Gainesville City Commission looks to UF for funds as City faces significant budget cuts

BY JENNIFER CABRERA

GAINESVILLE, Fla. – The Gainesville City Commission held an emergency workshop today to address the concerns expressed last Thursday by the Joint Legislative Auditing Committee (JLAC). During the workshop, commissioners discussed areas in which they could cut expenses, but many also spoke about their hope that the University of Florida would agree to make some sort of payment in lieu of taxes to preserve services that might otherwise be eliminated.

Mayor Harvey Ward reminded attendees at the beginning that the commission does not take votes at a workshop, but “Staff will understand what we’re looking for when we’re done.”

State Rep. Mike Caruso attended the meeting by Zoom and said the quick scheduling of the workshop “certainly sends the right signal to Tallahassee.” He said the commission should be looking at ending the General Fund Transfer (GFT) from Gainesville Regional Utilities (GRU) to the General Government side, controlling utility rates, focusing on reliable power service, developing a long-term plan for reducing GRU’s debt, and reducing deferred maintenance in the utility system. He concluded by saying, “I hope that you’re sincere in your actions today. I hope you work on bold actions, bold modifications to what is transpiring now.” He said JLAC would reconvene in November and would consider the decisions the city commission has pledged to make by October 1.

“A way to create a better path”

Ward started off by saying that “things are a little different than anyone would like them to be, and we’re going to find a way to create a better path.”

Ward said that City leadership is “listening to our neighbors’ concerns. We hear you.” He said the City Manager and GRU General Manager will work with staff and coordinate with the mayor and commissioners individually to identify potential solutions. The leadership will return written answers to questions posed last week by JLAC members and will maintain open lines of communication with JLAC members. The mayor and city commission will hear regular updates and will report back to the public on a regular basis. 

Ward promised that the City “will continue to provide excellent service to our neighbors and support for our community builders (employees).”

City Manager Cynthia Curry promised that this year’s budget review will not build on the previous year’s budget, as has been done in recent years, but “will start from a zero-based approach.” 

Ward said that the City’s senior staff “did not let any grass grow” but worked all day Friday on the issues. 

GRU General Manager Tony Cunningham said GRU has been working for some time on the two main issues of GRU’s debt and the GFT, but “what we heard at JLAC… is that plan is not bold enough or not drastic enough,” so they will be re-evaluating their current plan. 

Cynthia Chestnut presents specific ideas

City Commissioner Cynthia Chestnut said she had been struck by comments from citizens at the JLAC hearing about “how they had been treated, how they felt when speaking before us. So I think it is clear we need a kinder, gentler commission in working with our neighbors, from both the commission and staff.”

She presented her ideas for reducing the City’s budget:

• Have the attorney repeal the commissioner salary increase that was passed in December and hold salaries where they are now, which is roughly $40,000 for commissioners and $51,000 for the mayor. 
• Ask all charter officers to make significant budget cuts and start working on that before the first scheduled budget workshop in May.
• Direct all charter officers to implement a hiring freeze immediately.
• Direct the attorney to hold execution of the Origis Solar Purchase Power Agreement contract and return it to the commission for review: “I am very, very afraid of a Biomass 2.”
• Direct the managers of GRU and General Government to review duplications of services and consolidate where possible.
• Look at a third party to assist in consolidating GRU and General Government.
• Ask the legislature to “speak on our behalf” to induce UF to buy electric service from GRU. She said the City would “accept a payment in lieu of taxes if they’re not going to be our customer.”
• End the GFT this year but look at bonding opportunities for those dollars.
• Consider property tax increases.

Ward said he would add an item to the agenda of this Thursday’s city commission meeting to vote on a similar motion. He said it would be a “game-changer” to have a fee in lieu of taxes or a direct customer relationship with the university.

