The Gainesville Regional Utilities (GRU) Authority voted Wednesday night to increase charges to the city of Gainesville, but a vote to eliminate the general services contribution failed for the second straight month.
The motion to make two payment changes beginning in the next fiscal year passed unanimously. It directs staff to charge the general government side the full cost of fiber services—up to $218,000—and offer two service options for IT services—full services at $5.8 million and reduced services at $2.9 million.
These steps follow on the heels of a January motion that began reducing payments to general government for services that GRU says it doesn’t use. That reduction started in February and put a $1.4 million hole in the city’s budget.
City Manager Cynthia Curry responded to the February reductions with a recommendation to move set-aside funds to cover the loss. The Gainesville City Commission will discuss the recommendation on Feb. 15.
General government and GRU have disagreed on whether the $1.4 million that the utility was scheduled to pay is for services in the current fiscal year or from services already provided two years ago.
A city news release on Tuesday takes the latter position, essentially calling the funds debt for past service. However, the authority has differed in its interpretation of the finances.
Authority Chair Craig Carter addressed the difference at the start of Wednesday’s meeting. He said GRU can find no indication that the payments are for past services or a two-year gap where GRU stopped paying for the services.
“When you see us trying to get a few bucks back here or there, we’re not trying to hurt anybody,” Carter said. “We’re just trying to figure out where we’re at, get our line in the sand, and run this utility as a business [moving] forward.”
At a previous meeting, Board Member Eric Lawson explained his understanding of the two-years-behind situation. He said general government charges GRU for the services based on the prices and costs from two years before—using the previous year’s data to calculate the amount. At that meeting, Curry agreed with Lawson’s explanation.
“This transition is complicated; the full transition is inevitable,” Curry said at the meeting. “But I don’t believe, speaking as city manager, that it can be done tonight or next week.”
Carter said he’s asked the city government to show where it’s recorded that these payments are for services rendered two years ago. He said if the city has a smoking gun that shows their position, he’s willing for GRU to make a payment to bring everything up to date.
The city has also begun reevaluating its services with GRU. The City Commission directed staff to prepare an ordinance that would charge the utility for services provided when GRU works in the city right-of-way.
General Manager Tony Cunningham said GRU will need to pay between $150,000 and $250,000 annually to the city of Gainesville if that ordinance is passed in the future. Cunningham added that he doesn’t think GRU should fight the ordinance, noting that GRU also pays for those same services from Alachua County.
Carter said it’s another example of both entities—GRU and general government—putting their relationships in contracts and finding the best deals.
Wednesday’s motion also included the elimination of a surcharge for Alachua County residents who hook up to GRU water and wastewater. Once implemented, Gainesville and unincorporated Alachua County residents will have the same charges for that service.
The authority dropped another part of the motion recommended by Cunningham. That part would have lowered the general services contribution, an annual transfer of money from the utility to the city, by the amount GRU pays to power streetlights in Alachua County.
The city of Gainesville pays for the streetlights used in unincorporated Alachua County under a decades-old agreement. The cost to power those lights totaled $1.1 million this fiscal year.
In the past, general government has paid the cost. But the City Commission changed that in 2023, putting the responsibility to pay on GRU.
Cunningham said he believes general government should be responsible since it made the agreement with Alachua County. But authority members also worried about negatives that could come from the decision.
Carter said he’d like to speak with the county to get a full picture. Board member Robert Karow added that he doesn’t even want to pay a general services contribution.
A motion to eliminate the contribution failed in January. On Wednesday, Karow again made a motion to eliminate the contribution, which Board Member James Coats seconded. But both Lawson and Carter voted against the motion, so it failed in a 2-2 tie.
Carter said the authority needs to move on and not rehash the vote at each meeting. Until Gov. Ron DeSantis appoints a fifth member, the authority stands stalemated.