GRU Authority tells CEO/GM to bring back options for eliminating the General Fund Transfer and holding rates steady
BY JENNIFER CABRERA
GAINESVILLE, Fla. – At the May 29 GRU Authority meeting, the board voted to send a letter to the Supervisor of Elections, asking her to keep a referendum off the ballot; agreed to have a workshop in June; asked staff to bring back options to cut the budget, eliminate the fund transfer to the City, and avoid rate increases; and scheduled another meeting for June 5.
Bielarski’s budget presentation
Chair Ed Bielarski led off with a presentation during the Chair Comments agenda item (the full presentation can be viewed here).
Bielarski explained that there are four main budget categories that can be controlled: non-fuel operating expenses, the number of employees, capital expenditures (CAPEX), and the transfer to the City (GFT) as a percent of net earnings before the transfer is removed.
Bielarski displayed a chart that showed GRU’s non-fuel operating expenses increasing sharply since 2022. Another chart showed that capital expenditures averaged about $80 million per year from 2015 to 2023, but they increased to $121 million in FY2024 and are projected to be $142 million in FY2025. He commented, “I mean, it just sends a red flag… The other thing with CAPEX is that I don’t know that we have the capacity to actually handle all those projects.”
He displayed another chart that compared fund transfers as a percent of earnings for five municipal utilities in Florida over the past six years: JEA, OUC, Tallahassee, Lakeland, and Gainesville. The chart showed that three of the utilities were in the 49%-62% range, while Tallahassee was at 101% and GRU was at 150% of earnings.
Bielarski: “The goal is to stabilize rates”
Bielarski said, “The budget is the basis of rate-making.” He pointed out that the budget is a “living, breathing document” that can be amended over the year and that the board had not discussed the utility’s strategic direction, including a multi-year wastewater project, a gas expansion into Newberry, a “dramatic” increase in reserves, and debt reduction goals. He said, “The goal is to stabilize rates,” and that means “to make steady, keep flat, and they’re increasing, and it’s on the backs of customers. So I don’t think that was the intent of House Bill 1645.”
Ballot referendum to return control of GRU to the City Commission
After his budget presentation, Bielarski said that he had spoken with the Governor’s office about the upcoming ballot referendum to return control of GRU to the City Commission. He said the Governor’s Office “has yet to decide what process they’re going through, but I did hear that Mr. Ray Washington has agreed to represent a group of county ratepayers in a lawsuit to keep what they feel is an unconstitutional measure off the ballot… It’s their argument that the City Commission lacks the authority to change the governance of GRU and the proposed referendum violates their civil rights, as it would result in their unequal treatment, as well as their due process rights, because of their exclusion.”
Motion
Director (Bielarski has decided that board members will be referred to as “Director”) Chair Carter made a motion to ask the board’s attorney to “file [their objections to the referendum] with the Supervisor of Elections Office to keep it off the ballot.” Director David Haslam seconded the motion. Carter clarified, “I don’t want to tell them how to write [it], but we want to let the election office know that we believe it’s invalid for them to do that and give them some sort of case law.” Bielarski agreed that such a letter “would notify folks of what we thought about this.”
Carter amended the motion to ask the attorney to bring the letter to Bielarski for approval instead of waiting for the next board meeting: “I think the sooner, the better.”
The motion passed unanimously.
Workshop in June
During CEO/GM comment, members of the board indicated that they would like to have a workshop to catch up on all the information they need to know, and Bielarski and CEO/GM Tony Cunningham agreed to work on scheduling that, perhaps in late June.
Power outage
Cunningham also said GRU had a “circuit switch or trip” of one of their substations, resulting in a power outage for about 15,000 customers; although he did not specify a date, GRU’s X account provided updates on an outage on the morning of May 28. Cunningham said power was restored “within 5 or 10 minutes” for all but about 2,600 customers, and the rest were restored over the next two hours. He said the utility is following up with required reporting and a root cause analysis.