“I think it’s necessary. We provide a lot to the university, and we cherish the university, but they need to be a player with us, need to be at the table with us. It’s like asking your big brother to come in and help you.” – City Commissioner Cynthia Chestnut

Chestnut replied, “I think it’s necessary. We provide a lot to the university, and we cherish the university, but they need to be a player with us, need to be at the table with us. It’s like asking your big brother to come in and help you.”

Curry said staff wants to be “deliberate” in making budget decisions, but it would be “aggressive” to ask them to do that in a four-week time period. However, she said an immediate hiring freeze would “definitely” be in place. 

Desmon Duncan-Walker: “Everything should be on the table”

Commissioner Desmon Duncan-Walker said that “in a strange way” she is grateful for the legislature’s engagement with the City. She said she hoped the City would take Sen. Jason Pizzo up on his offer to look at some of their contracts. 

Duncan-Walker agreed with many of Chestnut’s proposals and said those items were also on her list. She said that if the City is able to engage the university as a partner “in the right way… I think we would be positioning ourselves and this city for something that is sustainable.”

Duncan-Walker has consistently voted against raising commissioner salaries, and she also agreed with eliminating the GFT, which would take about $33.5 million out of the General Government budget. She proposed a 10-20% reduction in budgets across the board, but Curry said that might not be “equitable” and “might not be the right approach at this time.” 

“We don’t want to be in this position, but here we are, having to make the hard decisions–that we didn’t cause, but that we have to try to fix.” – City Commissioner Desmon Duncan-Walker

Duncan-Walker said everything should be on the table: “We have to throw the things out on the table that we don’t want to throw out on the table. We don’t want to be in this position, but here we are, having to make the hard decisions–that we didn’t cause, but that we have to try to fix.”

She proposed selling Ironwood Golf Course but said she would like to keep the electric utility, although she said, “Our goal of being renewable by 2045 may put us in much greater debt. I’m curious about those numbers–and I want the community to hear me: I’m not saying that’s not a priority for me. I’m just suggesting that we assess everything that we have said we’re going to do because this is critical.” She also proposed ending catered meals for commissioners on meeting days and eliminating their travel budgets.

Commissioners: GRU should remain a public utility

Commissioner Ed Book generally agreed with Chestnut and Duncan-Walker’s ideas, particularly reducing or eliminating the GFT, freezing hiring for open positions, and beginning with essential functions of local government. He also supported taking another look at the Solar PPA. 

Commissioner Bryan Eastman said he wanted to ensure that GRU would “continue to be owned by the people it serves” and argued that the credit rating agencies’ evaluations of GRU did not match JLAC’s evaluation. He agreed, however, that the GFT needs to be addressed: “I think we can do it; I don’t think we need to overreact on how to do that.”

Commissioner Casey Willits said part of why he decided to run for office in 2022 was to protect the long-term sustainability of GRU: “The pride and joy of Gainesville is that we own a utility that has impact on all parts of our life… There’s a lot of support in the community for GRU as an idea.” He also said a payment in lieu of taxes from UF is “a real no-brainer” because the City provides services to UF. 

Commissioner Reina Saco also agreed that GRU should remain a public utility but that they need to take “bold and really creative actions,” including getting rid of the at-large seats on the city commission. She supported giving staff time to thoroughly research the options for adjusting the budget.

Ward: County and UF will need to pick up the slack

Ward said the commission and staff must continue to focus on the business of the City: “There’s always gonna be another fire to put out… but we are absolutely committed to making sure that the things that have to be handled on a day-to-day basis continue to be handled and this remains a wonderful place to live.” He supported consolidating functions between GRU and General Government, recalling that the commission had previously voted to do that. He also spoke about the Power District and said the commission could gain tax revenue from developing that area.

“I love love love the idea of a payment in lieu of taxes from the University of Florida and Santa Fe College, but let’s keep in mind, we don’t get to make that decision… But we do have some folks listening from the legislature who can make that happen.” – Mayor Harvey Ward

Ward said, “I love love love the idea of a payment in lieu of taxes from the University of Florida and Santa Fe College, but let’s keep in mind, we don’t get to make that decision… But we do have some folks listening from the legislature who can make that happen. I’m not saying that they must, but I’m glad that we’re having the conversation.”

