GRU Authority tables decision on hiring law firm, reduces future meetings until new board is appointed

The GRU Authority met on March 27, 2024

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At the March 27 GRU Authority meeting, the board made changes to its procurement policy, tabled the selection of a firm that would provide legal services to the board, and extended the contract of the interim legal services firm until a new firm is selected.

Chair Carter: “We are going to work until we are not working anymore.”

During the Chair Comment period, Chair Craig Carter said, “Anybody that’s been in Gainesville, or basically on the planet, understands this entire board has resigned, effective 60 days from our resignation letter, or, in my thoughts, until the Governor appoints a new board. They’re going to advertise for approximately 30 days, and then he has 30 days to appoint the new board. Any member up here is welcome to reapply, as long as they meet the requirements of the law. But I want to let everybody know, whether it be the ratepayers or the employees of this utility, we are going to work until we are not working anymore. So, until the last day, our goal is to still do what’s right for the ratepayers and this utility.”

Current board will only have one more meeting

During the CEO/GM Comment period, CEO/GM Tony Cunningham said the Authority meeting schedule has changed; the next meeting will be April 17, “and then we’re going to have a meeting in late May, anticipating a turnover of the board… so that we can start with that new board fresh in May. And then we’ll have two meetings in June.”

Fuel adjustment charge reduced by 5 mills

Cunningham also announced that GRU will reduce the fuel adjustment charge by five mills on April 1. 

$45 million in revenue bonds to refund existing bonds

The board voted unanimously to issue $45 million of utility system revenue bonds (2024 Series A) for the purpose of refunding existing 2014 Series A bonds. 

Member James Coats moved to adopt the resolution approving the bond issuance, and Member Robert Karow seconded the motion.

In response to a question from Karow, GRU Director of Accounting & Finance Mark Benton said the utility’s equity-to-capital position is around 19% (at the end of the meeting, in a discussion about the debt reduction plan, he said the debt-to-capital ratio is 87%). When asked to compare that to other municipal utilities, Benton said he “didn’t know about the net position. Obviously, our capitalization ratio is considerably lower than most because we have considerably higher debt than utilities with the same, or even with larger, revenue streams.”

Karow then asked Benton how much it would cost to do the debt issuance, “as well as your estimation of what we’re going to gain from the transaction.”

Instead of answering those questions, Benton spoke about why he believes the bond validation process is necessary; the decision to proceed with the bond validation process was made in a previous meeting, and Jim Konish had brought up the issue during public comment on the motion about the debt issuance.

Changes to GRU’s procurement policy

As part of the Authority’s efforts to bring GRU’s policies in line with the requirements of HB 1645, Benton introduced a proposed change to GRU’s procurement policy. He said, “The crux of the matter is that the law states that only pecuniary factors and utility industry best practices should be considered when making policy decisions.”

The change removes references in the procurement policy to City-required living wage requirements, apprenticeship program requirements, veterans’ preferences, and small business and local preferences. It also removes references to City officials and makes other miscellaneous changes such as changing some thresholds for a formal solicitation process. Benton said another change is that in the rare event when there is a tie in the scores in a solicitation process, GRU will use veteran status as the principle tiebreaker.

Member Eric Lawson made a motion to accept the new policy, and Karow seconded the motion. 

During public comment, Jim Konish noted that members of the Authority had previously strongly supported a veterans’ preference, so “only using that as a tiebreaker seems to be a very watered-down provision.” He also supported a local preference.

Kim Popejoy referred to his earlier advice to the board to “do no harm” in their lame-duck status and said this was an opportunity to do no harm: “You will harm living wage, you will harm apprentice programs, you will harm veterans, small businesses, you will harm local preferences.” He encouraged them to make no changes to the policy “until we have settled the legitimacy of this board.”

Carter clarified that the veterans’ policy is consistent with the State of Florida’s veterans’ policy, then the tie-breaker comes into play.

The motion passed unanimously.

Selection of firm to provide legal services to the board

The board then took up the selection of a firm to provide legal services to the Authority. 

