GRU, Gainesville City Commission work to find way out of debt issues
Gainesville Regional Utilities has been the topic of conversation on the local and state levels in recent months, with state Rep. Chuck Clemons this week filing a bill that would change who controls the utility.
Ahead of such a drastic possible change, Gainesville Mayor Harvey Ward and city commissioners came together on Thursday to discuss a new formula to help reduce the debt that GRU carries.
GRU General Manager Tony Cunningham opened the meeting by stating that he and other utility officials had worked closely with Gainesville’s city manager, Cynthia Curry, to develop a method and formula to address the debt issues.
“We have all been aware of the debt that GRU has and it being significantly more than other utilities of significant size and we have had a plan of addressing that debt,” Cunningham said.
There were two major findings that the state auditor found in a January 2022 audit that zeroed in on the debt load and recommended a formula to reduce it.
“What we have today is establishing a strong recommendation jointly, of both of those items,” Cunningham said.
In the presentation, city Risk Management Director Steve Varvel shared a formula that would help reduce the amount of debt that GRU carries over the next 10 years.
The formula includes the amount that the city levies in property taxes in addition to the franchise fee that the utility charges, according to the presentation.
There was an emphasis on the methodology behind the formula and an explanation as to why this formula was created in this way.
“We focused on an input methodology, not an outcome-based formula,” Varvel said.
City commissioners used often the word "bold" during the meeting, specifically the importance of being bold in making this decision.
“We would not be having the conversation as we are having it, we would probably have a more nuanced, less time-driven discussion about this if we had not been directly tasked by the Joint Legislative Audit Committee with finding a formula,” Ward said. “Period. I mean that is a reality.”
The commission unanimously approved a to adopt the recommended formula methodology as well as the 10-year period to reach a more healthy debt level. The commission also approved a motion to revisit the formula once that level is reached.
Ward said the state auditing committee wanted to see a bold sense of direction from the city commission in regard to GRU.
“That is the case,” Ward said. "This is bold, this is a big deal, this is going to be hard to figure out. This is not the last meeting that is going to be painful. We are going to have a series of workshops and votes for both the utility budget and the general government budget and they’re going to be uncomfortable. They’re going to be complicated and complex.”
Ward encouraged the community to continue to ask questions of the Gainesville commissioners and JLAC during this process.
“I do want to contextualize in the midst of that, we are still operating the city of Gainesville,” Cunningham said.
He reassured that the upcoming budget and strategic planning processes would not take away from the daily tasks of operating Gainesville.
“Because of where we are today with JLAC, we really do need to address the financial services in a lot more detail and the impact on services,” Curry said.