294,311 3% JEA $1,398,998,500 $83,969,075 6% Key West $100,460,458 $408,290 0% Kissimmee $190,382,592 $9,779,043 5% Lake Worth $52,020,000 $2,151,041 4% Lakeland $311,140,091 $24,775,000 8% Leesburg $65,268,895 $5,288,993 8% Moore Haven $2,007,060 $365,111 18% Mount Dora $11,713,800 $1,332,500 11% New Smyrna Beach $44,615,749 $2,637,848 6% Newberry $4,111,699 $357,500 9% Ocala $155,000,000 $8,719,746 6% OUC/St.Cloud $783,774,000 $74,872,000 10% Quincy $15,172,855 $3,845,121 25% Starke $9,822,500 $312,200 3% Tallahassee $268,439,184 $23,900,000 9% Vero Beach $90,949,000 $5,612,400 6% Wauchula $6,010,207 $414,750 7% Williston $4,015,762 $627,000 16% Winter Park $49,414,166 $2,720,000 6% TOTALS $4,141,560,466 $303,274,560 7% 3o Vero Beach Mediation Statement Attachment B `o Gardner, Bist, Wiener, G B W Bowden, Bush, Dee, LaVia& Wright, P.A. A"URNMATLAW Michael P.Hist 1300 Thonlaswood Drive Bruce 1.Wiener" Garvin B.Bowden" Tallahassee,Florida 32308 Wendy Rusaell Wiener Benjamin B.Bush Bedford Wilder David S_Dee www.gbwlegal.comn Robert Scheffel`Scher Wright Erin W.Duncan Charles R.Gardner Telephone Facsimile John T.Wm,111 850-385-0070 850-385-5416 "B-M r*+Irwd Rent Zemte Lauver RRX0RaXDUX December 1, 2014 TO: JAMES R. O'CONNOR, CITY MANAGER WAYNE R. COMENNT, CITY ATTORNEY FROM: ROBERT SCHEFFEL WRIGHT SUBJECT: UPDATES REGARDING OUC PPA DISCUSSIONS This memorandum summarizes the current status of the ongoing discussions between the City and Orlando Utilities Commission ('oUCe) regarding possible changes to the City's 2008 Power Purchase Agreement (the 12008 PPA") with OUC. Following discussion of OUC's previously suggested "Discussion Points" (potential terms of an Amended and Restated PPA) at both the City Council and Utilities Commission meetings on October 21, I communicated concerns raised at those meetings to OUC, and the City Manager and I met with OUC senior management again on November 19 to discuss those concerns and how they might be addressed in revised PPA terms. On November 25, I received revised terms from OUC. In summary, the revised terms would include: (1) a shorter PPA term, through 2023 instead of through 2029; (2) no unilateral option for OUC (or the City) to terminate the PPA earlier than 2023; (3) no 'St. Lucie Option;" (4) an opportunity for the City to •recall" or reclaim its FGT gas transportation contracts if needed to fuel new gas-fired capacity built by the City by December 31, 2024, to serve the City's native load; and (5) capacity prices for the Base Capacity purchased by the City that are less than under the 2008 PPA but greater than in the October 20 terns. The key differences between the October 20 'Discussion Points," which were presented and discussed at the October 21 Council and Utilities Commission meetings, the November 25 Discussion Points, and the 2008 OUC-COVE PPA are summarized on Attachment A. (Attachment B consists of the October 20 Discussion Points and pricing table, and Attachment C consists of the November 25 Discussion Points and pricing table. ) 31 y... sackgrauad As you }mow, City Manager Jim O'Connor and I have met with OuC several times since August in our ongoing efforts to obtain amendments to the 2008 PPA that would enable the City to reduce our retail electric rates. On October 20, OUC provided to the City a list of "Discussion Points' that included: (1) significant reductions in the Capacity Payment rates as compared to those in the 2008 PPA; (2) a `minimum take" or `floor" in the amount of base capacity that the City would have to purchase in any year of 85 MW; (3) purchase by the City of 54.5 MW of Peaking Capacity to replace the capacity of the Vero Beach Power Plant; (4) a unilateral option for OUC to terminate the PPA in or after 2020, with 2 years notice to the City; (5) an option for oUC to purchase the City's capacity and energy entitlement from the St. Lucie II Power Plant, pursuant to a PPA (as opposed to an assignment) ; and (6) OUC would receive permanent rights to (and obligations under) the City's gas transportation contracts with FGT. The October 20 Discussion Points and pricing for both the Base Capacity and the Peaking Capacity purchases are included as Attachment B to this memo. Discussion at the City Council and Utilities Commission meetings on October 21 included concerns expressed by members of the Utilities Commission and others that centered on: (1) the fact that the City would still be in a PPA with OUC that would continue through 2029; (2) the "St. Lucie Option" in the October 20 Discussion Points by which OUC would have an option to acquire the City's share of the output of the St. Lucie II Power Plant from the date when the option would be exercised through the end of the St. Lucie Plant's useful life (presently expected to be 2043) ; (3) permanent release to OUC of the City's gas transportation contracts with FGT; and (4) the unilateral opportunity for OUC to terminate the PPA in or after 2020. Responding to those concerns, I communicated the concerns to OUC, and City Manager Jim O'Connor and I met again with OUC senior management on November 19, 2014 to discuss whether there might be alternatives to the terms set forth in the Discussion Points that oUC provided to us on October 20, 2014. Following that meeting, on November 25, 2014, we received revised, alternative terms (Attachment C) that are set forth in a document comparable to the October 20 Discussion Points, as well as a table of revised prices for both the Base Capacity purchase under the PPA and also for the purchase of 54.5 MW of Peaking Capacity (which would enable the City to retire the Vero Beach Power Plant) . 2 3c. niscussiome 2008 PPA vs. October 20 Proposal vs r 25 proposal Attachment A is a table that summarizes the key points of the City's existing 2008 PPA with OUC as compared to the October 20 Discussion Points and the November 25 Discussion Points. In summary, the November 25 Discussion Points address the concerns mentioned above by: (1) reducing the term of the PPA by 6 years, so that it would terminate at the end of 2023 instead of 2029; (2) the unilateral option for OUC to terminate the PPA is deleted; (3) the %St. Lucie Option" is deleted; and (4) OUC would still be in line to receive or obtain the City's rights to the FGT gas transportation contracts, @�t that the City would get the right to recall or reclaim those contracts if the City were to build new gas-fired generating capacity at the existing Vero Beach Power Plant site to serve the City's native load. Not surprisingly, because of the lesser value to OUC of the revised terms, the Capacity Payments in the November 25 Discussion Points are higher than those in the October 20 Discussion Points, but still less than those in the 2008 OUC-COVE PPA. The other changed terms are the same as in the October 20 Discussion Points. Naturally, since the revised, November 25 Capacity Payments are greater than under the October 20 Discussion Points, the savings to the City are less. Because the estimated effective date of the amendments is now assumed to be October 1, 2015, the 2015 savings are significantly less than under the October 20 proposal, about $1.3 million in 2015 vs. about $7 million under the previous proposal. Because of the higher pricing, the savings in 2016-2018 are also less - e.g., about $5.5 million in 2016-2017 vs. about $7 million in 2016-2017 under the October 20 proposal. Also, because the new proposal would terminate the PPA as of 2023, there would be no known or definite savings from the end of 2023 going forward. In nominal dollar terms, the total savings of the October 20 proposal vs. the 2008 PPA would be about $68.7 million (including an adjustment to reflect the current projected implementation date of October 1, 2015) , and under the November 25 proposal, the nominal dollar savings are about $37.8 million (also reflecting the October 1, 2015 implementation date) . (These savings are summarized in Attachment D to this memo.) In practical terms, this would limit the City's ability to reduce retail electric rates in 2016, 2017, and 2018 to somewhat less than the reductions that would have been possible with the October 20 proposed Capacity Payment rates. The termination as of 2023 would also eliminate any known, definite savings available through PPA amendments as compared to performing the 2008 PPA through its current termination date, December 31, 2029. Actual results may be better or worse than the longer-term option (i.e. , 3 ° 33 the October 20 proposal) depending on whether the longer-run cost of capacity in the market is greater than or less than the costs available to the City under the October 20 proposal. Additionally, although not reflected on the term sheet, OUC's senior management have indicated that they would be happy to receive and process employment applications from any City employees whose positions would be terminated upon retirement of the Power Plant, Additional Analyses Needed for City Decision At my request, OUC senior management have confirmed to me that the City can choose either the October 20 terms or the November 25 terms, subject to the approval of the OUC Board. There are a number of elements ("moving parts") to be addressed in analyzing the three alternatives available to the City, i.e., simply performing the 2008 PPA until its termination in 2029, the October 20 proposal, and the November 25 proposal. Needed additional analyses will, I believe, include sensitivity analyses relating to future costs of capacity and energy in the market since, under the November 25 proposal, the City will be in the market as of January 1, 2024, and what the City believes about the relationship between OUC's proposed Capacity Payment rates and the market rates for Base Capacity and Peaking Capacity from 2024 through 2029; the value of the St. Lucie Option; the value to the City of possibly keeping, or being able to recall, the rights to the FM contracts; how these variables would fit into the City's electric rates; and other variables and considerations. I would recommend that the City undertake such analyses as soon as practicable so that the City Council will be in the best possible position to make an informed decision as soon as practicable. Because of the need to make transmission arrangements to accommodate either set of amendments, at some point, delay will almost certainly impinge on the City's ability to implement either option in October 2015. Thank you again for the opportunity to be of service to the City of Vero Beach and your citizens. I look forward to seeing you again soon. If you have any questions, please call me any time. Attachments COPIES: CINDY LAWSON, FINANCE DIRECTOR TOM RIMMRDS, ELECTRIC UTILITIES DIRECTOR .. 4 3q COMPARISON OF M1.1 TERMS IN EXISTING ouc-cOVB POWER PURCHASE AGREE TO AMENDMENT ALTERNATIVESMEMT COIbTRAC?GDNIPONENT EXISTING PPA CCT013ER 2�2014 NOVEMBER 25 2014 Contract Termination ng- DISCUSSION POINTS 12/31/2029 DISCUSSION POINTS Base Capacity Payments 12/31/2029 $13,205/MW-month in 2015, $5,500/MW-month in 2015, W31/2023 Increasing to$14,950/MW-month increasing to$10,000/MW-month increasing g to$10,000/MW-month in 2018-2029 for 2018-2029 Peaking Capacrtu(54.5MW) NO PEAKING CAPACfTY Por 2018-2023 Prices PURCHASE $3,750/MW-month in 2015, $3,750/MW month in 2015, forInc20sin2to$7,000/MW-month increasing to$7,000/MW-month for 2023`2029 for 2023(same as per 10/20/2014 Separate Transmission Charge NO Discussion Paints) Yes;$1,566/MW month In 2015, Yes; 1,566/MW month in NO Increasing to$1,861/MW-Month for increasing to$1,861/MW-mo nth for Minimum Take of Base 2023-2029 2023 or Capacity Yes;85 MW Yes;85 MW Termination Options NONE Yes:OUC unilateral option to NONE terminate as early as 2020,with 2 St. Ducie Option NONEyearsnotice to C Yes,OUC has option to buy COVB's NONE share of output of St.Lucie pursuant to a PPA;OUC must exercise option FGT Contractsbefore 2029 COVB's rights under FGT gas OUC would receive permanent OUC would receive permanent- transportation contracts rights to COVB's capacity under FGT rights,EXCEPrth t transferred to OUC for term of contracts a COVE could the PPA,revert to COVE at end of recall'or"reclaim"its rights if PPA COVE builds new gas-fired generating capacity at the Vero y Beach Power Plant site to serve COVE native load by 12/31/2024 H ATTACBI!SIW B Page 1 of 3 „ Orlando Utilities Con mdWon Discussion Points in Bespome to City of Vero Bead Bequest for Modification to PPA October 20,2014 Source of CapadVIEnergy: Remains as OUC system sale,for both the Base Capacity and the Peaking CePackY• Term: Base Capacity: Beginning on the Amendment Rrhe ive Date and g ftr the mmainki;team of tic PPA,with the option of OUC to tmminme no earlier than 2020 upon 2 yeah'prior written notice. If OUC gives notice oftmInination,OUC and Vmu Bouch well negotiate in good faith to reach agreement on now marlmt based terms and conditions for renewal and cxtensicm;provided,that neither party is obligated to agnea to any such extonsiom. Peak®gm y:Begiming upon the Amendment Effective Date and conti mmHg Am the remaining farm of the PPIS,with the option of OUC to U rmwat�e no earlier than 2024,vpm 2 years'Prior written notice.If OUC BMW notice of termination,OUC and VeroBeach will negotiate in good faith to reach agmcu of on new marlmt based tams and Gond mm for renewal and a xtensim;provided,Out neidw party is obligated to agree to any such extsnalon. Contract Cspsdty: Haas C anseity SS MW minimum taloa regWr mont,with the capacity calculated as is currently provided in the PPA(mkstitutigg the Pealorng C.apsaity for the Venn combined cycle gen<aatiom). ►kw Peaking Caemci 54 MW of peal king capacity based on a lice rate of 11,500 Btuc/RWH. Gpaity Ckarges Soo Attudl m mg A Ewa Charge Ban Emu Calculated as is uun=tky in the PPA Pig D me¢v Charge: The Hourly Energy Rate(S/MWII)_[(Index+$0.78)*11.5]+ $S/MWfI VOM Indent—g1urida Zane 3 midpoint as posted in Platt's Gras Dadyi, Imisians omhm>Sauth divided by(1-FGT Fuel Smobatge affeetim for that month in rise DeliveryPeriod)]+FGT's FTS-1 Usage Rate effective fur that in the Delivery Period TYamadmion Charge $ase Capacity: OUC published tela Eaddagcapac�it : OUC published tariff. w.. Par 1 1t7 ATTACHMM B Page 2 of 3 Orlando Utltitles Commission Discusdan Points to Response to City of Vern Beach Request for Modifleatton to PPA Oder Z0,2014 Delivery Point for Capacity/Energy Same as in PPA currently for both Base Capacity and P Baking Capacity (OUGFPL inteMmmectlon). Conditions of OUC Otter 1) Vero to retire the Vero Power Plaut upon completion of any aPphcabb tranamisaion reliability upgrades,with the plant capacity removed from d w PPA as an available resource for Vero as of the Amendment EftWtIe Date. 2) OUC is to have a one-time option on or before 1-1-2024 to acquire the 411ts end obligations att'Vero's St Lucie Entitlement(13.5 MW) based on an agreed power purcahasc agremaw that is a cost pass, tlrrm9hprieing. Option would survive OUC early termination. 3) C urent natural gas transporttiou rights assigned to OUC would remain with OUC and would survive OUC early tarminatian. 4) Vero eball obtain network transmission service from FPL for Peaking Capacity from the Delivery Point to the bad. 5) OUC Bhall obtain firms traastuisaion service over the OUC transmission system for the Peaking Capacity to the Delivery Point 5) Subject to negotiation And agreement on definitive contrail terms and Cmroval by the Board of OUC and the City of Venn Bosch City � Page 2 3� ATTACHMENT B Page 3 of 3 OUCSystem Produet OUC Peaking Prod PPA Catendar Year Existing PPA Ahematim PpA PPA` Sayings 54,5 M Dollars In Thoasarmb 2014 $ 146143 $ 14,143 $ - $ - 2015 15,054 8,055 61999 3,476 i 2016 16,182 9,191 61991 8,640 2017 17,378 10,429 6,949 3,829 2018 18,478 13,157 5,321 4,019 2019 19,016 K864 4,152 4,373 2020 19,375 15,200 4,175 4,727 2021 19,913 15,679 4,234 5,,052 2022 20,452 16,164 4,288 5,438 2023 20,810 16,51.0 4,300 5,795 2024 21,349 17,004 4,345 5,825 2025 21„887 17,502 4,385 5,857 2026 22,425 18,006 4,419 5,888 2027 22,963 181515 4,448 51921 2028 23,501 19,030 4,471 51955 f 2029 24,040 19,550 4,490 5,989 li Monthly tis iS!A" OUC&5n Product OUC Peaking Product OdOng PPA 1 Obdudes Altemstive Peaking Peaking j Thm) Altaernative PPA PPATrans! Prcd PPA Prod Trans;L 2014 $ 12,673 $ 12,673 $ 2,9" $ 8.500 $ 1,566 ! 2015 13,206 51500 11566 3,750 :LS66 i 2015 13,760 6,250 11566 4,000 1,566 2017 14,338 71000 1,605 4,= 2018 14,950 91000 3,645 4,500 11645 2019 14,950 1Q000 1,686 51000 11686 2020 141950 101000 1,728 5,500 1,728 2021 14,950 10,tD0 1,771 61000 1,771 20622 14,950 1010m 1,816 6,500 1,$16 2023&Bepnd 14950 101000 1,861 7,000 1,861 I i Estimated trenarniaatan rates equal to pnment nrte plus 2SK anrwel Increase nerft in 2017 t 39 ATTACHMENT C Orlando Utilities Commission,Discussion Pointe In Page 1 of 3 � Response to City of Vero Beach Request for Additional Options for Modification to PPA November 25,2014 Source of Cepatctty/Energy: Remains as OUC sysum sale,for both the Ba w Opacity and fhe Peaking Capacity. Term: luso CaapaagTty Begh:mmg on the Amendment R%ctive Date and continuing through December 31,2023. Peaidag Qggw r Beginning upon the Amendment Effwdvo Date and continuing through December 31,2023. Contract Capacity: A ._-G`aMcity:85 MW minimum take requt,w&the capacity calculated as is currcotiy provided in the PPA(substitudrig the Peaking Capacity for the Veto combined cycle generation). PJt'-: 54 MW of pealdng capacity based on a beat rate of 11,300 Btu/KWH. Capadty Charges See Attachment A Energy Charge Bane Eaerov Chareo: Calculated aaa is curmrtly in the PPA EqWU Bw[RY : The Hotuly EMMY Rate($WWH)-((Index+$0.78)*11.51+ $5&WH VoM ]ndem=[Florida Zone 3 midpoint as pasted in Platt's On Dar7y under YAouisiana onehon>-South divided by(1-FGT Fuel Surcharge effective for that month m the Delivery Pedod)1+FGI"s FTS-I Usage Rate effeaft o for that mouth in the Delivery Period Tranamisdon Charge BIWQ= oUC published tsrilF bakma CxagMr OUC published tanff Page 1 3 � ATTACffiENT C Page 2 0£ 3 Orlando Utilities Commission Discussion Points in Response to City of Vero Beach R"ned for Additional Options for MoMeation to PPA November 25,2014 Delivery Point for Capacity/Energy Same as in PPA currently for both Base Capacity sad Peaking Capacity (01)C-FPL interconnection). Conditions of OUC Offer 1) Vero to retire the Vero Power Plant upon completion of any applicable transmission reliability upgrades,with the plant capadtyrcmoved from the PPA as an available rrmurce for Vero as of the Amendment Effective Date. 2) Upon expirstiion of the PPA's,the natural gas iranaportation rights assigned to OUC would remain with OUC unless Vero builds gas-feed generation at the existitkg Vero Power Plant site by December 31,2024 to aervr;its native load,in which out Vero can request the natural gas transportation rights to be assigned back to Vero. 3) Veno shall obtain network transmission service from FPL for Peaking Capacity from the Delivery Point to the load 4) OUC shall obtain firm transmission service over the OUC tramm mwm system for the Peaking Capacity to tate Delivery Point. 5) Subject to negotiation and aVeement on definitive contract teras;and CVproval by the Board of OUC and the City of Vero Beach City �«- Page 2 L ATTACM4ENT C Page 3 of 3 M ch QOt A OUC System Product OUC Peaking Estimated Prod PPA Calendar Year Existing PPA Alternative PPA PPA Savings1 (54.5 MW) Dollars in Thousands 2014 $ 14,143 $ 14,143 $ - $ - 2015 15,054 13,731 1,323 869 2016 16,182' 10,661 5,521 3,640 2017 17,378 11,641 5,737 3,829 2018 18,478 14,393 4,085 4,019 2019 19,016 14,864 4,152 4,373 2020 19,375 15,200 4,175 4,727 2021 19,913 15,679 4,234 5,082 2022 20,452 16,164 4,288 5,438 2023 20,810 16510 4,300 5,795 Monthly Rates($J MUS OUC System Product OUC Peaking Product Existing PPA (Includes Alternative Peaking Peaking Calendar Year Trans) Alternative PPA PPA Trans2 Prod PPA Prod Trans Z 2014 $ 12,673 $ 12,673 $ 1,566 $ 3,500 $ 1,566 2015 13,205 7,000 1,566 3,750 1,566 2016 13,760 7,500 1,566 4,000 1,566 2017 14,338 8,000 1,605 4,250 1,605 2018 14,950 10,000 1,645 4,500 1,645 2019 14,950 10,000 1,686 51000 1,686 2020 14,950 10AM 1,728 51500 1,728 2021 14,950 10,000 1,771 61000 1,771 2022 14,950 101000 1,816 6,500 1,816 2023 14,950 10,000 1,861 7,000 1,861 W Estimated PPA Savings assumes the Amendment Effective Date is October 1,2015 (2) Estimated transmission rates equal to present rate plus 2.5%annual increase starting in 2017 { J ATTACHMENT 0 CITY OF VERO BEACH-ESTIMATED CAPACITY PAYMENT SAVINGS AVAILABLE UNDER OUC'S OCTOBER 10/20 AND 11/25 PROPOSALS VS, 2008 OUC-COVS POWER PURCHASE AGREEMENT NOMINAL SAVINGS UNDER NOMINAL SAVINGS UNDER MOBEi�,�O PROPOSAL NOVEMBER 25 PROPOSAL YEAR [DOLLARS IN THOUMNDSI IDOI.IARS IN THOUSANDS) 2015 $1,750 $1,323 2015 $6,991 $5,521 2017 $6,949 $5,737 2018 $5,321 $4,085 2019 $4,152 $4,152 2020 $4,175 $4,175 2021 $4,234 $4,234 2022 $4,288 $4,288 2023 $4,300 $4,300 2024 $4,345 $0 2025 $4,385 $0 2026 $4,419 $0 2027 $4,448 $0 2028 $4,471 $0 2029 $4,490 $0 TOTAL S68,718 637.§15 NOTES: The 2015 savings under the October 20 proposal have been reduced by 75%to reflect the fact that the new PPA terms would not be Implemented until October 1,2015. This makes the value comparable to the value in November 25 proposal. w.. Vero Beach Mediation Statement-Attachment C RESOLUTION NO.2014- 41 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERO BEACH, FLORIDA, AUTHORIZING THE CITY'S STAFF TO DEVELOP A DETAILED PROCESS TO HOLD A REFERENDUM OF THE CITY'S NAMED RETAIL ELECTRIC CUSTOMERS REGARDING THE ESTABLISHMENT OF A UTILITY AUTHORITY TO OPERATE THE BUSINESS OF THE CI'T'Y ELECTRIC UTILITY; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Vero Beach operates an electric utility system that serves customers inside the city limits of the City and also serves customers located in unincorporated Indian River County and in the Town of Indian River Shores; and WHEREAS, customers have expressed a desire that the City establish a utility authority to operate the business of the City's electric utility system; and WHEREAS, in 2008, the Florida Legislature enacted Section 366.04(7), Florida Statutes (also referred to herein as the"2008 Statute"),which required municipal electric utilities meeting certain criteria to conduct a referendum of their named retail electric customers regarding those customers' desire to have the municipal electric utility establish a utility authority to operate the business of the electric utility; and WHEREAS, the City of Vero Beach duly evaluated whether the City was subject to Section 366.04(7), Florida Statutes, in accordance with the criteria set forth therein, and determined that it was not subject to that section, because the City had fewer than 30,000 named retail electric customers as of September 30, 2007, and also because the City electric utility served customers outside Indian River County as of September 30,2007;and WHEREAS, customers of the City electric system have continued to request that the City consider establishing a utility authority to operate the business of the City electric utility; and WHEREAS, the Town of Indian River Shores has initiated a civil lawsuit against the City, in which the Town effectively demands, among other things, that the Circuit Court order the City to comply with the requirements of the 2008 Statute;and WHEREAS, although the City is not subject to the 2008 Statute, the City desires, as a matter of good faith and responsiveness to the concerns expressed by its customers,to conduct a referendum of its retail electric customers that complies, to the extent reasonably possible, with the 2008 Statute;and WHEREAS, the Indian River County Supervisor of Elections has advised the City that she cannot conduct the subject referendum because those who are to vote in the referendum are not registered voters, but rather the City's named retail electric customers, and has also advised Page l of 3 L43 the City that her Office can assist the City with programming voting machines, printing ballots, w,w tabulating ballots,and with other administrative aspects of the referendum; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERO BEACH,FLORIDA,THAT: Section 1. The foregoing "WHEREAS" clauses are hereby found true and correct and are adopted as findings of the City Council of the City of Vero Beach, Florida. Section 2. The City Council of the City of Vero Beach, Florida, hereby authorizes the City's administrative Staff to develop, in consultation and cooperation with the Indian River County Supervisor of Elections, a proposed ordinance setting forth a definitive, detailed proposal for conducting a referendum of the City's named retail electric customers, with the ballot question being whether each customer desires the City to establish a utility authority to operate the business of the City's electric utility system. The City Council further authorizes Staff to bring such definitive,detailed ordinance before the City Council no later than the first Council meeting in March 2015. Section 3. The City Council further authorizes the Staff to include in the proposed ordinance the requirement that the referendum is to be held no later than the date of the next City general election, which is November 3, 2015, and to work cooperatively with representatives of the Town of Indian River Shores and Indian River County, and with other interested customers, to determine whether those customers would desire that the referendum be held at a special election earlier than November 3,2015. Section 4. The City Clerk is directed to provide a certified copy of this Resolution to Florida State Senators Thad Altman and Joe Negron;Florida State Representatives Debbie Mayfield and Gayle B. Harrell; the Mayor and Town Council of the Town of Indian River Shores; and the Chairman and Commissioners of the Indian River County Board of County Commissioners. Section 5. This Resolution shall become effective upon adoption by the City Council. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Page 2 of 3 44 This Resolution was heard on the 3 day of J)n. C1,,rn-j1Zf-) 2014, at which time it wasmoved for adoption by Councilmember G.nrarLi-) , seconded by Councilmember J)Yt1 n own ,n ,and adopted by the following vote of the City Council: Mayor Richard G. Winger Vice Mayor Jay Kramer r, Councilmember Pilar E. Turner t i Councilmember Amelia Graves t k Councilmember Randolph B. Oldr� --L-— ATTEST: CITY COUNCIL i CITY OF VERO 11 ACH, FLORIDA ?7 Tammy K. Rich G. Winger City Clerk Mayor [SEAL] Approved as to form and legal Approved as conforming to municipal sufficiency: policy: WayndR. Coment tames k. 0' onnor` Cit}'.Attorney City Manager Page 3 of 3 L1S Vero Beach Mediation Statement-Attachment D RESOLUTION NO.2014-_Al_ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERO BEACH, FLORIDA, AUTHORIZING THE CITY'S STAFF TO DEVELOP A PROPOSED ORDINANCE, IN COLLABORATION WITH CITY ELECTRIC CUSTOMERS, INCLUDING INDIAN RIVER COUNTY AND THE TOWN OF INDIAN RIVER SHORES, FOR THE ESTABLISHMENT OF A UTILITY AUTHORITY TO OPERATE THE BUSINESS OF THE CITY ELECTRIC UTILITY; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Vero Beach operates an electric utility system that serves customers inside the city limits of the City and also serves customers located in unincorporated Indian River County and in the Town of Indian River Shores;and WHEREAS, customers have expressed a desire that the City establish a utility authority to operate the business of the City's electric utility system;and . WHEREAS, in 2008,the Florida Legislature enacted Section 366.04(7),Florida Statutes (also referred to herein as the"2008 Statute"),which required municipal electric utilities meeting certain criteria to conduct a referendum of their named retail electric customers regarding those customers' desire to have the municipal electric utility establish a utility authority to operate the business of the electric utility;and ,. WHEREAS, the City of Vero Beach duly evaluated whether the City was subject to Section 366.04(7), Florida Statutes, in accordance with the criteria set forth therein, and determined that it was not subject to that section,because the City had fewer than 30,000 named retail electric customers as of September 30, 2007, and also because the City electric utility served customers outside Indian River County as of September 30,2007;and WHEREAS, customers of the City electric system have continued to request that the City consider establishing a utility authority to operate the business of the City electric utility; and WHEREAS, the Town of Indian River Shores has initiated a civil lawsuit against the City, in which the Town effectively demands, among other things, that the Circuit Court order the City to comply with the requirements of the 2008 Statute;and WHEREAS, although the City is not subject to the 2008 Statute, the City desires as a matter of good faith and responsiveness to the concerns expressed by its customers, to move forward toward developing an ordinance that would provide for a separate utility authority to operate the business of the City's electric utility system; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERO BEACH,FLORIDA,THAT: Pagel of 3 y(o Section 1. The foregoing "WHEREAS" clauses are hereby found true and cornett and are adopted as findings of the City Council of the City of Vero Beach,Indian River County,Florida. Section 2. The City Council of the City of Vero Beach, Florida, hereby authorizes the City's administrative Staff to develop, in consultation and collaboration with appropriate representatives of City electric customers, including Indian River County and the Town of Indian River Shores, a proposed ordinance that would provide for establishment, structure, powers, operational matters, and other necessary attributes of a separate utility authority to operate the business of the City's electric utility system. The City Council further authorizes Staff to bring such definitive, detailed ordinance before the City Council as soon as possible,but in no case any later than the first Council meeting in July 2015. Section 3. The City Clerk is directed to provide a certified copy of this Resolution to Florida State Senators Thad Altman and Joe Negron; Florida State Representatives Debbie Mayfield and Gayle B. Harrell; the Mayor and Town Council of the Town of Indian River Shores; and the Chairman and Commissioners of the Indian River County Board of County Commissioners. Section 4. This Resolution shall become effective upon adoption by the City Council. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Page 2 of 3 L4-7 �d This Resolution was heard on the ,day of UJrQ u:.-/l 2014, at which time it was moved for adoption by Councilmember r 6a/VLL/) seconded by Councilmember ( t-1 d n4A�,Q ,and adopted by the following vote of the City Council: Mayor Richard G. Winger r Vice Mayor Jay KramerC}7'.,7 Councilmember Pilar E. Turner n o Councilmember Amelia Graves �!� Councilmember Randolph B. Old C' ATTEST: CITY COUNCItr ?fr CITY OF VAO•9E41-1,FLORIDA fr 7 J � r l Tammy K. Richard G. Winger City Clerk Mayor [SEAL] Approved as to form and legal Approved as conforming to municipal sufficiency: policy: Wa R. Coment James k. Connor Cit ttorney City Manager Page 3 of 3 -10 Vero Beach Mediation Statement-Attachment E Storey v.Mayo,77 P.U.R.3d 411(1968) 217 So.2d 304 within confines of statute and limits of organic -WW 77 P.U.R3d 411 law.F.S.A.§366.01 et seq. Supreme Court of Florida. 5 Cases that cite this headnote Mrs.John De Raismes STOREY,Mr.and Mrs. Richard Conley,Mr.and Mrs.George Fichter, [31 Public Utilities Dr.P.M.Boyd,Jr.,et ux.,et al.,Petitioners, Certificates,Permits,and Franchises V. Power to mandate efficient and effective utility William T.MAYO,Chairman,and Edwin L. in public interest necessitates correlative power Mason,and Jerry W.Carter,Commissioners, to protect utility against unnecessary,expensive as and constituting the Florida Public competitive practices.F.S.A.§366.01 et seq. Service Commission,Respondents. Cayes that cite this headnote No.372o3. I Nov.6,1968. Rehearing Denied Dec.12,x.968. [41 Public Utilities fey- Service and Facilities Certiorari proceeding by consumers to review order ofPublic Individual has no organic,economic or political Service Commission which approved a territorial service right to service by particular utility merely agreement between a privately owned electric utility and a because he deems it advantageous to himself. municipal electric utility. The Supreme Court, Thomal, J., held that territorial service agreement entered into to avoid 7 Cases that cite this headnote overlapping service and expensive competitive activity was not invalid as being in restraint of trade,contrary to public interest,or violative of equal protection. [51 Constitutional Law 4r- Carriers and Public Utilities; Railroads Petition denied. Electricity 0- Service Areas; Competition Caldwell,C.J,and Ervin,J.,dissented. Individuals who protested tentorial service agreement between two electric utilities which was entered into to avoid overlapping service, West Headnotes(10) and which required them to take electrical service from unregulated municipal utility rather than from regulated private utility,from which [1] Electricity they had been receiving service,were not denied — Regulation in General; Statutes and equal protection,since they occupied same status Ordinances as all users of power from municipal utility. Powers of Public Service Commission to Cases that cite this headnote regulate privately owned electric utilities are exclusive and,therefore,necessarily broad and comprehensive.F.S.A.§§366.03,366.05. [6] Electricity e-- Regulation of Supply and Use 4 Cases that cite this headnote Electricity h Judicial Review and Enforcement [2] Electricity In event of excessive rates or inadequate Regulation in General; Statutes and service by municipal electric utility that Ordinances assumed function from privately owned utility Power of Public Service Commission over of supplying electricity to certain individuals, privately owned electric utilities is omnipotent ©2014`fhomson Reuters.No claim to original U.S. Government Works. 1 Storey v.Mayo,77 P.U.R.3d 411(1968) 217 So.2d 304 individuals would have appeal to courts or over function of privately owned utility in municipal council. suburban area, and which was entered into to avoid overlapping service and expensive 1 Cases that cite this headnote competitive activity was not invalid as being in restraint of trade,contrary to public interest,or [71 Electricity violative of equal protection.F.S.A.