“If we’re going to do this every 2 weeks, why don’t we just tell the Governor’s office we’re gonna pause until we get our 5th member?”: GRU Authority again votes down proposal to withhold General Services Contribution to City
BY JENNIFER CABRERA
GAINESVILLE, Fla. – At the February 7 GRU Authority meeting, the board voted to change the amounts they bill to the City in three areas starting October 1, and a motion to withhold the General Services Contribution failed, 2-2, for the second meeting in a row.
Is GRU “two years in arrears” to the City?
Chair Craig Carter led off the meeting with a new agenda item, “Chair Comments,” which he said he inserted to “clear things up that might have been said in between meetings, sort of address a few elephants in the room, and try to start the meeting off with some information.”
Carter said that at the January 17 meeting, Member Eric Lawson “did an excellent job on the assumption of the question of arrears. He spelled it out. And, like I did, he looked at the balance sheets.” At that meeting, Lawson said the assertion by the City that GRU is paying for services provided two years ago is “simply a methodology for how they calculate the annual allocation. They look back two years; they say, ‘This is what our cost was two years ago, that’s what we’re going to allocate,’ and it’s a rolling process. What we pay for today are the services we get today. They just based it on two years ago as actuals.”
During public comment at the same meeting, City Manager Cynthia Curry said, “Mr. Lawson, you explain the two-year arrears issue very well. We use audited statements to do that, last audited statement we have was ’22. And so of course we’re in arrears in that respect.”
City of Gainesville says GRU “stopped paying… for services the utility received in fiscal year 2022”
Alachua Chronicle asked the City for clarification on the issue after the City issued a press release that said GRU “stopped paying the City of Gainesville for services the utility received in fiscal year 2022.” Public Information Officer Rossana Passaniti responded, “When addressing the GRU Authority Board, the City Manager affirmed Mr. Lawson’s correct assertion that the ‘two years in arrears’ budget methodology relied on a complete financial audit from fiscal year 2022. The City Manager did not affirm the second part of his statement. The City’s position is that the fiscal year 2024 budget agreed upon by the City and GRU established the fiscal year 2022 cost allocations as reimbursement for services provided two years previously.”
Passaniti pointed to a statement from GRU CEO/GM Tony Cunningham earlier in the meeting to support the City’s position. Cunningham said, “There is an issue associated with this that is, I think, a controversial part of it—and that piece is, in discussions with General Government last year and the charters, there was this discussion of ‘are we paying in arrears.’ Are we paying for years gone by or are we paying currently where we are now? From my perspective, there was consternation around that, that we’re paying for services rendered two years ago. My perspective is, that was a discussion then, we are in a new reality now, and so my recommendation is in this new reality we’re not getting those services this year, so we should not be paying for them this year.” Cunningham concluded, “There are different perspectives on that that are very real perspectives. But I wanted to give you my perspective.”
Carter: “I think there’s a misunderstanding here”
During the “Chair Comments” agenda item of Wednesday’s meeting, Carter said that he and Cunningham had met with the Charter Officers and the Mayor, “and we explained to them that we’re going to go back to our staff and see if we can find evidence of ‘two years in arrears.'” Carter said there’s no information in the GRU or General Government budgets indicating that the payment is two years in arrears. He added, “I don’t think the City Manager is trying to do anything deceitful, by any means, but I think there’s a misunderstanding here… And now we’re sort of being pointed at for being the bad people.”
Carter also said the City Commission should have stopped the payments from GRU that are designated for City Commission services as of October 1, 2023, “because they’re no longer in charge of GRU, and approximately 50% of their pay comes from us – $225,000. And we quit paying that on February 1, but the duties actually stopped on October 1.”
Carter added that the City has been paying GRU about $1.4 million per year for IT services, when the “true number is about $5.8 million.” The City has agreed to pay $2.9 million this year, and negotiations for next year’s budget are ongoing. Carter added, “Also, from 2018 to 2021, approximately, the City of Gainesville approximately took $68 million more than this utility made. So when you see us trying to get a few bucks back here and there, we’re not trying to hurt anybody. We’re just trying to figure out where we’re at, get our line in the sand, and let’s run this utility as a business forward.”
IT services, network connectivity services, ConnectFree, streetlights
Cunningham reminded the board that they had previously agreed to stop paying the City about $181,000 per month, starting this month, for services that the City is no longer providing to GRU. That will result in a savings of about $1.4 million in this fiscal year.
