GRU Authority moves forward on wastewater facility expansion, seeks regulatory relief from FERC

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At the GRU Authority meeting on September 10, the board approved modifications to a contract to upgrade the capacity of the Main Street Water Reclamation Facility, voted to seek regulatory relief from FERC, and agreed to sell the Cross Creek Water and Wastewater Systems.

Vice Chair David Haslam opened the meeting by praying for the family of Charlie Kirk, adding, “Father, we just want to remind everyone that disagreeing with someone is no reason to hate them, want to harm them, or kill them.”

Chair Eric Lawson asked the other directors to fill out an evaluation for CEO Ed Bielarski, discuss it with Bielarski one-on-one, and then submit it. He said the board will discuss the evaluations at next month’s board meeting. 

Skinner’s term expiring

Director Chip Skinner noted that his term expires before the next meeting, so he had requested a legal opinion about whether he could stay on the board until another director is appointed; one of the five seats has been vacant since Craig Carter announced in May that he would resign from the board because his term had expired the previous October.

Derek Perry, GRU’s attorney, said he found an opinion from the Attorney General’s office about a different appointed board, “and generally speaking, in the law, they found people can hold over after their term, because otherwise governments could collapse, in theory.” He said the Special Act creating the Authority is silent on the issue “but doesn’t have anything against that.” He said his opinion was that board members may stay “as de facto officers” until a successor is appointed. 

Accelerated debt reduction

During the GRU Review, Bielarski highlighted the accelerated debt reduction since the Authority took over governance of GRU: “There’s always some discussion about, ‘The City came up with a debt reduction plan, and the Authority’s not doing any more than what we said.’ That’s not true. The City’s debt reduction plan had us paying down $51 million in ’24 and ’25. Under your stewardship, we’re up to $66 million — that’s $15 million more than what the City had planned. And frankly, part of that was on the General Fund Transfer, but it was also efficiencies here at the utility.”

Main Street Water Reclamation Facility upgrade contract modifications

The board next approved modifications to a contract for Phase 2 of a project to upgrade the capacity of the Main Street Water Reclamation Facility; the project will cost $120 million over five years, and GRU is applying for grant funding to cover some portion of the cost. Lawson pointed out that the project is already built into the capital planning and debt over the next five years, “so this is part of the reduction plan.”

Waiver from FERC’s Independent Functioning Rule

The next agenda item was approval of a request to seek a waiver from the Federal Energy Regulatory Commission’s (FERC) Independent Functioning Rule. Perry explained that GRU, as a smaller municipal utility, has burdensome personnel costs to meet the rule, and the legal costs of obtaining the waiver are not expected to exceed $20,000.

Perry said, “Holland and Knight… recommend that we go before FERC and ask for a waiver. They feel confident, as do I, that FERC will grant this waiver. They traditionally do, and it’s very commonplace… It will enable us to have less regulation.”

Bielarski added, “This doesn’t impact our balancing authority. This doesn’t impact our ability to sell and purchase power off the grid.”

Director Jack Jacobs pointed out that the waiver will only be granted if FERC agrees.

Selling the Cross Creek Water and Wastewater Systems

The final item was approval of a staff request to start the process of selling the Cross Creek Water and Wastewater Systems; according to the agenda, the system generates annual revenue of about $24,000 but costs over $294,000 to operate and maintain. 

Bielarski said there are 50 customers on the system, and “this is not a core component of GRU’s water/wastewater system. It doesn’t get water flow from us; it doesn’t get wastewater; it’s a package system down there… We think there’s an opportunity for us to sell it to some entity that can make that work and relieve ourselves of some of these expenses.”

Perry said under the bond covenants, GRU can’t do anything to materially affect the system, “and offloading this asset will only serve to bolster our system and our ability to operate.”

Attorney Kiersten Ballou said her firm believes that this action “does not run afoul of HB 1645; you are in compliance by taking this action.”

Bielarski clarified that the board was not voting to sell it: “We’re just voting to go out to this marketplace.”