§§350.641, c,- Duty to Supply,Conditions,and 366.01 et seq.,366.03,366.05,366.10,366.11. Discrimination 1 Cases that cite this headnote Obligation of privately owned electric company was to furnish reasonably sufficient service to applicants therefor upon terms required by Public Service Commission.F.S.A.§366.03. Attorneys and Law Firms Cases that cite this headnote *305 Irving Peskoe,pm se, and for Robert L.Lewis, for petitioners and others directly affected. 181 Electricity z- Supply by Municipalities Robert M. C. Rose,Tallahassee,for Florida Public Service Evidence was sufficient to support conclusion Commission. that it was not reasonable to require privately *306 Phillip Goldman of Scott,McCarthy,Steel,Hector& owned electric utility to continue to service Davis,Miami,for Florida Power&Light Co. area, which was subject of agreement between privately owned utility and municipal utility that Vernon W.Turner of Turner&Hodson,Homestead,for City municipal utility would take over function of of Homestead. sen icing area.F.S.A.§366.05. Opinion Cases that cite this headnote THORNAL,Justice. [91 Electricity By petition for a writ of certiorari we have for review an order #,n Supply by Municipalities of the Florida Public Service Commission which approved Notice of hearing before Public Service a territorial service agreement between two electric utilities, Commission on application for approval of one being privately-owned and regulated by the state, the territorial service agreement between privately other being municipally owned and unregulated. owned electric utility and municipal utility was sufficient,where formal notice in adequate detail We must decide whether the subject agreement is invalid as was published and city notified all of its affected being in restraint of trade,contrary to the public interest,or customers by personally delivered letter well in isolative of equal protection requirements, advance of hearing. The Ci tyof Homestead, a municipal corporation, owns its 3 Cases that cite this headnote electric utility system It serves all residents in the City and some in adjacent non-municipal areas. Florida Power and Light Company is a privately-owned electric utility.It serves [10] Constitutional Law extensive areas along the east coast,lower west coast and a+- Carriers and Public Utilities; Railroads south central sections of Florida.Included in the Company's Electricity service territory is the non-municipal area surrounding rw- Supply by Municipalities Homestead.Because ofthemunicipal operation the Company Territorial service agreement between privately is not permitted to serve customers inside the city limits, owned electric utility and municipal electric However,prior to the subject agreement,the Company and utility, by which municipal utility would take the City actively competed for customers in the suburban areas.This, of course,required duplicating,paralleling and v':e_:n:-Next ®2094 Thomson Reuters.No claim to original U.S. Government Works. 2 SO Storey v.Mayo,77 P.U.R.3d 411(1968) 217 So.2d 304 overlapping distribution systems in the affected areas.This agreement. Petitioners, who were among the protestants, -.►d duplication of lines,poles,transformers and other equipment seek review pursuant to Fla.Stat.s 350.641 (1967),F.S.A.; not only marred the appearance of the community but it also Fla.Stat.s 366.10(1967),F.S.A. increased the hazards of servicing the area.Such overlapping distribution systems substantially increase the cost of service The petitioners contend that the notice of the hearing was per customer because they simply mean that two separate insufficient; that the proposed agreement is contrary to the systems are being supplied and maintained to serve an area public interest and is in restraint of trade;and that it denies when one should be sufficient. Obviously, neither system to them both equal protection and due process of law.They receives maximum benefit from its capital invested in the claim that the impact of the agreement is to force them to area.The ultimate effect of this is that the rates charged in take service from an unregulated instead of a regulated utility. the affected area are necessarily higher,or,alternatively,the They insist that the rates and service of the latter are superior customers in some other part of the system must help bear to the former,and that the agreement eliminates competition. the added cost.It is the latter which most often happens in an [1) The established state policy in Florida is to supervise extensive system-wide operation,such as that conducted by privately-owned electric utilities through regulation by the Company here. a state agency. By the same policy municipally-owned electric utilities are expressly exempted from state agency In order to end the unsatisfactory effects of this type of supervision. Fla.Stat. s 366.11 (1967), F.S.A. It was for expensive,competitive activity,the City and the Company, this reason that in the instant matter, the City pointedly on August 7,1967,executed the territorial service agreement saved itself against submission to Commission jurisdiction, which is the subject of this litigation.In effect it established Under Florida law, municipally-owned electric utilities areas of service around the City in the suburban territory. enjoy the privileges of legally protected monopolies within It provided that twelve (12) commercial and sixty-six municipal limits.The monopoly is totally effective because (66) residential customers would be transferred from the the government of the City,which owns the utility,has the City to the Company. Thirty-five (35) commercial and power to preclude even the slightest threat of competition three hundred sixty-three(363)residential electric customers within the city limits.On the other hand,the rates and services were transferred to the City by the Company. There of the privately-owned electric companies are regulated by wererovisions for reciprocal transfers of facilities and a the p p respondent Commission.Fla.Stat.Ch.366(1967),F.S.A. reservation by the City of authority to continue to serve Service areas are not specifically controlled by requirement certain municipally-owned property located in the Company of certificates ofpublic necessity and convenience.However, service area On November 1, 1967, the City Council of in some measure the Commission does control the areas Homestead adopted a resolution providing that electric utility served by the companies by virtue of its prescribed powers, rates to be charged residential customers in the proposed including the specific power '* * * to require repairs, service area would'be established as those now existing in improvements, additions and extensions to the plant and the proposed service area'and served by the Company.This equipment of any public utility reasonably necessary to resolution is a part of the record which also reveals that promote the convenience and welfare of the public and over a period of forty-three(43)years electric rates charged secure adequate service or facilities for those reasonably customers of the city have never been raised. entitled thereto***.'Fla.Stat.a 366.05(1967),F.S.A.The regulatory powers of the Commission,as announced in the The Company applied to the Florida Public Service cited section,ane exclusive and,therefore,necessarily broad Commission for approval of the agreement. A hearing, and comprehensive.Fla.Stat.s 366.03(1967),F.S.A.;Florida pursuant to notice,was held at the Homestead City Hall on Power&Light Co.v.City of Miami,72 So.2d 270(Fle.1954). November 8, 1967. Witnesses for the City and Company were presented.None of the customers being transferred from 121 131 The powers of the Commission over these City to Company appeared. Seven, including petitioners, privately-owned utilities is ominpotent within the confines appeared in opposition to the transfers by the Company of the statute and the limits of organic law. Because of to the City. Petitioners now here claim to represent a this,the power to mandate an efficient and effective utility class numbering more than one *307 hundred in this in the public interest necessitates a correlative power to category.At the hearing,the City expressly stated that it was not conceding Commission jurisdiction over the municipal protect the utility against unnecessary,expensive competitive practices. While in particular locales such practices might operation. By it 2-1 vote the Commission approved the appy to benefit a few, the ultimate impact of repetition -.r' «;vNext©2014 Thomson Reuters.No claim to original U.S. Government Works. 3 5l Storey v.Mayo,77 P.U.R.3d 411(1966) 217 So.2d 304 -— ,ft� occurring many times in an extensive system-wide operation [9] Petitioners'attack on the notice of the hearing is without could be extremely harmful and expensive to the utility,its merit.A formal notice in adequate detail was published.In stockholders and the great mass of its customers. Tampa addition the City notified all of its affected customers by a Electric Co. v. Withlacoochee River Electric Coop., 122 personally delivered letter well in advance of the heating. So.2d 471 ('F1a.1960). It was a recognition of this basic concept that led us to approve territorial service agreements [10] The arrangement under review was reached after between two regulated utilities.Peoples Gas System,Inc.,v. several years of negotiations between the City and the Mason, 187 So.2d 335(F1a.1966);City Gas Co.,v.Peoples Company. It received the unanimous approval of the City Gas System, Inc., 182 So.2d 429 (F1a.1965). In the last- Council. Following a well-publicized hearing it has been cited cases we recognized the importance of the regulatory approved by a majority of the respondent Commission which function as a substitute for unrestrained competition in the is burdened with the duty of measuring its judgment by the public utility field.We there noted that often a regulated or dictates of the public convenience and welfare in this type of measurably controlled monopoly is in the public interest,and situation.When we measure the obligations of the respondent that in the area of public utility operations competition alone electric company by the responsibilities placed upon it under has long since ceased to be a potent or even a reasonably Fla.Stat.Ch.366(196'),F.S.A.,and especially in view of the efficient regulatory factorextensive regulatory powers of the respondent Commission, we see no reason to disturb the subj ect order. [4] [5] [6] An individual has no organic, economic or political right to service by a *308 particular utility merely because he deems it advantageous to himself. If he lives The petition for certiorari is denied. within the limits of a city which operates its own system,he It is so ordered. can compel service by the city.however,he could not compel service by a privately-owned utility operating just across his city limits line merely because he preferred that service.In THOMAS, ROBERTS, DREW and ADAMS (Ret.), JJ, the instant situation,these petitioners have not been denied concur. equal protection became they occupy the same status as all CALDWELL,C.J.,dissents. users of the municipal power.In the event of excessive nates or inadequate service their appeal under Florida law is to the ERVIN,J.,dissents with Opinion. courts or the municipal council. ERVIN,Justice(dissenting). [7] [9] The obligation of the respondent electric company is to furnish reasonably sufficient service to applicants Once again we have a case where the Florida Public Service therefor'***upon tams as required by the commission* Commission has approved a territorial agreement between **'F1a.Stat.s 366.03(1967),F.S.A.When the Commission two utilities over the objections of a large number of approved the subject agreement, it, in effect,informed the consumers of one of the utilities.See earlier cases:City Gas respondent electric company that it would not have to serve Co.Y.Peoples Gas System, Inc.,Fla., 182 So.2d 429,and the particular area because under the circumstances it would Peoples Gas System,Inc.,v.Mason,Fla.,187 So.2d 335.One not be reasonable to require it to do so.F1a.Stat.s 366.05, is an electric utility municipally operated;theotberisapQivate F.S.A, supra. There was certainly competent, substantial electric power company under the regulation of the Public evidence to support this conclusion and the Commission had Service Commission. Despite the fact that the Legislature the power to act in the premises.The petitioners here are in has never given the Public Service Commission the express the posture of customers demanding service of a particular powr to approve such agreements (and certainly not the regulated utility.The regulatory agency has heard the matter power to approve agreements where one of the utilities is and with evidentiary support has concluded that under the municipally operated, over which the Commission has no circumstances it would be unreasonable to require this utility regaWoryjurisdiction),nevertheless the objecting customers to vender the service.This in substance is the ultimate impact who have been served by the private company,some for many of the arrangement which the Commission has approved. years,now have been'transfen-ed' *309 by the agreement from the status of customers of the private electric power company to the status of new customers of the City. 2014 Thomson Reuters.No claim to originzI U.S. Govemment Works. 4 Storey v.Mayo,77 P.U.R.3d 411(1968) 217 So.2d 304 -- —---- I note conclusions in the majority opinion that the purpose of An electric company may not cease to serve the �.. the tentorial agreement is to curtail`duplicating,paralleling public because the city,in constructing a competing system, and overlapping distributions systems in the affected areas; has created conditions rendering continued service dangerous that this overlapping' marred the appearance of the and refuses to alter them. (Citing Alabama Power Co. v. community and substantially increased the cost of service Cin'of Guntersville,236 Ala.503,183 So.396, 119 A.L.R. per customer `because they simply mean that two separate 429•)Where a public service company does not show that a systems are being supplied and maintained to serve an area branch of service which it wishes to discontinue results in a when one should be sufficient.'The objecting customers give loss,permission to discontinue will generally be refused. not the slightest indication they are dissatisfied with the cost *'(Citing 21 A.L.R.578.) of service to them. On the contrary, they allege they are content and wish to remain paying customers of the private In conclusion,it appears to me that customers who have long utility.From my reading of the record I find no substantial been served by a private power company have a substantial support for these conclusions or that any comprehensive property right to continue receiving electric current from that hearing was afforded Petitioners to voice their objections. company; that whatever competition exists between utility On the basis of this record, I conclude the convenience companies should not be looked upon with disfavor but of the two utilities-primarily the interest of the municipal should be eliminated only in extreme circumstances where electric utility-was the paramount objective served by the it is apparent the economic interests of the utilities, or of agreement,rather than the interest of the consumers. I get one of them, are being jeopardized by such competition the impression from the record the private electric company to the disadvantage of the consuming public; that unless yielded to the demands of the municipality to surrender the the Legislature specifically grants authority to the Public subject suburban territory in order to `keep peace' with the Service Commission to approve divisions of service territory City,since there had been wrangling between the two utilities between utility companies and `transfer customers'therein, concerning which should provide utility service in the subject such auth0rity should not be implied by the Commission,and area for a number of years.I do not subscribe to the view especially should this be so where the Commission has not that long standing consumers of a particular electric company regulatoryJunsdiction supervising the supplying of power by have no substantial interest in the status quo of their existing municipal utilities. service,but may be required by the private utility,with the I believe the majority decision will come as a surprise approval of the Commission, to thereafter obtain electric to electricity consumers who reside within suburban areas power from the City. Especially is this so where there is no showing the private company will suffer economic loss outside cities and have long been served by a private utility company that there is a possibility that at some time in the by continuing to serve such consumers,but is complacently ktur,e they maybe`transferred'as customers from the private agreeable forpublic relations or policy considerations to yield electric company and become customers of the adjacent city these consumers to the City. electric utility. In 43 AmJur.Public Utilities and Services,s 78,the text at Parallci Citations page 621 reads in part: 217 So.2d 304 End of Document 0 2014 Thomson Reuters.No claim to original U.S.Government Works. t �s`'�„�rNeact 02014 Thomson Reuters. No claim to original U.S. Government Works. 5 53 Page 1 402 So.2d 1209,*; 1981 Fla.App.LEXIS 20623,*� ROSALIND HOLDING COMPANY,etc.,Appellant,v.THE ORLANDO UTILI- TIES COMMISSION,et al.,Appellee Nos. 79-1298/T4-5%;80-9 Court of Appeal of Florida,Filth District 402 Sa 2d 1209;1981 Fla.App.LEXIS 20623 July 22,1981 SUBSEQUENT HISTORY: [**1] Rehearing sonable rates, filed by Rosalind as a member of Denied September 11,1981. the class, stated a cause of action.Rosalind is a "resident" of the City of Orlando and an OUC PRIOR HISTORY: Appeal from the Circuit Court customer. The OUC has approximately 80,000 for Orange County,William C.Gridley,Judge. consumers of its utilities services. The standing of Rosalind to bring this suit,and the propriety of the suit as a class action,were determined in the COUNSEL: Stephen P.Kam,Winter Park and Charles prior appeal and are therefore the "law of the Evans Davis of Fishback, Davis, Dominick &Bennett, case." Orlando,for appellant. [**2] The OUC was created in 1923 by a special J.Thomas Gurney,Leon Handley and Thomas B.Tart of act of the legislature, Chapter 9861, Laws of Florida Gurney,Gurney&Handley,P.A.,Orlando,for appellee, (1923),as a part of the City of Orlando.Its purpose is to Orlando Utilities Commission, operate and manage the City's electrical and water utili- ties both inside and outside the boundaries of the City. Richard W.Bates and Gray,Adams,Harris&Robinson, The Commission is empowered to set the utility rates, Orlando,for appellee,Orange County. and the City is required to pay for any OUC utilities it uses.During the period 1970 through June 1974,Florida Robert L. Hamilton,Orlando, for appellee, The City of excluded municipally owned utilities from regulation by Orlando. the Florida Public Service Commission(PSC). I Effe - tive July 1, 1974, section 366 04(2), Florida Statutes, JUDGES: Before SHARP,W. J. ORFINGER,J., and was added to give the PSC power over municipal electric WALKER,GRISSIM H.,Associate Judge,concur. utilities..."(b)(t)prescribe a rate structure for all elec- tric lecttric utilities...and(f)(t)o prescribe and require the filing OPINION BY:SHARP of periodic reports and other data as may be reasonably available and as necessary to exercise its jurisdiction." OPINION Since 1978 the OUC has filed its reports with the PSC, but as yet no regulations concerning rate structure have [*1210] Rosalind Holding Company appeals from been promulgated by the PSC. a final judgment denying it any relief in its class action suit' against the Orlando Utilities Commission and the 2. Ch.10968,Laws of FIs.(1925). City of Orlando. The lower court held that Rosalind 3. Edris v. Sebring MR Comm'A 237 So.2d failed to prove the utility rates charged by the OUC for 583(Fla. 2d DCA),cert. denied,240 So.2d 643 the years 1970 through 1978 were unreasonable and con- (Ra.1970);§§366.02,36611,367.022, FlaStat. fiscatory.The court assessed Rosalind with taxable costs (1979). of$ 8,624.67, which Rosalind also appeals. After an [**3] In contrast to a public service commission, extensive review of the record in this case,we afJinm the which is designed to regulate and set reasonable rates for lower court on both grounds. utilities and require certain methods of calculating rea- l. In the Orlando Utilities Commission V. sortable rates,the courts have a much more limited fimc- Rosalind Holding, 330 S0.2d 56 (Fla Ah DCA tion. Setting rates and methods to calculate them is a 1976), the Fourth District Court ruled that the legislative function, whether it is done by a public ser- complaint alleging that the Orlando Utilities vice [*1211] commission or the OUC board.'A per- Commission had charged its customers unrea- son seeking to attack in the courts the rates charged by a c 5� 402 So.2d 1209,*;1981 Fla.App.LEXIS 20623,*" Page 2 utility has the burden of showing S that the rates are out- therefore its rate of return on capital,far above what oth- side or beyond the"zone of reasonableness," 6 as estab- er municipal utilities and private utilities are allowed to lished by the evidence, and not necessarily by the PSC, earn.Rosalind also argued that the OUC should not have so as to be confiscatory or discriminatory. ' Absent a been allowed to set its rates so as to earn as high a return controlling statute, a municipal utility, like any other on its equity as an investor-owned utility.The OUC ar- utility,is entitled to earn a reasonable rate of return on its gues that these matters relate to the method of calculating capital°and its rates may be set so that it earns a rate of rates and not to the reasonableness of the rates them- return on its equity comparable to other similar busi- selves. Obviously the method of calculating rates im- nesses.° pacts on their reasonableness,and it is a proper subject for judicial review. 20 We shall consider each point raised 4. Cooper x Tampa Elea Co., 154 Fla. 410, by Rosalind separately. 17 So.2d 785 (1944); City of Pompano Beach v OitnraA 389 So.2d 283(Fla. 4th DCA 1980);and 10. In re Permian Basin Area Rate Cases, 64Am.Jur.2iJ Public Utilities§§80,89(1972). 390 U.S. 747, 88 S. Ct. 1344, 20 L Ed 2d 312 5. Mohme v. City of Cocoa 328 So.2d 422 (1968) (reviewed method of regulation); Banton (Fla 1976); Miami Bridge Co. v Miami Beach v.Belt Line R Corp.,268 U.S. 413, 45 S.Ct.S34, By. Co., 152 Fla.458, 12 So.2d 438(1943);12 E. 69 L. Ed 1020 (1925) (reviewing operating ex- McQuillin, Municipal Corporations, § 35.37a penses); Wichita Gas Ca v.Public Serv.CommW (1970). of Kan, 2 F.Supp. 792(D.Kan1933),modified, [**41 290 U.S.561, 54 S Ct. 321, 78 L.Ed 500(1934) 6. Federal Power Comm'n v. Hope Natural (reviewed proper operating expenses and fair rate Gas Co., 320 U.S. 591, 64 S. Ct 281, 88 L. Eel of return on utility property); Shevin v Yar- 333 (1944); Cooksey v. Utilities Comm'n, 261 borough, 274 So.2d 505 (Fla 1973) (reviewed So.2d 129(Fla 1972);Pinellas Apartment Assn, method to calculate rate base,inclusion of items Inc.v.City of St.Petersburg,294 So.2d 676(Fla in operating expenses); City of Miami v. Florida 2d DCA 1974);§180.131(2), F7aStat (1979); 64 Public Serv. Comin'rr, 208 So.2d 249 (Fla.1968) Am.Jur.2d Public Utilities §§ 135, 190 (1972); (reviewed method to compute rate of return); Annot.,127 A.L.R 94(1940). Hawaiian Elec. Co.,Inc., 56 Haw.260,535 P.2d 7. Miami Bridge Co.v.Munni Beach Ry.Co., 1102,83 A.LR 3d 951(1975)(reviewed ,pmmo- 152 Fla 458, 12 So.2d 438(1943);City of Pom- 6ional" expenses as operating expenses); ,State V. pano Beach v. Oltma% 389 So.2d 283 (Fla 4th Department of Pub. Serv., 19 Wash 2d 200, 142 DCA 1980); Clay Util. Co. x City of Jackson- P.2d 498(1943)(reviewed operating expenses). ville, 227 So.2d 516(Fla 1st DCA 1969); see: Edrls v. Sebring Wil. Comm'n, 237 So.2d 585 [**6] I. "IN LIEU OF TAX" PAYMENTS (Fla. 2d DCA), cert denied, 240 So.2d 643 MADE BY ORLANDO UTILITIES COM WSSION TO (F1a.1970); Wichita Go Co. v. Public Sere. ORANGE COUNTY. Comm'n of Kan„ 2 F. Supp. 792 (D.Kan.1933), The record established that the OUC made payments modified,290 U.S 561, 54 S Ck 321, 78 L. Ed totaling approximately $ 1,114,000 to Orange County 500 (1934); 64 Am.Jur.2d Public Utilities § 86 from 1973 through 1978. The amount of each annual (1972),29 C.J.S.Electricity§33(1965). payment was based on I%of the retail sales of electricity S. The parties all agree that basing rates on to the OUC's customers outside the City of Orlando,but "cost of capital" is the most universally adopted within Orange County.Witnesses for the OUC testified and reasonable method in the industry.The OUC [*1212] that these payments were somewhat less than a has employed this method in setting its rates. private utility would have paid Orange County for ad 9. Federal Power Comm'n v. Hope Natural valorem taxes based on the value of OUC's property lo- Gas Co., 320 U.S. 591, 64 S. Ct. 281, 88 L. Ed sated within Orange County,and that the payments were 333 (1944); City of Logansport v. Public Serp. for police and fire protection and other services afforded Comm'n of Ind. 202 Ind 523, 177 N.E 249, 76 the utility by the County. A.LR 838(1931). Rosalind argued that the City's property could not [**5] Rosalind argued that certain payments made legally be taxed by the County absent a general statute," by the OUC to Orange County "in lieu of taxes" and which does not now exist,that the amount paid to Or- payments in the nature of franchise fees paid by the OUC ange County was not a valid obligation of the OUC,but to the City of Orlando were improper operating expens- rather was a "gift", and therefore it should not serve to es, and if disallowed as operating expenses, the results reduce the OUC's income by allowing the utility to treat would substantially increase the OUC's income, and it as an operating expense. -.we V Page 3 402 So.2d 1209,*; 1981 Fla.App.LEXIS 20623,** 1,442,561 was paid to the City of Orlando as a franchise 11. Art. Yll,§3(a),Fla Const. fee and the OUC also paid the City S 5,542,000 in prof- [**7] Expert witnesses for the OUC testified that its. The OUC]seeps as retained earnings about as much it was not an uncommon practice in other states for tax as it pays Orlando in profits. exempt utilities to make "tax-equivalent" payments to 17. Approximately$2 million per year. local governmental bodies providing them with valuable 18. The amount of the fee is based roughly on services.Failure to make such payments would have the 6% of the revenues earned in Orlando. Six per- effect of discriminating against the county taxpayers cent for a true franchise fee is fairly standard in because they presumably would have to pay through Florida.Florida League of Cities,Mwdcipal Udl- higher taxes for the free services received by the utility, ities in Florida 122,123(1974).We note that the We have found no controlling precedent in Florida PSC now required real franchise fees to be paid on this point. In some jurisdictions, such payments are only by the consumers in the cities charging the not allowed. "However,the PSC has approved the pay- fees. City of St Petersburg v. Hawkins, 366 meat of"reasonable" charitable contributions by regu- So.2d 429(Fla 1978).However,this is an area of lated utilities and the inclusion of these amounts in oper- discretion available to the PSC.In any event we sting expenses of the utility for purposes of calculating do not consider the OUC's franchise fee as a real reasonable rates. f3 The allowance or disallowance of franchise payment. such"in lieu of tax"payments as operating expenses for The OUC shows the franchise fee as an operating purposes of determining the rate structure or rate base of expense, which reduces its net operating income.How- a utility is a matter more appropriate for determination by the PSC than the courts 14where the payments(as in ever, there [**10] is no franchise agreement between this case) are reasonable in amount for the purpose in- the City and the OUC. Further,the OUC witnesses ad- tended, are actually made, and are made pursuant to a mitted [*1213] that the franchise fee was treated as reasonable ground or basis." additional income on the OUC's reports filed with the Federal Power Commission and on its official bond 12. State v. Department of Pub. Serv., 19 statements, and that these fiords would be available to Wash.2d 200, 142 P.2d 498(1943). pay bonds or other"real"operating expenses if needed. [**g] Rosalind argues that the OUC's treatment of the 13. City of Miami v Florida Pub. Seryfranchise fee as an operating expense is an improper Comm'n, 208 So.2d 249(Fia.1968).See also:In method to mask additional profits. Since the OUC is in re Petitions of Burlington Mec. Light Dept, 135 actuality part of the City of Orlando, no payment to a Y4 114, 373 A.2d 514(1977);56 Am.Jur.2d Mu- third party is possible.It is merely a transfer of funds nicipal Corporation§583(1971). from one pock to another.We agree that the franchise 14. See: Occidental Chem. Co. V. Mayo, 351 fee should be considered as additional OUC profit.See: So.2d 336(F1a.1977). City of Logansport v. Public Serv. Comm'n of Ind, 202 15. In re Petitions of Burlington Eke. Light Ind 523, 177 KE 249, 76A.L.R 838(1931). Dep' 135 Vt. 114,373 A.2d 514(1977). However,assuming the franchise fee constitutes ad- We conclude that Rosalind failed to establish that ditional profits to the OUC,and should in fact be treated the OUC's inclusion of the "in lieu of tax" payments to as such,this does not,by itself,establish that the OUC's Orange County as an operating expense was arbitrary or rates are unreasonable.Municipal utilities in Florida are unreasonable.'" entitled to earn a profit on their utilities operations,and some municipalities in Florida take a higher percentage 16. Shevin v. Yarborough, 274 Sa2d 505 of the utility's [**11] profit into general revenues than (Fla 1973); Columbus & & Ohio Elec. Co. v Orlando does, even including the franchise-equivalent Public Util. Comm'n of Ohio, 58 Ohio St2d 110, payment." 388N.E2d 1378(1979). of R. "FRANCEIISE" PAYMENTS MADE BY OUC 19. The City of Jacksonville receives e, TO THE CITY OF ORLANDO. its utility's gross revenue. In an extremee case, there may arise the specter of a tax-free town The record showed that since 1970, the OUC has made wealthy by its utilities operations both in- been paying to the City of Orlando substantial annual side and outside its political limits. payments " labeled "franchise-equivalent" fee. [**9] No witness testified that the OUC was earning an The OUC pays the franchise fee to Orlando in addition to excessive amount of profit on its operations.Further,the profits earned by the OUC. "For example, in 1973, $ l� 1C/ 402 So.2d 1209,*; 1981 Fla.App.LEXPage 4IS 20623,** one expert witness for Rosalind was not allowed to testi_ [*1214] However, experts for the OUC testified fy that the OUC's rates were unreasonably high, and he that the OUC's operations are more comparable to the admitted he was not qualified to so testify. The OUC's private utilities in Florida because of its size and the expert witnesses all testified the OUC's rates were rea- [**141 fact that it has a substantial generating capacity. sonable.We conclude that Rosalind failed to establish by The municipal utilities in the Federal Power Commis. a preponderance of the evidence that the OUC was earn- sion's Report were considerably smaller than the OUC ing an excessive profit,or that its rates were unreasona- and many had no generative capacity.At least one public bly high for the years in issue. See: Killion v. City of service commission allowed a city utility a rate of return Paris; 192 Tenn.446,241 S W 2d 524(1951). on equity comparable to private industry, " and the III. WAS THE 13.5% RATE OF RETURN ON courts in our jurisdiction frequently equate municipal EQUITY USED BY ORLANDO UTILITIES COM utilities with privately owned utilities. m Where there is MISSION IN SETTING [**12] ITS RATES SHOWN conflicting expert testimony concerning the proper rate TO BE UNREASONABLE AND ARBITRARY? of return on equity standard to be applied to municipal utilities, we cannot say the lower court erred in finding The record showed that the OUC used the rate of for the OUC on this point.b We note however,that this 13.5°x6 in calculating the needed rate of return on equity is precisely the type of ruling relating to rate structure in setting its rates for the years in question.The testimo- that the PSC should determine.15 ny established that the rate of return among inves- tor-owned Florida utilities from 1972 to 1977 ranged 23. Re Municipality of Anchorage d/b/a An- from 12.75% to 16.35%, and that the PSC had estab- chorage Water Utility, 19 PUR 4th 278 (Alaska lished from 13% to 15% as a "reasonable" zone. Both Pub.Util.Comm'nFebruary 29,1977). appellant and appellees agree that a utility should be al. 24. Hander v. City of Jacksonville, 97 Fla; lowed to earn a reasonable rate of return on its equity,20 807, 122 So. 220 (1929); F.dris v. Sebring Util. but they disagree what industry earnings standard should Comm'n 237 So.2d 585, cert. denied,240 So.2d be applied. 643 (F7a.1970); 12 E. McQuillin, Municipal 20. In re Permian Basin,390 U.S. 747, 88 S. [**151 Corporations§35.37a(1970). Ct. 1344, 20 L.Ed 2d 312(1968);Federal Pow- 25. Columbus S Ohio Elec. v Public Utdl er Comm'n v Hope Natural Gas Co., 320 U.S Comm'n of Ohio, 58 Ohio&2d 120, 388 N.E2d 591,64 S. Q.281,88 L.Ed 333(1944), 1378(1979). Rosalind argued that because the OUC is a 26• The expert witness from the PSC express- city-owned utility,the court should not consider the rate Iy refused to answer this question. of return on equity allowed to privately owned utilities. Rosalind's expert witness testified that if the Orlando Some states' public service commissions do not allow franchise fee was treated as profit as we conclude it municipal utilities to receive [**13] as high a rate of should be, then the OUC was earning approximately a return as a private utility"because they pay no taxes,are 16% rate of return on equity rather than, 13.5%. The able to raise fimds through bonds at lower interest rates, OUC's witnesses conceded that disallowance of such a and their"stockholders,"or cities who take their profits, large"operating expense"would indeed affect the OUC'a pay no taxes either. Rosalind showed that the average income yield perhaps as much as 2%. Assuming the rate of return on equity fnr municipal utilities,as shown OUC is really setting its rates to earn 16%rate of return in a 1973 Federal Power Commission Report,u was only on equity,this figure exceeds the PSC's range of reason- 8.1%. The expert witness for Rosalind also testified that ablenew,or certainly sits on the extremely high side of a municipal utility should not cam a rate of return on the range.'