City Commission votes to raise electric rates by 7%
June 13, 2021
BY JENNIFER CABRERA
At the June 7 Gainesville City Commission Special Meeting, Gainesville Regional Utilities (GRU) requested a 7% electric rate increase, saying it was the equivalent of 3% for last year (the City Commission decided not to increase rates last year during the pandemic), 3% for this year, and “1% for the Deerhaven 2 conversion.” GRU also requested a 5% increase in wastewater rates and asked the commission to approve a resolution to reduce the General Fund Transfer (GFT – the amount of money transferred from GRU to the City’s General Government budget) by $2 million a year through 2027. In addition, GRU requested 3% electricity and 5% wastewater rate increases through 2027 and a 3% water increase for FY22.
The General Government (GG) budget presentation followed the GRU budget presentation, starting with the caveat that the GG budget didn’t take into account the future reductions in GFT or the increases in the City’s utility bills. The City’s budget presentation recommended a $12/year increase per unit in the Fire Assessment Fee, from $133 to $145.
At current property tax levels, the increment requests for the GG budget (not including increments from City Commissioners) lead to a projected deficit of $3.7 million in FY 2022 and a $5.2 million deficit in FY 2023. The electric and wastewater rate increases will add to those deficits because General Government has to pay those rates as a customer. The projected budget also doesn’t include increased revenue from a utility tax increase, which would reduce the deficits. The presentation estimated that a 0.5 mill increase in property taxes (about a 9.4% increase on top of increases caused by higher property values) would be required to make up a deficit of $3.86 million.
Mayor Lauren Poe said that some of the budget items and expenses “could potentially be addressed through the American Rescue Plan (ARP), depending on what the commission decides to do with that money.”
Commissioner increment requests are due this Monday to the Office of Equity and Inclusion. The office will do an analysis and send the results back to the City Commission after their break, but the Commission is required to set the tentative millage (which can be reduced but not increased after it is set) at their first meeting back, on July 15. City Manager Lee Feldman said that made his “head hurt” because the requests go first to the Office of Equity and Inclusion, and he doesn’t even know when his office will get a chance to look at them to see how they affect the budget.
Utility bill assistance: How to “address the challenges with our low-income neighbors and their utility bills”
Given that the electric rate increase will be at least 7%, the Commission then turned to discussing ways they could “address the challenges with our low-income neighbors and their utility bills.” The Policy Research Team presented a report on various options for utility bill assistance.
GRU already has several programs, including an automatic 7-day grace period plus an additional automatic 7-day extension. GRU also has Project Share, in which voluntary donations from GRU customers and employees can be used to help the elderly and disabled in paying their utility bills. Those funds are distributed by community outreach agencies. GRU also works with customers to make arrangements to pay their balance after a disconnection and referral to collections (active accounts are not referred to collections). GRU currently has 561 active arrangements for repayment of about $326,000 in prior debt. GRU also has a low-income energy efficiency program that helps low-income customers with home improvements that reduce their energy use. GRU offers energy audits, and they offer personal hardship extensions. A number of community organizations also offer utility payment assistance, and there are also federal and state programs that assist with utility bill payments.
Commissioner Harvey Ward pointed out that ARP funds from the City can only go to City customers, so he wants to “strongly encourage [the County] to use their ARP to do the same thing for GRU customers outside the city limits.”
“GRU was asked to bring back a lot of non-discretionary and discretionary cuts. And a large portion of the General Government budget were increments, increases.” – Commissioner David Arreola
Commissioner David Arreola pointed out that there was a “stark difference” in the discussions of the GRU and GG budgets. “GRU was asked to bring back a lot of non-discretionary and discretionary cuts. And a large portion of the General Government budget were increments, increases.”
Poe said his recommendations for spending ARP money would focus on “the sort of permanent fix, getting into people’s homes and apartments, and fixing those, you know, let’s call them big leaks… And I really am going to be challenging our staff as well as our community, all those folks that have talked to us about apprenticeship programs and using local labor, to work together, to find a plan to identify, analyze, come up with solutions, and then implement solutions over a 24-month period. It’s going to be a huge lift, but go out and get as many done as we can and create a permanent solution. That’s one big pot of money.”
Poe also said he wanted to build into the General Government budget a recurring source of funds, probably from the utility tax, to provide assistance to customers that “every month are having trouble paying their bills… Of course… who is going to be adversely affected by this, it’s sort of everyone, because it lowers GRU revenue, but I’d rather have that problem than continuing… with this… recurring problem of homes… that just are going to be high-utility homes until they get fixed.”