PFM Memo
Cunningham handed out a memo from PFM, GRU’s financial advisor; the memo concluded that if the ballot referendum on GRU governance passes, “the ratings agencies will look at that negatively and potentially even at a risk of a downgrade for that change of governance, once again, occurring.” He said PFM calculated that a downgrade could result in an impact of $28 million to the utility over the life of the loans that would be affected.
The paragraphs below are from the PFM Memo:
In terms of Governance, GRU’s operating environment is of concern to both investors and the rating agencies. Specifically, the recent efforts by the City Commission to bring to the November referendum, a resolution to dissolve the newly created GRUA and revert governance of GRU to the City (either the City Manager or the City Commission) is problematic. These concerns pertain to the City Commission’s ability to:
– Control the level of the General Fund Transfer/Government Services Contribution. Recent changes materially reducing the GFT/GSC were viewed very favorably by the rating agencies and any action to reduce or eliminate this progress would result in quick ratings action, either through a change in GRU’s current “stable” outlook to “negative” or a swift downgrade. PFM would expect the rating agencies to move quickly in response to this and other financial policy changes.
– Establish Rates and Charges. If rates increase materially to address the higher GFT/GSC, then the rating agencies would be concerned about rate affordability. If rate increases were not sufficient to address both a higher GFT/GSC and the financial footing of the utility, the rating agencies would also be concerned with weakening financial metrics.
To illustrate the rating agencies’ focus on governance, PFM has informed the other two agencies about the dissolution of the initial Gainesville Regional Utilities Authority (“GRUA”), the reappointment of a new GRUA slate of directors as well as the recent City Commission approval to proceed with the referendum. The responses back from the agencies were a bit more concerning than expected, as both asked for follow-up calls with GRU’s finance team to better understand the situation and implications on the credit ratings of GRU.
In the aggregate, it is PFM’s opinion that GRU will likely be downgraded by Fitch in the coming 12-24 months and potentially Moody’s given the large disparity between the Moody’s rating and the other agencies’ ratings. It is also PFM’s opinion that the passage of the referendum to dissolve the GRUA and revert back to the historical governance structure would be quickly met with some type of ratings action from the agencies – either a change in outlook or downgrade. PFM has provided this analysis to illustrate the cost of a potential downgrade on GRU’s current and planned debt portfolio and that financial impact starting on October 1, 2025.
The PFM memo also included the following chart, showing ratings downgrades since 2010:
Staff budget presentation
In his budget presentation, Cunningham said his staff is working to “slow down and stabilize [the electric] rates over time and also reduce the overall bill.” He said that under the proposed budget, the customer’s overall bill will be about $15 less than their October 2023 bill, although that is “primarily due to the… fuel adjustment coming down.” He said the increase in operating expenses referred to by Bielarski was due to cost increases “through the pandemic and through inflationary increases.” Cunningham said he was “not looking for a vote tonight,” but he was looking for “head nods” or feedback. Under HB 1645, the budget must be submitted to the City by July 1.
Bielarski: “This idea of stabilizing rates with increases over the next decade is just kind of an oxymoron to me.”
Bielarski said he was less interested in “stabilizing” rates than in “affordable rates… This idea of stabilizing rates with increases over the next decade is just kind of an oxymoron to me.” He also pointed out that if the full-fledged budget is not ready by July 1, “we’re not going to go to budget jail… There’s a lot of ways around it, rather than putting pressure on the board to make decisions that they’re not ready to, at this point… We make the rules.”
Cunningham said the law is “explicit” that they must “submit” a budget by July 1, “so I do think we have some latitude with that.” For example, he said the board may be able to vote on resolutions after July 1 as long as a budget is sent to the City by July 1.
Instead of the annual increases of 3% for electricity and 5% for wastewater through 2027 that were approved by the City Commission in July 2021, Cunningham proposed a 1% increase per year in electric rates through 2034 and increases of 2% for water, 2% for wastewater, and 2% for gas for FY2025.
In response to a comment from Bielarski about the affordability of the rates, Cunningham said the rate increases are necessary if debt reduction is a priority of the board. Bielarski said it is a priority, but “debt reduction is being built on the backs of customers. It needs to be built on austerity; it needs to be built on efficiencies.”