*However,rates may be higher than the PSC's equity higher than 6% to 9%, and that OUC's calcula- "reasonable"range but still not be confiscatory and arbi- tions based on 13.5 would make its rates unreasonable. trary. "Although this is a close question,we are reluc- tant to Wile that one percentage point topples the OUC 21. In re Petitions of Burlington Elec. Light into the confiscatory or excessive range." Dept, 135 Vt. 114, 373 A.1d 514 (1977); in re Wanahah Water Co., No. 24511 (N.Y. P.S.C. 27. Government owned municipals are con- March 26,1968), sidered by authorities to foster lower rates in pri. 22. Federal Power Commission, Statistics of vete utilities because of lower nate competition. Publicly Owned Electric Utilities in the United R. Hellman, Government Competition in the States 1973(1974). Electric Utility Industry A 7heoradcal and Em- pirical Study 39 (1972). In this case Orlando Utilities Commission has disproved the none. 5� Page S 402 So.2d 1209,*; 1981 Fla.App.LEXIS 20623,F,a [**16] Finally Rosalind argues that litigation costs I should 28. "A reasonable rate is one that falls within not be taxed against it as the representative of the class a"zone of reason'...it is a field,and not a math- action because such amount has been included in the ematical point." Wichita Gas Co. v. Public Serv. rates as an operating expense and therefore has been as- Comm'A 2 F. Supp. 792, 799 (D.Kan.1933), sessed to the OUC's consumers through regular bilis for modified,290 U.S 561, 54 S. Ct. 321, 78 L Ed service.We find this argument to be without merit, and 500 (1934). See also: Banton v Bell Line R consequently affirm the award of costs to the OUC as the Corp., 268 U.S. 413, 45 S. Ct. 534, 69 L Ed prevailing party." 1020(1925);64 Am.Jur.2d Public Utilities 9190 (1972), 30. Rosalind does not dispute the amount of 29. City of Pompano Beach v. Oltman, 389 costs S 8,624.67. So.2d 283(Fla.4th DCA 1980). 31. §57.041,171a&d.(1979). N.COSTS. [**17] AFFIRMED. ORFINGER, J., and WALKER, GRISSIM H., As- sociate Judge,concur. 58� Holland & Knight .,.. 315 South Calhoun Street,Suite 600 1 Tallahassee,FL 32301 1 T 850.224.7000 1 F 850.224.8832 Holland&Knight LLP I www.hklaw.com D.Bruce May,Jr. (850)425-5607 bruce.may@hklaw.com December 11, 2014 Via E-mail[ca.alvarez@embargmail.com] Carlos Alvarez, Esq. 847 East Park Avenue Tallahassee, Florida 32301 Re: Mediation Statement of the Town of Indian River Shores, Chapter 164 F.S. Mediation, Scheduled for December 17, 2014 Dear Mr. Alvarez: Thank you for agreeing to serve as mediator as part of the conflict resolution process between the Town of Indian River Shores(the"Town"), Indian River County (the"County"), and the City of Vero Beach (the "City," and collectively, the "Parties"). On behalf of the Town, I am sending this letter outlining the Town's position in advance of the December 17, 2014, mediation to help promote a productive mediation effort. I will be joined at the mediation by the Town's Mayor, Brian Barefoot, the Town's Manager Robert Stabe, the Town's attorney Chester Clem, Holland & Knight's outside consultant Terry Deason, and my colleague Kevin Cox. Background Electric utility service within the Town is currently fragmented. A portion of the Town lying north of Old Winter Beach Road is served by Florida Power & Light Company ("FPL"), while the remainder of the Town south of Old Winter Beach Road is served by the City. The inefficiencies and other problems inherent with fragmented utility services are exacerbated by the fact that the City's electric rates are substantially higher than the rates charged by FPL and the Town's residents have no say in how the City's rates are set. Consequently, Town residents receiving electric service from the City are forced pay substantially more for electric service than those Town citizens receiving service from FPL. This substantial rate differential, coupled with the fragmentation of electric service,and the disenfranchisement of the City's non-resident electric customers, is costly, divisive, and unfair to the Town's residents. The Town is concerned that this problem will only worsen, and believes that the City cannot operate its electric utility in a way that can provide Town residents with reasonable rates, particularly when compared to the rates which FPL charges for the electric service it furnishes in the Town. Anchorage I Atlanta I Austin I Boston I Chicago I Dallas I Fort Lauderdale I Jacksonville I Lakeland I Los Angeles I Miami I New York Northern Virginia I Orlando I Portland I San Francisco I Tallahassee I Tampa I Washington,D.C.I West Palm Beach 5q Carlos Alvarez,Esq. December 11, 2014 Page 2 Summary of Conflict This conflict involves an extremely rare situation in which one municipality,the City,seeks to exert extra-territorial monopoly utility powers and extract monopoly profits within the sovereign boundaries of another municipality, the Town, without the Town's consent. The City currently operates its electric utility within the Town as an unregulated monopoly, yet the City has been given no statutory or constitutional power provide extra-territorial electric service within the Town's municipal boundaries. The Town, on the other hand, has the express statutory power and responsibility to furnish its residents with electric utility service, and has temporarily delegated that power to the City pursuant to a Franchise Agreement(Exhibit A),which will expire on November 6, 2016. The Town has elected not to renew its Franchise Agreement with the City at the expiration of its term because the City continues to mismanage its electric utility and subject the Town and its citizens to unreasonable electric rates and oppressive utility practices. The Town and its residents receiving electric service from the City are captive non-resident electric customers of the City and have no electoral voice in how the City manages its electric utility or sets its electric rates. The City has set its rates in such a way that the Town and other captive non-resident customers are required to produce millions of dollars of surplus electric revenues that the City then diverts to its General Operating Fund to be used for general purposes that are entirely unrelated to the City's electric utility. This diversion of surplus electric revenues results in a massive subsidy that unjustly enriches the City at the expense of the Town and other captive non-resident customers. In addition to diverting electric revenues to its General Operating Fund,the City has made a series of imprudent management decisions that have driven the City's electric power supply costs to excessive levels. This in turn has resulted in the City charging unreasonable and oppressive electric rates to the Town and other captive non-resident customers. Again, the Town and other captive non-resident customers have no voice in electing the City officials who ratified these unreasonable rates and imprudent management decisions and will continue to make decisions regarding the City's electric service and rates in the future. As captive non-resident customers of the City,the Town and its residents receiving electric service from the City continue to be disenfranchised by the City's refusal to comply with the referendum requirements of Section 366.04(7), which the Florida legislature passed in 2008 to give non-resident customers a meaningful voice in electing the board that controls the City's electric utility. For these and other reasons, the Town has lost all confidence in the City's ability to properly manage its electric utility and treat its non-resident customers fairly. Accordingly, the Town seeks to exercise its express statutory right to furnish electric service to its inhabitants independent of the City upon the expiration of the Franchise Agreement. The Town also seeks damages for unjust enrichment and unreasonable rates. (� Carlos Alvarez, Esq. December 11, 2014 Page 3 Procedural History The Town is an incorporated Florida municipality of approximately 4,000 residents in Indian River County, Florida, and is a customer of the City's electric utility. The Town was established by Chapter 29163, Laws of Florida (1953). The City is an incorporated Florida municipality of approximately 15,000 residents in Indian River County, Florida, and operates a municipal electric utility that currently furnishes electric utility service to the Town and other customers located within and outside the City limits. The City was established by Chapter 14439, Laws of Florida(1929). The City owns and is responsible for operating a municipal electric utility system that serves approximately 34,000 customers, of which approximately 13,000 are located within the City and approximately 21,000 are located outside the City. Approximately 3,000 of the City's non-resident customers are in the Town. The Town and one of its residents initiated a lawsuit against the City on July 18, 2014 regarding the disputes summarized above and more fully described below. The Town's Complaint is attached as Exhibit B. Because the Town and the City are both political subdivisions subject to Chapter 164, Florida Statutes (the "Florida Governmental Conflict Resolution Act"), the Town initiated the statutorily mandated conflict resolution process and the court abated the lawsuit and administratively closed the case pending completion of the mandatory conflict resolution process. The County subsequently joined in the process as a primary conflicting party but has not intervened in, and therefore, is not a party to the lawsuit. The Parties have met in two conflict assessment meetings and a joint public meeting in an effort to define and resolve the issues in dispute.To date, ,%low the conflict has not been resolved. The Town hopes that the upcoming mediation enables the Parties to reach some resolution. If this mediation is unsuccessful, however, the Town will ask the court to remove the abatement and will resume the litigation initiated by the filing of the Town's Complaint. The Statutory Powers of the City and the Town The City has no inherent home rule power to provide extra-territorial electric service within the municipal boundaries of the Town. Art. VIII, 2(c), Fla. Const. ("Municipal annexation of unincorporated territory, merger of municipalities, and exercise of extra-territorial powers by municipalities shall be as provided by general or special law."); § 166.021(3)(a), Fla. Stat. (`The subjects of annexation, merger, and exercise of extraterritorial power ... require general or special law pursuant to s. 2(c),Art. VIII of the State Constitution."). There are no general or special laws, however, granting the City the power to provide extra-territorial electric service within the Town. In fact, the special law that creates the City only empowers the City to provide electric service to "the City and its inhabitants". Ch. 14439, § 40, Laws of Fla. (1929). In recent Florida Public Service Commission(`PSC")proceedings involving the County,to which the Town is not a party, the City has cited Section 180.02(2), Florida Statutes, for its right to extend and execute all of its corporate powers outside of its corporate limits. However, Section 180.02(2)further provides that "said corporate powers shall not extend or apply within the corporate limits of another municipality," such as the Town. Co l Carlos Alvarez, Esq. December 11, 2014 Page 4 w... In contrast to the City's lack of extra-territorial power to serve within the Town,the Town has been given broad powers to: "furnish any and all local public services, including electricity" to its inhabitants; contract "on behalf of the inhabitants of the Town" with other utilities for the provision of electricity; "purchase, construct, maintain, operate, lease or contract for any public utilities, including but not limited to, electric light systems and plants ... and distribution systems therefore"; and to grant public utility franchises of all kinds. Ch. 29163, §2(e) and (f), Laws of Fla. (1953) (Exhibit Q. The Franchise Agreement Pursuant to these broad statutory powers, the Town entered into the Franchise Agreement with the City in 1986. That Franchise Agreement will expire on November 6,2016. The Franchise Agreement has four fundamental features. First, it is based on the Town's statutory right and responsibility to see that its inhabitants are furnished with reliable and reasonably priced electric service. Second,it called for the Town to temporarily relinquish its right to furnish electric service to its inhabitants residing south of Old Winter Beach Road for a period of thirty years. Franchise Agreement, § 8. Third, it temporarily granted the City the exclusive franchise and permission to provide extra-territorial electric service within parts of the Town lying south of Old Winter Beach Road for a period of thirty years. Franchise Agreement, § 1. Fourth, it granted the City temporary permission to place its electric facilities in the Town's rights-of-way and other public areas for a period of thirty years. Id. The Franchise Agreement has no automatic or mandatory renewal provisions. """ By certified letter dated July 18, 2014, the Town formally advised the City in writing that it will not renew the City's Franchise, and that upon expiration of the Franchise Agreement the City will no longer have the Town's permission to furnish electricity to the Town's residents. The City's power to provide extra-territorial electric utility service within the Town is derived only by contract with the Town in the form of the Franchise Agreement, and the City has no legal power to provide such extra-territorial in the absence of a contractual agreement with the Town. The City has indicated that it intends to continue to provide extra-territorial electric service within the Town on a monopoly basis when the City's Franchise expires notwithstanding the complete absence of any statutory power for the City to provide such extra-territorial service. The City has also indicated that it will seek to prevent the Town from exercising its statutory rights to furnish its inhabitants with electric service. The City's attempts to exert extra-territorial monopoly powers and extract monopoly profits within the Town without the Town's consent are extremely rare in the municipal utility field. However, such attempts are not unprecedented and where they have occurred courts have been quick to reject them. For example, in City of Indian Harbour Beach v. City of Melbourne, 265 So. 2d 422 (Fla. 4th DCA 1972), the Fourth DCA was asked to resolve a similar inter-municipality dispute involving Melbourne's provision of extra-territorial utility service to the residents of Indian Harbour Beach at rates which Indian Harbour Beach asserted were unreasonable. The court resolved the dispute over Melbourne's extra-territorial powers by first finding that the two municipalities were "theoretically equally independent." The court then ruled that,unless there was a franchise agreement that gave Melbourne the right to serve within Indian Harbour Beach or unless the cities mutually agreed to resolve their dispute, Melbourne would have to exit the area and Indian Harbour Beach had the right to obtain d� Carlos Alvarez,Esq. December 11, 2014 Page 5 "substitute"utility service from other utilities pursuant to an orderly process which the court would supervise. Id. at 424-25. The Territorial Agreement Although the City has entered into a bi-lateral territorial agreement with FPL that currently envisions that the City will provide electric service to a portion of the Town, and the PSC has approved that territorial agreement pursuant to that agency's regulatory authority under Chapter 366,Florida Statutes,the courts have recognized that a municipality like the Town can exercise its statutory rights and pursue the option of furnishing electric service to its residents at the end of a franchise agreement without running afoul of existing PSC-approved territorial agreements. Florida Power Corp. v. City of Casselberry, 793 So. 2d 1174, 1177 (Fla. 5th DCA 2001). Furthermore,the PSC has recognized that an existing territorial agreement may be modified when a municipality elects to provide electricity to its residents at the end of a franchise agreement. See PSC Orders Nos. PSC-05-0453-PAA-E1 (Apr. 8, 2005) and PSC-14-0108-PAA-EU (Feb. 24, 2014). Furthermore, the Florida Legislature has confirmed that "nothing" in Chapter 366, including the PSC's approval of the territorial agreement, should be read to restrict the Town's broad regulatory power to grant or deny public utility franchises for the use of its rights-of-way and other public areas. § 366.11(2), Fla. Stat. (2014) ("Nothing herein shall restrict the police power of municipalities over their streets, highways,and public places..."). In fact,in interpreting the jurisdictional limitations in Section 366.11(2), Florida Statutes, the PSC has expressly ruled �... that it has no authority to impose itself in a dispute over whether a city's franchise agreement with an electric utility should be allowed to expire. See PSC Order No. 10543 (Jan. 25, 1982)(the PSC "may not interpose itself in the terms and conditions of the franchise contract."). Moreover, the territorial agreement itself expressly acknowledges that the service area boundaries contained therein may be terminated or modified by a court of law. PSC Order No. 10382 (Nov. 3, 198 1) at Ex. A, Territorial Agreement, § 1.1. Thus, nothing in the territorial agreement or the PSC approval thereof impedes the Town from seeking to exercise its express statutory powers to furnish electricity to its inhabitants, and deny the City permission to furnish electricity within the Town at the expiration of the Franchise Agreement. The Town's Right and Responsibility to Protect its Inhabitants from Unreasonable Rates and Oppressive Utility Practices The City has used its electric monopoly to force the Town and other non-resident customers in the Town to pay unreasonable electric rates that have been consistently and substantially higher than the electric rates paid by Town citizens receiving electric utility service from FPL. For example, according to the comparative rate statistics compiled by the PSC and the Florida Municipal Electric Association, the City's residential electric rates for 1000 kWh usage were approximately: to 3 Carlos Alvarez, Esq. December 11, 2014 Page 6 • 22.01%higher than the rates of FPL in December 2004; • 45.01%higher than the rates of FPL in December 2005; • 9.56%higher than the rates of FPL in December 2006; • 31.12%higher than the rates of FPL in December 2007; • 30.23%higher than the rates of FPL in December 2008; • 30.63% higher than the rates of FPL in December 2009; • 26.46%higher than the rates of FPL in December 2010; • 21.57% higher than the rates of FPL in December 2011; • 31.45%higher than the rates of FPL in December 2012; and • 41.19%higher than the rates of FPL in December 2013. Because FPL is an investor-owned utility, its electric rates are regulated by the PSC under Chapter 366, Florida Statutes. In contrast, as a municipal electric utility, the City and its electric utility rates are not regulated by the PSC. See §§ 366.04 and 366.02(1), Fla. Stat. (providing the PSC with the jurisdiction to regulate rates and services of a "public utility," but excluding municipalities from the definition of"public utility"). Instead,the City's electric utility is managed and its rates are set exclusively by the City Council. Ch. 14439, § 40, Laws of Fla. (1929). The City Council Members are elected by the citizens who reside inside the City's corporate limits. Under Florida law, the rate levels of a municipal electric utility like the City are not regulated by the PSC because there is an expectation that citizen-ratepayers of a municipal electric utility have an adequate voice in regulating their own electric rates. This expectation is based on the premise that elected municipal officials are ultimately responsible to their citizen-ratepayers for all rate impacts associated with their operation of the municipal utility system. In other words, if a customer believes that an elected official is not properly managing the municipal electric utility,then that customer can vote the elected official out of office. However,because approximately 62%of the City's electric customers are non-residents of the City, a significant majority of the City's electric customers cannot vote in City elections, and thus have no voice in electing those officials that manage the City's electric utility system and set their electric rates. Although the City is not subject to the PSC's rate-setting jurisdiction,the City is still required by law to set rates that are reasonable. The special act creating the City provides that the "City Council may by ordinance make reasonable regulations as to the use of any public utility and may fix reasonable rates for service furnished by public utilities to consumers." § 40, Ch. 14439, Laws of Fla. (1929) (emphasis added). In the Town's view,the City has engaged in oppressive rate-making practices that require the Town and its residents to unfairly subsidize City operations that are not related to the furnishing of electric service to customers. For example, the City has set its electric rates so that the Town and other captive non-resident customers are required to produce millions of dollars of surplus electric revenues that the City then diverts to the City's General Operating Fund. Those diverted surplus revenues are then used to cover non-utility costs, including propping up the City's unfunded pension obligations to current and former employees that had nothing to do with the operation of the City's electric utility or the furnishing of electric service. In addition, the City is diverting these surplus electric revenues from non-resident customers as a surrogate for ad valorem tp Carlos Alvarez, Esq. December I I, 2014 Page 7 �. tax levies such that non-citizens are required to fund the City's municipal functions. This diversion of surplus electric revenues results in a massive subsidy that unjustly enriches the City at the expense of the Town and other captive non-resident customers. This massive subsidy has also contributed to driving up the City's electric rates to unreasonable and oppressive levels. In order to protect against unreasonable rates,the City has a legal duty to the Town and its other electric customers to operate and manage its municipal electric utility with the same degree of business prudence, conservative business judgment and sound fiscal management as is required of private investor-owned electric utilities. State v. City of Daytona Beach, 158 So. 300, 305 (Fla. 1934). Under Florida law, customers of an electric utility are not required to bear the cost of imprudent utility management decisions. Gulf Power Co. v. FPSC, 487 So. 2d 1036 (Fla. 1986). Prudent electric utility management requires attention to detail, vigilant oversight, due diligence, and the implementation of proper risk management policies in order to manage fuel price volatility and keep power costs as low as reasonably possible. As described above, the Town believes that the City has breached its legal duty to charge only reasonable rates by employing oppressive rate-making practices that require the Town and other captive non-resident customers to unfairly subsidize City operations that are not related to the furnishing of electric service. In addition,the Town believes the City has breached its duty to prudently operate and manage its electric utility by making a series of ill-advised utility management decisions,including entering into a number of imprudent,expensive long-term power supply arrangements which bind the City to above-market prices well into the latter parts of this century. An elected City official recently stated publicly that his predecessors at the City should never have entered into these long-term power supply arrangements. Furthermore, other City officials have publicly stated that because of the City's obligations under these long-term power supply arrangements, the City's electric rates will be higher than FPL's electric rates into the foreseeable future. To be clear,the Town is not seeking to invalidate the long-term power supply arrangements that the City has entered into in the past. Those are contractual obligations of the City not the Town. Rather,the Town's lawsuit seeks only to show that the City was imprudent in entering into those long-term power supply arrangements in the first place and thus the costs caused by the City's imprudent management decisions should not be borne by the Town and its residents that have had no voice in the management of the City's electric utility. See Gulf Power Co. v. FPSC 487 So. 2d 1036 (Fla. 1986) (customers of an electric utility are not required to bear the cost of imprudent utility management decisions). The City Continues To Disenfranchise The Town And Its Citizens In the Town's view,the City has imposed unreasonable rates on the Town and its residents which the City has used to subsidize its own operations and reduce its citizens' own tax burdens, while not providing the Town an electoral voice in the management of the utility and the use of its revenues. This is troubling because in 2008 the Florida Legislature passed a law for the express purpose of providing all customers of small municipal utilities, including those outside the IW. Carlos Alvarez, Esq. December 11, 2014 Page 8 municipality, a proportionate voice in electing the governing board of their municipal utility. See Ch. 2008-227, Laws of Fla. Specifically, Chapter 2008-227 added subsection (7) to Section 366.04, Florida Statutes, to require each "affected municipal electric utility" to conduct a referendum election of all of its retail electric customers to determine if a majority of the customers are in favor of creating a separate electric utility authority to operate the business of the electric utility. "Affected municipal electric utility" is defined as a municipality that operates an electric utility that: (a) serves two cities in the same county; (b) is located in a noncharter county; (c)has between 30,000 and 35,000 retail electric customers as of September 30, 2007; and (d) does not have a service territory that extends beyond its home county as of September 30, 2007. § 366.04(7), Fla. Stat. (2008). The City is an "affected municipal electric utility" subject to the requirements of Section 366.04(7). In filings before the PSC,the City has admitted that: (i)it serves the City of Vero Beach and the Town,both municipalities in Indian River County; (ii)Indian River County is a noncharter county;and(iii)the City's service area does not extend beyond Indian River County. Furthermore, the City's audited financial statement for 2007 expressly notified the public that the City had 33,442 retail electric customers as of September 30, 2007. Upon information and belief, the City also represented to the PSC and to credit rating agencies that it had in excess of 33,000 retail electric customers in 2007. Prior to passage of Section 366.04(7), consistent with established electric utility industry practice, the City quantified its retail customers by counting the number of separate meter accounts. After Section 366.04(7) became law, however, the City adopted a customer counting method which for the first time counts individuals with multiple meters as a single "customer," which resulted in a number of customers below 30,000. The Town believes that Section 366.04(7) should be enforced here, and that it provides all of the City's retail electric customers -- including non-residents of the City -- a right to vote in a referendum on whether a separate electric utility should be created to operate the business of the City's electric utility. The process set forth in Section 366.04(7) also provides an opportunity, upon approval through the referenced referendum, for the non-resident customers of the City to be served by a separate electric utility authority, the governing board of which shall proportionately represent all of the customers of the City's electric utility. Conclusion The Town has the right and responsibility to protect its residents from unreasonable rates and oppressive utility practices. Although the Town understands that the City is trying as part of this conflict resolution process to reduce its electric rates, City officials have publicly stated that, because of the City's past contractual decisions, its electric rates will continue to substantially exceed FPL's rates into the foreseeable future. Furthermore, City officials have publicly stated that the City has no intention of suspending the oppressive rate-making practices that require the Town and its residents to unfairly subsidize City operations. Consequently, the Town has lost all confidence in the City's ability to properly manage its electric utility and treat its non-resident customers fairly. Accordingly, the Town seeks to exercise its express statutory right to furnish �w Carlos Alvarez, Esq. December 11, 2014 Page 9 electric service to its inhabitants independent of the City upon the expiration of the Franchise Agreement. The Town asks for the City's acknowledgment that the City will honor the Town's right to determine how electric service will be furnished to its residents by relinquishing any asserted right to continue serving the Town upon expiration of the Franchise Agreement. The Town looks forward a productive mediation session on December 17, 2014. Please let me know if you need any additional information in advance of the mediation. Sincerely, HOLLAND & KNIGHT LLP D. Bruce May, Jr. DBM:kjg Enclosures cc: Dylan Reingold, Esq., County Attorney, Indian River County Floyd R. Self, Esq., Counsel for County Wayne R. Coment, Esq., City Attorney, City of Vero Beach Robert Scheffel "Schef' Wright, Esq., Counsel for City #34233460_vl EXHIBIT A IRS E F (10/27/86) RESOLUTION 414 w.. A RESOLUTION GRANTING TO THE CITY OF VERO BEACH, FLORIDA, ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC FRANCHISE IN THE INCORPORATED AREAS OF THE TOWN OF INDIAN RIVER SHORES, FLORIDA; I14POSING PROVISIOKS AND CONDITIONS RELATING TKKRETO; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED by the Board of the Town of Indian River Shores Indian River County, Florida, as follows: Section 1. That there is hereby granted to the City of Vero Beach, Florida (herein called "Grantee"), its successors and assigns, the sole and exclusive right, privilege or franchise to construct, maintain, and operate an electric system in, under, upon, over and across the present and future streets, alleys, bridges, easements and other public places throughout all the incorporated areas of the Town of Indian River Shores, Florida, (herein called the "Grantor") , lying south of Winter Beach Road, as such incorporated limits were defined on January 1, 1986, and vw. its successors, in accordance with established practices with respect to electric system construction and maintenance, for a period of thirty (30) years from the date of acceptance hereof. Such electric system shall consist of electric facilities (including poles, fixtures, conduits, wires, meters, cable, etc., and, for electric system use, telephone lines) for the purpose of supplying electricity to Grantor, and its successors, the inhabitants thereof, and persons and corporations beyond the limits thereof. Section 2. Upon acceptance of this franchise, Grantee agrees to provide such areas with electric service. All of the electric facilities of the Grantee shall be constructed, maintained and operated in accordance with the applicable regulations of the Federal Government and the State of Florida and the quantity and quality of electric service delivered and sold shall at all times be and remain not inferior to the applicable standards for such service and other applicable rules, w regulations and standards now or hereafter adopted by the Federal -1- Goverrunent and the State of Florida. The Grantee shall supply all electric power and energy to consumers through meters which shall accurately measure the amount of power and energy supplied in accordance with normally accepted utility standards. Section 3. That the facilities shall be so located or relocated and so constructed as to interfere as little as practicable with traffic over said streets, alleys, bridges, and public places, and with reasonable egress from and ingress to abutting property. The location or relocation of all facilities shall be made under the supervision and with the approval of such representatives as the governing body of Grantor may designate for the purpose, but not so as unreasonably to interfere with the proper operation of Grantee's facilities and service. That when any portion of a street is excavated by Grantee in the location or relocation of any of its facilities, the portion of the street so excavated shall, within a reasonable time and as early as practicable after such excavation, be replaced by the Grantee at its expense, and in as good condition as it was at the time of such excavation. Provided, however, that nothing herein contained shall be construed to make the Grantor liable to the Grantee for any cost or expense in connection with the construction, reconstruction, repair or relocation of Grantee's facilities in streets, highways and other public places made necessary by the widening, grading, paving or otherwise improving by said Grantor, of any of the present and future streets, avenues, alleys, bridges, highways, easements and other public places used or occupied by the Grantee, except, however, Grantee shall be entitled to reimbursement of its costs as may be provided by law. Section 4. That Grantor shall in no way be liable or responsible for any accident or damage that may occur in the construction, operation or maintenance by Grantee of its facilities hereunder, and the acceptance of this Resolution shall be deemed an agreement on the part of Grantee to indemnify Grantor and hold it harmless against any and all liability, loss, cost, damage, or expense, which may accrue to Grantor by reason of the neglect, default or misconduct of Grantee in the construction, operation or maintenance of its facilities hereunder. -2- 7O Section 5. That all rates and rules and regulations established by Grantee from time to time shall be reasonable and wr. Grantee's rates for electric service shall at all times be subject to such regulation as may be provided by State law. The Outside City Limit Surcharge levied by the Grantee on electric rates is as governed by state regulations and may not be changed unless and until such state regulations are changed and even in that event such charges shall not be increased from the present ten (10%) per cent above the prevailing City of Vero Beach base rates without a supporting cost of service study, in order to assure that such an increase is reasonable and not arbitrary and/or capricious. The right to regulate electric rates, impact fees, service policies or other rules or regulations or the construction, operation and maintenance of the electric system is vested solely in the Grantee except as may be otherwise provided by applicable laws of the Federal Government or the State of Florida. Section 6. Prior to the imposition of any franchise fee and/or utility tax by the Grantor, the Grantor shall give a minimum of sixty (60) days notice to the Grantee of the imposition of such fee and/or tax. Such fee and/or tax shall be initiated only upon passage of an appropriate ordinance in accordance with Florida Statutes. Such fee and/or tax shall be a percentage of gross revenues from the sale of electric power and energy to customers within the franchise area as defined herein. Said fee and/or tax, at the option of the Grantee, may be shown as an additional charge on affected utility bills. The franchise fee, if imposed, shall not exceed six (68) per cent of applicable gross revenues. The utility tax, if imposed, shall be in accordance with applicable State Statutes. Section 7. Payments of the amount to be paid to Grantor by Grantee under the terms of Section 6 hereof shall be made in monthly installments. Such monthly payments shall be rendered twenty (20) days after the monthly collection period. The Grantor agrees to hold the Grantee harmless from any damages or suits resulting directly or indirectly as a result of the -3- 1 I collection of such fees and/or taxes, pursuant to Sections 6 and 7 hereof and the Grantor shall defend any and all suits filed ... against the Grantee based on the collection of such moneys. Section S. As further consideration of this franchise, the Grantor agrees not to engage in or permit any person other than the Grantee to engage in the business of distributing and selling electric power and energy during the life of this franchise or any extension thereof in competition with the Grantee, its successors and assigns. Additionally, the Grantee shall have the authority to enter into Developer Agreements with the developers of real estate projects and other consumers within the franchise territory, which agreements may include, but not be limited to provisions relating to; (1) advance payment of contributions in aid of construction to finance system expansion and/or extension, (2) revenue guarantees or other such arrangements as may make the expansion/extension self supporting, (3) capacity reservation fees, NOW (4) prorata allocations of plant expansion/line extension charges between two or more developers. Developer Agreements entered into by the Grantee shall be fair, just and non-discriminatory. Section 9. That failure on the part of Grantee to comply in any substantial respect with any of the provisions of this Resolution, shall be grounds for a forfeiture of this grant, but no such forfeiture shall take effect, if the reasonableness or propriety thereof is protested by Grantee, until a court of competent jurisdiction (with right of appeal in either party) shall have found that Grantee has failed to comply in a substantial respect with any of the provisions of this franchise, and the Grantee shall have six (6) months after final determination of the question, to make good the default, before a forfeiture shall result, with the right in Grantor at its discretion to grant such additional time to Grantee for compliance as necessities in the case require; provided, however, that the w -4- failure or delay is due to causes beyond the Grantee's control including, without limitation, "Acts of God", unavoidable casualties, and labor disputes. DONE and ADOPTED in regular session, this 30th day of Octobeh 1986. ACCEPTED: TOWN COUNCIL CITY OF VERO BEACH TOWN OF INDIAN RIVER SHORES By: �..