Ward also wanted “our partners at the County to know that as we move away from things that I think we’re probably going to have to move away from… we need you as partners. We need that slack to be picked up where we drop it. So I’m reaching out to all our institutional partners–I want you to hear me, that there are going to be things in our community that we need you on, that we have to have you pick up.” Ward said the City should develop a policy for accepting sponsorships for things that were previously paid for out of taxes. 

He concluded, “I agree with all my colleagues that everything is on the table…  but I don’t do the day-to-day management… We have amazing senior staff who does the day-to-day management… My promise to everyone… is that I will listen to you, I will listen particularly to our staff… Before I make the decisions, I want to hear from all kinds of folks… I’m not throwing ideas out there today. I want to hear what our professionals bring us… We need to figure out what happens when [the GFT] is not there.”

Public comment

During public comment, Robert Mounts advocated for consolidating the City and County governments. Don Fields said the city commission itself should have recognized the financial problems at the utility and at the City and that the commission should listen more to citizens, particularly those who have warned about these issues for many years.

Debbie Martinez thanked Chestnut and Duncan-Walker for the ideas they brought to the workshop. She reminded listeners that the city commission sits as the Board of Directors for GRU and added, “It was the city commissioners who drove our utility into the ground.”

Nathan Skop provided the recommendations that were previously published here, saying they’re the same recommendations the City would get from high-paid consultants.

Chuck Ross said he was shocked that City officials seemed unprepared for the questions asked at the JLAC meeting. He recommended looking at the salaries of commissioners and middle and upper management, along with cuts to employee positions. He said his rough calculations showed that it would take about $85 million per year for 30 years to pay off GRU’s $1.7 billion debt.

Jenn Powell, a union organizer for the Communications Workers of America 3170, said City workers might be receptive to measures like a 4-day work week and elimination of upper management positions. She said she would survey her members to get feedback.

Joe Little said GRU made a lot of money for the City up until “the fiasco of purchasing the biomass plant.” He said Gainesville would be Hogtown without the utility and that the number one job must be to deal with budget matters and protect the utility at all costs. He also recommended eliminating the at-large seats and having a five-member commission.

Tyler Foerst said he supported making hard decisions “as long as we protect the workers who keep this city running.” He said that keeping GRU public was a “red line” for him. Speaking to legislators in Tallahassee, he said, “You can have GRU when you pry it from our cold, dead hands.” 

Bobby Mermer, Coordinator of the Alachua County Labor Coalition, also said selling GRU should be off the table. He said, “I fear major impetus for the JLAC audit was a desire on the part of FP&L, or maybe Duke, to do here what they tried to do in Jacksonville.” He also said UF should stop “free-riding… It’s high time they become a good neighbor.”

Duncan-Walker asks UF to work with the City

City Attorney Daniel Nee said the City has no way to compel UF to make payments in lieu of taxes unless they want to use something like fire services as leverage. He said he’s seen no indication that the legislature would do that, “but there’s no reason we can’t hold out hope.”

Duncan-Walker said, “We partner a lot [with UF]… I hope they are hearing us today, seeing a need, that they may consider it being a good neighbor or good partner” and that maybe the legislature would get involved. “UF, you are one of the flagships of this community. We respect you. We love what you bring. We are the City of Gainesville. We represent the citizens of this great city. How can we work together to see to it that Gainesville be able to function in a way that the citizens are happy with, in such a way that the City can be sustained in the best possible way as we move forward?”

As the meeting closed, Rep. Caruso thanked everyone for “recognizing the severity of the issues here… I was concerned that we wouldn’t be looking at bold actions, and I think you’ve done that today. I heard a lot of things that were pleasing and could be a resolution of the issues facing Gainesville and GRU.” Caruso said he would also attend future workshops.