Cunningham agreed but said, “It’s a balance of all those, so we are reducing expenses and becoming more efficient regarding headcount.”
Opt-out for AMI
An additional proposal for FY2025 was to add an opt-out program for customers who do not want the new AMI meters; those customers would pay an $85 set-up fee and $38 per month to avoid the new meters.
Residential vs. commercial rates
Bielarski pointed out that the rates shown were residential, and “I hear the argument all the time, ‘Well, we’re not the most expensive.’ Well, yeah, that’s true on a residential basis. But if you combine residential and commercial, yes, we are the most expensive… That changed back in the late 2000s, where all of a sudden, the commercial rates rose, and that has a direct impact on the development within the city… So let’s not forget commercial rates here.”
Cunningham said the 1% rate increase is “in all those classes,” so the same percentage increase will apply to residential and commercial rates.
Debt service
Director of Accounting & Finance Mark Benton said debt service and debt defeasance will be over $138 million for FY2025, about 31% of the budget, “which is a bigger chunk than most any other public power entity that you’re gonna see.”
Debt ratio is 7.5 times the median for A+-rated public utilities
Benton displayed a chart that showed the ratio of debt to operating revenue for five utilities, along with the median ratio for utilities with GRU’s A+ credit rating. Benton explained that for FY2023, the ratio reflects $1.8 billion in debt, relative to operating revenues of $450 million, for a ratio of 4.1. The median of all other A+-rated public utilities rated by Fitch is 0.44, so GRU is 7.5 times higher than the median. GRU is 2.7 to 4.1 times higher than the other Florida municipal utilities on the chart.
GFT has totaled 95% of GRU’s profit since 2002
Bielarski asked Benton for a comparison of the GFT over the years as a percent of earnings before GFT, and Benton said they had looked at that and had verified Bielarski’s calculation showing that the transfer was $68 million more than earnings over the 2018-23 time period. Benton agreed that Bielarski’s formula, taking income before capital contributions and transfers as a proxy for profit, was “appropriate.”
Benton said staff had looked back to 2002, and over that period, the GFT was 95% of GRU’s profit. He added, “It ramped up considerably in the [2018-2023] time frame. Between 2002 and 2017, we transferred about 82% of our profit. Over the timeframe [Bielarski] looked at, it was about 145%. The driver behind that was the fact that that also correlated with the purchase of [the biomass plant (DHR)]. We moved the cost associated with DHR out of fuel into the debt service, which moved the interest associated with that $650 million onto our income statement. It reduced our profit, but the General Fund Transfer was not reduced at the same time, which is what drove those numbers up that you listed.”
Benton said that if the GFT remains steady at $15.3 million, that will be 82% of the FY2024 profit and 64% of the FY2025 profit.
Director David Haslam asked, “There still is an overpayment, correct?” Benton responded that there was an overpayment between 2018 and 2023, but not in 2024 or 2025. Bielarski added, “Said another way, there’s still a – I call it a prepayment,” and Haslam asked, “Yeah, we have to make that up somehow?” and several directors agreed.
CFO Rasnick: “No other business remits practically every dollar that you earn back to their shareholders.”
Chief Financial Officer Claudia Rasnick said that transferring 95% of GRU’s profit over the past 21 years “is extremely large… No other business remits practically every dollar that you earn back to their shareholders.”
Cunningham summarized the presentation by saying the staff recommendation is to hold the GFT steady at $15.3 million, spread out the rate increases over 10 years instead of “front-loading” them over the next 3 years, and continue with the debt reduction plan.
Haslam: “I think that $68 million in advance is stealing“
Director Craig Carter asked what a “fair” GFT would be; he suggested calculating that and then “recovering” the $68 million over the next 10 years.
Haslam said, “I think that $68 million in advance is stealing, and I think we need to get that money back… I don’t like the concept of putting it over the course of 10 years… It needs to go down… Everyone else is afraid to say it; I won’t because I’m not gonna run for office, I could care less.”
