On Wednesday, the Florida House State Affairs Committee voted against amendments to a bill changing control of Gainesville Regional Utilities (GRU) and pushed the bill to the next stage.
Introduced by state Rep. Chuck Clemons, R—Newberry, the local bill would authorize the governor to appoint a board independent of the city commission to manage GRU. The legislative delegation for Alachua County approved the bill 4-1 for Clemons to submit.
State Rep. Yvonne Hayes Hinson, D—Gainesville, dissented on that vote and submitted two amendments for the committee to consider. The first allowed GRU customers to elect the independent board instead of the governor, and the second limited the independent board’s authority if appointed, placing limits on eminent domain and selling services.
The committee voted down both amendments.
The five-hour meeting began to run short on time, and Chair Lawrence McClure, R—Dover, limited questions, comments and debate on the bill to 30 seconds per person. McClure placed the same limitations on other bills before the committee, including one with more than 100 public commenters.
Hinson said the issue of state interference with GRU has continued for some time and called concerns of bankruptcy messaging. Gainesville voters defeated a state-sponsored referendum in 2018 that would have created an independent board elected by the city commission.
“I was a Gainesville city commissioner in 2012 to 2015, and I have witnessed an aggressive pursuit of GRU by legislators since that time,” Hinson said. “Its genesis did not begin today.”
Meanwhile, Clemons called the situation around GRU’s finances a crisis caused by the city commission control.
State Rep. Anna Eskamani, D—Orlando, asked what compelling state interest exists for Tallahassee to intervene and Clemons said to prevent GRU from going broke.
He said GRU’s level of debt, at $1.69 billion, sits four times higher than comparable utilities. He also told the committee that, in the last four years, the city commission has transferred $68 million more than GRU has earned in profit from the utility’s budget to the city’s general fund.
Clemons also pointed to bills that exceed other municipal utilities in the state. He also stated that the independent board cannot sell GRU or assets without voter approval.
“This bill will help to right the ship and provide stable leadership and separate the city commissioners from the apparent conflict of interest that they're currently undergoing,” Clemons said.
According to February 2023 data by the Florida Municipal Electric Association, GRU had the highest residential 1,000 kWh bills for municipal utilities. Among all utilities, Duke Energy ranked slightly higher, followed by GRU then Key West and then Florida Public Utilities. All four sat within $4 of each other.
Hinson said the Legislature has failed to give Gainesville a chance to crawl out from its debt situation, a process currently in the works, since highlighting the problem.
Gainesville Mayor Harvey Ward briefly stated those efforts to address concerns presented by the Joint Legislative Audit Committee in February. In the 30 seconds given, he noted the commission has set a formula for calculating how much money is transferred from GRU to the general government, resulting in a 55% reduction. That reduction forms part of the plan passed by the Gainesville commission on April 13 to lower debt by $315 million in 10 years.
Eskamani said the utility is still highly rated and called the bill heavy-handed. Currently, bond rating agencies rank GRU as an investment-grade utility.
The bill passed 14 to 5 and will now proceed to the chamber.
What about that Pesky GRU Fuel Adjustment and County Surcharges. Do you dare compare GRU to Clay Electric?
Once again the City Commission offers too little too late. All of this could have been avoided but ever since they removed the Back Out Clause from the GREC PPA, they've continued to make a long list of bad decisions. Even without the Back Out Clause, the City Commission could have stopped the project but instead Susan Bottcher allowed GRU's GM to sign a secret agreement making an already bad deal even worse. Too bad they spent so much political capital opposing the Independent Board when it was on the ballot. Then they could have appointed their cronies so they could continue to run GRU into the ground.
Rep Clemons bases the need for his bill on GRU being (his words) "on the verge of bankruptcy". This is a gross distortion of facts. GRU is financially sound and strong, according to the three bond rating agencies.
Fitch, Standard & Poor, and Moody’s have given GRU these grades: A+, A and Aa3 respectively.
This class of upper tier ratings includes these characteristics:
“Possessing superior intrinsic financial strength;
Having a very predictable stable operating environment;
With obligations subject to very low credit risk.”
The city’s bond counsel (in a recent email to the City Attorney) recommended that ownership remains with the city and stated this bill could create insecurity by bondholders.
Passing this bill will create uncertainty with the bond rating agencies and actually hurt GRU’s financial standing.
Further, with the passage of this bill no GRU customer can vote for/against any of these political appointees. The Authority serves at the pleasure of the governor, not any citizen in Alachua County. So GRU customers outside the city limits who complained that they
had no voice"about GRU since they can't vote for city commissioners, get nothing from Clemons' bill. Everyone's "voice" - city residents too -has now been silenced.
Since when were you worried about bond ratings SB? You stood by and encouraged Poe and cronies to spend without limits, never saying a word against it for 7 years, even the millions for free internet and you were all for your buddy Harahan to comply with Kyoto protocol that got us into this mess with biomass. So now you’re worried about bond ratings? Hilarious!!! LOL you never met a tax or radical liberal spending plan you didn’t like! You’ve lost this one and your phony arguments won’t save it! You should move to where someone might listen to you.
Clemons and the "Alachua County delegation" is an enemy of Gainesville and like the rest of our "delegation" - with the exception of Hinson who is the only one actually representing Gainesville - couldn't get elected dog catcher there. As you note, he's not speaking facts about his hostile takeover attempt, and when specifically asked by Esmamonte (sp?) if GRU has missed any payments relied "I can't speak to that." Say what? Why are you here then?
Long story short, hostile takeovers is what Governor Ron and the state GOP specializes in - see Disney, state university system, New College, and the DA in Tampa - and in this one they seek to take away the right - and responsibilities - of Gainesville's citizens and voters and replace it with hand picked political appointees who are guaranteed to not represent the will of Gainesville citizens (see the governor's replacement appointments to removed commissioners here).
How stupid do local elected officials think the Republican majority in both houses are? How stupid does this newspaper think its readers are? All the Democrats--Hinson, Ward, and whoever Eskaman is supposed to be know they are blowing in the wind to cover up the two mistakes they and former Mayor Lauren Poe and Pegeen Hanrahan made, in contracting to create a biomass plant and then purchasing it for an outrageous price and incurring thousands of dollars in senseless legal fees to protect that so-called investment. The referendum was nonsense because only City voters were eligible, not the GRU customers who live outside the municipality. But Mayor Harvey Ward is so proud of the ratification of long-time bureaucrat Tony Cunningham as permanent GRU director that they (non-binary) fail to see that only an articulate trusted voice could save the City from the takeover.
Hinson subscribed to reckless spending too and helped create the situation. She sure turned tail since the initial JLC meeting in Tallahassee where she even suggested shutting of Reichert House! Watch the whole tape and see! All a show of course, she turned tail within days. Can’t be trusted. Botcher has been the most to blame for the whole biomass $1 billion theft from taxpayers because she runs the DEC that kept these democrat maniac super-liberal zealots in office! Don’t listen to ANYTHING Hinson or Botcher says! Stand up and tell them to sit down and butt out! They’ve done enough damage!