--.,� By: —� May/or yor Date: V Woo. Attes t Attest: ity Clerk —'`Town C ehk-- -6- qq EXHIBIT B 75 Filing# 16068137 Electronically Filed 07/18/2014 10:01:49 AM IN THE CIRCUIT COURT OF THE NINETEENTH JUDICIAL CIRCUIT 1N AND FOR INDIAN RIVER COUNTY, FLORIDA TOWN OF INDIAN RIVER SHORES, a Florida municipality, and MICHAEL OCHSNER, CASE NO.: Plaintiffs, V. CITY OF VERO BEACH, a Florida municipality, Defendant. COMPLAINT Plaintiff, TOWN OF INDIAN RIVER SHORES (the "Town") and Plaintiff, MICHAEL OCHSNER (the "Customer," and collectively with the Town, "Plaintiffs"), by and through their undersigned attorneys, sue Defendant, CITY OF VERO BEACH ("Defendant" or the "City"), and allege as follows: JURISDICTION AND VENUE I. This is an action for declaratory and injunctive relief over which this Court has jurisdiction pursuant to Section 26.012(2)(c) and (3) and Chapter 86, Florida Statutes. 2. Venue is proper in this Court pursuant to Section 47.011, Florida Statutes, because both the Town and the City are municipalities in Indian River County, Florida, the Customer resides in Indian River County, the Town's rights-of-way and other public areas which are at issue in this Complaint are located in Indian River County, and the cause of action accrued in Indian River County. 7� NNW PARTIES 3. The Plaintiff, Town, is an incorporated Florida municipality of approximately 4,000 residents in Indian River County, Florida, and is an electric utility customer of the City. The Town was established by Chapter 29163, Laws of Florida(1953). 4. The Plaintiff, Customer, is a resident of the Town and is an electric utility customer of the City. 5. The Defendant, City, is an incorporated Florida municipality of approximately 15,000 residents in Indian River County, Florida, and operates a municipal electric utility that furnishes electric utility service to the Plaintiffs and other customers located within and outside the City limits. The City was established by Chapter 14439, Laws of Florida (1929). STATEMENT REGARDING THE FLORIDA GOVERNMENTAL CONFLICT RESOLUTION ACT 6. The Town and the City are both political subdivisions subject to Chapter 164, Florida Statutes (the "Florida Governmental Conflict Resolution Act"). Accordingly, the Plaintiffs agree to abatement of this action to pursue resolution of this dispute under the Florida Governmental Conflict Resolution Act, and the Town intends to initiate the appropriate dispute resolution procedures before further prosecution of this action. In the event that the Plaintiffs and the City fail to resolve their dispute within the time frame, and through the procedures, provided by Sections 164.1053 and 164.1055, Florida Statutes, the Plaintiffs reserve the right to immediately renew prosecution of this action and to avail themselves of all available legal rights and remedies. 2 r7 GENERAL ALLEGATIONS The City's Authority To Provide Electric Utility Service Within The Town Is Conditioned Upon The Town's Permission Which Has Been Revoked As Of November 6, 2016 7. The City owns and is responsible for operating a municipal electric utility system that serves approximately 34,000 customers, of which approximately 12,000 are located within the City ("Resident Customers") and approximately 22,000 are located outside the City ("Non- Resident Customers"). Approximately 3,500 of the City's Non-Resident Customers are in the Town. 8. The Plaintiffs are located in the Town and receive electric utility service from the City. The Town is located outside the City. Thus, Plaintiffs are Non-Resident Customers of the City. 9. The City's ability to provide electric utility service in the Town is derived directly from the consent of the Town, and the City has no legal right to provide such service absent the Town's consent. 10. The Florida Constitution and the Municipal Home Rules Powers Act provide the Town with broad powers to regulate the use of its own rights-of-way and other public areas. Art. VIII, § 2(b), Fla. Const.; § 166.021, Fla. Stat. (2014). 11. The special act that established the Town also provides it with broad powers to regulate the use of its rights-of-way, contract with other municipalities for the provision of electricity, and grant franchises of all kinds for the use of its rights-of-way and public areas. Ch. 29163, §2(e) & (f), Laws of Fla. (1953). 12. Pursuant to those broad powers, the Town entered into a franchise agreement with the City in 1986 (the "Franchise Agreement") that granted the City an exclusive franchise to 3 ! 8 1%MW construct, maintain and operate an electric utility within the Town's rights-of-way and other public areas lying south of Old Winter Beach Road (the "Franchise"). A copy of the Franchise Agreement is attached hereto as Exhibit "A." 13. Pursuant to its Franchise, the City has placed poles, wires, fixtures, conduits, meters, cables and other electric facilities within the Town's rights-of-way and other public areas for the purpose of supplying electricity to the Town and its inhabitants. 14. The City currently provides electric utility service to approximately 3,500 customers within the Town, while Florida Power and Light Company ("FPL") serves the remainder of the customers in the Town (approximately 739 customers). 15. In return for the Town granting the City the exclusive Franchise to operate an electric utility within a certain area of the Town, the City agreed to provide the Town and its citizens with electric utility service, to furnish such electric utility services in accordance with normally accepted electric utility standards, and to charge only reasonable rates for the electric services it provides. Ex. A, Franchise Agreement, §§ 1, 2 and 5. 16. The Franchise Agreement between the Town and the City has a term of thirty (30) years and will expire on November 6, 2016. 17. The Town has formally advised the City in writing that it will not renew the City's Franchise, and that upon expiration of the Franchise the City will no longer have the Town's permission to occupy the Town's rights-of-way and public areas nor will it have the Town's permission to operate an electric utility within the Town. 18. The City's sole authority to occupy or in any manner use the Town's rights-of- ways and other public areas to provide electric service is found in the Franchise Agreement. w. 4 19. Florida law does not authorize a municipality to provide extra-territorial electric utility service within another municipality's corporate limits without the other municipality's permission. The Franchise Agreement provides the permission under which the City is currently providing electric utility service in the Town, but the City will no longer have that permission after November 6, 2016. 20. The Town has elected to revoke its permission for the City to operate its electric utility in the Town because the City continues to mismanage its utility and charge the Town and its citizens unreasonable and excessive electric rates. The City's Failure to Charge Reasonable Rates 21. The City's electric rates have increased dramatically over the last 10 years. Today, the Plaintiffs and other Non-Resident Customers in the Town are forced to pay unreasonable electric rates that are approximately 30% higher than the electric rates paid by Town citizens receiving electric utility service from FPL. 22. Upon information and belief, Plaintiffs and other Non-Resident Customers in the Town receiving electric service from the City are collectively paying in excess of$2.0 million more per year than they otherwise would pay if electric service was provided by FPL. 23. Because FPL is an investor-owned utility, its electric rates are regulated by the Florida Public Service Commission ("PSC") under Chapter 366, Florida Statutes. 24. In contrast, as a municipal electric utility, the City and its electric utility rates are not regulated by the PSC. See §§ 366.04 and 366.02(1), Fla. Stat. (2014) (providing the PSC with the jurisdiction to regulate rates and services of a "public utility," but excluding municipalities from the definition of"public utility"). 5 CIA 0 v 25. Instead, the City's electric utility is managed and its rates are set exclusively by the City Council. Ch. 14439, § 40, Laws of Fla. (1929). 26. The City's Council Members are elected by the citizens who reside inside the City's corporate limits. See Ch. 14439, § 9, Laws of Fla. (1929) (the Council is "elected by the qualified voters of said City."); Part 1, Art. IV, § 4.01, of the City Code ("[a]ny person who is a resident of the city, who has qualified as an elector of this state, and who registers in the manner prescribed by law shall be an elector of the city."). 27. Under Florida law, the rate levels of a municipal electric utility like the City are not regulated by the PSC because there is an expectation that citizen-ratepayers of a municipal electric utility have an adequate voice in regulating their own electric rates. This expectation is based on the premise that elected municipal officials are ultimately responsible to their citizen- ratepayers for all rate impacts associated with their operation of the municipal utility system. In other words, if a customer believes that an elected official is not properly managing the municipal electric utility, then that customer can vote the elected official out of office. 28. However, because approximately 65% of the City's electric customers are Non- Resident Customers located outside of the City, a significant majority of the City's electric customers cannot vote in City elections, and thus have no voice in electing those officials that manage the City's electric utility system and set their electric rates. 29. Although the City is not subject to the PSC's rate-setting jurisdiction, the City is still required by law to set rates that are reasonable. The special act creating the City provides that the "City Council may by ordinance make reasonable regulations as to the use of any public utility and may fix reasonable rates for service furnished by public utilities to consumers." § 40, Ch. 14439, Laws of Fla. (1929) (emphasis added). A copy of the special act is attached hereto as 6 71 Exhibit "B." Likewise, the Franchise Agreement between the Town and the City expressly requires that the City only charge "reasonable" rates for the electric services it furnishes to the Town and its citizens. Ex. A, Franchise Agreement, § 5. 30. The City has engaged in improper rate-making practices that require the Plaintiffs and other Non-Resident Customers to unfairly subsidize City operations that are not related to the furnishing of electric service to customers. For example, upon information and belief: a. The City has diverted electric utility revenues to the City's general revenue fund to cover non-utility costs, including propping up the City's unfunded pension obligations to current and former employees that had nothing to do with the operation of the City's electric utility or the furnishing of electric service; and b. Under the pretense of eliminating a 10% surcharge on the Plaintiffs and other Non-Resident Customers, the City actually adopted an aggressive inverted rate which resulted in a net increase in base rates that disproportionately affected Non- Resident Customers. As a result of these improper rate-making practices,Non-Resident Customers are being forced to subsidize approximately 24% of the City's total budget. These and other improper rate-making practices of the City have resulted in unreasonable and excessive rates, which the Plaintiffs and other Non-Residential Customers are being forced to pay. 31. In order to protect against unreasonable rates, the City has a legal duty to the Plaintiffs and its other electric customers to operate and manage its municipal electric utility with the same degree of business prudence, conservative business judgment and sound fiscal management as is required of private investor owned electric utilities. State v. City of Daytona Beach, 158 So. 300, 305 (Fla. 1934). 7 bOZ 32. Under Florida law, customers of an electric utility are not required to bear the cost of imprudent utility management decisions. Gulf Power Company v. Florida Public Service Commission, 487 So. 2d 1036 (Fla. 1986). 33. Prudent electric utility managernent requires the implementation of proper risk management policies in order to manage fuel price volatility and keep power costs as low as reasonably possible. 34. The City has failed to prudently manage its utility system. For example: a. Upon information and belief, the City has abdicated its operational and managerial responsibilities to others without appropriate oversight and due diligence; b. Upon information and belief, the City has operated its electric utility system without implementing appropriate risk management protocols to mitigate fuel price volatility and keep electric power costs as low as reasonably possible; and c. The City has conceded in filings with the PSC that it did not have the "required knowledge, capabilities, or expertise" to perform basic utility managerial functions such as determining how customers were counted prior to 2008. These and other instances of managerial imprudence have caused the City's electric power costs to rise to excessive levels. 35. The City's elected officials have decided to pass the City's excessive power costs on to Plaintiffs by charging them unreasonable electric rates. As a result, Plaintiffs are being forced to pay unreasonable electric rates that are approximately 30% higher than the electric rates paid by other Town citizens receiving the same unit of electric service from FPL. All that 8 OJ differentiates these electric customers is where they fall in terms of the City's service area versus FPL's service area. 36. The Plaintiffs and other Non-Resident Customers have had no voice in electing the City officials who made, approved and/or ratified these unreasonable rates and imprudent utility management decisions. Consequently, the Plaintiffs have been and continue to be harmed by the unreasonable, unjust, and inequitable electric rates which they are being charged by the City. The Plaintiffs'Rights To Have An Electoral Voice ReQardinQ the Governance of the City's Electric Utility 37. The United States Supreme Court has recognized that where a municipal government is providing electric utility services, the benefits and burdens of the electric utility operations affect all customers indiscriminately such that all customers should have an electoral voice in how the utility is governed. See Cipriano v. City of Houma, 395 U.S. 701, 705 (1969). However, the Plaintiffs and other Non-Resident Customers of the City, have no vote with respect to the governance of the City's electric utility. 38. In 2008, the Florida Legislature passed Chapter 2008-227, Laws of Florida, for the express purpose of providing all customers of small municipal utilities, including those outside the municipality, a voice in electing the governing board of their municipal utility. 39. Chapter 2008-227 added subsection (7) to Section 366.04, Florida Statutes, to require each "affected municipal electric utility" to conduct a referendum election of all of its retail electric customers to determine if a majority of the customers are in favor of creating a separate electric utility authority to operate the business of the electric utility. "Affected municipal electric utility" is defined as a municipality that operates an electric utility that: a. Serves two cities in the same county; 9 Wq b. Is located in a noncharter county; c. Has between 30,000 and 35,000 retail electric customers as of September 30, 2007; and d. Does not have a service territory that extends beyond its home county as of September 30, 2007. § 366.04(7), Fla. Stat. (2008). 40. The City is an "affected municipal electric utility" subject to the requirements of Section 366.04(7). In filings before the PSC, the City has admitted that: (i) it serves the City of Vero Beach and the Town, both municipalities in Indian River County; (ii) Indian River County is a noncharter county; and (iii) the City's service area does not extend beyond Indian River County. Furthermore, the City's audited financial statement for 2007 expressly notified the public that the City had 33,442 retail electric customers as of September 30, 2007. Upon information and belief, the City also represented to the PSC and to credit rating agencies that it had in excess of 33,000 retail electric customers in 2007. 41. Prior to passage of Section 366.04(7), consistent with established electric utility industry practice, the City quantified its retail customers by counting the number of separate meter accounts. 42. After Section 366.04(7) became law, the City disavowed its prior customer counts set forth in its audited financial statements and has now has asserted that it is not subject to Section 366.04(7) because the City had less than 30,000 customers as of September 30, 2007. In reversing itself and claiming that it had less than 30,000 retail electric customers the City has adopted a novel and erroneous customer count method which for the first time counts individuals with multiple meters as a single "customer". 10 95 43. The City's newfound scheme for counting customers was contrived to avoid the referendum election requirements in Section 366.04(7), and is contrary to established utility practice for counting utility customers. Moreover, it differs radically from the method of counting customers which the City uses for purposes of its own audited financial reports, and its filings with the PSC and the credit rating agencies. 44. Section 366.04(7) in fact applies to the City, and all of the City's customers are entitled by that statute to participate in a referendum election and vote on the creation of a utility authority, which if approved, would give all customers a voice in electing the governing board of their utility. The Plaintiffs, along with the City's other Non-Resident Customers, continue to be harmed by the City's ongoing failure to comply with Section 366.04(7) because they continue to be disenfranchised and have no voice in electing those officials that manage the City's electric utility and set their electric rates. COUNT I For Declaratory and Injunctive Relief Relating to the City's Unreasonable and Unjust Electric Rates 45. This count is an action for declaratory and injunctive relief by the Plaintiffs against the City relating to the City's unreasonable and unjust electric utility rates. 46. The Plaintiffs adopt paragraphs 1 through 44 as if set forth fully herein. 47. The City has a legal duty to its customers, including the Town and the Customer, to charge only "reasonable rates" for the electric services that the City provides, and to keep those rates as low as possible because the City is a monopoly electric service provider and is only allowed to operate as such in order to provide its customers with electric service at prices that are as low as reasonably possible. Ch. 14439, § 40, Laws of Fla. (1929); § 180.13(1), Fla. Stat. (2014); Ex. A, Franchise Agreement, § 5. 11 8�0 48. The City also has a legal duty to act prudently in managing its electric utility system in order to protect its customers from unreasonable rates. 49. As described in paragraph 30 above, the City has breached its legal duty to charge only reasonable rates by employing improper rate-making practices that require Non-Resident Customers, including the Plaintiffs, to unfairly subsidize City operations that are not related to the furnishing of electric service to customers. These and other improper rate-making practices by the City have resulted in unreasonable and excessive rates, which the Plaintiffs and other Non-Residential Customers are being forced to pay. 50. As described in paragraph 34 above, the City has breached its duty to prudently operate and manage its electric utility by making a series of ill-advised utility management decisions which have driven the City's cost of power to excessive levels and resulted in the City charging unreasonable electric rates. 51. The Plaintiffs have a clear legal right to pay only those electric rates which are reasonable, just, and equitable, and have been and continue to be harmed by the unreasonable, unjust, and inequitable electric rates charged by the City. 52. The Plaintiffs are being irreparably harmed by the City's continued imposition of rates which are not reasonable,just, and equitable, and have no adequate remedy of law. WHEREFORE, the Plaintiffs request this Court: (1) Declare that the electric utility rates the Plaintiffs are being charged by the City are unreasonable, unjust, and inequitable in violation of the special act creating the City and common law; (2) Enjoin the City from further charging any rates beyond those that are reasonable, just, and equitable; (3) Award Plaintiffs supplemental relief under Section 86.061, Florida Statutes, in the form of a refund of any payment of rates they have made which were in excess of what was reasonable,just, and equitable; and u� 12 L� 1 (4) Grant the Plaintiffs such other and further relief as the Court deems proper under the circumstances. COUNT II For Declaratory Relief That The City Must Remove Its Electric Facilities from the Town Upon Imminent Expiration of the Franchise Agreement 53. This count is an action for declaratory relief by the Town against the City regarding the Town's rights under the Franchise Agreement. 54. The Town adopts paragraphs 1 through 44 as if set forth fully herein. 55. The Town granted the City an exclusive 30-year Franchise to operate and maintain electric utility facilities within certain parts of the Town pursuant to the Town's broad powers to grant or deny franchises for the use of its rights-of-way and other public areas. 56. The City's ability to provide electric utility service in the Town is derived directly from the permission of the Town, and the City has no legal right to provide such service absent the permission of the Town. 57. The Franchise Agreement provides the permission under which the City is currently providing electric utility service in the Town. However, the City will no longer have that permission when its Franchise expires on November 6, 2016. 58. Under Florida law a Franchise is a privilege not a right, and the City has no right to keep its electric facilities in the Town's rights-of-ways and other public areas after the Franchise Agreement expires unless the Town otherwise grants permission. 59. Although the City has a territorial agreement with FPL that currently envisions that the City will provide electric service to a portion of the Town, and the PSC has approved that territorial agreement pursuant to that agency's regulatory authority under Chapter 366, Florida Statutes, the Florida Legislature has confirmed that "nothing" in Chapter 366, including 13 g� the PSC's approval of the territorial agreement, should be read to restrict the Town's broad regulatory power to grant or deny franchises for the use of its rights-of-way and other public areas. § 366.11(2), Fla. Stat. (2014) ("Nothing herein shall restrict the police power of municipalities over their streets, highways, and public places..."). 60. In fact, in interpreting the jurisdictional limitations in Section 366.1 l(2), Florida Statutes, the PSC has expressly ruled that it has no authority to impose itself in a dispute over whether a franchise agreement should be allowed to expire. See PSC Order No. 10543 (Jan. 25, 1982). 61. Moreover, the territorial agreement itself expressly acknowledges that the service area boundaries contained therein may be terminated or modified by a court of law. 62. Thus nothing in the territorial agreement or the PSC approval thereof impedes the prosecution of this Complaint wherein the Town seeks to enforce its broad and sovereign regulatory powers to deny a franchise to another municipality for the use of the Town's rights- of-way and public areas. 63. The Town has elected not to renew the Franchise Agreement with the City because the City continues to mismanage its electric utility and to charge the Town and its citizens unreasonable and excessive electric rates. 64. Pursuant to its broad regulatory powers over its rights-of-way and other public areas, the Town has the legal right to require the City to remove its electric utility infrastructure from the Town's public rights-of-way when the Franchise Agreement expires on November 6, 2016, and to obtain substitute electric service from other providers. See City of Indian Harbour Beach v. City of Melbourne, 265 So. 2d 422 (Fla. 4th DCA 1972). In that case the court was asked to resolve a similar inter-municipality dispute involving Melbourne's provision of utility 14 �9 service to the residents of Indian Harbour Beach at rates which Indian Harbour Beach asserted were unreasonable. The Court resolved the dispute finding that, unless the cities mutually agreed to resolve their dispute, Indian Harbour Beach had the right to "expel" Melbourne and to obtain "substitute" utility service from other providers pursuant to an orderly process which the Court would supervise. Id. at 424-25. 65. There is nothing in the Franchise Agreement that prohibits or in any way restricts the Town's right to expel the City's electric facilities from its rights-of-way and other public areas when the Franchise Agreement expires. 66. There is nothing in the Franchise Agreement that requires the Town to purchase the City's electric facilities in the Town's rights-of-way or pay for the relocation of the City's electric facilities upon expiration of the Franchise Agreement. Thus, the City must bear the cost of removing its electric facilities from the Town's rights-of-way and public areas at the expiration of the Franchise, or negotiate a sale, lease or other transfer of those electric facilities to the substitute utility electric service provider selected by the Town. 67. The City has indicated that it will not vacate the Town's rights-of-way public property, or allow the Town to secure substitute electric service from other providers, when the City's Franchise expires. 68. The Town needs to act now to ensure that the City will remove its electric facilities from the Town's public property when the Franchise Agreement expires and that it does so in an orderly and efficient manner so that substitute electric utility service, other than from the City, will be available to serve the Town and its citizens when the City's Franchise expires. The Town also needs to ensure that the transition to such substitute electric utility service will not result in interruption of electric service to the Town or any of its citizens. A sufficient transition 15 IV period is required due to the number of customers involved; therefore, the Town needs the requested declaratory relief in advance of the Franchise Agreement's actual expiration in order to protect its citizens. 69. Thus, there exists a present, actual, and justifiable controversy between Town and the City, requiring a declaration of rights, not merely the giving of legal advice. 70. The Town seeks a declaration that under the Franchise Agreement and the statutory provisions cited above (i) the City has no legal authority to provide extra-territorial electric service to customers residing within the corporate limits of the Town upon expiration of the Franchise Agreement; and (ii) the Town has a clear legal right to require the City to remove its electrical facilities from the Town's rights-of-way upon expiration of the Franchise Agreement, and to seek substitute electric service from other providers. WHEREFORE, the Town requests this Court: (1) Declare that upon expiration of the Franchise Agreement the City has no legal authority to provide extra-territorial electric service to customers residing within the corporate limits of the Town; (2) Declare that at the expiration of the Franchise Agreement on November 6, 2016, the City will have no right to maintain its electrical facilities in the Town's public rights-of-way, and must remove its electrical facilities from the Town's public rights-of-way; (3) Declare that at the expiration of the Franchise Agreement on November 6, 2016, the Town has a legal right to seek substitute electric service from other providers; and (4) Grant the Town such other and further relief as the Court deems proper under the circumstances. 16 qI 'Wool -00, -.WNW *6W COUNT III For Declaratory and Injunctive Relief Relating to the City's Non-Compliance with Section 366.04(7), Florida Statutes 71. This count is an action for declaratory and injunctive relief by the Plaintiffs against the City relating to the City's failure to comply with Section 366.04(7), Florida Statutes. 72. Plaintiffs adopt paragraphs l through 44 as if set forth fully herein. 73. The City's electric utility is managed and its electric rates are set exclusively by the City's Council Members who are elected by the citizens who reside inside the City's limits. 74. Approximately 65% of the City's electric customers are not "residents" of the City, cannot as a matter of law vote in City elections, and thus have no voice in electing those officials that manage the City's electric utility and set their electric rates. Plaintiffs are part of this disenfranchised portion of the City's electric customers. 75. Section 366.04(7), Florida Statutes, was passed to provide non-resident customers of small municipal electric utilities, such as the Plaintiffs, a voice in electing the governing board of their electric utility. Section 366.04(7) requires each "affected municipal electric utility" to conduct a referendum election of all of its retail electric customers (both inside and outside the municipal limits) to determine if a majority of the customers are in favor of creating a separate electric utility authority whose governing board shall proportionately represent Resident and Non-Resident Customers. 76. For purposes of Section 366.04(7), "affected municipal electric utility" means a municipal electric utility which serves two cities in the same non-charter county, does not serve outside of its home county, and which had between 30,000 and 35,000 retail electric customers on September 30, 2007. 17 77. The City is an "affected municipal electric utility" subject to the requirements of Section 366.04(7). 