Cunningham said there are other categories that he and his staff have been reviewing, and the biggest one is for IT services. He recommended offering the full services to the City for $5.8 million and offering reduced services for $2.9 million, but he said both options run the risk of losing all of the revenue, which helps cover GRU’s fixed costs, if the City decides to purchase services elsewhere.
GRU also provides network connectivity services to the City through GRUCom, and Cunningham said GRU has charged for many of those systems, but not all of them. Cunningham recommending charging each City department for the networking services provided.
Cunningham recommended that GRU stop collecting surcharges on connection fees for new connections outside the city limits, a program known as ConnectFree; he said those fees go to the City, so there would be no financial impact to GRU, and he said it’s a charge that GRU’s customers and future customers have to pay that doesn’t provide a financial benefit to the utility or its customers.
Cunningham also explained that the City pays GRU for its streetlights, but due to an agreement from many years ago, the City also agreed to pay for streetlights in the county; however, the City Commission decided last fall that GRU should absorb that cost. Cunningham recommended that GRU reduce the General Services Contribution (GSC) by that amount, which is about $1.1 million.
Carter said he didn’t want to stop paying for the County’s streetlights and then start getting bills from the County for using their right-of-way, “so I’m gonna need more education on that, personally.”
Cunningham said the City would still be paying for the streetlights, but GRU would deduct the amount from the GSC instead of absorbing the cost. Member Eric Lawson speculated that the City could stop paying for the streetlights and GRU could end up having to pay the County for using their right-of-way.
GRU Attorney Scott Walker said, “I think that will be the wisest course, is to get more information on this and find out.”
Cunningham recommended implementing all the Phase 2 actions, shown in the slide above, for Fiscal Year 2025 (starting October 1, 2024).
Regarding the $1.4 million the board previously voted to stop paying to the City, Carter said he’d had conversations with the City Manager and the Mayor, and “if we owe the money, I want to pay the money because I don’t want to be a deadbeat in any way. But I need proof… Show us proof and bring it to the board.”
Lawson said they were “piecemealing” the payments that go between GRU and the City, “and without having the full picture… this could come back on us if we end up having to go out and purchase some of these services at a much higher rate.”
Cunningham said he recommended continuing to pay for all the other services (the ones that are not on the Phase 2 list), then evaluate them over the next year for Fiscal Year 2026.
Lawson said the City could, for example, decide not to provide fleet management services anymore; Carter said if that happened, the Authority could go to the legislature and say that the City is “now impeding the service of the utility.”
Motion to move forward with all except streetlights
Member Robert Karow made a motion to move forward with the recommended changes for IT services, network connectivity, and connection charges, but not streetlights, beginning October 1, 2024. Member James Coats seconded the motion. The motion passed unanimously.
Coats recommends putting the GSC in escrow
The next item was placed on the agenda at the request of Coats; he said he understood that some members of the board weren’t ready to eliminate the GSC, but “what we have is a patient that is bleeding out,” so he proposed putting that money in escrow, which “gives us a vehicle that allows us to put a tourniquet on while everyone involved has an opportunity to look at the situation and create a true solution. It might be that a fifth member cancels out the general fund transfer two weeks from now–we don’t know that. Every month that goes by costs the ratepayers and adds $1.3 million–it’s horrible.”
Karow said he understood what Coats was trying to do, but he didn’t think they could “give money to the City” under the law that created the Authority because it’s not “in the pecuniary interest of the utility.”
Karow said that after he made a motion in the previous meeting to eliminate the GSC, he received a chart showing that GRU had paid $472 million to the City in general transfers since 2011, “and we’re staring into the abyss here.” There was some discussion about when the general fund transfer began, and the answer was that it started around 1984; GRU was founded in 1912.
Karow: “I don’t see how we can ever reach the threshold where we have extra money to give to the City.”
Karow said, “When we are staring into the abyss and $1.84 billion in debt that was caused, essentially, by the City, at least a large part of it, I don’t see how we can ever reach the threshold where we have extra money to give to the City.” He added that he didn’t think putting the funds into an escrow account would help the ratepayers or GRU’s debt service.
Motion to “withhold the entirety of the GSC”
Karow made a motion to “withhold the entirety of the GSC,” and Coats seconded the motion.
