Gainesville staff will present a plan at Thursday’s General Policy Committee to reduce debt at Gainesville Regional Utilities (GRU) by $315 million over the next 10 years.
According to backup documents, the proposed plan would lower the utility’s capitalization ratio from 86% to 70%, meaning the city would have 30% equity in the utility instead of 14%.
The largest reduction category, $119 million, will come from cutting the general fund transfer—money sent from the utility to the general government each year. The transfer will drop by over 50% from last year if the commission approves the plan.
For the next fiscal year, the transfer would drop to $15.3 million. If the commission approves the plan, the transfer would be $16.7 million less than the city has anticipated in previous budgets. The general government would need to plug that gap, likely from reduced services. In the past, the transfer funded 25% of the city’s general budget.
The city also instituted hiring and spending freezes in March to save money.
The other portion of the $315 million reduction would come from payments already scheduled to reduce debt, $91 million, a reduction in GRU expenses, $28 million, and from excess reserves coming from base rate increases, $76 million.
The commission will hear a presentation on the plan at its policy meeting and decide how to move forward.