78. Prior to passage of Section 366.04(7), consistent with established electric utility industry practice, the City counted its retail customers by quantifying the number of separate meter accounts. The City utilized this customer count methodology in preparing its 2007 audited financial statement which expressly notified the public that the City had 33,442 retail electric customers as of September 30, 2007. 79. After Section 366.04(7) became law, the City has apparently disavowed its prior customer counts set forth in its audited financial statements, and has now refused to comply with the referendum requirements in Section 366.04(7) because it claims that it had less than 30,000 customers on September 30, 2007. 80. In regulatory filings with the PSC in 2011, the City directly asserted that it is not subject to Section 366.04(7) based on an erroneous interpretation of Section 366.04(7) that would count individuals with multiple meter accounts as a single "customer" for purposes of the statute. The City's erroneous interpretation of Section 366.04(7) is nothing more than a contrived scheme to artificially lower the City's customer count below the statutory threshold to avoid the referendum election requirements in Section 366.04(7). That scheme is contrary to established utility practice for counting utility customers, and differs radically from the method of counting customers which the City uses for purposes of its own audited financial report, and its other filings with the PSC and the credit rating agencies. 81. In reliance on this erroneous legal interpretation, the City continues to refuse to comply with the directives of Section 366.04(7), and has not conducted the referendum election 18 Q3 „%MW required by the statute that would give Plaintiffs and other Non-Resident Customers an electoral voice in the governance of the City's municipal electric utility. 82. Plaintiffs dispute the City's erroneous interpretation of Section 366.04(7), and dispute the City's contention that it is not subject to that law. 83. Consistent with the method the City used for counting customers in its audited financial statements, its other filings with the PSC, and its filings with the various credit rating agencies, the City should be required to count customers by quantifying separate meter accounts, in which case the City is subject to the requirements of Section 366.04(7), Florida Statutes. 84. The Plaintiffs are being continually and irreparably harmed by the City's ongoing failure to comply with Section 366.04(7), because if the City complied with that statute, the Plaintiffs would have an opportunity to vote on the creation of a utility authority, which if approved, would give them a voice in electing the decision-makers who govern the City's electric utility and set the electric rates which Plaintiffs are being forced to pay. Thus, there exists a present, actual, and justifiable controversy between the Plaintiffs and the City, requiring a declaration of rights, not merely the giving of legal advice. 85. The Plaintiffs have a clear legal and ongoing right to vote in the referendum and otherwise be represented as provided by Section 366.04(7), Florida Statutes, and no adequate remedy at law to cure the ongoing denial of that right and the irreparable harm imposed on Plaintiffs. WHEREFORE, the Town and the Customer request this Court: (1) Declare that the City is subject to and must comply with Section 366.04(7)(a), Florida Statutes; (2) Enjoin the City from continuing to fail to comply with the requirements of Section 366.04(7); and 19 qq ,*no, (3) Grant the Town and the Customer any other relief which may be proper. COUNT IV For Declaratory and Injunctive Relief Relating to the City's Violation of the Customer's Constitutional Rights 86. This count is an action by the Customer against the City for declaratory judgment that the City's denial of the Customer's right to vote in a referendum and otherwise be represented as provided in Section 366.04(7), Florida Statutes, violates the Customer's due process and equal protection rights under the United States and Florida Constitutions, and for injunctive relief to require the City to comply with Section 366.04(7) in order to remedy these Constitutional violations. 87. The Customer adopts paragraphs 1 through 44 and paragraphs 71 through 85 as if set forth fully herein. 88. Section 366.04(7) provides all of the City's retail electric customers -- both Resident Customers and Non-Resident Customers -- a right to vote in a referendum on whether a separate electric utility should be created to operate the business of the City's electric utility. 89. The City has denied that right to vote to the Customer, as well as to all of its other Non-Resident Customers. 90. The process set forth in Section 366.04(7) also provides an opportunity, upon approval through the referenced referendum, for the Customer and all other Non-Resident Customers of the City to be served by a separate electric utility authority, the governing board of which shall proportionately represent the Resident and Non-Resident Customers of the City's electric utility. 91. The City continues to deny the Customer, as well as all its other Non-Resident Customers, a path to obtaining that fair and proportionate representation. 20 9,5 ,.Aw 92. Rather, the City's electric utility is controlled and managed by the City Council, which is "elected by the qualified voters of said City" alone. Ch. 14439, §§ 9, 40, Laws of Fla. (1929). 93. When all citizens are affected in important ways by a governmental decision, and indeed are given the right to vote and participate in that decision by legislative act, it is unconstitutional to exclude some of those citizens from the electoral franchise rights accorded to others similarly affected. 94. By depriving the Customer (and other Non-Resident Customers) of the right to vote and participate in the processes provided for in Section 366.04(7), the City is in continual violation of the Customer's right to due process and equal protection under the United States and Florida Constitutions. U.S. Const. amend. XIV, § l; Fl. Const. art. I, §§ 2, 9. 95. This denial of the Customer's Constitutional rights constitutes an ongoing and �" irreparable harm for which there is no adequate remedy at law. 96. There exists a present, actual, and justifiable ongoing controversy between the Customer and the City regarding whether the City should provide the Customer a right to vote on matters concerning the City's electric utility, requiring a declaration of rights, not merely the giving of legal advice. WHEREFORE, the Customer requests this Court: (l) Declare that the City's denial of the Customer's right to vote in a referendum and otherwise participate in the opportunities for representation provided in Section 366.04(7), Florida Statutes, violates the due process and equal protection clauses of the United States Constitution and the Florida Constitution; (2) Enjoin the City from continuing to deny such voting right, and require the City to comply with Section 366.04(7) in order to address the Constitutional deficiencies alleged herein; and (3) Grant the Customer such other and further relief as the Court deems proper under the circumstances. 21 Respectfully submitted this 18th day of July, 2014. HOLLAND & KNIGHT LLP /s/D. Bruce May Jr. D. BRUCE MAY,JR. Florida Bar No. 354473 Email: bruce.may@hklaw.com KAREN D. WALKER Florida Bar No. 982921 Email: karen.walker@hklaw.com KEVIN COX Florida Bar No. 34020 Email: kevin.cox@hklaw.com HOLLAND & KNIGHT LLP 315 S. Calhoun Street, Suite 600 Tallahassee, Florida 32301 Telephone: (850) 224-7000 Facsimile: (850) 224-8832 Secondary Email:jennifer.gillis@hklaw.com Secondary Email: connie.boatright@hklaw.com �.. Attorneys for Plaintiffs Town of Indian River Shores and Michael Ochsner 22 I ! LAWS OF FLORIDA 2181 Sections 35, 36 and the Fast half of Section 34, lying and being in Manatee County, Florida, also Section 1, 2 and the Inst half of Section 3 in Township 36 South, Range 20 Last, lying and being in Sarasota County, Flo%-oda, shall be subject to the payment of taxes sufficient to pay off and discharge said indebtedness. Section 3. For the purpose of assessing, levying and collecting such taxes, the County Commissioners of Manatee County, Florida, shall order a sufficient assessment made of the real and personal property within such territorial limits as shall lie within the County of Manatee, Florida, to pay off and discharge its just proportion of said indebtedness, and likewise the County Commissioners of Sarasota County, Florida, shall order a sufficient assessment made on the real and personal property within such territorial limits as shall lie within the County of Sarasotit. Florida, to pay off and dis- charge its just proportion of said indebtedness. Such proportions of said indebtedness shall be figured on the basis of the assessed valuations for State and County purposes. Such property shall be assessed by the County Assessor of the Taxes, and shall be collected by the Tax Collector of i,lie respective Counties. The proceedings in the assessments, collections, receipts and disbursements of such taxes shall be like the proceedings concerning County taxes as far as applicable, which taxes when collected shall be paid to the Treas- urer of the City of Verna, for the benefit of the creditors of said city. Such Treasurer shall hold office for the sole purpose of re- ceiving and paying out such funds and only so long as is necessary to carry out said trust. Section 4. Any and all tax assessments, rolls or levies heretofore made by the City of Verna and uncollected are now declared null and void. Section 5. All laws or parts of laws in conflict herewith are hereby repealed. Section G. This Act shall take effect immediately upon its passage and approval by the Governor, or upon its becoming a law without such approval. Approved June 7, A. D. 1929. CHAPTER 14439—(No. 875). AN ACT to Abolish the Present Municipal Government of the City of 'Pero Beach, in Indian River County, Florida; to Create and Establish a New Municipality to be Known as City of Vero Beach, l � 2182 LAWS OF FLORIDA in Indian River County, Florida; to Fix the Territorial Limits of Such City; to Legalize and Validate the Ordinances of the Abolished Municipality and Official Acts Thereon; to Validate, Legalize, Ratify and Confirm the Ordinances and Resolutions, Bonds, Certificates of Indebtedness and Obligations of the Abolished Municipality of Vero Beach, Florida, as the Ordinances and Resolutions, Bonds, Certificates of Indebtedness and Other Obligations of the New Municipality of Vero Beach, Florida; to Legalize, Validate, Ratify and Confirm all Contracts of the Abolished Municipality of Vero Beach, Florida, Making Such Contracts Binding Upon the New Municipality of Vero Beach, Florida; to Provide and Specify How Such Municipality Sball Be Governed, by What Officers It Shall Be Governed, and to Fix and Prescribe the Jurisdiction and Powers of the Said City of Vero Beach, Florida, and the Officers Thereof; and to Provide for the Assessment,Levy and Collection of Taxes and Assessments in and for the Said City. Be It Enacted by the Legislature of the State of Florida: Section 1. That the municipal corporation now existing and known as City of Vero Beach, in Indian River County, Florida, be and the same is hereby abolished and a new municipality to be known as City of Vero Beach, in Indian River County, Florida, is hereby created and established to succeed such former municipality of the City of Vero Beach, in Indian River County, Florida. City of Vero Beach Beach,hereby created and established, shall embrace and include all that territory situated and being in Indian River County, Florida, described as follows, to-wit: Beginning at the northwest corner of Section 7, Township 33, South, Range 40 East, run east to the center of the navigation channel of the Indian River, Thence run southerly along the center of the said channel to a point due west of the south line of Government Lots 3, 4 and 5 of Section 8, Township 33 South, Range 40 East, Thence run east along the south line of the said Lots 3, 4 and 5 to the Atlantic Ocean, Thence run northerly along the Atlantic coast, including the waters of the Atlantic Ocean within the limits of Indian River County, Florida, to the east and west center line of Section 29, Township 32 South, Range 40 East, qq LAWS OF FLORIDA 2183 Thence run west along the said center line of Section 29 to the center of Bethel Creek, Thence run southerly and westerly along the center of Bethel Creek to the Indian River, Thence run southwesterly past the north end of Fritz's island to the center of the west channel of the Indian River, Thence run southerly along the west channel of the Indian River to the south right-of-way line of the Indian River Farms Drainage District's Drain Canal, Thence west along the said south right-of-way line of the Drain Canal to a point due south of the east line of R. D. Carter's Sub- division lying in the northeast quarter of the southeast quarter of Section 35, Township 32 South, Range 39 Fast, Thence run north along the said east line of R. D. Carter's Sub- division to the northeast corner of the said R. D. Carter's Sub- division, , Thence run west along the center line of Section 35, Township 32 South, Range 39 Fast to the east line of Twenty-seventh (Emer- son) Avenue, Thence run south along the said east line of Twenty-seventh Avenue to the south right-of-way line of the Drain Canal of the Indian River Farms Drainage District, Thence run westerly along the said south right-of-way line of the Alain Canal to the east line of Forty-third (Clemann) Avenue, Thence south along the said east line of Forty-third Avenue, to a point thirty-five feet north of the south line of northwest quar- ter of the northwest quarter of Section 10, Township 33, South, Range 39 Fast, the said point being on the north line of Fourteenth Street, Thence east along the said north line of Fourteenth street to the east line of the northwest quarter of the northwest quarter of Sec- tion 12, Township 33 South, Range 39 East, Thence north along the said east line of the northwest quarter• of the northwest quarter of Section 12 to the north line of the said Section 12. Thence run east to the point of beginning. Section 2. The title to and jurisdiction over all streets, thor- oughfares, parks, alleys, public lots and sewers, and all other prop- erty of every kind, nature or description within or without said City, and all other property and municipal plants of the City now owned, po sessed or operated by it, and all property of every kind and character which said City may hereafter acquire within or '�O 2184 LAWS OF FLORIDA without said City, or may be vested in it or be dedicated to it, or which may have heretofore been vested in it or dedicated to it, for its use or for the public use, shall be vested in the City of Vero Beach as created under this Act. There shall also be vested in said City of Vero Beach, as created by this Act, for municipal pur- poses only, title to all tide water and other lands, and river and bay bottom waters, waterways and water bottoms and all riparian rights within the City limits, now owned by the State of Florida. Section 3. All assessments for taxes, public improvements or benefits heretofore made or levied by the City of Vero Beach, and all licenses, fines or forfeitures heretofore imposed and heretofore validated and confirmed, and all acts, resolutions, doings and pro- ceedings of.the City Council of the City of Vero Beach, Florida, as said municipality existed prior to the passage of this Act rela- tive to the issuance of bonds of said City and relative to assess- ments against property therein for public improvements of any kind, nature or description, which bonds have heretofore been issued and which assessments have heretofore been made,are hereby legalized, ratified, validated and confirmed, notwithstanding any want of power or authority of the said City Council or of said City, or of any defects or any irregularities or omissions in said sets, resolutions, doings and proceedings; and all bonds which have heretofore been sold and delivered by said City of Vero Beach, or which have heretofore been authorized and issued but not yet sold or delivered and which may hereafter be sold and delivered, are hereby declared to be valid and binding obligations of said City and incontestable in the hands of bona fide purchasers for value for any reason or upon any ground whatsoever. And all moneys due to or collectible by the City from taxes, assessments, licenses, fines, forfeitures or from any other source whatsoever; and all debts or obligations due the City of whatsoever nature sball henceforth be due and payable to the City of Vero Beach created under this Act. `All liabilities and obligations to and rights of actions possessed by the City shall remain in force and effect; and all prosecutions for any violation of the ordinances of said City, and all offenses here- tofore committed against said City are hereby saved and preserved with the right of prosecution; and all judgments, fines and sen- tences against persons under conviction are likewise saved and pre- served under thsi Act. Section 4. All lawful debts or obligations of the City now ex- isting or outstanding are hereby declared to be valid and unim- paired as debts and obligations of the City of Vero Beach created y1' LAWS OF FLORIDA 2185 under this Act. And no obligation or contract of said City shall be impaired by'this change, and all obligations, debts, bonds, time warrants, notes and other lawful obligations of every kind, nature or description heretofore incurred, executed, issued or sold by said City of Vero Beach shall be, and the same are, hereby declared to be the valid and binding obligations of the City of Vero Beach created under this Act. Section 5. All ordinances, resolutions, rules and regulations now in force in the City of Vero Beach, not in conflict with the pro- visions of this Act or the Constitution of the United States or of the State of Florida, shall remain of full force and effect until re- scinded, repealed or amended by the City of Vero Beach created under this Act. And all laws now in force or that may hereafter be enacted by the Legislature of the State for the benefit and pro- tection of cities and towns, which may not conflict with the pro- visions of this Act, shall enure to and be applicable to the City of Vero Beach. Section 6. All contracts entered into by the City of Vero Beach, and all pending legal proceedings of every kind and character, either by or against the City of Vero Beach, or in which the City of Vero Beach is interested, instituted prior to the passage of this rte., Act, and all pending proceedings for public work or improvements by the City of Vero Beach, of every kind and character, whether or not the same shall result in the levying of general or special taxes or assessments, or the issuance of warrants or eertifleates of indebt- edness or bonds or notes, shall continue in full force and effect and shall not be affected in any manner by the provisions of this Act. Section 7. No vested right or rights acquired or held by any individual or corporation under and by virtue of the existing char- ter, ordinances, resolutions, rules, regulations and contracts of the City of Vero Beach shall be abridged, nullified or abolished by this charter. Section 8. The corporate authority of said City shall be vested in a Mayor, City Council, Clerk, Tax Collector, Tax Assessor, Treas- urer, Marshal .and Registration Officer; and the City Council is hereby authorized and empowered to create, by ordinance, such other and additional officers, with such powers and duties, as it deems advisable. The City Council is hereby authorized and em- powered to abolish the office of City Treasurer of said City pro- ' vided the same shall not become effective until after the expiration of the term of office of the present incumbent. i... I �� 2186 LAWS OF FLORIDA Section 9. The Mayor and the members of the City Council shall be elected by the qualified voter's of said City. The Clerk, Tax Col- lector, Tax Assessor, Treasurer, Marshal, Registration Officer, and any other officers hereafter created, when the City Council sliall not otherwise provide, shall be appointed by the Mayor, subject to confirmation by the City Council. Section 10. The City Council may provide by ordinance for the holding by one or more persons of the offices of Tax Assessor, Tax Collector, Clerk, Treasurer and Registration Officer. Section 11. Any person, male or female, who has reached the age of twenty-one years and is a citizen of the State of Florida and who has resided in the County six months and in the City of Vero Beach for thirty days and who is registered as a voter on the City Registration Book, sliall be qualified to hold any office in said City, and to vote in all City ]flections, except bond elections, when the qualifications shall be hereinafter provided. The payment of poll tax shall not be required as a qualification for voting at elections in said City. Section 12. No person shall be eligible to hold office in said City unless lie or she be a qualified voter in said City. Section.13. The regular annual election for the elective officers .w.. of the City of Vero Beach shall be held on the second Tuesday in December of each year, and the present officers of the City of Vero Beach, whether elected or appointed, sliall retain the same offices under the City hereby created for the term for which they were elected or appointed and until their successors are elected or ap- pointed and qualified. Provided, however, that the City Council shall have the power by ordinance to lay off the City of Vero Beach into wards not to exceed five in number and to provide for the election of a Councilman from eiich ward to be elected either-by the qualified electors of the City at large or by the qualified electors iri each ward, as the City Council may determine. At the regular annual election to be held in the City of Vero Beach on the second Tuesday in December, 1929, there shall be elected three members of the City Council for the term of two years; at the next City election held on the second Tuesday in December, 1930, two members of the City Council shall be elected for the term of two years; and thereafter members of the City Council shall be elected for the term of two years each; so that two members are elected at one annual election, and three members are elected at the next annual election, but each for the term of two years and until their successors are elected and qualified, 103 .40. -mow LAWS OF FLORIDA 2187 Beginning with the election held in December, 1929, a Mayor shall be elected for the term of two years. Section 14. That all officers of the City of Vero Beach shall hold office until their successors are elected or appointed and qualified. Section 15. Each officer of the City as soon as convenient after his appointment or election shall take before the Mayor or before any person authorized to administer oaths, an oath or affirmation that he will support, protect and defend the Constitution and gov- ornment of the United States and of the State of Florida against all enemies, domestic or foreign, and that he will bear true faith, loyalty and allegiance to the same and that he is entitled to hold office under the Constitution and laws of the State of Florida, and that ho will faithfully perform the duties of the office on which he is about to enter. Section 16. Said corporation shall have perpetual succession, may sue and be sued, plead and he impleaded, and shall have a com- mon seal which may be changed by the City Council at pleasure. Section 17. Said corporation may own, purchase, lease, receive; acquire and hold property, real and personal, within and without the territorial boundaries of said corporation to be used for any and all such public purposes as the City Council may deem neces- sary and proper, and that said corporation is hereby fully empow- ered to sell, lease, convey and otherwise dispose of any and all prop- erty, real and personal, which may belong to said corporation, and . the City Council shall prescribe by ordinance the manner of making such conveyance. Provided, however, that the electric light and power plant and/or-waterworks and/or any other public utilities owned or operated by said City shall never be sold, leased or other- wise disposed of unless such sale, lease or disposal shall first be rat- ifled, approved and confirmed by a majority vote of the qualified electors of said City who are freeholders, voting at an election duly called and held for such purpose in accordance with the rules and regulations of said City providing for the holding of general elec- tions therein. Section 18. The City Council shall by ordinance provide for the holding of all general and special elections and for the return and canvass of the same and for the registration of voters. Section 19. The Mayor shall have the power to preserve peace and order and to enforce the ordinances of said City and shall have such powers and duties as are conferred upon him by ordinance. His compensation shall be fixed by ordinance and shall not be changed during his term of office. He shall have jurisdiction for any 2188 LAD'S OF FLORIDA the trial of all offenses against the laws of the City, and it shall be his duty to see that the ordinances are faithfully executed and the orders of the Council duly observed and enforced. He shall be Judge of the Municipal Court and shall have power by his warrant to have brought before him any person or persons charged with the violation of the ordinances. He shall have power to require the attendance of witnesses for and against the accused; to administer oaths, to take affidavits and to inquire as to the truth of all charges preferred; to decide upon the guilt or innocence of the accused, and to fix by sentence the penalty prescribed by ordinance, and to, enforce the same; to pardon and release persons convicted by him, and to have and exercise all the powers incident and usual to the enforcement of his jurisdiction; and he shall also have the*power to punish for contempt of Municipal Court to the extent of a fine not exceeding One Hundred Dollars or imprisonment not exceeding thirty days, or both such penalties in his discretion. Provided, how- ever, that the City Council, with the written consent of or at the written request of the Mayor,shall have the power to elect by a ma- jority vote,a suitable person who shall preferably be a duly licensed and practicing attorney at law of said City, and who shall also be a qualified elector therain, to be Judge of the Municipal Court of the City of Vero Beach, and when so elected said Judge shall have the same powers and duties as this Act confers upon the Mayor as such Judge, and upon the election of such Judge the authority of the Mayor as such Judge shall cease, except during the absence or sickness of such Municipal Judge,when the Mayor of said City shall be acting Judge of the Municipal Court of Said City. The City Council shall fix the compensation of such Judge and the term of office of such Judge, when elected as herein provided, shall expire on the date of the term of the office of the incumbent Mayor. Section 20. The City Council shall have authority by ordi- nance to provide for taking cash security for appearance before the Mayor's Court for any person or corporation accused of violating a City ordinance and for the forfeiture thereof in default of such appearance. Section 21. The Mayor shall have power to suspend any officer, except Councilmen, for misconduct in office, or neglect of duty re- porting his action in writing, with reasons therefor, to the next regular meeting of the Council, for its approval or disapproval. Notice of such suspension and the reasons therefor shall be given. in writing to the suspended officer by mailing the same to his last known address, and the said suspended officer shall have ��5 LAWS OF FLORIDA 2189 the right to a hearing before the City Council. If the City Council shall approve the action of the Mayor in suspending such officer, said officer shall thereupon stand removed and his office vacated. If the Council shall not approve the action of the Mayor in sus- pending such officer, the said officer shall resume his duties. Section 22. The Mayor shall have general supervision over all City officers and the police force and may examine into the con- ditlon of the officers, books, records and papers thereof and the manner of conducting official business. He shall report to the City Council all violations or neglect of duty of any official that may come to his knowledge. He shall make such recommendations about City business to the City Council as lie deems advisable. Section 23. The Mayor shall appoint such police force with the consent of the Council as may be deemed necessary. The compen- sation of policemen shall be fixed by the City Council. Section 24. When in his opinion the public good requires, the Mayor may appoint and discharge special policemen and detec- tives, making report thereof to the City Council at its next meet- ing thereafter. Section 25. The Mayor shall communicate from time to time to the Council such information and recommend such measures touch- ing the public services as he may deem proper, and shall perform such other duties as the ordinances prescribe. Section 26. The Mayor may call special meetings of the Council, and when called lie shall state the object for which called, and the business of such meeting shall be confined to the objects so stated in the call, unless all the members of the Council are present, when they may transact such business as they see fit. Section 27. The Mayor may be impeached by the Council for misfeasance, malfeasance or nonfeasance in office, for drunken- ness or gross immorality. Should charges be preferredt ggainst the Mayor the Council shall furnish said Mayor with a copy of the charges, giving him a reasonable time to answer, and shall proceed without unnecessary delay to investigate and decide said charges. It shall require a four-fifths vote of all the members of the City Council to remove the Mayor. Section 28. That in case of death or absence of the Mayor from the City, or his inability from any cause to discharge the duties of the office of Mayor, the President of the Council, or in his absence the acting President of the Council, shall discharge the duties of Mayor as "Mayor pro tempore" until the office of Mayor shall be filled, or until the Mayor shall resume his duties. 