Gainesville signs off on radio system sale

GRUCom fiber optic truck
A GRUCom fiber optic truck.
Photo courtesy GRU

The city of Gainesville approved a contract to sell its trunked radio system to Alachua County during the city’s Thursday meeting, mirroring the county’s vote earlier this week.  

The $8 million sale promotes the county from a user of the system to the owner, while the city will now pay as a system user in a deal that both commissions celebrated.  

The trunked radio system is used by law enforcement, emergency services and public works across Alachua County. Users include the cities of High Springs, Alachua and Newberry, along with Santa Fe College, UF and others.  

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Gainesville Regional Utilities (GRU) currently owns and operates the system. Lewis Walton, GRU’s chief business services officer, said the work falls outside typical utility functions. Across Florida, county governments control the system for all users through tax revenue, he said at Thursday’s meeting.  

The deal has been in the works for years as Alachua County wanted to control the system. In December, the Alachua County Board of County Commissioners (BOCC) tired of waiting and gave the city an ultimatum: sell the system or the county would build its own. 

Commissioner Casey Willits noted that the project had been ongoing for years and wasn’t a quick reaction to legislative or county pressure. 

“I want to make sure that we acknowledge that this was not the first deal and we’re in a corner and we say yes,” Willits said. “This was an ongoing conversation, many months, years back.”   

Walton said the sale will allow GRU to pay off most of the debt it acquired by operating the system, around $10.8 million, while cutting yearly operating costs by $1.4 million. He said the system has continued to underperform financially.  

He added that GRU could now focus on core products and services within its communications department.  

An independent study valued the system at $3.7 million for all the assets as of Dec. 31, 2022.  

At its Tuesday meeting, BOCC members said paying $8 million will still save the county money, rather than spending $14 million to $17 million for a duplicate system with six tower sites. County Manager Michele Lieberman said building a new system would also take two to four years to finish.  

BOCC Commissioner Ken Cornell said the price is probably more than the county would like and less than GRU would like, making for a pretty good deal.   

“I think it’s a good transition for all the citizens both in the city and outside the city,” Cornell said.   

The contract has payment plans from Gainesville and GRU to use the system for the next five years—totaling $4.9 million combined. The county said it would also issue a flat rate for the next five years to the other system users.   

Alachua County Fire Rescue Chief Harold Theus told the City Commission on Thursday that Gainesville residents were also county residents. He said the deal will benefit both. 

“With the revenue that we will generate from our users, we will be able to expand this radio system into the unincorporated area to provide a better radio service in the future,” Theus said.    

Alachua County will take over operation on Oct. 1, 2023, once the contract is finalized.  

Walton said GRU worked with the city’s legal staff to determine whether the Gainesville charter would prohibit a sale without voter approval on a ballot. The charter requires a ballot measure before the city can dispose parts of the utility “so as to materially reduce the capacity of that system to produce, distribute or treat. . .[the telecommunications system].” (Find the full code section here.) 

Walton said all of GRU’s commercial telecommunications services and capabilities will remain options for customers after the sale. Because the sale doesn’t materially reduce those abilities, the commission can proceed without voter approval.  

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When a city government makes a profit because of a sale, do they still have to pay taxes on it? Does that make them a reseller, with concurrent requirements as such?

A lot of weird stuff goes on in government.