Director Chip Skinner agreed: “You know, they become addicted to the money, and I look at it [like] any addiction, you typically don’t go cold turkey. But having something reasonable that we can agree upon, going somewhere in line with our peer agencies and what they’re paying and that percentage, something that we can look at. But yes, recouping that money is definitely something that is very important to us, as well as keeping the rates as low as possible to avoid that impact.”
Lawson: “Overall, I think the budget’s reasonable”
Director Eric Lawson said, “Overall, I think the budget’s reasonable; I think the way it was put together is reasonable. I think we all can debate [on] what the right number is [for the GFT]… As far as going back, and recouping, I don’t generally look at it that way. I look at, you know, that was previous administrations, that was a previous commission – I look at, how do we go forward? And how do we provide safe, reliable utilities at the most reasonable price possible?”
Bielarski said he probably had a different view from the rest of the group: “[The overpayment was] ostensibly a prepayment of future profits… I think for the ’25 fiscal year, you need to pause it… I would entertain some instructions to the General Manager that would look at what the GFT would have to be to have no rate increases.”
Carter: City will probably raise property taxes if GFT is eliminated
Carter responded, “My concern is, the City has very few ways to recoup the money. So we take $15 more million, taxes are gonna go up for the city residents only. So the people who are going to be penalized are the city residents only; people in the county, you know, the ratepayers there will not notice it because they’re not going to raise their taxes, but the City could go ahead and probably justify a tax increase. So that is a concern of mine… I mean, we all know that their budget actually went up last year.”
Lawson pointed out that the City could also implement a franchise fee on the utility: “It’s debatable what the risk is about that.”
Bielarski: A franchise fee would need to be negotiated with the City
Bielarski said a franchise fee would just “codify a GFT into a payment that needs to be negotiated with the City.” He said that just giving up their authority to pause the GFT would be a “bad way to do a negotiation… I don’t think that’s the spirit of House Bill 1645… It doesn’t feel right for me.” He pointed out that the City’s budget has grown $50 million in the past 10 years, “and even though they reduce their headcount, it’s still higher than it was. So no, they haven’t done all that they can.”
“No rate increases”
Cunningham asked for guidance from the board, and Bielarski said, “I think the overriding issue for me is – no rate increases,” and Haslam chimed in, “No rate increases.” Carter asked whether the utility could function over a period of five years without rate increases, and Bielarski said, “We’re only voting on this coming year.”
Carter said, “There’s one true expert on utility and utility finances sitting on this board, and that’s Mr. Bielarski… So I think that we should sort of see what direction he’s wanting.”
Bielarski’s proposal
Bielarski said he wanted to see something like a $5 million reduction in operating expenses, a reduction of at least $20 million in CAPEX, and no GFT, with no rate increases.
Cunningham said staff would bring back options at the June 12 meeting, but Carter said that was getting too close to the July 1 deadline and suggested a June 5 meeting. Cunningham said they might not be able to do the analysis by then, so the board decided to have a CAPEX discussion on June 5.
We likely finally have 3 votes to make change…
Would someone please explain to me why the hospital guy is in on the board??? The chair is trying to lead progress and he wanted to end the meeting because they had been there for only 3 hours?? Are you kidding? They should have gone till midnight. So much work to do to catch up. He is like Mr. Status Quo. Me thinks he’s doing this only to list on his resume.
you are likely right and the fact that I believe he is friends with the gm, and he wants to save his well you know.
As the back-Ward Mayor of Gainesville, I want to assure the people, so they don’t worry, that I will not let the city run out of money and have to stop funding my pet projects and daily donut buffets. Please rest assured and no need to worry about money for the city, if GRU stops sending us money to waste, I mean fund the city, I will simply just continue to raise the property taxes, fees, and regulation on the citizens at even a faster pace than I currently am. So, there is no need to be concerned I will make sure the city has money to waste, whether it comes from GRU (through high utility bills) or directly from the citizens in taxes, but the city will continue to move forward with our current wasteful spending one way or the other. And to think some peoples’ solution is to cut spending, so dumb.
For once in years the direction is changing ! Please make rates reasonable and use every available dollar to pay down debt. Sick of the inexperienced city idiots spending as they wish by increasing rates and the transfer. Dont agree to willingly give the city one red cent !
