Alachua County’s legislative delegation voted 4-1 on Friday to support a bill that will take Gainesville Regional Utility governance away from the City Commission.
If passed by the Florida House and Senate, the bill would hand Gov. Ron DeSantis the power to create a five-member board that would control Gainesville Regional Utilities’ (GRU) operations instead of the City Commission.
State Rep. Yvonne Hinson, D-District 20, dissented in the vote. State Rep. Chuck Clemons, R-District 22, who brought the bill forward, said April 10 is the earliest the bill could be introduced in the Florida House.
State senators Keith Perry, R-District 9, and Jennifer Bradley, R-District 6, along with state Rep. Chuck Brannan, R-District 10, voted in support of Clemons’s proposal.
If passed, the bill will continue to the Senate packaged with other local bills. A senator can pull the bill for individual consideration, but otherwise, senators will vote on the bill as part of package of local legislation.
Clemons said the legislators will craft the exact language of the bill.
“We’re the state elected officials for Alachua County and its municipalities,” Clemons said. “We’re not outsiders.”
In previous legislative sessions, Clemons and Perry introduced bills that opened the option for an independent board to operate GRU. In 2018, Alachua County voters defeated a referendum that would have established a GRU Authority to set utility rates.
This time around, the bill changes the structure directly instead of requiring a citizen vote. Clemons said the Legislature can make such changes without a referendum even though cities would need to appeal to the voters for the same change.
The two legislatures asked the Joint Legislative Audit Committee (JLAC) to audit the city and GRU in 2019. The audit finished at the end of 2021, and JLAC held a hearing on the 18 findings in February. The main issue it found concerned GRU debt, currently at $1.7 billion.
JLAC demanded bold actions to reduce debt and gave the city an Oct. 1 deadline for its plan. Since then, the city manager has instituted a hiring and spending freeze, and the commission passed a trio of ordinances as a first step. The ordinances stopped a schedule raise for the commission and ordered staff to begin reducing duplicate services between GRU and general government.
Clemons called the findings shocking and said the financial situation has only strengthened the need for an independent board.
At Friday’s delegation meeting, Mayor Harvey Ward said he plans for the general fund transfer to reduce to less than $10 million in the next fiscal year. He called a cut of that size painful and said he can’t promise a certain path since the commission as a whole must vote to decide.
Last year’s general fund transfer totaled $34 million and formed over 23% of the entire general government budget of $144 million. At previous meetings, Ward called on community partners like Alachua County to pick up any slack in services caused by city budget reductions.
He also said the city would continue to see new projects unveiled despite the fiscal issues because of different dedicated funding sources, like the Wild Spaces Public Places surtax.
The commission will begin finalizing its fiscal budget for 2024 in April, and Ward agreed the fund transfer should be reduced. He said that he supports placing a formula in the city charter that restricts how much the city commission could transfer each year.
“We don’t want to make moves that place harm on the utility, on the utilities’ customers, on the people who own the utility,” Ward said. “We want to do this carefully, and that’s why we talked with JLAC about having an Oct. 1 deadline.”
Hinson asked Ward what assets GRU could sell to improve finances. He pointed to the sale of the trunked radio system that the commission voted on in early March along with the Power District.
Hinson also asked if GRU’s communications department, GRUCOM, could be sold. Ward said a sale that large would require a citywide referendum.
Clemons said the bill will help stabilize GRU even after it handles its high debt.
He said an independent board would remove a potential conflict of interest where the city commission has to decide between raising rates for all GRU customers and raising taxes for Gainesville residents. The city has used those higher rates to then fund city services and even take more than GRU earned, Clemons said.
Referencing the JLAC report, Clemons said the city of Gainesville transferred $68 million more from GRU than the utility’s revenue during the last four years.
“We would be derelict if we didn’t exercise both our constitutional and our statutory authority to correct or help to correct decades-long problems when they get worse by being ignored,” Clemons said.
Clemons also said the new board would include a representative of the GRU customers who live outside the city limits—mostly in the urban cluster on the western edge of Gainesville. Currently, between 30% and 40% of GRU’s customers live outside city limits.
Ward said the city made a mistake in the 1980s and 1990s by providing utilities for residents outside city limits without requiring annexation—a requirement that Tallahassee had at the time. He said annexation would solve Clemons and Perry’s issue that so many of GRU’s customers can’t vote in elections that in turn impacts GRU policy.
Dozens of residents showed up at the delegation meeting in Tallahassee, including many community group leaders who spoke against the bill on Thursday at Gainesville’s City Hall.
Some support the proposed bill while others called it an overreach into municipal affairs.
“[The bill] takes away a local asset with no local input and no plan to actually improve the local situation,” James Ingle, president of the International Brotherhood of Electrical Workers 1205, said at the meeting.
Others added that the entire city has a vote in how the commission operates the utility under the current structure, but with an independent board, no citizens within or outside the city would have that influence.
Rodney Long, who served on the Gainesville commission in the 1990s, said in an interview that discussion of turning GRU over to a private board has been ongoing since his time on the city dais.
Clemons’s bill would step over home rule, Long said. For GRU’s entire history, he said the city operated GRU with an AAA bond rating. He said the city commissions biomass plant decision in 2009 and $750 million buyout in 2017 has caused the majority of the debt and issues. But Long said the city can handle the situation and said GRU’s current bond rating remains in good standing.
“I think the city of Gainesville can, and they will, get their house in order,” Long said. “But I don’t think it calls for government overreach by a bill from one of our delegation members to tell us what to do and to appoint an authority of people by the governor.”
Perry said at the meeting that the city’s high bond rating is influenced by the fact that the city commission has and can continue to raise rates without having to go through the Public Service Commission, which regulates the rates that companies like Duke Energy and Florida Power & Light can charge.
Perry said that the independent board may not be able to set GRU onto a sustainable course because of the severity of the problem.
Regardless of people’s opinion on the bill, Clemons said everyone at the meeting wanted the best for GRU and needs to work together
Editor’s note: This story was updated.
I remember when GRU had million dollars in a “slush” fund. Mismanagement by both city and county governments is why they are in such a mess. Stop catering to individual interests and pet projects. Get back to the basics of government.
Rep. Clemons criticizes GRU’s debt and proposes state control as a remedy, but this piece provides no information on how utilities elsewhere and over time have fared in comparison. What does that experience tell us? If the current debt is due primarily to a couple of high-stakes decisions, as former Commissioner Long says, then that should be clear from a higher vantage point. (Surely there is credible research on this, and i’d like to see news outlets help their readerships understand it.)
Since we have the highest (or 2nd highest) rates in the State, I would say they’ve done better.
Gainesville had one some of the lowest utility rates in the state prior to the stupid biomass plant PPA contract and the addiction of city commission to larger transfers to fund one idiotic idea after another. Now, the only utility in the state with higher prices is surrounded by water, Key West!!! Elected local leaders have zero knowledge, skills or experience to steer a large regional utility; and have a self dealing interest to get more spending money to feed their addiction. Good bill! Pass it ASAP.