“From my perspective, we should plan these things out. If we want to address the formula and come up with a different methodology, I’m okay with that.” – Member Eric Lawson
Lawson said the Joint Legislative Audit Committee had instructed the City to develop a formula for the GSC, and “they did do that… And so we do have a formulaic approach… From my perspective, we should plan these things out. If we want to address the formula and come up with a different methodology, I’m okay with that.” He said every municipally-owned utility has a GSC, “and so, if we were to eliminate it, it appears to me we would be an outlier… I feel like, making a change midstream–I’m not in favor of the motion.”
“If history tells me anything, [the City Commission will] just put it on the people… My position hasn’t changed from two weeks ago; I think it’s a bad business decision.” – Chair Craig Carter
Carter said, “We’re told not to make it political… If we cancel this transfer, the only recourse the City Commission has is on the citizens itself, typically through property taxes. Your response was, ‘Let that be their burden, let that fall onto them, because the constituents will speak.’ But the fact of the matter is, they don’t care. They really don’t. If history tells me anything, they’ll just put it on the people… My position hasn’t changed from two weeks ago; I think it’s a bad business decision.”
Carter said that if Karow and Coats are going to keep making this motion until there’s a fifth member that will vote one way or the other, “this board’s not gonna get anything done… I think it’s a bad business move. I think it’s going to be punitive to the residents of the city of Gainesville, only… Is there opportunity to claw it back? Yes. I’ve already said it… But let’s do it in a very deliberate, business-like move. Let’s not do it because we were prodded to do it, let’s not do it because it sounds sexy… Nobody’s come up with a business reason to do it, so I’m not going to support it.”
“I think the business reason is to save money. And we need money.” – Member Robert Karow
Karow responded, “I think the business reason is to save money. And we need money.” He said he was uncomfortable with the previous decision to meet with the City Commission because “we have specific limitations on how we should spend money. And so, if I go sit down with the City, I’m saying, ‘I, by law, cannot give that money for those purposes, but I’m willing to give it to a surrogate to do that for me.’ And I’m uncomfortable with it.”
Carter said, “So we need to look at our gas suppliers, everybody else, to see what they do with their money, because we shouldn’t give it to them, either, under that premise.”
Karow said, “That’s being spent to further the interests of the utility, I would argue.”
“I called the Governor’s office, asked them, ‘Am I doing what you want? I mean, is this why you put me in office?’ They said, ‘Yeah.’ I called the guy that recommended me for this job. I said, ‘Am I doing what you wanted? Is this why you recommended me?’ He said, ‘Yeah.’ So I’m at peace with that.” – Chair Craig Carter
Carter responded, “I respectfully disagree with you. I don’t do business that way. I called the Governor’s office, asked them, ‘Am I doing what you want? I mean, is this why you put me in office?’ They said, ‘Yeah.’ I called the guy that recommended me for this job. I said, ‘Am I doing what you wanted? Is this why you recommended me?’ He said, ‘Yeah.’ So I’m at peace with that… If we’re going to do this every two weeks, why don’t we just tell the Governor’s office we’re gonna pause until we get our fifth member?”
Karow’s motion failed, 2-2, with Karow and Coats in favor.
Why is there still a vacancy on the GRU Authority? And won’t there be even more vacancies when those who don’t live in the city are removed?
It’s infuriating.
This is all politics while ratepayers suffer. Sad.
The ratepayers have been suffering for a long time already. The transfer of GRU profits to the city of Gainesville has always been a hidden tax. At least two members are merely trying to uncloak it. Good for them.
Joe while I agree the intent of the Bill writers was to have the majority of the members from the city, there are legitimate questions as to whether the actual law exactly requires that.
It does require that unless those who are served by GRU but not citizens of Gainesville increase to a certain number, and they have not. The law is simple.
A minimum of one outside the city… reread the law!
You’re wrong and I already corrected you on this quoting chapter and verse and the law. Look up the law and try to prove to us you are not wrong. You will fail.
There 4 vacancies on the 5 member Authority, since only one of them meets the very clear and unarguable residency requirements. The “elephant in the room” is the fact that those 3 are pretending to be what they are not and by definition have no authority to do anything but get up during citizen comments time and state their opinion.
A judge will eventually throw out everything they have claimed to have done for this reason, or we are no longer a state with rules. We have already been stripped of the pretense of being a democracy since the state took governance of GRU away from those who own it, the citizens of Gainesville.
If we own it, the Mayor and City Commission should be charged and convicted of robbery.
