Gov. Ron DeSantis announced on Tuesday three of the Gainesville Regional Utilities (GRU) Authority members that will assume operational control of the utility on Oct. 1.
The appointees were James Coats IV, Robert Karow, and Eric Lawson.
Coats currently serves as the CEO of Phalanx Defense Systems and was awarded the “Spirit of Gainesville” Award by the Alachua County Chamber of Commerce, according to a press release from the governor’s office. He earned a bachelor’s degree and a master’s degree in business administration from American Military University.
Karow, a retired marine, previously served as manager, legal counsel and contracts manager for Oleoductos de Crudos Pesados, an oil pipeline in Ecuador. He earned his juris doctor from UF.
Lawson is the CEO of HCA Florida North Florida Hospital and has held various leadership positions in healthcare over the past 30 years. He earned his bachelor’s degree in accounting from Tennessee Technological University.
According to the legislation, DeSantis can select as little as one or as many as five of the initial authority appointments from outside the city of Gainesville and within Alachua County. Once the initial five have served out their terms, representation on the authority board will be required to reflect the ratio of GRU customers who live inside Gainesville city limits vs. those who live outside the city limits.
HB 1645 cuts the Gainesville City Commission out of the decision-making process, placing GRU General Manager Tony Cunningham under the Authority’s purview. The Authority will also set rates, issue bonds and chart future energy plans for more than 93,000 GRU customers.
State Rep. Chuck Clemons, R-District 22, first announced the bill in early March. He said an audit by the state’s Joint Legislative Audit Committee showed mismanagement of GRU by the City Commission.
GRU has $1.7 billion in debt with 14% equity remaining. Electricity rates for residential customers topped the state on average in 2022, and the city voted to raise them again last week when it finalized its budget with a 3% electric rate increase.
Lawmakers called the annual money transfer from GRU to the general government budget excessive. It reached a high of $38 million in 2019, but the commission slashed it to $34 million in fiscal year 2023 and it will be $15.3 million in 2024.
Clemons said the City Commission has used GRU to transfer profits and support city programs while leaving the utility in poor shape and without a way to cut back debt. Those decisions, Clemons said, resulted in high utility rates that impact Alachua County citizens who have no voting control over the City Commission. Between 30% and 40% of GRU customers live outside city limits depending on the utility service.
The City Commission approved the use of an initial quarter of a million dollars in June and hired the national law firm Akerman LLP to represent Gainesville. Since then, those funds have been used to file a complaint for declaratory and injunctive relief, motion for temporary relief and a motion for full and final summary judgment, spending an estimated $300,000 through the end of August.
On Sept. 14, the City Commission voted to continue funding its legal action against the state of Florida by allocating another $250,000 to the effort.
Gainesville residents also formed the nonprofit Gainesville Residents United and sued the state of Florida in federal court over the Gainesville Regional Utilities Authority. The state has filed a dismissal in that case on procedural grounds.
Editor’s note: This story was updated with background information regarding HB 1645.