“I feel uncomfortable making this decision”: Gainesville City Commission approves electric and wastewater rate increases

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At a Gainesville City Commission Special Meeting on August 9, the commission confirmed rate increases for electricity and wastewater that were set by the previous commission in a 2021 resolution.

The increases are part of the Gainesville Regional Utilities (GRU) budget that was first presented to the commission on May 15; the budget cuts the transfer of funds from GRU to the City’s General Fund by about $17 million for FY24 (on top of the $2 million per year reduction set in the 2021 resolution) and is part of a 10-year plan to reduce GRU’s debt by about $315 million (30%). GRU staff recommended that the City Commission approve a 3% increase in electric rates and a 5% increase in wastewater rates, the amounts that were set for every year through 2027 in the 2021 resolution. The reason the electric bills shown below don’t reflect the full 3% increase is that the fuel surcharge has come down from 8 cents to 5 cents since last October. 

GRU showed a comparison of the total utility bills for October 2022 and October 2023 on the overhead, including solid waste (trash pick-up) and stormwater; they are unfortunately hard to read but show an overall decrease of about $24 from last October’s bills, mainly due to decreases in fuel adjustment surcharges (the October 2023 bills, however, will be higher than current bills, which already reflect the decrease in the fuel surcharge).

Is there a possibility that stormwater and solid waste fees could be moved to property tax bills?

Commissioner Ed Book asked whether there was any expectation that solid waste and stormwater might be removed from the monthly utility bills in the future; there have been discussions about moving those charges to property tax bills over the years. Mark Benton, GRU Director of Accounting & Finance, said that they were not making that recommendation: “It’s not a simple process; it’s been evaluated in the past.”

GRU General Manager Tony Cunningham said the advantages of having those charges on the utility bill are that “it’s efficient, it optimizes the ability to bill as opposed to setting up a whole ‘nother billing system… We’re able to collect those and pass those through to the different entities. So there’s an efficiency and optimization there.” He said the cons of the system include bigger numbers at the bottom of the bill “and [customers] think, ‘Wow, okay, look at my GRU bill,’ and there’s actually more things than that on there.” Cunningham said if the city commission decided to make that change, it would take a long time to implement. 

Mayor Harvey Ward pointed out that the bill shown above is for a city resident; solid waste and stormwater are on county residents’ property tax bills. 

Fuel adjustment surcharges are evaluated monthly

Commissioner Cynthia Chestnut asked whether the reduction in the fuel adjustment surcharge was ending, and Benton said GRU looks at it every month. He said they have eliminated the negative fuel levelization balance and that it would “not be a surprise” if the surcharge went down again in the near future. 

Can the new GRU Authority change the rates?

Commissioner Desmon Duncan-Walker asked whether the GRU Authority (which will be seated October 4) could change the rates, and City Attorney Daniel Nee said the Authority will have the power to “establish and amend the rates, fees, assessments, charges, rules, regulations, and policies governing the sale and use of services provided through the utility.” He said the City is “trying to get straightened out the mechanics of how an appointed board can do that, exercise those legislative powers of a municipality, despite not being elected.”

Although fuel adjustment surcharges change electric and gas bills frequently during the year and there is no statutory limit to how often the City Commission can change utility rates, Commissioner Casey Willits was concerned that the new Authority might change electric rates more than once a year: “It sounds crazy… And obviously, as expressed by most of us up here, definitely by me, it is definitely crazy that the people who could potentially make that decision later in the year have never received a vote, at least for that position, have never received a vote from a single voter in the city of Gainesville.”

“We have made a number of very bold moves here at the City of Gainesville”

Commissioner Bryan Eastman said he was “nervous” about voting for the rate increases, “just based on kind of where we are. I feel like we have been told in no uncertain terms by the legislature that the governor will be in ownership and control, full oversight of our utilities going forward… We have made a number of very bold moves here at the City of Gainesville; we’ve cut $19 million from our budget in order to ensure that we are complying with a bold move of $315 million in deficit reduction.”

The proposed FY24 budget does cut about $19 million from the transfer from GRU to General Government, but a proposed property tax increase will increase revenue by over $15 million dollars, replenishing all but about $4 million of that; the combination of reducing 86 City positions (most but not all unfilled) and providing raises to the remaining employees (including raises that are part of union contracts and cannot be modified by the City Commission) has resulted in an overall General Government budget that was only cut by about $327,000. The $315 million proposed reduction Eastman mentions is in GRU’s debt (not deficit) and is expected to take 10 years. 

Eastman also said, “I’m really proud of the work we have done… We have cut GRU bills by a significant amount,” but the City Commission has not voted on GRU rates since he has been on the board. The bill reductions since April have been due to fuel adjustment surcharge reductions, which are implemented at the direction of the GRU General Manager. The City Commission receives reports of these reductions but does not vote on them or provide direction on them.

Eastman continued, “I wouldn’t want one of the last actions that the people take as direct overseers of GRU through us to be, you know, raising up GRU rates… I think that this is a decision that Governor Ron DeSantis and his political appointees can determine when they come in… I feel uncomfortable making this decision, considering where we are.”

Cunningham said staff was asking the commission to approve the overall budget and the plan for the utility and that the recommendation was for the commission to adopt the budget and the associated rate and fee increases “so that we can continue to provide reliable electricity, water, wastewater, natural gas, and telecommunication services to our customers.” He added that GRU can’t stay on the path of its Debt Reduction Plan unless the rate increases are approved. 

“A greater commitment to reliable service than the people who drafted the bill”

Willits said to Cunningham, “It sounds like you and your staff and GRU possibly have a greater commitment to reliable service than the people who drafted the bill that leaves us in a position that we’re dealing with in interesting ways… I’m a little–I don’t know if the word is worried or disturbed–that we are asked to raise rates. And then on October 4, the new Authority can change how those revenues are then spent… I guarantee you, if we raise the rates now… [the Authority is] gonna decide how it’s spent; no matter what it gets spent on, whether they decide they’re not going to pay off the debt… I guarantee you they will take all credit for those whatever-it-is decisions… So it’s very convenient for them.” Willits speculated that the Authority might decide, for example, to build a “bright, shiny, maybe they build us another Depot Park.”

Chestnut said they “have quite a conundrum here” because they have been charged by the Joint Legislative Audit Committee “to address our debt and address it responsibly… We cannot have the debt reduction unless we stick to this plan for 10 years. If the incoming Authority wants to disrupt all that… that’s going to fall on them.” She said the City Commission can best protect their citizens by staying on track with reducing the debt: “I have never supported rate increases since I’ve been on this board. But I must this time for the sake of the citizens, and I must in order to protect our system.”

“I choose to believe that the new Authority will abide by the Debt Reduction Plan”

Ward said, “It’s never easy or simple to vote for a rate increase… I do want to reiterate–this is the recommendation of our professional staff… I choose to believe that the new Authority will abide by the Debt Reduction Plan.”

Eastman said, “It just feels like we are between a rock and a hard place of trying to figure out–how do we govern a City that is soon to be taken half away and given to the governor of the state, and how do we ensure that our residents are taken care of, and how do we ensure that we are representing our constituents?… So it’s a hard pill to swallow.”

Chestnut made a motion to approve staff’s recommendation for a 3% increase in electric rates, a 5% increase in wastewater rates, and increases in connection charges and outdoor lighting fees. Book seconded the motion, adding, “I don’t like it one bit.”

The motion passed 6-1, with Duncan-Walker in dissent.