Konish: Unsustainable hemorrhaging of GRU ratepayer funds continues

Letter to the editor

In the fifth month of the GRU Authority’s existence, Craig Carter and Tony Cunningham continue to protect the flow of GRU ratepayer money into coffers controlled by the Gainesville City Commission. This is clearly violative of Article VII of the City of Gainesville Charter, which legally binds both gentlemen. 

After monthly meetings with scanty agendas and minutes, actual discussion of the aforementioned hemorrhaging of GRU ratepayer money is about to commence. 

We first have seen a waste of infrequent meetings filibustered by GRU spoon-feeding of hundreds of slides. Their presentations regarding massive GRU debt show that it is roughly equal to GRU assets, less depreciation – $1.84 billion. Debt service on pre-2023 GRU debt will increase annually until 2028. GRU long-term debt will increase about $50 million in FY23. Audited FY23 financial statements are nowhere in sight.

Ominously, GRU has also revealed that 51.3% of its electric generating capacity at four (4) plants is slated for retirement by 12/2031, starting in 2028. With a claimed 13% equity stake in its assets after depreciation, which probably is exaggerated, GRU has neither the time nor the credit-worthiness to build any kind of new electric generating plant or plants. Gas would be preferable as fuel. 

The former, merely aspirational, disastrous, and ridiculous goal of 100% “renewable” GRU energy by 2045 appears to have been abandoned, along with the Net Zero emissions goal. 

GRU currently lacks adequate firm transmission line availability to purchase the power it will need in 2028 and beyond. GRU is required to be able to meet its peak local load without its massive early 1970s DH2 coal plants at all times. GRU also faces escalating wheeling changes for transmission of electricity through 2028, which are not negotiable. Solar of any kind cannot fill the void alone because the summer peak load occurs between 6 and 8 p.m., when the sun is setting.

Nonetheless, to date, the only GRU payment to the City of Gainesville that has allegedly changed, effective 10/1/23, is an annual fee of $212,750 formerly paid to the Gainesville City Commission as a body to mismanage and plunder our regional GRU, since Jan. 2000. City Commissioners doubled their salaries, ate catered meals, and traveled the globe as if they were world leaders, and GRU ratepayers covered 50% of commissioner salaries.

An FY24 GRU Budget noncompliant with HB1645 (City Charter Article VII) in numerous and substantial regards has been belatedly and merely tweaked by $180,000 per month – as of 2/1/24. This insignificant reduction in GRU transfers to the City of Gainesville cannot be verified. 

The cumulative total of the annual direct $15.3 million transfer and companion indirect transfers is said to be unknown. This is despite an express HB1645 cap on any such transfer. The “indirect transfers” likely dwarf the “direct transfer” of $15.3 million dollars annually. GRU CEO/GM concealment of a massive and ongoing underpayment by the City Commission for GRU IT services has rendered GRU financial statements materially inaccurate. The backup to the Feb. 7, 2024 agenda suggests there is much more. 

Similarly, it appears that county streetlights are not being fully paid for by either the City of Gainesville or Alachua County, to the tune of more than $1.1 million annually. 

Our disgraced and replaced City Attorney Nee remains fully funded in a variety of ways, the total of which is unclear. No promised recovery of $250,000 for the Nee/Akerman challenge to HB1645 has occurred or has been taken. Around 40% of the City Budget flows through GRU. 

Of 41 stated GRU “Financial Associations” (there are more) with the City of Gainesville and other governments, only five (5) “Service Level Agreements (SLA)” are acknowledged. An unitemized array of Memoranda of Understanding (MOU) are said to exist regarding the other “financial associations,” and otherwise there is no agreement whatsoever. Money is exchanged between GRU and the City of Gainesville through an “interfund process” daily.

GRU gets no reimbursement for administering, collecting, or transferring pyramided utility tax revenues to the City of Gainesville, Alachua County, and others. Utility tax transferred by GRU on bad debts is not recovered by GRU for seven (7) years, when such debts are written off. The City of Gainesville does not pay GRU for all GRUCom services delivered despite the fact that GRUCom is said to be losing money, reportedly $218,000 annually. 

The Authority has had to retain private independent legal counsel for at least $200,000 annually. City Attorney Nee and an associate continue to loom at the meetings, fully conflicted and funded by GRU ratepayers. Nee disagrees with nearly every opinion Mr. Walker offers.

The ultimate source within the five (5) GRU revenue streams for the $15.3 million-dollar direct annual transfer is in the sole discretion of a GRU CEO/GM who was stripped of all power except for GRU HR as of 7/1/23. Only the authorization to handle GRU liquidity facilities has been redelegated to the GRU CEO/GM so far. His resignation has been requested by elected state representatives, and he is likely under ongoing state investigation and audit. Ultra vires acts are a daily ritual for the grandfathered, interim GRU CEO/GM.

GRU continues to pay for a “shared” state lobbyist at odds with the Authority’s very legal existence for years. GRU lacks a credible financial equity position and will see its claimed “Net Position” immediately go negative with the imminent retirement of and absorption of decommissioning costs associated with its four (4) worn out, uneconomic electric generating plants, starting in 2028. There is talk of operating our coal plant until 2040. This would leave us wholly dependent on coal and whole trees, plus the Solar PPA, when it comes online.

Nonetheless, GRU will continue to fund the over-paid City Charter “equity officer,” expressly prohibited by HB1645, until well past 10/1/23.

The abysmal failure of our appointed Authority to date to get the total transfer ascertained, much less limited, presents a grave threat to GRU’s continued financial viability. There currently is no independent GRU Auditor. Craig Carter has played a key role in delaying and preventing the orderly implementation of HB1645. Mr. Carter has prevented discussions of a meaningful reduction in the transfer and other watershed matters. He falsely claimed that the City Commission can hurt ratepayers by charging prohibited franchise and permit fees for use of City Rights-of-Way. He is worried about City Commission behavior that would get the Mayor and Commissioners thrown out of office. GRU ratepayers are accordingly badly harmed. Carter’s claims are as false legally as they are ridiculous. The magnitude of threatened City Right-of-Way fees is dwarfed by the GRU transfer – direct and indirect. Franchise free use of City and County Right-of-Way is shown as an asset on the GRU balance sheet in the amount of $758,738. 

GRU inefficiently and regressively ties garbage and stormwater fees to all electric meters in the City of Gainesville. The city paid 1/3 of a million dollars to a consultant in 2018 who found one million dollars of City stormwater fees never billed by GRU. These same fees are collected by the Alachua County Tax Collector on the property tax bill.

This practice puts the bundled GRU bills further out of the reach of low-income GRU ratepayers. Landlords are the only beneficiary of this policy by offloading their stormwater management costs onto their tenants – along with solid waste fees. These same fees are collected by Alachua County on the property tax bill. 

Jim Konish, Gainesville

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