Gainesville City Commission sets utility and property tax rates

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At a September 8 Special Meeting, the Gainesville City Commission passed increases in utility rates and a flat property tax rate that will collect more revenue because of increased property values. They also passed budgets for Gainesville Regional Utilities (GRU) and General Government.

Wastewater 

The wastewater ordinance increased new connection charges and other related fees by 8.24%, but those are mostly one-time fees for new construction. The ordinance also eliminated the wastewater winter maximum calculations and adjustments. The winter maximum provision established an individual winter maximum for each customer in January or February that determined the maximum wastewater charges for that customer for the remainder of the year.

After several residents objected to eliminating the winter maximum calculation, GRU Interim General Manager Tony Cunningham said the change was made last year and that the ordinance was just “cleaning up the language.” Cunningham added that GRU was only one of two utilities in the state of Florida that used winter maximum calculations to cap water usage in the summer.

The ordinance passed unanimously.

Utility rates

As the commission decided a year ago, electric rates were increased 3% and wastewater rates were increased 5%. 

Residential electric rates will go up from $0.0797/kWh to $0.0821/kWh for the first 850 kilowatt-hours (Tier 1) and from $0.1056/kWh to $0.1088/kWh for usage over 850 kWh (Tier 2). The Electric Customer Charge will also increase from $16/month to $16.50/month. The new rates will apply to all bills mailed starting October 1.

During public comment, multiple residents complained about long billing cycles that pushed their usage into the more expensive Tier 2 just because there were more than 30 days between meter readings. They also complained about low bill estimates when GRU says they weren’t able to read the meter; those also push the next month into Tier 2 and lead to an overall higher bill over the two months than they would have received if the estimated bill had reflected the actual usage for that month. One person said that when she complained about this, GRU told her to go to a community organization that helps people with utility bills. However, those organizations told her she made too much money to qualify for help. She said the only other thing GRU offered her was a payment plan to spread out the high payment over several months. She added, “It’s not our problem they’re short-staffed. It’s not our problem you guys aren’t hearing us when we’re saying there’s a problem.”

After public comment, Mayor Lauren Poe said that the 3% increase in electric rates was lower than the inflation rate; he did not mention the fuel adjustment charge, which is currently higher than the charge for the electricity itself ($0.08/kWh), more than doubling the amount paid by customers.

The fuel adjustment charge is designed to balance fuel expense with fuel revenue, but in spite of big increases in the fuel adjustment charge over the past year, the fuel levelization balance has dropped below -$18 million. At the September 9 General Policy Committee meeting, GRU’s Chief Financial Officer Claudia Rasnick told the City Commission that these funds have to be replenished at some point, and she expects the fuel adjustment charge to stay at its current level for some period of time, possibly as long as a year, until the balance gets back to zero: “If [the balance is negative], that means customers owe the utility for fuel costs that have already been incurred.”

Poe continued, “We understand the difficulty. We do. And we have significantly increased our programs to try to help people. And anybody out there that’s listening or watching, if you are struggling, please reach out and contact GRU, and we will do whatever we can to work with you.”

The vote in favor of the rate increases was 4-3, with Commissioners Cynthia Chestnut, Desmon Duncan-Walker, and Harvey Ward in dissent. Ward, who is now running for mayor, voted for the multi-year increase last year before voting against it this year.

Fire Assessment Fee

The Fire Assessment fee will remain flat at $133/unit. During public comment, Nathan Skop said that the number of units on his bill increased from previous years, causing a significant increase in this fee, so homeowners should compare the Fire Assessment fee on this year’s tax bill with last year’s bill. Skop said he was told by the Fire Chief that the units are calculated by consultants.

The Fire Assessment fee passed unanimously.

GRU Budget

During public comment on the GRU budget, questions were asked about the City’s audited financial statements, which were not prepared on time this year. Interim City Manager Cynthia Curry said they hope the statements will be ready in another 30 days. 

The tentative GRU budget passed 5-2, with Ward and Duncan-Walker in dissent.

Property taxes and general government budget

The city commission adopted a property tax rate of 5.5000 mills, the same as the previous year. A presentation showed that the property values in the City of Gainesville have increased 11.8% since last year, so that millage will raise $4.5 million more revenue (and cost property owners more) than it did last year. This millage rate is 9.23% higher than the rolled-back rate, which was calculated at 5.0351 mills. 

The general government budget for FY23 is $154,356,686, a 6.2% increase over the FY 2022 budget of $145,312,788. The City added 22 new full-time employees in the upcoming budget.

The property tax millage rate passed, 6-1, with Duncan-Walker in dissent.

The budget passed 6-0, with Duncan-Walker absent.

The final votes on all these items will be taken on September 22.