Bielarski: Returning GRU to City control will let them use it as a piggy bank again

Letter to the editor

GRU CEO Ed Bielarski submitted the speech he presented at the Four A’s forum today:

I am honored to be here today to assist the community with a better understanding of the GRU Governance Charter Amendment. I’m not here to advocate for either a YES or NO vote. I’m here to help you understand the consequences of either vote. Then you’ll decide.

When faced with a decision on a YES or NO vote, I’m reminded of the famous quote: “Those who cannot remember history are condemned to repeat it.”

For over 100 years, the City Commission has governed the utility. What’s their track record?

The last 20 years have been defined by poor decision-making and financial mismanagement, leading to crushing debt, aging infrastructure, and high electric rates.

I know this to be true – I was the General Manager from 2015 through early 2022. I worked to protect GRU from the repercussions of the Commission’s reckless behavior. I was fired for doing so and telling them to:

• Stop using GRU as the city’s piggy bank.
• Stop asking GRU customers to fund pet projects.
• Stop reaching into the pockets of GRU’s almost 40,000 county customers.

The Commission obligated GRU to solar feed-in tariff contracts with 450 privileged customers who could afford to install costly rooftop solar arrays. GRU has been paying these privileged few almost 10 times the market rate of power. To date, GRU has paid them almost $70 million above and beyond the market rate of power.

They encumbered GRU with a 30-year, $2.5 billion contract entitling the biomass plant owner to $75 million a year, whether we used the plant or not. A plant we often didn’t often use because we had cheaper options.

They regularly raided GRU’s coffers. Over the past 20 years, while GRU earned $750 million in profits, $714 million was gobbled up by the City.

Imagine any other company in the world being forced to give up 95% of its profits to shareholders.

There were scant resources left in GRU’s financial cupboard to upgrade outdated software, pay employees competitive salaries, maintain GRU’s aging assets, and keep utility bills competitive.

The result was a utility with almost $2 billion in debt, requiring some of the highest utility rates in the state just to pay off interest on that debt and make general fund transfers to the City. Make no mistake – the condition of GRU was built on the Commission’s systematic mismanagement and litany of failures that led to hurting GRU customers the most.

That’s why the Florida Legislature removed the Commission as GRU’s governing body. They did so with cause. They did so to protect GRU customers. They created an independent board to run the utility. It’s now the law.

What’s the track record of the new GRU Authority? They re-hired me and we went to work:

• to eliminate the utility rate increases proposed by the former GRU CEO who was picked by the Commission as my replacement. That’s right, they voted for zero rate increases this year, and
• to reduce GRU operating expenses by $150 million over the next decade, substantially reducing the trajectory of future utility rate increases, and
• to reduce excessive general fund transfers to the city of almost $38 million a year to $8.5 million a year, allowing us to more quickly pay down the very debt that was thrust upon us by the Commission. One of our bond rating agencies called the Authority’s actions transformative. I agree.

Now, the City Commission has the audacity to think they can overturn state law through a referendum vote before city residents.

Let the voters decide, they say.
Let the people vote, they cry.
It’s a democracy, after all, they protest.

Let me remind folks that we live in a representative democracy in which the people vote for elected officials to act in the community’s best interests – in accordance with the law.

Let me repeat: The special legislative act that created the GRU Authority is the law.

That law, in addition to removing GRU from Commission oversight, granted board representation to the almost 40% of GRU customers who live outside city limits – customers who, otherwise, didn’t have a vote on how the utility was governed or how the City spends GRU profits.

Under the new law, for every 20% of GRU customers living in the unincorporated areas surrounding Gainesville, a representative is chosen to sit on the GRU Authority Board. That’s representative democracy in action.

The folks who vocally support the referendum, who have created a website and campaign yard signs, and who repeatedly attack me on social media in a politics-of-personal-destruction sort of way, say, “To heck with non-city residents, the heck with the law. Pay your bills, including a 10% surcharge on electric and 25% on water/wastewater charges. It’s our utility, not yours.”

I say, that’s not representative democracy, that’s autocracy. That’s the tyranny of the majority.

The proponents of the referendum purport that the referendum will simply return GRU to the City as it used to operate, but that’s not true. The referendum doesn’t return the governance of GRU to what it once was – it eliminates the CEO or General Manager (GM) as a charter officer.

The GM or CEO will be replaced by the City Manager. That means the utility would have no voice in discussions about how much profit GRU should turn over to the City. That is a dangerous, dangerous precedent.

If you don’t believe me, listen to the words of our highly respected former City Manager and GRU General Manager Karen Johnson, who wrote:

“The City Commission needs to hear the voice of both the City Manager and General Manager as equals. There is a dynamic tension between the role of the City Manager and the GM, and as our elected representatives, you need to be the ones to sort out and balance those priorities.”

The City didn’t heed her advice. The referendum is deeply flawed.

Voting Yes on the referendum is a vote for a return to the past without accountability on GRU’s use as the City’s piggy bank. A past where $714 million of GRU profits was sunk into City coffers unbeknownst to many in the community. A past where $2.5 billion contracts with out-of-town power players were approved with little or no accountability. A past that brought GRU customers the highest electric rates in the state.

Voting No on the referendum allows a professional board to continue operating GRU like a business, making sound financial decisions based on industry best practices – keeping rates competitive and service high.

Edward Bielarski, CEO of Gainesville Regional Utilities

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