Seth Johnson
State Rep. Chuck Clemons, R-Newberry, has called for the resignation of Mayor Harvey Ward over a bond delay and an extra $2.9 million in debt incurred by Gainesville Regional Utilities (GRU).
On Wednesday, Clemons said Ward and GRU General Manager Tony Cunningham should both resign for their roles in the delay. He said Ward went outside his role of mayor and broke the city charter.
“It looks like the mayor has directed the GRU [general manager] to delay the bond reissuance,” Clemons said in a Thursday phone interview.
Clemons said he believes Ward and Cunningham are at fault based on communications that have emerged between Gainesville employees—including GRU’s Chief Financial Officer Claudia Rasnick.
On Thursday, Ward said he plans to continue his duties.
“I don’t intend to resign, and I’m focused on making Gainesville the best place in Florida to live, work, learn and thrive,” Ward said in a text to Mainstreet.
Ward and Cunningham defended their actions during a Joint Legislative Audit Committee (JLAC) meeting on Oct. 16. Rep. Mike Caruso, R- Delray Beach, brought forward a memo by Rasnick that says Ward directed the delay.
“I’m at a loss as to why the CFO would say direct,” Ward told lawmakers at the meeting. “I have no capacity to direct.”
The Alachua Chronicle reported on a March 15 email from Rasnick that said, “The new money part of the April transactions has been asked by the Mayor, as of this morning, to be moved to June for issuance so as not to adversely impact interactions with the state legislature.”
Caruso also asked Cunningham why the bond deal was delayed. Cunningham said commissioners felt at the time that the utility needed to solidify its debt reduction plan before issuing the bonds.
“I absolutely believe that the truth was neither of those gentleman’s constant companion, especially in front of the JLAC committee,” Clemons said Thursday.
Clemons also targeted Commissioner Bryan Eastman in his statement calling for the resignations, saying Eastman promoted false claims that the Florida Legislature caused the $2.9 million increase.
On Thursday, Eastman reiterated that position to Mainstreet, pointing to House Bill 1645 as the cause of the $2.9 million increase.
“This completely novel governance structure has spooked our bond holders, and my worry is it will cost GRU ratepayers even more in the future,” Eastman said in an email.
He cites a report by PFM Financial Advisers, GRU’s independent bond counsel, as evidence.
The report says the charged environment in March and April hampered bond issuance. During that time, House Bill 1645 and public debate centered on GRU and a change of authority.
“Effectively, these events created a dark cloud of uncertainty on GRU and its ability to issue debt,” the report reads. “Specifically, there were questions about bankruptcy and downgrades that the finance staff had to dispel as well as frequent engagement and informational updates with both the rating agencies and GRU’s historical banking team.”
GRU had an initial contract with Barclays. In June, the bank pulled out of the deal. The report lists Barclays’ reasons as “the question of the governing authority and the formal timeline for the authorization of the transaction.”
Because of Barclays decision, PFM and GRU turned to TD Bank. The bank was willing to loan the money, and PFM said the terms weren’t as good as Barclays but still fair based on GRU’s request for proposals earlier in the year.
Still, the terms were $2.9 million higher than Barclays, and Clemons said he believes an investigation by JLAC or the Committee on Ethics and Elections will uncover Ward going outside the charter. Clemons said Cunningham also broke the charter by not providing for the fiscal interest of the utility and allowing the delay.
Clemons said he also thinks Florida’s Sunshine Laws were violated through ‘daisy-chaining.’ He said charter officers aren’t allowed to go to members of the commission separately to see how they would vote on an issue, skirting or delaying a public vote at a meeting.
“I believe that the resignations will be the first part of the reckoning that should occur for this type of big mistake,” Clemons said, adding that the resignations would save taxpayer money and time.
Clemons said JLAC will vote to restart an investigation into the bond delay, along with continued check-ins on audit items. The Oct. 16 JLAC vote to initiate a probe, while initially called successfully, was later revoked because of a tied senator vote, 2-2.
Clemons said state Sen. Nick DiCeglie, R-Indian Rocks Beach, who was absent at the last meeting, will be at the next meeting and, he believes, will push the vote through.
“I think there’s a coverup going on, quite frankly,” Clemons said.
On Thursday, Robert Hutchinson, a former county commissioner, circulated a letter calling for the resignation of Clemons. Hutchinson also heads Gainesville Residents United, a nonprofit suing over HB 1645 and the new GRU Authority.
In the letter, Hutchinson lists the reasons for the call: sponsoring HB 1645, spreading inaccurate allegations about the city’s fiscal health, damaging city employee reputations through rumors of malfeasance, and ignoring public records requests.
Editor’s note: This story has been updated.
I have evidence Barclays DID NOT PULL OUT! Per communications and also the answers to the due diligence questions! I’m tired of these people trying to escape their lies! Good thing I keep pulling public records maybe I should find a team that wants to go through the mess!
Typical.Gainesville politician that cannot accept mistakes and admit accountability.
For years the standard back-office daisy-chain is for the Charter Officers to meet with Commissioners one at a time in a round-robin style so the charters can give info, and the commissioners can tell the charters their desire. Are those orders or direction? Not exactly, but, if you are a consistent block, your employment might be in jeopardy.