GNV passes first motions to address debt woes

The Gainesville City Commission approved three motions at its regular meeting on Thursday to tighten budgets following demands for change from the Joint Legislative Audit Committee (JLAC) last week.  

City Commissioner Cynthia Chestnut made the motion based on her comments at a special meeting on Monday that organized the city response to JLAC’s demands.  

The first motion directs city staff to return with an ordinance that will repeal commission salary raises scheduled for Oct. 1. The previous city commission approved the raises in December, and the current commission confirmed the direction on Jan. 19 in a 5-2 vote.  

On Thursday, the commission voted 5-2 to repeal the increases with commissioners Reina Saco and Casey Willits in dissent.  

Mayor Harvey Ward noted that the measure is symbolic as the raises hardly register compared to the city’s large budget.  

Saco and Willits both said the salary raises should stay in order to move the commission from a part-time job and allow increased opportunity for citizens to run for office, echoing past arguments on the topic.  

The second motion directs the mayor to begin a conversation with JLAC and ask for assistance in pursuing a fee in lieu of taxes with UF. The motion also has the mayor give updates on progress to the JLAC.  

The motion passed unanimously, but Commissioner Bryan Eastman said he would prefer entering talks with UF first instead of going over their heads. Commissioner Ed Book recommended inviting UF to the next city meeting to discuss possibilities.  

The third motion also passed unanimously and directs the city manager and general manager to investigate ways to consolidate duplicate services.  

The work started in early 2022, but after some progress, city staff paused to focus on other areas. The motion also directs the managers to use a third party in the consolidation.  

However, JLAC targeted the general fund transfer between Gainesville Regional Utilities (GRU) and the general government and called for its reduction or elimination.  

The transfer finances around 20% of the general government’s spending, according to Ward, and totaled around $34 million last year. If GRU keeps even half of that transfer in the next fiscal year, the general government could need to cut $15 million from its budget or find another funding source.  

City Manager Cynthia Curry informed the commission that general government budgets will start from scratch, and Gainesville will use zero-based budgeting to fund city needs first. GRU will do the same, General Manager Tony Cunningham said, noting that the utility always uses zero-based budgeting.  

“The direction I had given was to not increase budgets from the previous year,” Cunningham said. “Now, with where we are, we’ve got to take those [budgets] back and vet them back down to see where we can get other reductions.”   

Commissioners said at the Monday meeting that the city will consider almost all options to lower GRU debt currently sitting at $1.7 billion. Ward said that might mean reductions in services the city has typically offered.  

On another item passed Thursday, the commission approved a budget amendment to the current fiscal year. The amendment places three positions on hold within the Parks, Recreation and Cultural Department.  

Willits said that this is where the reality of budget constraints kicks in, holding positions that would positively impact youth in the city.  

Curry said the city has issued a strategic hiring freeze along with a spending freeze for purchase orders and bids. She added that a Continuous Improvement Review Committee will look over different departments’ budgets to lend outside perspectives.  

Revisiting solar contract 

Earlier in the meeting, the commission revisited its motion from Feb. 16 that authorized Gainesville Regional Utilities (GRU) to move forward on a solar array contract with Origis Energy. The item returned to the agenda following JLAC’s concern that pursuing renewable energy would further GRU debt.   

Chestnut asked on Monday to revisit the contract that the city has yet to finalize.   

Eric Walters, GRU’s chief sustainability officer, walked through the contract, comparing and contrasting it with the biomass contract signed in 2009.  

He said the biomass contract differed from anything else happening in the market at the time, leaving the city with few contract options. But cities and municipalities across Florida and the county continue to sign solar contracts like the one between GRU and Origis.  

Walters noted that Origis Energy has already completed eight other solar contracts within Florida, including two with the city of Tallahassee. The company also has another 300 megawatts of solar energy contracts currently in the works for Florida.  

Parts of the contract with Origis are redacted, and Walters said solar companies consider their pricing a trade secret, forcing the city to redact the information. He said all solar contracts he’s looked at across the state do the same.  

However, to be transparent with JLAC, Walters said GRU recommends an alteration to the Feb. 16 contract. The change, approved by Origis, will pause the contract, and allow GRU to meet individually with JLAC members to discuss the details of the contract.  

Walters said those meetings will show JLAC that nothing out of the ordinary is happening in the contract. Instead, he said it’s a good deal for the city of Gainesville that won’t lead to rate increases. The contract, he said, allows GRU to buy electricity for less than the average cost GRU spends to make it.  

The city commission agreed to the new recommendation, and Walters said GRU would return on April 20 with updates from its conversations. The commission would have another opportunity to reject the contract then.  

Chestnut said the contract still felt like another biomass contract that would turn sour. She made a motion to stop the contract with Origis Energy, but no one seconded.  

Eastman then motioned to approve the contract with the new alteration. The motion passed unanimously.