6 0� 2190 LAWS OF FLORIDA Section 29. In the event there should occur, from any cause, a vacancy in any of the elective offices of aaid municipality, whether it be in any of the offices provided for and created by this Act, or whether it be in any offices that may hereafter be created, it shall be the duty of the City Council to fill such vacancy. In the event there should occur from any cause a vacancy in any of the offices of said municipality, other than elective offices, it shall be the duty of the Mayor of said municipality to fill such vacancy, subject to confirmation by the City Council. In either event the person so appointed to fill any such vacancy shall hold office for the unexpired term of his predecessor. Section 30. The City Council shall be composed of five coun- cilmen, each of whom shall receive not exceeding three dollars for each regular or special meeting he attends. The City Council shall prescribe its own rules and procedure and may prescribe penalties for non-attendance or disorderly conduct of its members and en- force the same. Four-fifths of its members concurring, it may expel a member for improper conduct in office. A majority of the members of the Council shall be necessary to constitute a quorum for the transaction of business, but a smaller number may adjourn from time to time until a quorum is obtained. The Coun- cil shall hold meetings at such times as it may determine, holding not less than one regular meeting each month. And said Council shall be the judge of the qualification, election and returns thereof of its own members and shall prescribe rules relative to any con- test over any election to membership thereon. Section 31. The City Council shall organize immediately after any general City election by electing one of its members president, who shall preside over the Council. When acting as Mayor, he shall be disqualified from acting as president or as a member of the City Council. A president pro tem shall be elected to preside over the Council during the absence or disability of the president of the Council. Section 32. The City Council shall have the power and is hereby authorized to create by ordinance such additional offices and provide for the election or appointment of additional officers or employees as it may in its judgment deem necessary. The Coun- cil shall have power at any time by ordinance to abolish any offices thus created. Section 33. The City Council may make such other and further ordinances not inconsistent with the laws of the State, as shall be deemed expedient for the good government of the City, the public I �� w.. LAWS OF FLORIDA 2191 safety and welfare, the protection of property, the preservation of peace and good order, the suppression of vice, the benefit of trade and commerce, the preservation of good health, the preven- tion and extinguishing of fires, and for the exercise of its corporate powers and the performance of its corporate duties. No ordinance shall become a law unless passed by at least three-fifths of all the members of the City Council. Every ordinance passed by the City Council before becoming a law shall be presented to the Mayor under the certificate of the Clerk. If the Mayor approves the same he shall sign it and return it to the Clerk; but if he shall not approve it, lie shall return it to the Clerk with his objections in-writing at or before the next regular meeting of the Council for reconsideration; and if.the Council shall pass the ordi- nance by a four-fifths vote of all its members it shall go into effect. If the Mayor shall fail to return any ordinance, or shall return the same unsigned, without objections,in writing, at or before the next regular meeting 'of the Council after its passage, he shall be deemed to have approved the. same, and it shall become a law without his signature. Section 34. The City Council may require any officer or em- ployee of the City to give bond and with such sureties as the Council may by ordinance determine. �.. Section 35. The City Council shall have power by ordinance to impGse a tax upon any acid all business, professions and occupa- tions engaged in, or carried on, either wholly or in part within the corporate limits of said City, whether the same be taxed by the State or not, and without regard to the amount of the State tax, if any, imposed upon such business, profession or occupation. Section 36. The City Council shall have the power by ordinance to establish, maintain and regulate hospitals, jails, houses of de- tention and correction, public libraries and cemeteries. Section 37. The Council shall have power by ordinance to make regulations to secure and protect the general health of the in- habitants and to prevent and remove nuisances, where affecting the health or morals of the community; to regulate the sale and storage of all articles of food and to establish and regulate mar- kets; to establish flie limits and to regulate the construction of buildings within the fire limits; the Council shall have the power by ordinance to prohibit and suppress gambling houses, bawdy houses and disorderly houses, and any exhibition, show, circus, parade or amusement contrary to good morals, and all obscene pictures or literature; to regulate and prevent the carrying on of lo0 2192 LAWS OF FLORIDA business dangerous in increasing or producing fires; to regulate and prevent the storage of explosives, oils and other combustibles and inflammable material; and to regulate the use of lights, electric wiring and steam pipes in all buildings and other places; to regulate and suppress the storage and sale of firecrackers and all other fireworks, guns, pistols and other fire irons, to;,, pistols, air guns and sling shots; to prohibit and punish all disorderly con- duct, breakers of the peace, and disorderly assemblies; to regulate the use of automobiles, motor trucks and other power driven vehicles; to regulate the use of the streets, alleys, parks and side- walks of the City; to regulate and prohibit the running at large of any wild or domestic animals or fowl; and to provide for the impounding and disposal of the same; to prohibit and provide for the removal and abatement of any dangerous building, struc- ture, encroachment, material or other thing dangerous to the health or safety of the inhabitants; to compel owners of buildings to erect fire escapes and to provide for prevention of fires and the safety of persons in any building or place; and the Council shall have the power to pass all ordinances necessary to the health, peace, convenience, welfare or the protection of the inhabitants of said City and to carry out the full extent and meaning of this Act .,.. and, to accomplish the objects of this corporation; and the City Council may provide fines, forfeiture, terms and imprisonment with or without hard labor and other penalties for the enforcement of ordinances; and may provide ways and means to prevent the escape of prisoners. Section 38. The City Council shall have power by ordinance to prevent the introduction and spread of infectious and con- tagious diseases and to make quarantine regulations for that pur- pose and to provide for the enforcement of the same within five miles of the City, when same does not conflict with laws of'the . State of Floriria or of the United States. Section 39. That the City.Council.shall have authority to cause to be prepared, as often as it may deem necessary, a code or digest of the City Ordinances, which may be adopted by the City Council as a single ordinance, and it shall not be necessary to post or publish the same in order that the same may become ef- feetive and in force. The Courts in this State shall take judicial cognizance of the code and ordinances of the City, and the printed copy of the code and ordinances officially printed by the City shall be taken in evidence in any trial in which the same may be com- X09 LAWS OF FLORIDA 2193 petent without proof of the due presentation and approval of said code and ordinances. Section 40. The City Council shall have power by ordinance to provide the City and its inhabitants with water supply, sewer system, electric light and power, gas for light and fuel, street and other railways, telephone and telegraph lines, municipal docks, seawalls along the water fronts of said City, bulkheads, causeways, bridges, golf courses, air ports and other public utili- ties, and for said purposes, or any of them, may buy, construct, lease or otherwise acquire the same; and the City Council may by ordinance permit any person or corporation to buy, construct, lease or otherwise acquire and maintain any of said public utilities for the purpose of furnishing the said City and its inhabitants with service from the same; provided, however, that no exclusive permission of franchises shall be granted to any person or corpora- tion for any public utility. The City Council may by ordinance make reasonable regulations as to the use of any public utility and may Rx reasonable rates for service furnished by public utili- ties to consumers. Section 41. The City Council shall by ordinance provide for the organization and maintenance of the Fire Department and provide for the prevention and extinguishing of fires. Section 42. The City Council shall have power to open, establish, abolish, alter, extend, widen, grade, regrade, pave, repave or other- wise improve, clean and keep in repair or rebuild streets, avenues, alleys, sidewalks and crosswalks and other public ways and thor- oughfares and construct, erect and keep in repair and rebuild bridges, culverts, gutters, sewers and drains; to regulate and provide for the construction, preservation and repair of streets, avenues, alleys, sidewalks, foot pavements and other public ways and thoroughfares and paving and repairing the same; to provide for the construction of sewers and drains and for keeping the same in repair; to provide for a uniform character of sidewalks which shall be built upon a grade established by the City; to take and appropriate private grounds, in manner and form pro- vided by law for condemnation, for widening streets or parts ' thereof, or for extending the same, or for laying out new streets, avenues, alleys, squares, parks or promenades; to grant the right- of-way through the streets, alleys, avenues, and public grounds of the City for the use of street or other railways, but the owner of property abutting thereon shall not thereby be deprived of any right he may have to claim any damage that he may receive I � D 2194 LAWS OF FLORIDA by reason of such right-of-way; to require owners of property or their w,ents to keep their lots, tracts or parcels of land free and clean of weeds, brush, undergrowth, trash, filth, garbage or other refuse or in case of their failure to do so the City may remove or cause the removal of such weeds, brush, undergrowth, trash, filth, garbage or other refuse, and may charge and assess the expense thereof against the property so cleaned and improved, to provide for the care and protection of trees, shrubs and flowers in the public streets, avenues, parks and grounds, to impose pen- alties on the owner or occupant of or agent for any sidewalk, house or other structure, place or thing which may be dangerous or detrimental to the inhabitants of said City or dangerous or detrimental to their property unless after due notice the same be Temoved or remedied in accordance with the requirements of the City Council. Section 43. The Council shall have the ppwer by ordinance to acquire, improve and maintain parks for the benefit of the City and its inhabitants. Section 44. That said City is hereby delegated authority to exercise the right and power of eminent domain, that is, the right to appropriate -property within or without the territorial �•- limits of said City for the following uses or purposes: For streets, lanes, alleys and ways; for public parks, squares and grounds; for drainage and for raising or filling in land in order to promote sanitation and healthfulness; for reclaiming and filling when lands are low or wet or overflowed altogether at times, and entirely or partly; for the abatement of any nuisance; for the , use of water pipes and for sewerage and drainage purposes; for laying wires and conduits under the ground; for City buildings, waterworks, electric light plants, pounds, bridges, seawalls, bulk- heads, causeways, municipal docks, golf courses, air ports, and any other municipal purpose; which shall be coextensive with the powers of said City exercising the right of eminent domain under this section; and the absolute, fee simple title to all property so taken and acquired shall vest in the said City, unless the City seeks to condemn a particular right or estate in such property. That the procedure for the exercise of eminent domain or the condemnation of any lands or property under this section shall be the same as is provided by the general laws of Florida on the subject of condemnation of property for public uses. Section 45. The Council shall have power by ordinance to provide for the construction, improvement and maintenance of I � I LAWS OF FLORIDA 2195 necessary ditches and drains within said City for the purpose of protecting the lands within said City from overflow or. for the protection of the health of the City's inhabitants; and the City Council shall have the power by ordinance to enter into and con- tract with any existing Drainage District relating to the use of any Drainage Canals or ditches under the jurisdiction of said Drainage District. If at any time the Council shall deem it necessary or expedient for any good reason, that any lot, tract or parcel of land within said City should be cleaned of weeds, trash, undergrowth, brush, filth, garbage or other refuse, it shall have power to direct and require the owner or owners of said lot, tract or parcel of land to clean the same of weeds,trash, undergrowth, brush, filth, garbage or other refuse. Such notice shall be given by resolution of the Council, a copy of which shall be served upon the owner or owners of such lot, parcel or tract of land,or upon the agent of such owners, or if the owner is a non-resident or cannot be found within the City and has no known agent within the City, a copy of such resolu- tion shall be published for once each week for two weeks in some newspaper published in the City and a copy thereof posted upon said lot, tract or parcel of land, and if the owner or owners shall not within such time as such resolution shall ,prescribe clean such lot, tract or parcel of land of weeds, trash, undergrowth, brush, filth, garbage or other refuse as therein directed, it shall be lawful for the Council to cause the same to be done and to pay therefor and to charge, assess and collect the expense thereof against said lot, tract or parcel of land and against the owner or owners thereof. Notica of hearing complaints and action thereon shall be done sub- stantially in accordance with the provisions of Chapter 9298 of the laws of Florida with respect to assessments for local improve- ments. Section 46. The City Council may by ordinance or resolution provide for standing committees of the Council; such committees to be appointed by the President of the Council annually after the organization of the Council. Section 47. Whenever it shall be deemed advisable to issue bonds for the purpose of constructing, maintaining, or purchasing water- works; for the purpose of constructing, maintaining or purchasing gas or electric light works, or other illuminating systems, for the purpose of constructing, maintaining or purchasing a system of sewerage; or otherwise promoting the health of said municipality; for the purpose of opening, constructing, paving or repaving, re- 1 ' 2196 LAWS OF FLORIDA pairing and (or) maintaining the streets and sidewalks of said municipality; for the purpose of opening, constructing and (or) maintaining public parks and (or) promenades; for the purpose of establishing and maintaining a fire department in said municipality; for the purpose of erecting public buildings for the use of said municipality; for the purpose of constructing seawalls along the water fronts of said City; for the purpose of constructing, repair- ing and (or) maintaining municipal docks; for the purpose of filling in any lot or submerged land in said City; for the purpose of constructing, repairing and (or) maintaining bridges, bulklicads and causeways; for the purpose of purchasing, constructing and . (or) maintaining a municipal golf course; for the purpose of pur- chasing, constructing and (or) maintaining a municipal hospital; for the purpose of purchasing, constructing and (or) maintaining a municipal air port; or for any other municipal purpose, the Mayor and City Council are hereby authorized to issue bonds of said municipality, and under the seal of said corporation, to an amount of not exceeding twenty-five per cent of the assessed valua- tion of all the property, both real and personal, within said City, as shown by the current assessment roll, said bonds to be signed by the Mayor, countersigned by the President of the Council, and at- `"" tested by the Clerk, with interest coupons attached, which shall be signed in like manner, except that such interest coupons may be signed by the lithographed or facsimile signatures of the Mayor, President of the City Council and City Clerk respectively; provided, however, that before said bonds shall be issued the issuance of said bonds shall be approved by an affirmative vote of a majority of the electors voting for each purpose separately at an election to be held for such purpose of purposes, which election shall be regulated by ordinance as to the manner of conducting and certifying the same, after the same has been advertised for not less than thirty days in a newspaper published in said City of Vero Beach, or in sonic news- paper published in Indian River County, Florida, and at which election only qualified electors of said City who own real estate in said City, and who have paid the taxes thereon last due shall be allowed to vote. Section 48. When the bonds are issued under the terms of this Act the said bonds shall be under the seal of the City of Vero Beach and shall be signed by the Mayor, countersigned by the President of the City Council and attested by the Clerk, with interest cou- pons attached, which shall be signed in like manner, except that such interest coupons may be signed by the lithographed facsimile 113 LAWS OF FLORIDA 2197 signatures of the Mayor, President of the City Council and City Clerk respectively, and the Mayor and City Council of said City of Vero Beach shall be authorized to levy a special tax upon all the taxable property within said City at such rate as may be neces- sary to raise a sufficient fund to pay off the interest that may accrue upon said bonds, as well as to provide a sinking fund for their final redemption. Section 49. The bonds herein provided for shall in no case be sold at a greater discount than five per cent of their par value, and shall not bear a greater rate of interest than eight per centum per annum, payable semi-annually. Section 50. It shall be the duty of said City Council, as soon as the bonds herein authorized have been approved, to advertise the same for sale on sealed bids, w1iich advertisements shall be pub- lished once a week for two successive weeks in a newspaper of gen- eral circulation published in Indian River County, Florida, and if said bonds be not sold pursuant to such advertisement they may be, sold at private sale at any time after the date advertised for the reception of sealed bids; providing that no bonds issued here- under shall be sold for less than ninety-five per cent of the par ..� value thereof with accrued interest to date of delivery, and pro- vided further that no bonds shall be sold at private sale for less. than the sealed bids received therefor, and no private sale shall be made of said bonds subsequent to'thirty days after the adver- tised date for the reception of sealed bids. Section 51. A bank or banks, or other depository to be desig- nated by the Council, shall receive and be custodian of said bonds. and all money arising from the sale of said bond or bonds. Section 52. The City Council shall advertise for bids for work. to be done for which bonds are issued, making contracts with the lowest responsible bidder, who shall himself give bond for the faith- ful performance of the work, but the said Council shall have the right to reject any or all bids received; it shall personally, or through proper agents, select all material and have supervision and charge of the work for which the bonds are issued, and shall audit all accounts connected with such work, and pay the same by check on the banks or depositories handling the proceeds of the sale. .of the said bonds. Section 53. The entire issue of bonds, or such portion thereof as the Mayor and Council may deem advisable, may be sold and. converted into money at once. 2198 LAWS OF FLORIDA Section 54. In the event there is remaining in the bank or banks, or other depository an unexpended balance of money that was derived from the sale of bonds after the work, the cost of which is to be paid therefrom, has been completed, the City Council shall invest such balance in such interest bearing securities as it may elect, to be approved by the Mayor, or deposit same at interest in an approved depository. Such securities shall be turned over by it to the Cify Treasurer or other proper officer, and the pro- ceeds thereof be applied to the payment of the bonds or the in- terest thereon, as directed by resolution of the Council. Section 55. The adverse result of an election to determine the question of the issuance of bonds for any one or more of the pur- poses mentioned in this Act shall not debar the then existing or any subsequent Council from resubmitting the same question to the legal voters of the City after the lapse of one year; but the ques- tion of bonding for any purpose not already voted upon can be submitted to the vote of the people whenever, in the judgment of the Council, it may be considered advisable. Section 56. All the property within the City taxable for State and County purposes shall be assessed and listed for the purpose of taxation on the City Assessment Roll and the City Tax Assessor shall proceed substantially in the same manner as is provided by law for the assessment of real and personal,property for the pur- poscs of State and County taxation; and railway and railroad com- panies,including street railways, shall be subject to assessment and taxation on all real estate and personal property owned by them within the limits of the corporation, in the same manner and at the same ratio and valuation as other property, save and excepting the roadbed and rolling stock of said railroad, which shall be assessed by the State Comptroller, as provided by law; provided, the City may make its own assessment of property for taxation, and the valuation of the property by the municipality shall not be con- trolled by the valuation fixed for State and County taxation, but may exceed the same, and provided, farther, the City Council shall act as a Board of Equalization for the purpose of equalizing the valuation instead of the Board of County Commissioners. Section 57. The City Tax Collector shall proceed with the col- lection of the City taxes substantially in the same manner as pro- vided by law for the collection of taxes and sale of property for the non-payment of taxes by State and County Tax Collectors. He shall give all notice required by law, and sell the real property of delinquents in the manner provided by law, and give to the pur- IIS LAWS OF FLORIDA 2199 chaser a certificate substantially in the form provided by law for State and County Collectors and shall prepare in duplicate a re- port of tax sales of real property for each year, one of which lie shall retain and one shall be filed in the office of the Clerk of the Circuit Court .for the County of Indian River for record. At all sales of land for unpaid City taxes, in the absence of purchasers therefor, the lands shall be bid in by the City Tax Collector for the City, and certificate issued accordingly. The City Tax Collector shall proceed with the collection of taxes on personal property, like- wise substantially in the same manner as provided by law for State and County Tax Collectors. Section 58. After the review and equalization of the City As- sessment Roll in each year, the City Council shall determine the amount of money to be raised by taxation upon the taxable prop- erty in said City, both real and personal, which amount shall not be more than twenty mills on the dollar on the total valuation of the taxable real and personal property in said City for general City purposes, but the City Council may levy such additional tax or taxes as may be necessary for the construction, repair and (or) maintenance of City buildings; for fire protection; for City light- ing; and for the construction, repair, improvement and (or) main- tenance of streets and sidewalks; and a tax of not to .exceed two mills on the dollar upon all the taxable property in said City for the purpose of public amusement, entertainment, publicity and ad- vertisement of said City. The City Council shall also levy such additional tax or taxes as may be necessary to pay the interest and to provide a sinking fund for the payment of the principal of any bonded or other indebtedness of said City. Section 59. The City Council shall have power by ordinance to provide for the construction and reconstruction, repair, paving, and repaving, hardsurfacing and reliardsurfacing of streets, boulevards and alleys;for grading and regrading, leveling, laying and relaying, paving and repaving, liardsurfacing and rehardsurfacing of side- walks; for the construction and reconstruction of curbs; for the construction and reconstruction of drains, ditches, sanitary sewers, storm sewers, white way lighting systems, and all things in the nature of local improvements; and for the payment of all or any part of the cost of any such improvement by levying and collecting special assessments on the abutting, adjoining, contiguous or other specially benefited property, in proportion to the benefits to be derived therefrom. Section 60. When the City Council shall determine to make any I 2200 LAWS OF FLORIDA local improvements as defined in Section 59 of this Act and to defray the whole or any part of the cost or expense thereof by spe- cial assessmi nt, it shall so declare by ordinance, stating the neces- sity for and the nature of the proposed improvement, and what part or proportion of the expense shall be paid by special assessment; by what method said special assessment shall be made; what part, if any, shall be paid out of the general fund of the City, and shall designate the district or lands and premises upon which the special assessments shall be levied. It shall be stated in said ordinance the total estimated cost of the improvement and the method of payment of assessments and the number of annual installments into which said assessments shall be divided. Section 61. At the time of passing the ordinance hereinbefore provided for, there shall be on file in the office of the City Clerk plans, specifications, estimates and profiles of the proposed im- provement, and such plans, specifications, estimates and profiles of the proposed improvement shall be open to the inspection of the public. Section 62. The ordinance thus adopted shall be published once a week for two successive weeks and shall be certified to by the City Clerk, who shall thereupon proceed to make an assessment roll in *4WW accordance with the method of assessment provided for in said ordinance, which assessment roll shall be completed and filed with the City Council of said City as promptly as possible; said assess- ment roll shall show the lots and lands assessed, the amount of the assessment against each lot or parcel of land, and, if said assessment is to be paid in installments, the number of annual installments into which the assessment is divided shall also be entered and shown upon said assessment roll; but in no case shall said installments be for any greater number of years than twenty years. Section 63. Upon the completion of said assessment roll, the City Council shall cause a copy thereof to be published two times suc- cessively,once each week,in a newspaper of general circulation pub- lished in Indian River County, Florida, and in the publication of said assessment roll the said City Council shall cause to be attached to the copy of the assessment roll published a notice directed to all property owners interested in said assessment of the time and place where complaints will be heard with reference to said assessment,and when said assessment roll will be finally approved and confirmed by.the City Council of said City sitting as an equalizing board. Section 64. At the time and place named in the notice provided for in the preceding section,the City Council of said City shall meet 1 �� LAWS OF FLORIDA 2201 as an equalizing board to hear and consider any and all complaints as to such special assessments and shall adjust and equalize said assessments on a basis of justice and right, and when so equalized and approved such assessments shall stand confirmed and be and remain legal, valid and binding liens upon the property against which said assessments are made until paid, in accordance with the provisions of this Act; provided, however, that upon the completion of the improvement the said City shall rebate to the owner of any property which shall have been specially assessed for any improve- ment the difference in the assessment as originally made, approved and confirmed and the proportionate part of the actual cost of said improvement to be paid by special assessments as finally determined upon the completion of said improvement; the amount of said rebate to be deduced from said assessments proratably over the entire assessment period. Section 65. Special assessments for local improvements in said City shall be payable by the owners of the property assessed for said improvements at the time and in the manner stipulated in the ordi- nance providing for said improvements and said special assessments shall be and remain liens supdrior in dignity to all other liens, except liens for taxes, until paid, from the date of the assessment upon the respective lots and parcels of land assessed, and shall bear interest at a rate not exceeding eight per cent per annum, and may be by ordinance aforesaid made payable in equal yearly install- ments, not exceeding twenty, with accrued interest on all deferred payments, unless paid within thirty days after said assessments shall stand approved and confirmed. Section 66. Each annual installmant provided for in the pre- ceding section shall be paid upon the date provided in said ordi- nance, with interest on all deferred payments, until the entire amount of said assessment has been paid; and upon the failure of any property owner to pay any annual installment due, or any part thereof, or any interest on deferred payments, the City Council of said City shall cause to be brought the necessary legal proceedings by a bill in chancery to enforce payment thereof, with all accrued interest, together with all legal costs incurred, including a reason- able solicitor's fees, to be assessed as part of the costs; and in the event of default in the payment of any installment of an assess- ment, or any accrued interest on said assessment, the whole assess- ment with interest thereon shall immediately become dae and pay- able and subject to foreclosure. In the foreclosure of any special assessment service of process against unknown or non-resident de- a Iia 2202 LAWS OF FLORIDA fendants may be had by publication as is provided by law for other chancery suits. The foreclosure proceeding shall be prosecuted to a sale and conveyance of the property involved in said proceeding as now provided by law in suits to foreclose mortgages. Section 67. After the equalization, approval and confirmation of the levying of special assessments for local improvements by the City Council, and as soon as the contract for said improvement or improvements has been finally let, the City Council may by ordi- nance issue bonds pledging the full faith and credit of the City, to an amount not exceeding the total cost of said improvement or improvements to be paid by special assessment, and the estimated cost of said improvement as stated in the ordinance providing for said improvement and the levying of special assessments therefor shall be used as the basis of calculation in determining the cost of said improvement; and the said bonds so issued shall be general obligations of said City. And if special assessments be not im- posed and collected in respect of the improvements in season to pay the principal and all interest on said bonds, the City Council shall levy and collect against all taxable property in the City of Vero Beach a tax sufficient to pay such principal and all interest as the same respectively becomes due and payable. All bonds so issued shall be excluded from any limitation of bonded indebtedness pre- scribed in this Act or any general law and shall be issued by ordi- nance of the City Council without submitting the question as to the issuance of said bonds to a vote of the electors of said City. All bonds issued under the provisions of this section shall be ad- vertised for sale on sealed bids, which advertisement shall be pub- lished once a week for two weeks in a newspaper of general circula- tion published in Indian River County, Florida; and if said bonds be not sold pursuant to such advertisement they may be sold at private sale at any time after the date advertised for the reception of sealed bids; provided, that no bonds issued hereunder shall be sold for less than ninety-five per cent of par value thereof, with accrued interest to date of delivery, and provided further that no bonds shall be sold at private sale for less than the best sealed bid received therefor, and no private sale shall be made of said bonds subsequent to thirty days after the advertised date for the reception of sealed bids. All bonds issued for local improvements under this section shall be in the denomination of One Hundred Dollars or some multiple thereof, and shall bear interest not exceeding six per cent per 1l� ,vow LAWS OF FLORIDA 2203 annum, payable annually or semi-annually, and both principal and interest shall be payable at such place or places as the City Council may determine. The form of such bonds shall be fixed by ordi- nance of the City Council, and said bonds shall be under the seal of the City of Vero Beach, and shall be signed by the Mayor, coun- tersigned by the President of the City Council and attested by the City Clerk, with interest coupons attached which shall be signed in like manner, except that such interest coupons may be signed by the lithographed or facsimile signatures of the Mayor, President of the City Council and City Clerk, respectively. Bonds,issued here- under shall have all the qualities of negotiable paper under the law merchant and shall not be invalid from any irregularity or defect in the proceedings for the issue and sale thereof and shall be in- contestable in the hands of bona fide purchasers or holders thereof for value. Section 68. If any special assessment made to defray the whole or any part of local improvements shall be either in whole or in part annulled, vacated or set aside by the judgment of any court, or if the City Council shall be satisfied that any such assessment is so illegal and defective that the same cannot be enforced or collected, or if the City Council shall have omitted to make such I"" assessment when it might have clone so, the City Council is hereby authorized and required to take all necessary steps to cause a new assessment to be made for the whole or any part of such improvements, and if the second assessment is annulled the City Council may proceed to make other assessments until a valid assessment shall be made. Section 69. All special assessments levied and imposed in respect of local improvements shall constitute a fund for the payment of principal and interest of the bonds authorized under this Act, and in the event there be a failure to collect and receive said special assessments in season to pay the principal and (or) in- terest of said bonds, the City Council of said City shnll levy and collect oil all taxable property in said City a tax sufficient to pay such principal and (or) interest, as has been hereinbefore provided. Section 70. The City Council shall have the power to pay out of its general fund, or out of any special fund that may be pro- vided for that purpose, such bonds for the cost of any local improvement as it may deem proper, and interest accruing while improvements are under construction and for six months there- ao 2204 LAWS OF FLORIDA after, and all engineering and inspection costs, including a proper proportion of the compensation, salaries and expenses of engi- neering staff of the City properly chargeable to such improve- ments, and all costs and estimated costs, including attorney's fees, in the issuance of bonds shall be deemed and considered a part of the costs of such improvements. Section 71. Any informality or irregularity in the proceedings in connection with the levy of any special assessments for local improvements shall not affect the validity of the same where the assessment roll has been confirmed by the City Council, and the assessment roll as finally approved and confirmed shall be com- petent and sufficient evidence &zt the assessment was duly levied, and that all other proceedings adequate to the adoption of the said assessment roll, were duly had, taken and performed as required by this Act, and no variance from the directions hereunder shall be held material unless it be clearly shown that the party objecting was materially injured thereby. Section 72. The City Council shall have power by ordinance to provide for a consolidation of all assessments which have here- tofore been made for local improvements in said City, so as to consolidate into one item the total amount of all Assessments for local improvements now existing against each lot, tract or parcel of land in said City, provided that there shall be no change made in the total amount of said assessments that would cause said consolidated assessments to be in excess of the total amount of principal and interest at the time of such consolidation of the assessments as heretofore made, assessed and confirmed against said property. The City Council may also provide by ordinance that all assessments for street paving that have here- tofore been made, where the costs of paving street intersections have been included in special assessments against abutting prop- erty,.shall be reduced in an amount not to exceed ten per cent of the total of the principal of such assessments against such property, and that the amount of such deduction shall be paid out of the general fund of said City, or otherwise, as may be lawfully provided by said City Council. The City Council shall also have the power by ordinance to provide that all assessments for street paving and sidewalks heretofore made in said City on corner lots where said lots have a greater depth than fifty feet shall be adjusted by assessing said lots on a basis of fifty feet frontage on the side street upon which said lots shall be located, but in no case shall the frontage assessed on the said ia � LAWS OF FLORIDA 2205 street be less than the frontage of the lot on the principal street, and such reduction so made in such assessments shall be paid out of the general fund of said City, or in any other lawful manner that may be provided by the City Council. Section 73. The City Council of the City of Vero Beach may, pursuant to the poser herein vested in it, by ordinance provide for the consolidation of all assessments for local improvements heretofore made. The Council is hereby authorized to provide that such assessments, after adjustments as hereinbefore provided, sliall be and become payable in fifteen annual payments of ten per cent each and a sixteenth payment of 7.311 per cent, payments to cover both principal and interest in accordance with the fol- lowing table: $1,000 ASSESSMENT. Payments Outstanding Interest Principal Total 1st . .. .. ...... .. ... $11000.00 $60.00 $40.00 $100.00 2nd . . .. .. .... . .. .. 