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City commission votes for GRU rate increase, information about cuts to GRU and General Government

BY JENNIFER CABRERA

During today’s Gainesville Regional Utilities (GRU) Budget Meeting, the Gainesville City Commission voted to start from a baseline option that raises electric rates by 7%, does not lay off any employees, and requires about $2 million in cuts in GRU non-labor expenses. They also deferred a decision on whether to implement Advanced Metering Infrastructure (AMI).

The presentation by GRU Chief Financial Officer Claudia Rasnick painted a bleak picture, showing that GRU’s revenue is lower than its costs and that revenue is projected to fall even farther behind expenses over time. She said that the biomass Power Purchase Agreement and Solar Feed-in Tariff put GRU on this path toward increasing deficits. She added that any cuts to expenses or capital are likely to affect the utility’s reliability.

The City Commission’s ever-increasing spending keeps the General Fund Transfer from GRU to General Government (GG) high; while GRU’s non-fuel expenses have grown 0.5% over the past 2 years, GG’s expenses have grown 9.85% over the past 2 years.

Rasnick pointed out that GRU’s credit rating has been downgraded 5 times over the past 10 years, resulting in an additional $60 million in debt payments “flowing outside the City of Gainesville.” She argued that the GFT should be calculated based on GRU’s earnings, not the amount that the commissioners want in order to fund GG. She also pointed out that the Commission’s goal of 100% renewables by 2045 is not included in GRU’s expense projections.

Commissioners voted 6-1, with Adrian Hayes-Santos in dissent, to select Option 5 presented by Rasnick: a 7% increase in electric rates (on top of 5% wastewater increases and 3% gas increases “for the foreseeable future”), and no lay-offs of GRU employees. They asked staff to draft a resolution to reduce the GFT by $2 million per year and also asked both GRU and GG staff to come back to them with “up to $5 million” in non-discretionary and discretionary budget cuts.

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After the vote, GRU General Manager Ed Bielarski said he needed guidance on funding for the AMI contract, which is ready to be signed. Mayor Lauren Poe said it was “not appropriate” to decide on that at today’s meeting and asked staff to schedule a separate meeting to discuss that. Given the dire budget situation and downgraded credit rating discussed at today’s meeting, it is unclear where the City would find or borrow the $81 million needed to implement AMI.

Poe also said that a discussion on commissioner increments (budget increases proposed by individual commissioners) has been added to tomorrow’s General Policy Meeting at 1:00.

  • Unbelievable! Double digit (10%!) increases in general government spending with huge equity raises right up until suddenly finding out your utility is downgraded and in big trouble! You can’t make this stuff up in movies and be believable. What’d they expect Santa Joe to sweep in with a sleigh full of bail out and stimulus checks. Maybe bankruptcy is the answer, but still keep our toys? Please talk to every business person you know to run all out for every vacant seat until these folks are long gone. Not a clue, none of them.

  • What was the reason for Hayes-Santos no vote? Did he want more cuts, less cuts? Just curious.

    • He wants to be re-elected for another term and he’s trying to shuck his newly discovered racism.

    • He said he knew they weren’t going to make $5 million in cuts, so he didn’t want staff to spend time coming up with a list of cuts.

      • Isn’t that a part of their jobs the salaries our tax dollars are paying for? Thanks for clearing that up but I do rather enjoy my not so subtle jab of sarcasm.

        I mean gee-whiz, shouldn’t they be doing something with the time they have at home?

      • Thanks Jennifer. I don’t live in Gainesville but my city, Alachua, buys its power from GRU so these rate hikes will eventually impact me won’t they?

        • The City of Alachua has a contract with GRU that fixes the rates. I’ve heard that it has either already expired or will expire soon, with Alachua moving to buy power from other companies. I haven’t followed this closely.

  • I lived in Gainesville a few years ago and recommended then that GRU be sold to FPL or some other entity that could clean out the idiots running the Gainesville Energy Scam. Government revenues should NOT be generated by shaking down utilities, they should stand on their own and have to explain to the voters why they need the budget they are requesting.

    Every citizen in Gainesville has a limited budget. When you go over it by 10% EVERY year, there isn’t a bank in the world that would loan you the money year after year. So, borrowing more money won’t solve the issue. Gainesville must cut people and projects and stop overspending.

  • Wonder how many woke people are going to chip in and pay for others’ utilities.
    Harvey “Two Face” won’t. Fairly certain King Poe won’t do anything but hide behind a mask. Doubt Arreola will be able to get his momma to pay his and others’ utility bills. Saco had to get a job as a commissioner to pay her student debt since she isn’t much of an attorney so she’s no help. Johnson, well, she happens to be the sellout to her community. Duncan-Walker is new so she just wants Poe to like her.

    Bottom line, these commissioners – all of them, have betrayed the community they supposedly swore to represent. How much longer will the voting idiots in Gainesville continue to put people such as these in office? It’s time for all of them to go. If memory serves me correctly, I recall the Gainesville Sun, the propagandist fish wrapper, endorsed every one of them. Tells you how much of their writing you should believe.

  • Hayes-Santos is termed out. He is not running for re-election. I thought realtruth2020 was better informed.

    • Nope. There’s just too much stupid going on with local government to keep up with. But on the bright side of things he’s outta there. I would like to say we can do better but as you have nicely put it, I am wrong at times.😉
      Maybe he just doesn’t want his lasting impression in City Hall to be perceived as that of a racist commissioner.

    • Commissioners are only termed out of the one post, they can run for an at large seat, mayor, or quickly move like this public disaster did when he got elected. By his own story he moved his bicycle and a box over to a friend’s porch the last day to qualify as a resident. He could move again on a whim like last time. His service on the Career Source board resulted in it being shut down with $642 thousand used on only 42 people and only $37 thousand for wages.This walking woke disaster needs to go yesterday. No surprise he believes no real cuts will be made. He sure won’t vote for any. The worst one up there that has no clue whatsoever. Anything with him as part of it will fail.

      https://alachuachronicle.com/careersource-of-north-central-florida-accused-of-improper-use-of-funds-conflicts-of-interest/

  • Mail Processing Facility in Southwest Gainesville moving operations to Jacksonville. Is this one of the first casualties of the rate increase? Whether it is or not, not only are many jobs lost but thousands of people are affected.

    Go Gainesville City Commissioners! To you know where.

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