VIA:

Email

May 2, 2016

Mr. Jim O’Connor
City Manager
City of Vero Beach
1053 20th Place
Vero Beach, FL 32960
Dear Jim:
The Indian River County Board of County Commissioners voted April 12, 2016, to authorize its
county attorney to appear before the Vero Beach City Council. The purpose of this appearance,
now scheduled for May 3, 2016, is to request that the Vero Beach City Council authorize the
City’s outside counsel to join in discussion with FMPA, Indian River County and others to
pursue the sale of the Vero Beach Electric Utility. I would like to clarify what FMPA’s role
would be in those potential discussions.
FMPA supports each of its members in pursuing whatever goals the member believes to be in its
best interests. If the City of Vero Beach (“City”) desires to sell its electric utility, FMPA will do
everything it can to facilitate that transaction within the bounds of the law and existing contracts.
Furthermore, FMPA will support the City by providing whatever information the City needs
concerning its FMPA contract requirements. Finally, FMPA stands ready to meet with the City
and any of its negotiating partners, together, if requested by the City.
In the event the City decides to engage in discussions regarding the sale of its electric utility, I
have attached a summary of the requirements for exiting FMPA’s All-Requirements Project and
transferring Vero Beach’s power supply interests in the other FMPA project to another utility, as
well as a status of each of the steps.
Please contact me if you have any questions.
Sincerely,

cc: Vero Beach City Council
Wayne Coment, City Attorney
Fred Bryant and Jody Finklea, FMPA

 FMPA Contract Requirements and Status
This summarizes key requirements for Vero Beach to exit FMPA’s All-Requirements Project
(ARP) and transfer Vero Beach’s obligations to another tax-exempt utility for the Partial
Requirements (PR) projects (i.e., Stanton Project, Stanton II Project, and St. Lucie Project).
1. ARP: Exit ARP and pay withdrawal costs for ARP.
2. PR: Find another tax-exempt power utility to buy the power supply output of Vero
Beach’s Stanton, Stanton II and St. Lucie projects.
3. PR: Address contingent liabilities.

Status
May 2016
1. Pay withdrawal costs for ARP. The City of Vero Beach already has the initial ARP
withdrawal estimate, and FMPA will update the withdrawal cost for the City of Vero
Beach within the coming months.
2. Find another public power entity to take transfer and assignment of the power supply
output of Vero Beach’s PR projects. Internal Revenue Service rules related to private use
of tax-exempt bond financing require that only another governmental power utility can
take the power supply output. Follow the transfer and assignment process previously used
by FMPA cities for PR projects. These documents have been transmitted to the City of
Vero Beach several times in the past few years.
3. Address contingent liabilities for PR projects. Vero Beach must find another party—an
electric utility or financial guarantor—to take responsibility for contingent liabilities in
order to meet all PR project obligations. This has yet to be accomplished. All other
project participants must approve Vero Beach’s handling of contingent liabilities to avoid
electric cost increases in their communities.

FMPA members’ objectives are to: 1) assure compliance with the power supply project contracts
for the protection of the bondholders, the remaining project participants and their electric
customers, and 2) assist the City of Vero Beach in achieving its objectives.
As a member of FMPA, only the City of Vero Beach has the responsibility and authority to
address these issues. Organizations that wish to seek solutions to the exit cost and requirements
outlined above must first engage with the City of Vero Beach to reach a viable resolution.