I haven’t had a say, and I seriously doubt anyone else has, about the funds being taken from GRU to fund their pet projects.
These knuckleheads run companies? I don’t recall what each has done but I can’t imagine they ever accomplished anything on their own.
Just further proof that dysfunction still rules the day in Gainesville.
Two of the four are RINOS. Period.
We all know this was a partisan take over by the state GOP led by 2 GOP politician traitors to Gainesville, but I’m pretty sure they didn’t explicitly make that part of the law. But good get to recognize the true purpose of the action.
Yeah, and so what?
Just that nature of our country these days. We’re just now starting to play your game.
And the failed City of Gainesville Commissions did not single handedly cause the demise of GRU finances?
“Carter said, “We’re told not to make it political… If we cancel this transfer, the only recourse the City Commission has is on the citizens itself, typically through property taxes. Your response was, ‘Let that be their burden, let that fall onto them, because the constituents will speak.’ But the fact of the matter is, they don’t care. They really don’t. If history tells me anything, they’ll just put it on the people…”
Then the citizens can either continue to vote for these policies and commissioners or not – but hiding the true costs of what city government is costing b/c of these transfers is not transparent to citizens. This is messy accounting that is going on right now imo.
I do applaud Mr. Cunningham for continuing to bring line items to the meetings to help clean up some of this accounting / transfer mess. Save $ and don’t bother with the search, he’s doing good things.
Don’t worry, they’ll raise the taxes. Ward enjoys things up his rear end so much he thinks everyone else should give it a try.
Speaking of constituents, it’s not that they don’t care, they’re just stupid. Gainesville voters are an ignorant, uneducated and gullible group of idiots. I often wonder how they’re able to walk and breathe at the same time.
Doing good things? Such as continuing a charade of an Integrated Resource Plan (IRP) which would cost almost $4 Billion to implement. Using phoney-baloney numbers in the analysis (not looking at the savings of eliminating tens of millions of dollars in fixed costs of operating power plants by expanding transmission line access). No, these are not good things.
I agree Ed. The summer peak is between 6 and 8 PM when the solar output is always dropping.
What will GRU have to do to show a positive “Net Position” after retiring plants and incurring decommissioning costs?
The process is way beyond the current process as being laid out in the Authority meetings.
The “net positive” position need to come from reliable and on demand fossil (multiple) fuel generation along with the expansion of the transmission system to take advantage of the market. Cost efficient generation and the ability to take advantage of both sides of the market buying and selling of power will put GRU back in position to being profitable.
This board has been in office 4 (that’s FOUR) months – and has done NOTHING of significance. Meanwhile our rates are high.
Something (a strategy) has to be going on behind the scenes in Tallahassee. When I saw the names of those who submitted an application to be on the board – there were some all stars on there…. And somehow, we ended up with this group??
And not putting forth the 5th name even after having a great list to pick from..? Makes no sense.
Last thing – The Chair is coming across as a dictator with an attitude.. he’s not more important than the other 3 members. Tone it down.
Something more is going on….
The debt is too high to do anything of consequence and ultimately this game is only going to make things worse.
Oh I agree. BUT freaking do SOMETHING to show the status quo is unacceptable.
These people seem to like to twiddle their thumbs while watching presentations – meeting after meeting after meeting.
Well said Marvin.
This is a great local example of how all politics truly work. The regular man be damned.
More people better wake up – and fast
I feel he has a huge political interest!
As CEO of that huge hospital just within the city limits, Mr Lawson will not support any measures that may knock his bottom line or other related corporate interest…his corporation uses a hell of a lot of utilities for one.
How would that look to the corporate bobble heads at HCA, his Nashville-based employer, if he was the deciding vote that cost his hospital to pay more since it’s within the city limits? Conflict of interest anyone?
Let’s also not forget the current corporate obsession (or obligation?) with funding, promoting, and progressing the degenerative culture that got the city into this predicament to begin with. I’m sure HCA and Mr Lawson are completely uninterested in ‘defunding’ the insanity of the local government.
He was a political appointee to the utility board… and apparently politics is what we get!
Having a 5th member on the board may NOT solve anything if the new member is just as AFRAID – as some on the board – of the city commission RETALIATING against the GRU Authority for doing their job by threatening to raise City Permitting Fees – like Building Permits etc.
Agree…someone else with a sack but no conflicts is badly needed.