960.00 57.60 42.40 100.00 3rd . . . . . ... ... ... .. 917.60 55.06 44.94 100.00 4th . . .. ... ....... .. 872.66 52.36 47.64 100.00 5th . ... .... ... ... .. 825.02 49.50 50.50 100.00 6th . ... .. ...... ... . 774.52 46.47 53.53 100.00 7th . . .. . .. ... .. . ... 720.99 43.26 56.74 100.00 8th . . .. . .. ..... . . .. 664.25 39.86 60.14 100.00 9th . ... .... ........ 604.11 36.25 63.75 100.00 10th ... . ... .. ....... 540.36 32.42 67.58 100.00 11th 472.78 28.37 71.63 100.00 12th . .. .. .. .. .. ... . . 401.15 24.07 75.93 100.00 13th . . ... . ... .... ... 325.22 19.51 80.49 100.00 14th . . . .. .. .. .. .. .. . 244.73 14.68 85.32 100.00 15th . . . . . . . ..... .. .. 159.41 9.56 90.44 100.00 16th . .. .. ...... . .. . 68.97 4.14 68.97 73.11 Section 74. The City Council shall further provide in the consolidation of said assessments that all delinquent interest on assessments to the date of the passage of such ordinance con- solidating said assessments be computed and added to the principal sum and that the interest rate on deferred instalments, starting from the date the consolidated plan is put into effect, shall be six per cent per annum where assessments are paid to date; but continue at eight per cent per annum as long.as payments are in arrears. Baa 2206 LAWS OF FLORIDA Section 75. The City Council shall make provision, after pro- viding for the consolidation and adjustment of assessments in accordance with the provisions of this Act, for each property owner against whom'an assessment has heretofore been made, to be notified of the consolidated and adjusted assessments, and notice shall be given to each property owner in said City that a consolidated and adjusted assessment has been made of property owned by him in said City, and such notice shall describe the property and shall state the amount of tho original assessment and shall state the amount of the consolidated and adjusted assessment and the time and place when the City Council will sit as an equalizing board for the purpose of hearing any complaint that the said property owner may have to offer with respect to the consolidated and adjusted assessment, which date shall be fixed at a time not less than ten clays from the date of said notice. It shall be deemed to be suffi- cient notice to the owner or owners of property against which spe- cial assessments shall have been made with reference to the consol- idation and adjustment of such assessments if such notice shall be mailed to the last known address of such owner or owners of record with the City Tax Collector of said City. At the time and place named in the notice herein provided for the City Council of the City of Vero Beach shall meet as an equal- izing Board to hear and consider any and all complaints as to such consolidated and adjusted assessments and shall adjust and equalizo the same on a basis of justice and right, and when said consolidated and adjusted assessments shall have been equalized and confirmed by the said City Council, said assessments shall stand confirmed and be and remain legal, valid and binding liens upon the property against which said assessments are made until paid in accordance with the provisions of this Act,and at the time of the confirmation of such consolidated and adjusted assessments the City Council shall provide that the first payment thereunder shall be made within a period of time not more than sixty days from the date of such con- firmation, and that if such first payment is not so made within said period of time that the entire amount of said assessment shall be forthwith due and payable; and shall make provision for each prop- erty owner in said City to be notified of the amount of said consol- idated and adjusted assessments as confirmed by said City Council and of the time within which the first payment thereunder shall be made, and the amount of said first payment, as well as the total amount of said assessment; and the property owner shall also be notified that unless said first payment is made in accordance with the terms of said notice that the entire amount of the assessment IA3 -wow LAWS OF FLORIDA 2207 will at once become due and payable and said lien subject to fore- closure, which notice shall be given to the property owner in the same manner as the notice hereinbefore provided for the notice of the meeting of the City Council as an equalizing Board to hear com- plaints thereon. Section 76. Each annual instalment p,.-ovided for herein of the consolidated and adjusted assessments shall be paid at the time or times specified in an ordinance of the City Council relative thereto, with interest upon all deferred payments, until the entire amount of said assessment has been paid, and upon the failure of any prop- erty owner to pay any annual instalment due, or any part thereof, or any annual interest upon deferred payments, the City Council of the City of Vero Beach shall cause to be brought the necessary legal proceedings by a bill in chancery to enforce payment thereof, with all accrued interest, together with all legal costs incurred, including a reasonable solicitor's fee, to be assessed as a part of the costs; and in the event of default in the payment of any instalment of an assessment or any accrued interest on said assessment, the whole assessment with interest thereon shall immediately become due and payable and subject to foreclosure. In the foreclosure of any spe- cial assessment service of process against unknown or non-resident defendants may be had by publication as now provided by law in other chancery suits. The foreclosure proceedings shall be pros- ecuted to a sale and conveyance of the property involved in said proceedings as now provided by law in suits to foreclose mortgages. Section 77. If at any time during the life of consolidated and adjusted assessments as herein provided all special assessment bonds which were issued to cover the local improvements for which said assessments were made shall have been paid, any balance in the assessment funding account, or'any uncollected assessments, shall be applied to retiring outstanding refunding bonds which were issued in lieu of special assessment bonds maturing and not otherwise paid. Section 78. The City Council of said City is also authorized to release all improvement liens which have been recorded in the office of the Clerk of the Circuit Court of St. Lucie or Indian River Counties at the time of the passage of this Act for the purpose of executing new liens in accordance with the consolidated and ad- justed plan of assessments as provided for by this Act. Section 79. The City Council shall have power by ordinance to prescribe the width, location, grade and materials of which streets and sidewalks shall be constructed. 2208 LAWS OF FLORIDA Section 80. It shall be the duty of the Tax Assessor to assess all taxable property, both real and personal, within the corporate limits of the City. The manner in which he shall perform his du- ties shall be determined by ordinance. Section 81. The Tax-Collector shall collect all City taxes and shall perform such other duties as may be prescribed by the City Council. The manner in which lie shall perforin his duties shall be determined by ordinance. Section 82. The Clerk of the City of Vero Beach shall act as Clerk of the Municipal Court and of the City Council. He shall be authorized to administer oaths and take affidavits. He shall perform such other duties as may be prescribed by the City Coun- cil. The manner in which he shall perform his duties shall be de- termined by ordinance. The City Treasurer shall be the official custodian of all the funds of the City. He shall deposit City funds in such bank or banks as the City Council may prescribe. He shall perform such other duties as the Council may prescribe. The manner in which he shall perform his duties shall be determined by ordinance. Section 83. The Marshal shall be Chief of Police of the City of ,WAW Vero Beach. It shall be his duty to attend all regular and special meetings of the City Council; to aid in the enforcement of order under the direction of the presiding officer; to execute the com- mands of the Mayor and Council from time to time, and to execute any process issued by authority of the Mayor or City Council; to attend the Municipal Court during its sittings and to execute its commands; to aid in the enforcement of order therein under the direction of the Mayor; and to perform such other duties as may be appropriate to his office under the provisions of law or as re- quired by ordinance. He shall have control of the police force, subject to the commands of the Mayor and City Council, and shall have police powers to make arrests for any violation of the lawful orders of the Mayor and City Council. All policemen appointed by the Mayor shall be deputies of the Marshal and shall have the same authority as the Marshal, but subject to his direction and control. Section 84. The Marshal shall have power and authority to im- mediately arrest and take into custody, with or without warrant, any person who shall commit, threaten or attempt to commit in his presence any offense prohibited by ordinance; and he shall without necessary delay upon making such arrests convey the offender be- fore the Mayor to be dealt with according to law. las LAIN'S OF FLORIDA 2209 Section 85. The Marshal and members of the police force, in addition to the powers incident to their office and as herein desig- nated, shall possess the common law and statutory authority of con- stables, except for the service of civil process. Section 86. Should any elective or appointed officer provided f. : by this Act, or by ordinance, fail to give bond as required by ordinance, within thirty days from his election or appointment, said office shall be declared vacant. Section 87. No suit against the City of Vero Beach arising from any claim or demand of whatsoever nature not heretofore pre- sented, or which may hereafter arise, shall be brought or main- tained in any court unless such claim was presented to the City Council of said City within sixty days after the time this Act takes effect or within sixty days after such alleged claim arose against said City; and no suit or proceeding at law or in equity shall be maintained on any such claim, demand or right of action unless prosecuted within six months after presentation of same to the City Council of said City. Section 86. If any member of the City Council shall fail to attend meetings of said City Council for a consecutive period of three months, then the office of said member of the Council may 1.60, be declared vacant by a majority vote of the Council. Section 89. The registration officer shall keep a set of books in which lie shall keep a list of all qualified voters. He shall open the registration books thirty days prior to any election and close the same five days prior to the election. He shall perform such,other duties as may be prescribed by the City Council and the manner of performance of his duties shall be fixed by ordinance. Section 90. The City Council shall have power to provide by ordinance for the appropriation of money for the payment of the debts and expenses of tho City. Section q1. The City Council shall fix by ordinance from time to time the compensation of all City officers and employees. Section 92. Immediately after an ordinance has been passed by the Council and approved by the Mayor or has become a law wi:h- out the approval of the Mayor, it shall be the duty of the Clerk to publish the same by posting said ordinance at the door of the City IIall or Council Chamber. The City.Council may direct that such ordinance be published in a newspaper published at Vero Beach, Florida, or within Indian River County, Florida. Section 93. The City Council shall have power for the purpose 70—I—Vol. z. Ia � 2210 LAWS OF FLORIDA of paying current expenses or to meet any unexpected expenses to borrow money from time to time on negotiable notes maturing in not to exceed two years after date at a rate of not exceeding eight per cent interest per annum, payable semi-annually; provided, however, that the total indebtedness at any one time under this section shall not exceed $50,000. No money shall be borrowed under this section so as to increase the indebtedness of said City as composed of bonds, time warrants and notes to more than twenty- five per cent of the assessed valuation of the taxable property of said City as shown by the current assessment roll thereof and the City Council shall assess and levy a tax upon the taxable property in said City for the purpose of paying the notes issued hereunder both principal and interest at the maturity thereof, which tax shall be levied, assessed and collected annually in the same manner as other taxes. Section 94. The City Council is authorized to issue and sell interest bearing time warrants, bearing interest at a rate not exceeding eight per cent per annum, to an amount not exceeding One Hundred Thousand Dollars to be outstanding at any one time. The City Council shall prescribe the form, denomination and date of maturity of such warrants. The City Council may sell such warrants at private sale, provided they are not sold for less than par, or said warrants may be sold to the highest bidder after advertisement for two successive weeks in a newspaper published in Indian River County, Florida, provided that no such time war- rants shall be sold for less than ninety-five per cent of par plus accrued interest to date of delivery. No time warrants provided for herein shall be issued so as to increase the indebtedness of said City, as composed of bonds, outstanding time w:rrants, and notes to more than twenty-five per cent of the assessed valuation of the taxable property of said City as shown by the current assessment roll of said City. The proceeds of the time warrants provided for herein shall be used for the purpose of repairing and maintaining electric light works and extending the electric light system; for the purpose of repairing and maintaining the sewer system; for the purpose of opening, constructing, repairing and (or) maintaining the streets and (or) sidewalks, for the purpose of maintaining public parks and promenades; for the purpose of maintaining a Bre depart- ment; for the purpose of constructing, repairing and (or) main- taining public buildings; for the purpose of refunding any in- debtedness of said City; or for any other municipal purpose. Iar7 LAWS OF FLORIDA 2211 The City Council shall assess and levy a tax upon the taxable property in said City for the purpose of obtaining interest and raising a sinking fund for the payment of the time warrants pro- vided for by this Act, which tax shall be levied, assessed and col- lected annually in the same manner as other taxes. Section 95. The City Council shall have the power to regulate, fix and prescribe by ordinance the maximum rates to be charged by all automobiles, taxicabs, jitney buses, or wheel chairs carrying or transporting passengers for hire within the City. Section 96. The City Council shall have power by ordinance to regulate and control the use of all streets, alleys, public ways, grounds or other public property by any person, firm or corpora- tion in the erection, placing or maintenance of any poles for tele- graph, telephone, electric or other wires, or for other purposes; to regulate and control the placing and maintenance in any street, alley, public way, ground or other public property of all under- ground wires, pipes or conduits; to require all such poles, wires, pipes or conduits to be kept and maintained in a proper state of repair; to regulate and control the use of the streets, alleys, public ways, grounds or other public property of said City by bicycles, automobiles and other vehicles and machines. ®- Section 97. The City Council shall have power by ordinance to regulate and prescribe the width of tires of all vehicles or ma- chines driven or operated upon any street, alley, or other public way of said City; to regulate and prescribe the kinds of tires which may be used upon automobiles and other motor vehicles or machines driven or operated upon any street, alley or other public way of said City, and to require the use upon such vehicles or machines of such tires as will do the smallest degree of damage or injury to the streets, alleys or other public ways of said City.' Section 98. Said City shall have full power and jurisdiction over, and the City Council may by ordinance provide for the pro- tection, care and control of, the waters within the City Limits; to keep pure and clean any body of water from which the public water supply of the City is taken; to prohibit the dumping of 81tb, dirt, garbage, shells, trash, refuse or other things in the waters of the Indian River, or any other lake, canal, or other body of water within the City Limits; to license, govern, regulate or pro- hibit the permanent anchorage of houseboats or other boats or vessels in the Indian River within the City Limits; to regulate or prohibit the use of boatways or boatyards within the City limits, or to restrict their use to any portion of said City; to control, manage I � O .Now .ar 2212 LAINTS OF FLORIDA and designate the use of all docks, wharves or piers within the City limits; to license and control ferries landing within the City, and all bridges wholly or in part within the City, and to erect a seawall along any portion of the waterfront within the City limits; and to erect and construct bulkheads and causeways along or over or across any waters within the City limits. Section 99. If at any time the City Council shall deem it neces- sary or expedient for the preservation of the public health, or for any other good reason, that any lot, parcel or tract of vacant land then lying and being within said City, which may be lower than any street, streets, avenue or public way adjoining the same or the grade established therefor, or which may be subject to overflow or to the accumulation thereon of water, should be filled in, or ditched or drained, the City Council shall have power to direct and require the owner or owners of said lot, parcel or tract of vacant land to ditch, drain, or to fill in the same to such grade as the Council shall direct. Such notice shall be given by a resolution of the Council, a copy of which shall be served upon the owner or owners of such lot, parcel or tract of vacant land or upon the agent of such owner, or if the owner is a non-resident and cannot be found within the City and has no known agent .,.. within the City, a copy of such resolution shall be published once each week for two consecutive weeks in some newspaper published in the City, and a copy thereof shall be posted upon said lot, parcel or tract of vacant land; or if no newspaper is published in the City, such posting upon. such lot, parcel or tract of vacant land shall be deemed sufficient. If the owner or owners shall not, within such time as such resolution shall prescribe, fill in, ditch or drain the lot, parcel or tract of vacant land as therein directed, it shall be lawful for the City Council to cause the same to be done, and to pay therefor, and to charge, assess and collect the expenses against the said lot, parcel or tract of vacant land and against the owner or owners 0z;reof. All the provisions of Chapter 9298 of the Laws of Florida rela- tive to the making of said assessment and proceedings subsequent thereto, notice to hear complaints and action thereon and the effect thereof, and providing for the issuance of bonds based upon said assessments as contained in said Chapter 9298 of the Laws of Florida, shall be applicable to and may be followed in malting and enforcing the assessments authorized by this Section. Section 100. The City Council.shall have power by ordinance to regulate, suppress or prohibit the blowing of whistles or the making �aq LAWS OF FLORIDA 2213 of unusual noises,by any engine, locomotive or train within said City;to limit and regulate the rate of speed at and manner in which any engine, locomotive, train, cur or cans of any street or railway company or any automobile, truck, car, motorcycle and all other motor driven vehicles may be operated within the City limits; to require that no engine, locomotive, train, car or cars of any street or other railway company shall block or obstruct the passage of persons or vehicles at any strget crossing or other public Crossing in said City, and to limit the time that tiny engine, locomotive, train, car or cars may stand upon, obstruct or Mock any such street or other public crossing; to require any street or other railway com- pany operating any engine, locomotive, train, car or cars in or through said City, to provide sub-grade crossings or gates and sta- tions and keep watchmen at such public crossings of such railway within said City as the City Council may designate by ordinance, and it shall be the duty of such watchmen to care for and protect the public while passing over or using such track or tracks; and each day or portion of a day that such railway company shall fail or refuse to provide gates and keep a watchman at such crossing so designated shall constitute a separate offense, and for each such offense such company may be punished by a fine not exceeding one hundred dollars, and the judgment or sentence therefor may be sued upon and recovery enforced in any Court of the State of competent jurisdiction; to require any street or other railway company doing business within said City to open, establish, pave or bridge,maintain and keep in repair a proper crossing, either surface or sub-grade, for the passage of persons and vehicles over and upon its track or tracks at any point where any public street, avenue or other public way of said City may now or hereafter be located or established, and to prescribe that if such railway company shall fail or refuse to comply with the provisions of any ordinance or resolution of the City Council ordering the opening, establishing, paving or bridging, maintaining or repairing of such crossing, within such time as may be prescribed, the Council or any person authorized by it,may open, establish, place, pave or bridge, maintain or repair any such Cross- ing and the City shall pay for the same and shall have a lien for tho amount so paid, which lien may be enforced by suit at law or in equity, or the City may maintain its personal action against such street or other railway company to recover said amount, or it may enforce its lien and also maintain its personal action until actually paid the amount due, and the same remedies may be pursued and enforced in any court of competent jurisdiction. 130 2214 LAWS OF FLORIDA Section 101. The said City of Vero Beach shall not be liable for personal injuries due to defective condition of or obstruction in its streets, public thoroughfares, public buildings, or parks, nor for the misfeasance,nonfeasance or malfeasance of its officers or employees; nor for any act of any of its employees, whereby through the act of such employees any injury or damage may be done or caused to the person or property of another. Section 102. That in addition to'the powers hereinbefore enu- merated, said City and its officers and employees shall have all the powers and perform all the duties conferred or imposed upon cities and towns of the State of Florida and officers and employees of such cities and towns by the general laws of Florida now in force or hereafter to be enacted providing for the government of cities and towns, not inconsistent with the provisions of this Act; and in all matters of procedure and conduct for the exercise and performance of such powers and duties, the general law of the State relative to municipalities shall govern, except where otherwise especially pro- vided by this Act, and no special power herein granted shall be con- strued to abridge any general power given hereunder or under the general laws of the State of Florida. Section 103. The City Planning and Zoning Commission of the City of Vero Beach, Florida, as heretofore created by ordinance of the City of Vero Beach abolished by this Act, shall continue as the City Planning and Zoning Commission of the City of Vero Beach created by this Act, and the members of said Commission as at present constituted shall continue to hold office for the term or terms for which they were appointed and until their successors are appointed and qualified; and whenever the term of office of any of the members of said Commission shall expire, or whenever there shall be a vacancy on said Commission for any other reason, the same shall be filled by appointment by the Mayor, subject to con- firmation by the City Council. \Vhere the appointment is for an unexpired term, the person so appointed shall serve for the re- mainder of the term of his predecessor and until his successor is appointed and qualified; and where the appointment is for the purpose of filling a vacancy caused by the expiration of a term of a member of the Commission, the person so appointed shall serve for a term of two years and until his successor is appointed and quali- fied. Section 104. That the City Planning and Zoning Commission shall annually, and at such time as by its rules it shall provide,meet 131 LAWS OF PLORI.DA 2215 and organize and appoint such officers, with such powers and du- ties, as the City Planning and Zoning Commission may deem advisa- ble and expedient for the conduct of its business under the authority herein granted, and shall prescribe such rules of procedure and adopt such by-laws as may be necessary to carry into effect and operation its duties and powers hereby granted, and may prescribe penalties for the non-attendance or disorderly conduct of its mem- bers and enforce the same. A majority of the Board shall be neecs- sary t0 constitute a quorum for the transaction of business, but a smaller number may adjourn from time to time, and under the pro- visions of their rules of procedure may compel the attendance of absent members by the imposition of fines and penalties. The said Commission shall provide the time and place of its regular meetings and the manner in which special meetings shall be called and held. Section 105. The general powers and duties of the City Planning and Zoning Conunission which shall be exercised and performed as herein provided and in accordance with the general ordinances of the City, shall be as follows: (a) The City Planning and Zoning Commission shall procure information and maize recommendations to the City Council of all facts bearing upon the needs of the City, with regard to recreation grounds, the development and improvement of parks and boule- vards, the improvement of water fronts, the extension or opening of streets and avenues or other public ways or places and all other City plans and improvements generally. (b) Shall receive and report on suggestions offered by citizens or officials within the scope of its-powers and when it deems such suggestions practicable, to report them to the City Council with its recommendation. (c) Shall prepare a general City plan, and if they deem it neces- sary they may, with the consent and approval of the City Council, ennploy any and all expert assistance which they may require in the preparation of such plan, which plan shall be submitted to the City Council for its approval. Upon the adoption of the City plan by tine City Council the City Planning and Zoning Commission shall carry out the provisions of the same in accordance with the direc- tions and requirements of the City Council. (d) Shall provide plans for original landscape work to be done in, about and around City parks and boulevards now owned or hereafter acquired; and shall provide plans for all landscape work to be done by said City. (e) Shall formulate a plan to regulate and restrict the location 1301� 2216 LASTS OF FLORIDA of trades and industries and the location of buildings designed for specific uses; and to formulate a plan for regulation and limiting of the height and bulk of buildings hereafter directed, and to this end for that purpose may divide the City into zones in such number, shape and area as may seem best suited to carry out a definite plan for the betterment of the City, and upon the approval and adoption of any such plan by the Council, the City Planning and Zoning Commission shall have paver and authority to enforce any and all provisions.of such plan where especial authority therefor is granted by the City Council. (f) Shall pass upon all questions involving the position, removal or alteration in any way work of art, including monuments, memo- rials and statuary, belonging to the City, and no action with refer- ence to the removal or alteration of any such works of art, including monuments, memorials and statuary shall be taken by any officer or department unless approved by the City Planning and Zoning Commission. (g) Shall have power to determine whether property shall be acquired for park, boulevard and recreation purposes or shall be condemned for the enlarging of any pari: or the widening or exten- sion of any boulevard or street; and shall have power to pass upon all plats of lands within the City and recommend the acceptance of such plats. (h) Shall be authorized to approve any sketch or plan of any gift to the City in the form of monnunennts or memorials and the proposed location thereof, and no gift shall be accepted unless the plan or sketch and the location thereof shall have been submitted first to the City Planning and Zoning Commission. (i) Shall, when requested by the City Council or by any other department, act in advisory capacity in respect to plans for the erection of public buildings, bridges, approaches or other structures erected or to be erected by the City, and all parks, boulevards and grounds for recreation purposes. (j) Shall have the power to call upon any other department for assistance in the performance of its duties hereunder, and it shall .be the duty of such department to render such assistance as may be reasonably required, all questions as to what shall constitute a reasonable requirement to be determined by the City Council, and its determination thereof shall be final and conclusive. (k) Shall make any and all contracts necessary to carry out the objects and purposes of the City Planning and Zoning Com- ALJ LA\VS OF FLORIDA 2217 mission as herein provided when specifically authorized to do so by the City Council. (1) Shall have,sueh powers as are herein prescribed or as may be necessary for the proper discharge of its duties. (m) Shall be required to pass upon all matters s_ibmitted to it within ninety days, and if it shall fail to decide upon any such matter within said period, its decision shall thereafter be unnecessary and not required. (n) Shall thirty days prior to making the levy of taxes of each year transmit in duplicate to the City Clerk its estimate of-the amount of money required for its purposes for the ensuing fiscal year. (o) Shall at the time of the transmission of its esfimate men- tioned in the preceding sub-section make a written report to the City Council of the work of the City Planning and Zoning Com- mission during the preceding year; the report shall be certified by the City Planning and Zoning Commission and entered of record by the City Clerk and published in such manner as the City Council may direct; the City Planning and Zoning Commis- sion shall also make such other reports as the City Council may from time to time require. Section 106. The City Council shall enact and is hereby given the power to enact such ordinances as may be necessary to carry out and enforce the provisions of Section 105 of this Act. Section 107. The City Council shall have power, and it is hereby authorized and permitted to pass any ordinances which it deems necessary to carry into effect any plan or suggestion which the City Planning and Zoning Commission is authorized to make pursuant to the provisions of this Act. Section 108. The City shall not be liable in any way for any contracts made and entered into for any acts clone or undertakings begun or debts and liabilities made, assumed or created by the City Planning and Zoning Commission unless it shall first obtain from the City Council its approval of and have an appropriation made by it for the specific contract made or entered into by it or the specific debt made, created, incurred or. assumed. Section 109. That none of the powers, duties or prerogatives of the City Planning and Zoning Commission shall be construed to be in any way a limitation upon the duties, powers and pre- rogatives of the City Council, but in every case shall be subordi- nate and subject to the approval of the City Council. �3y 2218 LAl1'S OF FLORIDA Section 110. The City Council may adopt a resolution directing, and requiring the owner of any lot, parcel or tract of land front- ing or abutting on any street, avenue, alley or other public way to construct, build or repair a sidewalk, foot pavement, curb or gutter, or either one or more of said improvements thereon, to be built in front of such abutting property, and upon a grade, and of such materials, width and other dimensions and in such man- ner as the City Council shall direct. The said resolution shall fix a time within which the said work shall be done by the owner, and a copy of said resolution shall be served upon such owner or upon the agent of such owner, or if the owner is a non-resident or cannot be found within said City, and has no known agent within the City, a copy of such resolution shall be published once each week for two consecutive weeks in some newspaper published in said City, and a copy thereof posted upon said lot, parcel or tract of land; or if no newspaper is published in said City, such posting upon said lot, parcel or tract of land shall be deemed sufficient. If the owner, or owners shall not, within the time fixed in said resolution, build, construct or repair such sidewalk or foot pavement, curb or gutter, or either one or more of said improve- ments in the manner and as directed in said resolution, the City Council may cause the same to be clone and pay therefor, and charge, assess and collect the expenses thereof against such lot, parcel or tract of land, and against the owner or owners thereof. But nothing in this section shall be construed to be in conflict with Section 59 et seq. of this Act, but both shall exist as cumu- lative, and as independent modes of procedure, either to be fol- lowed in the discretion of the City Council. All the provisions of Chapter 9298 of the Laws of Florida rela- tive to the making of said assessment and proceedings subsequent thereto, notice to hear complaints and action thereon and the effect thereof, and providing for the issuance of bonds based upon said assessments as contained in Chapter 9298 of the Laws of Flor- ida, shall be applicable to and may be followed in making and enforcing the assesmentx authorized by this section. Section 111. The fiscal year of the City of Vero Beach shall end on October 31 of each year; and as soon thereafter as possible the City Council shall have an audit made of all the books of the City of Vero Beach, and a competent accountant or flrm of ac- countants shall be employed for this purpose. Section 112. All officers of said City shall be exempt from jury duty during their respective terms of office. 