Benton described the Request for Proposal (RFP) process for selecting a firm and stated that the evaluation team had consisted of GRU’s Chief Financial Officer, Chief Operating Officer, and Chief Customer Officer. The scores are shown below.

Score sheet from evaluation process for legal services

Assistant City Attorney Bianca Lherisson, who sits on the dais at GRU Authority meetings with the Authority’s interim attorney Scott Walker, said the City Attorney’s office had reviewed the RFP and noted that the scope was too broad: the RFP requested services that are provided to GRU by the City Attorney’s office, under the City’s Charter. She said, “It included my entire job description in it and things that we believe that outside attorneys, such as consultants or contractors, should not be able to do.”

The evaluation team recommended hiring Gray Robinson, based on the scores. 

Karow said he believed it was “highly problematic” that the City Attorney’s staff was involved in the RFP process: “I’ve practiced law in Florida, in Texas, and the District of Columbia, and issues of conflict are not taken lightly in the business world.” He supported starting the process over from the beginning.

Carter asked for a motion, and Karow made a motion to “table this and re-look at this procurement process and continue for the moment with the Folds [Walker] law firm.” Coats seconded the motion. 

Cunningham asked what the board wanted to do in terms of hiring an attorney: “Are we starting a new process? Is the board looking for a different process?”

Karow said he thought they should take a look at the process, but he wasn’t ready to say what it should be. Cunningham offered to bring back options.

Carter said, “My thought is, we are short-timers here, and I am in agreement that we put a pin in it, and I think that we need some clarification.” He said City Attorney Daniel Nee “has been extremely professional, and his staff has been professional… He’s given me some good, strong advice. I have gone to Mr. Walker and gotten excellent advice.” 

The board voted unanimously to table the selection of an attorney.

Extending Folds Walker’s contract until a new firm is selected

Karow asked when Folds Walker’s interim contract expires, and Walker said there’s a deadline, but it’s subject to extension. 

Karow made a motion to “extend the time for the law firm until such time as we select a new firm.” Coats seconded the motion. The motion passed unanimously. 

  • This GRU board is an absolute embarrassment.

    Chair Carter: “We are going to work until we are not working anymore.”

    Please stop working now before you cause more harm to GRU customers.

    Maybe you should invite the Mayor over to pass out participation trophies 🏆 at the last meeting?

    • Counterpoint: these are volunteer positions, it’s “costing” people their time to be on it, regardless of whatever motivations each member has internally to do so.

      Mr. Karow has been great based on his meeting comments imo. If we can get 3 of him going forward would be great in my uneducated opinion. Thank you Mr. Karow.

  • Lawyers will be needed to file for bankruptcy and sell GRU to Clay Electric for $1. Delaying the inevitable won’t stop the future.

      • Only if you consider the looming retirement of 51.3% GRU electric generating capacity ( your “arsenal” Ed) by 2032 “far away”. Is the Biomass plant really a “BMW” that should cost much more as such?

  • Mr. Benton made numerous erroneous claims during his presentation. The refinancing is optional and is a Trojan Horse to create doubts about the legitimacy of the Governor-Appointed Authority. The appurtenant Bond Validation suit, which will need the blessings of the new Authority, will take years, open the door to more Hutch nuisance claims, and will cost $200,000 or more. This scheme is coming from Holland & Knight, Nee, Barclay’s Bank and GRU. Nee needs to be shut down immediately, Holland & Knight needs to go, and all GRU legal representation should be consolidated under the Authority’s attorney- Scot Walker. Craig Carter is a disgrace.

    • Agree that the situation is bleak. Setting up such a utility where elected commissioners can make or approve major decisions yet know nothing about running a utility, is ripe for failure. The only thing they know is higher rates usually means more funds available to spend during their short span in office. Couple that with radical liberals and their ill conceived agendas, and you wind up with the current disaster that is GRU. Sell to FPL for “take up payments.”

  • Since they all stepped down, this authority should not be making any decisions for GRU.

    • Yes, and they never should have. Everyone – including them – knew that only 1 of them did not meet residency requirements yet all pretended this wasn’t a problem, including self appointed expert and genius Jim Kornish, because they wanted it so bad. Their actions from the from the beginning were illegitimate.

      I told you so.

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