He only wanted to meet once a month, originally. It’s one of the most expensive hospitals in the country, and it’s been in the news lately for having surgical equipment so old that it can’t be properly sterilized. Is he there to keep property taxes down for the hospital? Maybe Cowardly-Lion Carter is on the hospital’s payroll, too? Make him quit by having long and frequent meetings.
The chair sets the agenda. I think they need to meet biweekly with enough content to keep them busy until at least 10pm.
Start earlier in the day if this presents a problem. If Mr. Hospital can’t do that because of conflicts then he should resign.
Yo , Carter? Your concern is, the City has very few ways to recoup the money. So we take $15 more million, taxes are gonna go up for the city residents only. So the people who are going to be penalized are the city residents only; people in the county, you know, the ratepayers there will not notice it because they’re not going to raise their taxes, but the City could go ahead and probably justify a tax increase. So that is a concern of mine? Really ? REALLY? The City Voters are exactly the ones to be penalized. The County GRU tax slaves have been penalized by the City Voters decision’s and agendas with no say so. Why would you think any other way?
100% correct. Has it been fair all these years for non-Gainesville residents to pay sky-high utility bills, just because of the paint-chip eaters that we keep letting get elected in this city, propped up by the influence of criminal organizations like the Alachua County Labor Coalition and Grace Marketplace? Absolutely not.
Basically people who don’t live in Gainesville were being secretly taxed by the city without any representation.
Unlike the city voters the resident in the county who had a misfortune of being stuck with GRU can’t vote that being said the dumbass voters in The city of Gainesville keeps voting these clowns in office vote people who will truly reduce the budget cut out marketplace cut out the wasteful spending reduce salaries of the high price employees they have. Cut the commission salary
Carter is a known hidden agenda guy. Claims to be for whomever he is in front of, and acts as if he’ll take someone or an organization to task. In reality, he is a shrinking violet and won’t do anything but suck up to whoever will butter his bread. Not a leader or someone to be trusted. He should resign ASAP. Wouldn’t doubt he has some deal with the city or its screwball leaders.
“Wouldn’t doubt he [Carter] has some deal with the city or its screwball leaders.”
I’m having bit of a problem following this train of thought…
Mr. Carter was appointed for the 2nd time by the same governor who put him in the first time, presumably in consideration and/or consultation with the local Republican leadership which pretty much precludes involvement of the “city or its screwball leaders.”
Carter, during GRU Authority 1.0, even stated he was told by the governor’s office and the person who nominated him that he (Carter) was doing exactly what they wanted him to do and were happy with his performance.
DeSantis and the local Republican apparatchik own this one hands down, no city drones need apply.
Carter told me his appointment ends 10/1/24.
It seems that Mr. Ed believes he is still the GRU GM. That’s not his role now. He is one member of a five member oversight board that provides strategic, policy, and fiduciary guidance, and can hire and fire the GM. I suppose they could save $310 k plus benefits by firing Cunningham and just letting Ed run the place…
Sec. 7.09 (1)(a) provides: “A sitting member may not be selected as the CEO/GM”
It our local city comm. oligarchs know better!
Even if the city’s political meddling causes bond ratings to plummet further… and loan payments to regressively increase GRU bills. It *feels good* to say “democracy” when oligarch puppets say it to us gullible masses 💩👺👹🤡👿D
Another incredible article by Jennifer Cabrera–you won’t find detailed and accurate reporting like this many places outside of the AC.
Ed Bielarski was the right choice for this job, as demonstrated by his technical and business savvy, and the fact that he has a backbone.
Carter is still the weakest link in this group and needs to be watched carefully.
Of course the City Commision are going to raise taxes and threaten to cut police, fire, etc.–anything but their own pet projects and bloated staff. They were going to do that anyway. Just ignore their threats and do what is right for GRU and its ratepayers.
The petty tyrants on the Gainesville City Commission can threaten the people of Gainesville with whatever punishment they want, but it will be at their own peril–they will be voted out of office easily by anyone who runs on cutting taxes.