135 LAWS OF FLORIDA 2219 Section 113. The City Council of the City of Vero Beach, Flor- ida, is authorized to issue and sell bonds of said-City in an amount not exceeding $1,000,000 for the purpose of refunding any bond, note, certificate of indebtedness or other obligation for the payment of which the credit of said City is pledged, or the credit of the municipality of Vero B9ach abolished b;r this Act has been pledged. Section 114. That upon determining to issue such bonds the City Council of the City of Vero Dcach, Florida,shall by ordinance, authorize the issuance thereof, prescribe the form of said bonds; the date thereof; the rate of interest which the same shall bear, which shall not exceed six per cent per annum; and the time of maturity of said bonds. All of said bunds shall be in the denomi- nation of One Hundred Dollars each or some multiple thereof, and the same shall be signed by the Mayor, countersigned by the Presi- dent of the City Council, and attested by the City Clerk, with in- terest coupons attached, which shall be signed in like manner, ex- cept that such interest coupons may be signed by the lithographed or facsimile signatures of the said officers of said City. Section 115. That bonds issued under the provisions of this Act shall have all the qualities of negotiable paper under the law mer- chant, and shall not be invalid for any irregularity or defect in the proceedings for the issuance and sale thereof, and shall be in- contestable in the hands of bona fide purchasers or holders thereof for value. Delivery of any bonds or coupons so executed at any time thereafter shall be valid, although before the date of delivery the person signing such bonds or coupons shall have ceased to hold office. Section 116. That it shall be the duty of.the City Council of the City of Vero Beach at or before the time of issuing bonds here- under to provide for the imposition and collection annually of a tax in excess of all other taxes on all property subject to taxation in said City sufficient in amount to pay the interest on such bonds and the principal thereof as the same respectively become due, not- withstanding any tax rate limitation for the payment of such in- debtedness refunded, such tax to be levied and collected by the same officers at the same time and in the same manner as general taxes of the municipality. Section 117. The bonds herein provided for shall in no case be sold at a greater discount than five per cent of their par value, and it shall be the duty of the City Council of said City, as soon as it shall authorize the issuance of any of the bonds herein provided for, to offer the same for sale by advertising the same for sale for �3� 2220 LAWS OF FLORIDA two successive weeks in some newspaper published in Indian River County, Florida. 'After such advertisement the Council may re- ceive bids and sell said bonds and it shall have the right to reject any and all bids and re-advertise the same, or any part thereof re- maining unsold; and if the bonds be not sold pursuant to such ad- vertisement, they may be sold at private sale at any time after the (late advertised for the reception of sealed bids, provided that no bonds issued under the authority of this Act shall be sold for less than ninety-five per cent of the par value thereof, with accrued in- terest, and provided further that no private sale thereof shall be made at a price lower than the best sealed bid received therefor, and no private sale shall be made of said bonds subsequent to thirty days after the advertised date for the reception of sealed bids. Section 118. It is the intention of the Legislature by virtue of the provisions of Sections 113 to 117, inclusive, of this Act to pre- scribe an independent and alternative authority for the City of Vero Beach to issue bonds for the purpose of refunding any out- standing obligations of said municipality or of the City of Vero Beach abolished by this Act which in any manner constitute an in- debtedness thereof. The refunding of any bonds under the pro- visions of said sections secured by special taxes, liens, assessments or benefits, as well as ad valorem taxes, shall not release such spe- cial taxes, liens or assessments, but the same shall in like manner constitute security for the payment of such refunding bonds; and the provisions of Sections 113 to 117, inclusive, of.this Act shall, without reference to any other Act of the Legislature, or any other provision in this Act, be full authority for the issuance, sale and exchange of bonds in said sections authorized, and no ordinance, resolution or proceeding in respect to the issuance of any bonds under the provisions of said sections shall be necessary, except such as required by the provisions of said sections; and it shall not be necessary to the validity of said bonds for any election to be called for the ratification of the issuance of said bonds by the voters of said City, nor for any other proceeding of any kind or character to be taken, except as provided and prescribed by Sections 113 to 117, inclusive, of this Act, and said bonds shall not be included in any debt or other limitation on the issuance of bonds by said City. Section 119. Should any rection or part of this Act be held unconstitutional or void for any reason by any court, the same shall affect only the particular section or part so held to be invalid and shall not affect in any manner the validity of any other part or parts of said Act. �� 1 LAWS OF FLORIDA 2221 Section 120. All laws and parts of laws in conflict with this Act are hereby repealed. Section 121. This Act shall go into effect inunedintely upon its passage and approval by the Governor or upon its becoming a law without such approval. Approved_11Iay 24, A. D. 1929. CHAPTER 14440—(No. 876). AN ACT to Prevent and ;flake Unlawful the Movement into Volusia County of Honey Bees in Certain Forms-of Hives, and Prohibiting the Movement of Certain Equipment into the County Prior to Inspection by a County Bee Inspector, and Pro- viding for an Inspection Fee, and Prohibiting the Placement of Apiaries Within One Mile of Established Apinries and Author- izing the Board of County Commissioners of Volusia County, Florida, to Appoint an Inspector of Bees and Declaring How His Compensation Shall be Fixed and Paid. Be It Evacted by the Legislature of the State of Florida: Section 1. From and after the passage of this Act it sliall be unlawful to ship or move into Volusia County, Florida, any honey bees in log gums or other form of hives, not permitting of the ready removal of frames and it shall be unlawful for any used bee-keeping equiment to be moved or shipped into the said Volusia County, Florida, until an Inspector from the County has inspected the said used bee-keeping equipment and has certified to the ap- parent freedom of the bees, their combs and hives, from con- tagious and infectious diseases and the said certificate must be based upon an actual inspection of the bees and used bee-keeping equipment so attempted to be moved into the County. Section 2. That all persons who are not taxpayers in Volusia County, Florida, and who desire to ship or introduce honey bees into Volusia County, Florida, shall be required to pay an in- spection fee of One ($1.00) Dollar per hive, per year for having or moving honey bees into Volusia County, and in case of partner- ships owning or operating any apiaries in this County where any one partner is not a taxpayer within this County, the non-resident member of such partnership shall pay the fee required by this Act to the County. 4� 13� EXHIBIT C 13� LAWS OF FLORIDA CHAPTER 29163 porations, property and property rights, occupations, businesses and professions whatsoever within said boundaries. The title to and jurisdiction over all streets, thoroughfares, parks, beaches, alleys, public roads and sewers, within the City, and all other property and municipal plants owned by it, and all property of every kind and character which the Town may hereafter acquire within or outside the boundaries of the Town, or which may vest in it, or be dedicated to it for its use or for the public use, shall be vested in the Town of Indian River Shores as created under this Charter. ARTICLE II POWERS OF THE TOWN Section 1. Charter: This Act shall hereafter be referred to as the Charter of the Town of Indian River Shores, a municipal corporation of Florida. Section 2. General Powers of the Town: The Town of Indian River Shores hereby created, established and organized, shall have full power and authority: (a) Acquisition of Property: To acquire by purchase, gift, devise, condemnation, lease or otherwise, real or personal prop- erty or any estate therein, or riparian rights or easements there- in, within or without the City, to be used for any municipal purpose, including cemeteries or place for burial of the dead; streets and highways, public parking lots or spaces; bridge and tunnel sites; the construction of a telephone system; plants, works and wells and other equipment necessary for supplying said City with water, ice, gas for illuminating and heating pur- poses, and electric power for illuminating, heating or power purposes; the location of waterworks and sites for public util- ity works; the establishment of poor houses, houses of deten- tion and correction; hospitals for the cure or detention of the sick; jails; market houses, public parks, playgrounds, airports, docks, sea walls, yacht harbors, wharves, warehouses, prome- nades; plants for cremating, neutralizing or otherwise destroy- ing sewerage, garbage and refuse; for extension of sewer and drainage pipes and water mains; and for any public or muni- cipal purposes; and to improve, sell, lease, pledge or otherwise dispose of same or any part thereof for the benefit of the City, 1287 CHAPTER 29163 LAWS OF FLORIDA to the same extent that natural persons might do, in the man- ner provided in this Charter. (b) Recreational Facilities: To acquire by purchase, gift, devise, condemnation, lease or otherwise, real or personal prop- erty or any estate therein, and on same, build, repair, improve, construct, own, lease, operate and maintain any and all man- ner of recreational facilities, including yacht basins, docks, 'piers, wharves, fishing piers, public beaches, beach casinos, cabanas, pavilions, entertainment and eating places, swimming pools, bath houses, stadiums, football fields, baseball parks, athletic fields, amusement parks, dance and concert halls, gym- nasiums, auditoriums, airports, golf courses, playgrounds, park- ing lots, tourist camps, trailer parks, tennis courts, shuffleboard courts, bowling courts, libraries and reading rooms, public parks and public recreational facilities of all kinds; to construct, im- prove, build or maintain all streets, alleys, parks, boulevards, via- ducts, tunnels or bridges necessary or proper to approach same, or to be used in connection with any of same, and any and all necessary or convenient appurtenances or aides in connection therewith; to regulate the use thereof, including the power to charge, establish and collect reasonable fees, admissions, tolls, charges, rentals, or moneys to be paid said Town by each per- son, firm or corporation using any of same or receiving a ser- vice from the use of same; to lease from others or to others, in accordance with the requirements of the Charter, such of said facilities as the municipality may desire or think proper; to prescribe, regulate and at all times control any charge de- manded of, paid by or collected from the public in patronizing, enjoying or using any of the privileges afforded by or tendered through any such facility; and, in the sole discretion of the municipality and in the public interest, to absolutely discon- tinue the use, operation or maintenance of any such facility, where no pledge of revenues therefrom has been made; and to pledge the revenue derived from any such facility or any other available funds to pay and discharge any bonds which might have been issued in connection with securing moneys to construct or improve such facilities. (c) Taxes and Assessment: To levy, assess and collect taxes for all ►municipal purposes, general and special, upon real and personal property and upon all businesses and occupations within the Town. 1288 I � LAWS OF FLORIDA CHAPTER 29163 (d) Occupatioual Licenses: To license and regulate the busi- ness, trade, occupation or profession of all classes, or any class of persons, firms or corporations doing business either wholly or in part within the Town, whether licensed by the State, or County, or not. (e) Public Utilities: To acquire, purchase, lease, install or distribute within the said Town limits when deemed necessary, or outside of said limits when deemed necessary, water supply of any kind whatsoever for public use, or for distribution to private users within the corporated limits; to contract with other municipalities, persons, firms or corporations on behalf of the inhabitants of the Town of Indian River Shores for water, electricity, gas, or other public utility; to give, grant or furnish any and all local public services, including electricity, gas, water or transportation, and to charge and collect neces- sary fees or charges therefor at a profit to said Town; to pur- chase, construct, maintain, operate, lease or contract for any public utilities, including, but not limited to, electric light systems and plants, gas plants or water supply, and distribu- tion system therefor; telephone and telegraph systems, ice plants and works, bus or transit systems, radio broadcasting stations, television stations; to establish, impose and enforce rates and charges for supplying such services and conven- iences by the Town to any person, persons, firms or corpora- tions. (f) Franchises: To grant franchises of all kinds for the use of the Town streets, waters and waterways, water systems, public beaches and recreational facilities; provided, that such power with respect to rates and charges for gas or electricity shall not be exercised or be available for exercise in contra- vention of or during the effectiveness of the provisions of Chapter 265.45, Laws of Florida, Acts of 1951, or any other law of the State of Florida, in vesting a State agency or commis- sion with regulatory power over rates and charges for gas or electricity. (g) Zoning: To adopt and enforce for the purpose of pro- moting health, safety, morals and the general welfare of the Town, regulations restricting the height, number of stories and size of buildings and other structures, controlling the den- sity of population and the location and use of buildings, struc- 1289 1A SETTLEMENT STRUCTURE OFFERED BY THE TOWN OF INDIAN RIVER SHORES' MEDIATION TEAM AT THE DECEMBER 17, 2014 MEDIATION The Town's mediation team is supportive of the following terms to resolve the Town's dispute with the City. If these terms are accepted by the City's mediation team, the Town's mediation team is prepared to present the agreement to the Town Council in a public meeting for the Town Council's independent approval. Settlement Terms For purposes of settlement, and in return for the Town continuing to abate its lawsuit against the City , the City would: 1. Expressly acknowledge that the Town may provide electric services to its citizens upon expiration of the Franchise Agreement either through direct provision of such electric service or by contracting on behalf of its residents with another electric utility provider in accordance with the Special Act creating the Town. 2. Honor the Town's right to conduct an evaluation, which may include but not be limited to a Request for Proposal ("RFP") process, of the most appropriate means for the Town to provide electric service to its citizens upon expiration of the Franchise Agreement. In the event the Town issues an RFP, the Town would recognize the City's right to submit a proposal in response to the RFP as a potential provider of electricity to the Town and its residents after the Franchise Agreement expires. 3. If, as part of the evaluation process in paragraph 2, the City is not selected to continue providing electric service, the City would enter into good faith negotiations with the Town to determine and agree upon the most appropriate means for the City to discontinue the provision of electric service within the Town after the Franchise Agreement expires. Such good faith negotiations may include discussions on the sale of the City's electric utility facilities in the Town to the Town or to another electric utility provider designated by the Town. 4. If on or before June 1, 2015, the Town has agreed that the City should continue to provide electricity within the Town after the Franchise Agreement expires on November 6, 2016, or the City and the Town have reached formal agreement on an appropriate means for the City to discontinue providing electric service within the Town after the Franchise Agreement expires, then the Town xvould dismiss its lawsuit against the City. 5. In the event that the Town and the City agree upon an appropriate means for the City to discontinue the provision of electric service within the Town after the Franchise Agreement expires, the City will cooperate with the Town in making the appropriate filings with the FPSC to amend the existing territorial agreement accordingly. ) H3 6. If on June 1, 2015 the Town has not agreed that the City should continue to provide electricity within the Town after the Franchise Agreement expires, or the City and the Town have not reached formal agreement on an appropriate means for the City to discontinue providing electric service within the Town after the Franchise Agreement expires, then the Town would be free to take whatever procedural steps are required to resume prosecution of its lawsuit against the City without repeating the conflict resolution process in Chapter 164, Florida Statutes. 44 Statutes & Constitution :View Statutes : Online Sunshine Page 1 of 1 Select Year: 2014 — Go The 2014 Florida Statutes Title XII Chapter 180 View Entire Chapter MUNICIPALITIES MUNICIPAL PUBLIC WORKS 180.02 Powers of municipalities.— (1) For the accomplishment of the purposes of this chapter, any municipality may execute its corporate powers within its corporate limits. (2) Any municipality may extend and execute all of its corporate powers applicable for the accomplishment of the purposes of this chapter outside of its corporate limits, as hereinafter provided and as may be desirable or necessary for the promotion of the public health, safety and welfare or for the accomplishment of the purposes of this chapter; provided, however, that said corporate powers shall not extend or apply within the corporate limits of another municipality. (3) In the event any municipality desires to avail itself of the provisions or benefits of this chapter, it is lawful for such municipality to create a zone or area by ordinance and to prescribe reasonable regulations requiring all persons or corporations living or doing business within said area to connect, when available, with any sewerage system or alternative water supply system, including, but not limited to, reclaimed water, aquifer storage and recovery, and desalination systems, constructed, erected and operated under the provisions of this chapter; provided, however, in the creation of said zone the municipality shall not include any area within the limits of any other incorporated city or village, nor shall such area or zone extend for more than 5 miles from the corporate limits of said municipality. History.—s. 1, ch. 17118, 1935; CGL 1936 Supp. 3100(6); s. 5, ch. 95-323. Copyright© 1995-2014 The Florida Legislature • Privacy Statement • Contact Us 1 � 5 http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String... 8/20/2014 INTERIM MEDIATION AGREEMENT THIS AGREEMENT is made this day of January, 2015 by and between the Town of Indian River Shores (the"Town"), Indian River County (the "County"), and the City of Vero Beach(the "City", and collectively,the "Parties"). WHEREAS,the respective representatives of the Town, the County, and the City participated on December 17, 2014 in a mediation session(the"Mediation")pursuant to the Florida Governmental Conflict Resolution Act, Chapter 164, Florida Statutes; and, WHEREAS, the respective Mediation representatives for the Town,the County, and the City agreed to recommend to their respective governing bodies to approve certain terms discussed at the Mediation which would involve an agreement by the Town to continue to abate the lawsuit brought by the Town against the City, Circuit Court Case No. 312014 CA 000748, in the Nineteenth Judicial Circuit in and for Indian River County(the "Lawsuit"), so that the Parties can further evaluate and explore options to resolve the conflicts between them. NOW, THEREFORE, the Parties, in consideration of the mutual benefits contained herein, agree as follows: 2015. 1. The Town will continue to abate the Town's lawsuit until Monday, March 2, 2. Without waiving its position that neither the Town nor the County may take any action, either before or after the expiration of their respective franchise agreements with the City, that would terminate or in any way impair the City's right, obligation, or ability to operate its electric utility system and/or provide retail electric service in its service territory approved by orders of the Florida Public Service Commission,the City will not object to either the Town or the County conducting, as contingency planning for the possibility that they might prevail in the Lawsuit or related litigation, evaluations of alternatives for the Town or the County to provide for, or to arrange for the provision of, electric service to their respective citizens upon expiration of their respective electric utility franchise agreements with the City. In this regard, the City will not object to the Town or the County issuing requests for proposals to, or otherwise communicating with, other potential electric utility providers, including but not limited to Florida Power&Light Company ("FPL"), with respect to any such alternatives. 3. On or before January 8, 2015, the City, Town and County will enter a separate agreement with FPL, if FPL consents, acknowledging that the Town's and the County's discussions with such potential providers would not be treated as a breach of, or interference with, the existing contract that the City has with FPL to sell the City's electric utility to FPL or any other agreement between the City and FPL. 4. The City will continue to diligently explore options to lower electric rates, which activities and options include, but are not limited to, the following: a. Working with FPL, the Orlando Utilities Commission("OUC"),the Florida Municipal Power Agency ("FMPA"), bond trustees and others to effectuate the sale of the City's electric utility system to FPL. In this regard, the City will ask I4w FPL, OUC, FMPA,the bond trustees, and if needed others to consent to allowing representatives of the Town and the County to attend such discussions; b. Negotiating with OUC and FMPA toward reducing the City's costs under its long-term power supply arrangements with those utilities. In this regard, the City will ask OUC and FMPA to consent to allowing representatives of the Town and the County to attend such discussions; C. Completing the Rate Study, which includes a cost-of-service study and evaluations of other financial and rate measures, with Public Resources Management Group, Inc.; d. Conducting and completing the anticipated study of the Vero Beach Electric Utility system with respect to efficiency, optimization, and potential cost-saving measures, which study is expected to begin in January 2015 and expected to be completed in the summer of 2015; and e. Continuing the City's efforts to identify and implement additional cost control and cost reduction measures to bring lower electric rates to its customers. 5. The City will continue to pursue conducting a referendum on the creation of an independent utility authority, and will agree to work in good faith with the Town and the County to reach agreement on the details of that authority, including its powers, structure, and composition. 6. No later than February 18, 2015,the City will provide the Town, the County and the mediator with a report on the status of efforts to lower rates (including but not limited to the status of its efforts to sell its electric utility system to FPL) and to create an independent utility authority. This report will be provided by the City. 7. This Agreement shall not preclude the County from moving forward with its petition for declaratory statement in Docket No. 140142-EM, which is currently scheduled to be considered by the Florida Public Service Commission on February 3, 2015. 8. Unless the Town and the City agree otherwise to continue abatement of the lawsuit, and following declaration of impasse by the Mediator with respect to the Town and the City,the Town will file an unopposed motion to lift the abatement of the lawsuit no earlier than March 2, 2015. [Signatures on following page] 2 141 On behalf of the Town: Signature: Name: Date: On behalf of the County: Signature: Name: Date: On behalf of the City: Signature: Name: Date: 3 149 January_, 2015 Dylan Reingold, Esquire County Attorney Indian River County County Attorney's Office 180127"' Street Vero Beach, Florida 32960-3365 Chester Clem, Esquire Town Attorney Town of Indian River Shores 6001 North A-1-A Indian River Shores, Florida 32963 D. Bruce May, Jr., Esquire Holland & Knight 315 South Calhoun Street, Suite 600 Tallahassee, Florida 32301 R. Wade Litchfield, Esquire General Counsel Florida Power & Light Company 700 Universe Boulevard Juno Beach, Florida 33408-0420 Re: Waivers and Consents By the City of Vero Beach and Florida Power & Light Company Gentlemen: I write to you today in connection with the ongoing mediation process relative to the complaint of the Town of Indian River Shores ("Town") against the City of Vero Beach ("City"), Case No. 312014 CA 000748, pending but presently in abeyance in the Circuit Court in and for Indian River County, Florida. In summary, and as set forth more fully and subject to the express qualifications stated below, the City will not assert any claim of tortious interference or breach of contract in connection with, or as a result of, (a) evaluations of future electric power supply alternatives by either the Town or Indian River County ("County"), or (b) discussions that the Town or the County may have with Florida Power & Light Company ("FPL") or any other potential supplier of electricity 1 149 regarding the possible future supply of electric service to customers in the County or the Town. Background As the City and the recipients of this letter know, the City is a party to certain agreements between the City and FPL, including the Asset Purchase and Sale Agreement by which the City has contracted to sell its electric utility system to FPL and a number of other agreements related to the proposed City-FPL utility system sale transactions. On July 18, 2014, the Town filed its Complaint against the City, initiating Case No. 312014 CA 000748. Because the complaint is by one Florida governmental entity against another, the mandatory processes of the Florida Governmental Conflict Resolution Act, Chapter 164, Florida Statutes, were invoked, and the parties have accordingly been engaged in those processes since then. On July 21, 2014, Indian River County filed a petition for declaratory statement with the Florida Public Service Commission ("PSC"), in which the County raised several issues similar to those raised by the Town in its suit. The County's petition was assigned Docket No. 140142-EM by the PSC; action on the County's petition is pending. Most recently, the parties, including the County pursuant to its notice of participation in the Chapter 164 dispute resolution processes, participated in a mediation session on December 17, 2014, facilitated by mediator Carlos Alvarez, Esquire. Among other things, at that mediation session, the parties agreed that the Town would continue its lawsuit in abeyance until March 2, 2015, and the City agreed (without waiving any of its positions in the litigation) that it would waive any claims of tortious interference, breach of contract, or similar claims that might arise from either the Town or the County (a) conducting evaluations of future electric power supply alternatives or (b) engaging in discussions with FPL or other potential electricity suppliers regarding the possible future supply of electricity to customers located in unincorporated Indian River County or in the Town but who are currently provided retail electric service by the City. Consent and Waiver Without waiving its position that neither the Town nor the County may take any action, either before or after the expiration of their respective franchise agreements with the City, that would terminate or in any way impair the City's right, obligation, or ability to operate its electric utility system and/or provide retail electric service within its service territory approved by orders of the Florida Public Service Commission, the City agrees that it will not object to either the Town or the County conducting, as contingency planning by the Town and County for the possibility that they might prevail in the litigation, evaluations of alternatives for the Town or the County to provide for, or to arrange for the provision of, electric service to their respective citizens upon expiration of 2 � 5o their respective electric utility franchise agreements with the City. Additionally, the City will not object to the Town or the County communicating with other potential electric utility providers, including but not limited to Florida Power & Light Company ("FPL"), with respect to any such alternatives. The potential objections thus waived include potential claims of tortious interference with contract or business advantage, breach of contract, or any similar claims. The potential objections thus waived apply and relate only to (a) the Town's and County's evaluations of power supply alternatives and (b) communications between the Town and the County, on the one hand, and potential electricity suppliers, on the other hand, in connection with the prospects for such suppliers to provide power to customers located in the Town or the County unincorporated area, respectively, and these waivers apply only to such evaluations and communications that are conducted during the period from December 17, 2014 through and including March 2, 2015. The only waivers given are those expressly stated in this paragraph and all claims and defenses of the City are otherwise reserved. The City also requests that FPL agree that the City's consents and waivers set forth above do not give rise to any claim by FPL against the City, and that FPL otherwise waives any such potential claim, whether arising from contracts between the City and FPL or otherwise. Further, the City requests that FPL, by its signature below, agree that any communications between December 17, 2014 and March 2, 2015, between the Town and the County, on the one hand, and any other potential electricity suppliers, on the other hand, do not give rise to any claims against any party hereto. I respectfully ask that each of you confirm your respective governmental entity's or company's understanding and acknowledgement of the City's consents and waivers as set forth above, and, as for FPL, its waiver of any claims as set forth above. My signature below confirms that the City consents to the evaluations and communications described above. Sincerely yours, Wayne R. Coment City Attorney 3 151 For Florida Power & Light Company: R. Wade Litchfield (Date) General Counsel For The Town of Indian River Shores: Chester Clem (Date) Town Attorney For Indian River County: Dylan Reingold (Date) County Attorney 4 150-1 SIGN UP SHEET NAME EMAIL ADDRESS -k'E V, h L11-104 �v,.. (. c� G71k I c1 c�"L, �./cl,,^ l.��-` �✓l CJI�.�ct�t-��C.�u'V�e.�it�-�'t<'�)`-`��'�` -��._,.,,.,— �'�� r� J��c'Z �� f/GWnI/V���✓/�'Gj� �' 1•^1��1D/�f.�(7,M a m n'1 VC) G K f v'D CJ� c C v �D , L) Ivy 2�(;� CA v. /ctset ( l Rc� i OJfv/VVA- -JocOki klol� 153 v- hn-e-