The two stone wallers on the board now are not adhering to their obligation to only address fiscal and operational items that are related to GRU.
Carter planted the retaliatory fees/taxes increase as a CYA – he knows there isn’t much meat on that bone…he’s dancing around and using that excuse under the guise of a possible fiduciary issue.
The human robot, known as Mr Lawson, will continue to block any progress and just run the clock out on Mr Karow’s short 1 yr term. Karow seems intent on doing his job and that isn’t okay with Carter and Lawson.
Exactly. Carter is the same RINO he was as a City Commissioner. He and Larson block the other two from acting in the best interest of GRU customers because Carter is beholden to his City of Gainesville masters.
Why doesn’t one of the citizen activists sign up? Some of them even ran for city commission before… 🧐🤔
It really shouldn’t be that difficult, it’s like weaning a child.
Maybe that’s the problem, some children are more difficult to wean than others and seeing as how Ward & Co have been suckling for so long – it’s even more difficult. It really is sad that some voters enjoy having sore teats more than others.
Neither the City nor County can impose franchise fees on GRU use of existing Rights-of-Way due to the “Privilege Fee” case. The direct and yet-to-be ascertained indirect transfer may exceed the Cap imposed by Section 7.11 of our Charter. Without any realistic way to fund future electric generating needs, GRU faces further debt downgrades while two Authority members protect an unsustainable hemorrhaging of GRU ratepayer funds into City of Gainesville coffers. Shame on them.
Those who are aware of the massive debt and the continued abuse of the GSC transfers over the years are understandably impatient for results. However, decisions made in haste and frustration, while changing the status quo, don’t necessarily improve the situation, and may very well make things even worse.
The details matter, they are complicated, and they take some time to understand, time to correctly diagnose the underlying problems, and time to solve those problems.
These board members have a very difficult job, with lots of public scrutiny (which is a good thing). I think they need to move things forward deliberately, carefully, and with lots of discussion and advice so they don’t make the situation worse.
This GRU problem won’t be resolved quickly, no matter how much we may demand a speedy solution.
We’ve got spaghetti accounting going on between 2 entities that has to be fixed first imo, otherwise just declare default and beg for a bailout. The dollar amount of debt is too high that nibbling around the margins, tho’ appreciated, will mean much the way I see it. Happy to be corrected though for another option out of this.
Well when you have a severed artery are you going to continue to let it squirt blood or are you going to tie a tourniquet and stop the bleeding first then analyze the situation? Just saying stop the bleeding first then if need be later after healing has begun.
Return and begin fixing.
Very well said.
And people thought Palm Beach County was expensive. Gainesville is about to break that title, raise property taxes again and your utility bill.
Remember, there is a local election in November. You CAN make a change if you just get involved.
That, or roll over and pay those high bills.
@Bradford Bumpkin – Or, we can move out of the city of Gainesville or even Alachua County altogether. That option is becoming more appealing as I keep reading about these meetings. Sounds like the taxpayers/ratepayers are being screwed again. I’m sure I’m not the only property owner who is over this.
If I ever need to visit a local dermatologist, it sure won’t be that woman who was too stupid to read the qualifications before nominating herself to the board.
It’s not her fault.
The whole selection process has either been purposefully bungled or we have incompetent politicians in charge. I’m 50/50 at this point.
Agree 100% it’s not her fault. It’s also not her fault that we’re in month 5 of her departing and the slot still not being filled.
Who’s responsible for appointing 5th member? If it’s our failed, wanna be President governor, then it’s a problem. He could care less at this point. He contributed to the confusion and has already moved on.
The governor should remove Carter and Lawson while he’s appointing a fifth member. Carter is too soft to make tough decisions – like the weak Captain Kirk when the transporter split him into two halves – and Lawson’s hospital needs all the attention he can give it due to apparent mismanagement for a long time and actual lives on the line. He should probably just resign, of course.
Having read this, I wondered what the heck all that talk meant. Having slept on all that, I concluded that they don’t know either. Maybe they are overthinking this…..
They need to focus solely on keeping GRU in biz, not the city politicians and their undemocratic agendas.
I’m just waiting for the Chair to lose his cool and publicly say “just so you in the community know, we’re not getting paid for our time.”
We all know – as did you when YOU submitted an application to be on the board. That’s not an excuse.
Also, what is this talk about going to get coffee? He can’t have coffee with the board due to Sunshine Laws. I hope this is a figure of speech.