I wish that was the case here(on being voted out), but history here has shown that to seldom be the case 🙁
As long as these idiot city commissioners can keep getting elected with 1,600 votes it will always be more of the same. Until people realize their local election is far more important than the bozo sitting in the White House nothing will change. So frustrating!
Gainesville Dad, most of what you said is completely true. I am less optimistic that the city commissioners or mayor will be voted out. Gainesville residents see paying high taxes as their patriotic duty. Has there ever been a tax increase they didn’t support?
It is hard to understand in materialist or utilitarian terms why Gainesville residents support policies that harm them. The answer is they are self-loathing and wish to punish themselves.
Dad: “The petty tyrants on the Gainesville City Commission can threaten the people of Gainesville with whatever punishment they want, but it will be at their own peril–they will be voted out of office easily by anyone who runs on cutting taxes.”
That’s correct Dad. Now what will you do if the “authority” ticks you off?
That’s right, nothing. They are untouchable.
They did at least introduce lowering rates which is more than the liberal lunatics have mentioned or even entertained.
As far as commissioners being voted out by someone running on cutting taxes, that won’t happen. History shows that if it’s anyone who’s fiscally competent and has anything other than a “D” behind their name, they have about as good a chance of winning a local election as winning the Powerball.
Then citizens of Gainesville will be responsible for what follows – no money or higher taxes or losing customers outside the city – Rep Hinson tried to make that a part of the bill that passed and was shot down on a quickie party based vote.
I repeat: If you don’t like something the “Authority” does, tough luck. They have no accountability. If you don’t like what the commissioners do, vote them out.
As long as the liberal lemmings continue to pledge fealty to the misguided and incompetent commissioners they continue to elect, the current conditions will remain.
So I must agree with you on your statement of fact, “Then citizens of Gainesville will be responsible for what follows.” All of the citizens, those who didn’t vote for the aforementioned incompetent commissioners as well as the idiots who did. Majority rules, right?
We agree.
This excellent article by Jennifer Cabrera is an ANOTHER reason to continue donating to the Alachua Chronicle and encourage your friends and others to do the same.
Having Bielarski at the wheel, with two other critical thinkers on the Authority, it will be near impossible for staff or anyone else to bamboozle or distract them from doing what NEEDS to be done.
Bielarski said-
“The goal is to stabilize rates,” and that means “to make steady, keep flat, and they’re increasing, and it’s on the backs of customers. So I don’t think that was the intent of House Bill 1645.”
Ed, Don’t let Carter and them succeed in their perversion of HB1645.
First and foremost the rates are supposed to be lowered.
The Cunningham gang loathe HB1645.
If they want to get on the ratepayers good side, they need to move away from tying rate reduction to fuel adjustment.
The most reliable and stable way for ratepayers to enjoy reduced rates is to raise the tier1 electricity usage cap. My tier1 electricity usage cap is set at 850kwh (lowest in the state).
Most residential ratepayers exceed 850kwh about 12 days into the billing cycle. They’re exposed to the much higher tier2 electricity usage rates for the remainder of the billing period.
To uphold the spirit of HB1645, the GRU Authority should make it a priority to raise the tier1 cap to 1100kwh per billing cycle for all GRU residential customers. This would shield ratepayers from the full impact of fuel adjustment fluctuations and give them guaranteed rate relief.
Anyone think the city commissioners give a hoot about controlling GRU rates?
Mr. Carter needs to be reminded that his concern should be GRU and stabilization of the Utility. NOT the tax rate for the City of Gainesville or what the City Commission will do. His votes and decisions should be solely for GRU and its rate payers. He’s not a City Commissioner anymore and he needs to stop acting like one.
Wow, it’s like the old board, but they’re doing actual things.
Remember the clown (don’t recall his ‘name’) who indignantly proclaimed GRU was a highly rated utility with no downgrades (yes, liberals lie). https://alachuachronicle.com/wp-content/uploads/2024/05/downgrades.png
Not to mention the frequently stated (but never sourced) claim that GRU was downgraded after the authority took over.