Commissioner Adrian Hayes-Santos proposed several ways to increase GG revenue, including doubling neighborhood parking fees, “looking at free parking downtown,” and removing neighborhood parking spaces and adding metered parking spaces. On the expense side, he talked about adding additional employees in finance and community engagement, plus a greenway study and a lighting study.
Commissioner Gail John moved for staff to come back at the July 15 meeting with data for eligibility requirements for recurring assistance, a source of potential funds for recurring assistance, and as much data as possible about the efficacy of existing programs. That motion died for lack of a second.
Arreola moved that they accept GRU’s recommendations (increase electric rates by 7% for FY22, increase wastewater rates by 5% per year for FY22, bring back a resolution to reduce the GFT by $2 million per year through 2027, bring back a rate ordinance for FY23-FY27 that would include a 3% increase in electric rates and 5% increase in wastewater rates per year) and include the data request from Johnson. Johnson seconded the motion. Then, at Poe’s request, Johnson added a request that staff bring back information on a framework for a program to help people lower their utility bills by improving the homes of high energy users.
Feldman told the Commission that “a sustained $2 million [GFT] reduction every year until 2027 is going to be unsustainable for the General Government side and will have some negative consequences, as well, both in the services that you want to provide and/or fiscal stability.”
In public comment on the motion, Nathan Skop asked the Commission to consider the solution he has offered – cut their spending, reduce the GFT, don’t increase electric rates, ask GRU to defer Advanced Metering Infrastructure, and increase property taxes to make up the difference. He pointed out that subsidizing utility bills for some customers increases the costs to other customers, whose bills are increased to pay for the subsidies.
“Cut your bloated budget and get to the place where you stop raising GRU bills.” – Debbie Martinez
Debbie Martinez said the Commission should “cut your bloated budget and get to the place where you stop raising GRU bills. Sky-high GRU bills are not due to leaky homes. It is a result of the City Commission getting a grossly overpriced utility contract for power we do not need…. You killed the GRU goose that laid the golden egg, and now you want to blame leaky buildings, rather than looking into the mirror and remembering members of this City Commission are to blame.”
Armando Grundy-Gomes reiterated that the GG side didn’t bring back budget decrements as requested in a previous meeting. “You… said no, we’re going to come back with increases and 17 new full-time positions… Another point that seems to be missing is that crime is up. Fires are not up. But 17 new positions for firefighters. For what? If anything, that needs to translate to GPD.”
Commissioners split off the 7% electric rate increase into a separate motion and voted on the rest of Arreola’s motion, which passed 5-1, with Hayes-Santos in dissent and Commissioner Desmon Duncan-Walker absent. The vote for the 7% electric rate increase was also 5-1, with Johnson in dissent.
“It seems to be known now as ‘shoot-‘em-up Sundays’” – Armando Grundy-Gomes
During general public comment, Grundy-Gomes said there have recently been some events “that were supposed to be peaceful on the weekends that have been a problem in our neighborhoods, especially within District 1. It seems to be known now as ‘shoot-‘em-up Sundays’ because a neighbor of mine in Duval Heights, her home was shot at about 23 times… We’ve had two murders within District 1 right here at the Waffle House.”
Poe said GPD is putting “a tremendous amount of resources towards protecting safety, especially at a few of the hot spots we’ve seen… many arrests have been made. They have confiscated firearms. It is a good time to remind people that a tremendous amount of firearms that end up on the street and used in these violent attacks are stolen from unlocked cars all around our city.” He pleaded with the public to not leave guns in their cars and to lock their cars.
Commissioner Reina Saco added, “I had the pleasure and honor of riding with GPD’s night shift on Friday, and I can attest to the fact that we spent about two hours chasing the car parties from one corner of University to all the way down to Lincoln Park and McPherson and so that was with three shifts on board that day. So we had about 30 squad cars chasing back and forth. Our police department is trying its very best to break those up. As soon as more than four cars congregate, they try very hard to break those up and they patrol from 11:00 p.m. onward, the hot spots that they’ve noticed. But it is more — my understanding is it’s more a matter of folks just coming into town, sending out a group text and saying this is where we’re going to party.”
At the end of the meeting, Poe signaled to the other Commissioners that he wanted to resolve the Cares Act dispute with the County at their Thursday meeting. “If you have any questions, I would encourage you to speak with the City Manager or any of your counterparts in the County Commission. I think they’re eager to move forward as well.”
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