Seth Johnson
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.
In 2021, the city commission approved seven years of rate increases for electricity and wastewater, and a split commission moved forward with the plan in 2022 after a 4-3 vote.
The commission will hear a presentation on the plan at its policy meeting and decide how to move forward.
If this reckless group of GRU Leaders are not fired, please continue to bend GRU Customers.
I don’t understand how a city utility would be allowed to be run as a profit center. Utilities are ‘supposed’ to be considered a basic necessity for citizens, aren’t they? The whole of the city government seems to be run haphazardly.
They should eliminate services/amenities duplicated by UF, the county, state and federal gov’t that are not mandated. Look to poorer cities for inspiration on what services they do not supply.
Aside from that, our state delegation must force UF to use GRU 100% and stop using private for-profit out-of-state Duke. Plus, annex the county’s urban cluster golden goose, used for county tax revenues while duplicating city services. They’re both guilty of milking and duplicating each other’s taxpayers.
Sounds like a classic Ponzi scheme to me. Gonna be moot anyway when the Gov signs the bill transferring the utility to an appointed Board of Governors anyway.
10 Years! Way too long. Start Today by cutting 1/3 of transfer now. Then 1/4 of what’s left each year for 4 years = zero transfer. Cuts ALL salaries 15% immediately! Take drastic action to make up for many years of wasteful stupidity! To think, the nuts like Poe and Hayes-sontoes wanted to build out GNV internet all over the county for probably $100 million! They wasted over a million studying it! Insane ignorance at its finest!