In response to numerous and regular claims that GRU was bankrupt I have repeatedly stated the truth that it is not bankrupt and has an A credit rating.
I also mistakenly claimed that it’s rating was downgraded when the state GOP took it over and I was wrong about that and have since stated that fact in at least one other post.
It is true however – and this was the source of my confusion – that Moody’s warned at that time that caution should be exercised:
“Moody’s Investors Service, one of three major credit unions working with the city, wrote that the uncertainty surrounding the day-to-day operations and objectives of the new authority board can lead to credit implications. It particularly touched on concerns related to the autonomy of the board and its ability to govern the utility….”
https://www.gainesville.com/story/news/local/2023/05/19/moodys-warns-of-impact-for-gru-if-desantis-signs-controversial-bill/70235532007/
I have no problem admitting mistakes and this is not the 1st time nor will it probably be the last. As far as I can see I am probably the only regular commenter here willing to do that.
Some thoughts…
1. Ed noted that GRU might not have the resources to implement all the capital projects under way. Would consultants and other temporary implementation contractors fall under CAPEX, and were any included in those numbers?
2. “the ratings agencies will look at that negatively and potentially even at a risk of a downgrade for that change of governance, once again, occurring.” to the tune of $28M. That information must be part of the voters’ decision if the measure survives challenges and makes it to the ballot.
3. “add an opt-out program for customers who do not want the new AMI meters” – $40 a month? Are you kidding me? It would be a lot easier to just make customers who don’t want the AMI meters (myself included, they are a security risk and therefore a upstream risk to GRU for requiring them) self-report. Customer gets a reminder email; they are required to take a clear cell phone photo of their meter and respond within three days. You get the idea.
4. “Residential vs. commercial rates” — Good to debunk that “we’re not the most expensive” myth. Commercial rates get folded right into the prices that consumers pay, so it all comes out of our pocket.
As to #1: How many of the CAPEX projects are related to the city’s net zero idiocy and can any of them be abandoned?
It is good to see the long term mismanagement of the utility finally coming to light outside a city meeting environment where the presenters expected to be fired if they did not tow the commission’s party line.
And it will be good to learn more about the history of subsidizing city operating costs, such as IT, by sliding them them over to GRU. The city has been fleecing county rate payers through a lot more channels than just the GFT.
How much was that smart meter business??? Was that a one time cost and free maintenance? Why do have to put it on my house or pay he fine?
https://i.giphy.com/media/v1.Y2lkPTc5MGI3NjExY3JlMWNmYTQ1ajJ6eHY0NGZ4aTRxOXdqbzI2Z2hmdm41eXdvbjZkaCZlcD12MV9pbnRlcm5hbF9naWZfYnlfaWQmY3Q9Zw/6pJNYBYSMFod2/giphy.gif
The elephant in the room are the “Service Level Agreement (SLA) Losses. Coats found $9 million in past and future SLA Losses for IT ALONE!
Combined System Flow of Funds
FY25 Budget Composition
O&M Expense $155,565,061 35%
Debt Defeasance $29,708,166 7%
Fuels $96,622,493 21%
Utility Plant Improvement $45,359,758 10%
Government Services Contribution $15,305,224 3%
Total FY25 Budget $450,907,530 100%
*Does not include SLA Losses
Sec. 7.02 Definitions
(6)”Flow of Funds” means the sum of required debt service, necessary operations and management expenses, a resonable contribution to a utility plan improvement fund, identified SLA-related losses, and any other lawful purpose as provided in bond covenants.
(11) “Service-level Agreement” or “SLA” means a contract entered into by the Authority that establishes a set of deliverables that one party has agreed to provide another.
Sec. 7.09 Management and Personnel
(2) All officers and employees of the City who serve under the supervision and direction of the sitting general manager of GRU shall serve under the CEO/GM.
Why is there a project to expand gas distribution to Newberry? Helping FPL profit off the sale of fossil fuel doesn’t seem like it is in GRU or Gainesville interest. It. Would be better to increase the use of renewables.
As to GUR rate payers outside the city limits:
Today’s Gainesville Sun:
“In 2023, while HB-1645 was not yet passed, local groups including the Alachua County Labor Coalition had asked state lawmakers to give customers outside city limits the right to vote on GRU related matters, but they rejected the request.
“I want to reiterate that the ACLC and many other groups that have asked the city commission to put this on the ballot in November, the referendum over GRU governance, we had asked the legislature in 2023 to allow all GRU customers to vote on this and [Florida Rep. Chuck Clemons] said no,” said Bobby Mermer, coordinator of the ACLC. “This authority just voted to try to take away voting rights of residents of the City of Gainesville.”…”
Rep Hinson tried to add an amendment to the law allowing GRU rate payers outside of the city to change their provider and it was voted down on party lines – GOP opposed. Clearly the issue for those who wrote and passed this hostile takeover was power.
Jazzy, it seems your regime has been exposed with all the recent updates and charts showing just how inept and damaging the City Commission’s Bully Leadership over GRU resulted in a history making firing for financial ignorance or maybe just agenda driven debt burden of 4 times the average municipally owned utility. Does your business operate with a 31% debt burden? Hmm, help us understand your logic as to why you don’t want professional help for the feckless failed and fired leadership? And as for Hinson Clueless Rawls , county GRU customers do not own your pikes peak debt , the City of Gainesville Citizens do .
Captain, the present – or any – city commissioners are not my “regime”. I have never voted for any of them – I don’t live in the city, though I voted for my area to become part of the city as I don’t like duplication of services as a matter of economy and unification of governments when common interests (we mostly all work in or depend on Gainesville for our work) should rule, not petty grievances and fantasies of independence – I don’t know any of them, couldn’t pick 1/2 of them out of a line up, nor have I donated to any of their campaigns. I assure you my position on the city and it’s citizens making it’s own decisions – and paying the price for poor ones – not the state which is clearly motivated by partisan interests, would be the same if all the commissioners were Republicans (of course, in such a case, Clemons and his Tallahassee mob would not have taken over GRU).
As for Hinson, and as noted above: “….local groups including the Alachua County Labor Coalition had asked state lawmakers to give customers outside city limits the right to vote on GRU related matters, but they rejected the request.” Since this is the major legitimate complaint of GRU customers outside of the city (and as if they would have any say in the governance of Duke or FPL) it is notable that the “villains” in taking away their power was Clemons and the mob. Please reply to that fact, which should have you praising ACLC and Hinson. If anyone is ruled by personalities in this discussion, it’s you.
How do you allow all of GRU ratepayers to vote for this ballot item or the last one, regardless of whether or not they live within the City limits? Does only the person paying the bill get to vote or does everyone (of voting age) in their household get to vote? What about people who’s electric bill is included in their rent?
Logically those who lived in an address served by GRU – whether one or many, renters or owners, – just like in any election would be eligible to vote on those issues.
Since we would need to include people who live in the county, how does the SOE figure out who is or isn’t eligible to vote? Would people who get gas or water but not electric be allowed to vote? How many different ballots would the SOE, so that people who may be in the same district but aren’t GRU customers are excluded? Would this require a special election? How much would it cost? What is the advantage of turning GRU’s governing board back into a political board instead of a board of professionals?
Oh, so supporting, grieving, or what ever label you choose , the failed leadership of Gainesville has created the 31% debt burden no one can survive as well as Debt percentages 4 times the average utility, is not sustainable. I guess acceptance of any responsibility just does not register with the Gainesville group. They have shown they are irresponsible and clueless in the business world. Fortunately the new governance board will be cutting the GFT to zero. $00. If your group plays nice we make work out a payment arrangement on the
apparent $68 million dollar overdraft ,over time . That should help GRU’s financial condition , and Gainesville ,oh well. A lot of us tried to tell them they were going down the wrong path. Best of luck with the new budget, but don’t expect pity .
The local power structure, including the ACLC, had no interest in what was proposed at the legislature until they realized that HB-1645 had the votes to pass. Their consistent position regarding GRU has been to support having the city commission wielding full control of the utility.
The fact that they got a naive writer for what’s left of the mullet wrapper to parrot their revisionism doesn’t make it true.