The Gainesville Regional Utilities Authority board postponed a decision Wednesday on whether its government services contribution fund would be cut in half or eliminated altogether.
"I don't have all the information," said board chair Craig Carter, who said he was worried that picking a side at the Wednesday meeting would represent a reckless approach to the situation.
The meeting took place at the GRU Administration Building, 301 SE Fourth Ave., at 5:30 p.m. The agenda item on the government services contribution fund sought solutions to reduce GRU’S $1.8 billion debt and stabilize rates.
Among the topics on the agenda were the selling of unused property in the Power District, reduction of city services and cuts or the elimination of Government Services Contribution.
The government services contribution, previously called the General Fund Transfer, refers to money from GRU customers that is reinvested into the city’s general budget each year. The money funds other public initiatives in town, including nonprofits, fire and police departments.
According to an update released by City Manager Cynthia Curry on Jan. 17, the government services contribution transfer from GRU in 2023, about $34 million, represented almost 25% of the city’s general budget of approximately $154 million.
A few months later, in April 2023, city commissioners lowered the government services contribution by nearly $19 million, as a way to reduce the debt. That was already a drastic cut, according to city commissioner Bryan Eastman.
"Our funds transfer is far away the smallest of any municipality utility in the state of Florida," he said.
On July 1, 2023, a new law signed by Gov. Ron DeSantis took effect and GRU's administration transitioned from the Gainesville City Commission to a board of governor-appointed members, now called the GRU Authority.
Recently, the new authority board projected even bigger cuts to the government services contribution. In the meeting's agenda, the future of the fund was narrowed down to be either cut in half or eliminated entirely.
Such aggressive alternatives aimed to reduce GRU debt and stabilize rates, which have repeatedly ranked among the most expensive public utilities in Florida.
City officials were not pleased.
According to Alachua County Labor Coalition Coordinator, Bobby Mermer, GRU Authority board should keep government services contribution as it is.
"We already are on a debt reduction plan, and we are never going to get the debt down to zero," he said, "nor should we, no utility does"
Board member Eric Lawson and Carter said they wanted more time to digest all the numbers and possible future consequences. On the other hand, Vice Chair James Coats and board member Robert Karow were leaning toward the elimination of government services contribution. In the absence of a fifth member, government services contribution's future was put on hold for at least a month and a half.
Coats expressed concern about postponing the decision one more time throughout the discussion. He then proposed a joint meeting between GRU and the City Commission to discuss the issue in the next 45 days, and the board approved.
"We have people that need help with rates today," he said.
Carter, meanwhile, said he is still not ready to vote. He said he fears if the cut or elimination is made, the city will find ways to make Gainesville residents pay the difference in other ways like raising taxes, for example.
"This is more than just a game, this is people's lives," he said. "Let's look at legitimate ways to reduce [the debt]."
In addition to government services contribution, the board discussed cuts in what they called unused city services.
The first item on the list, $212,750 directed to the City Commission, is expected to be cut entirely, as GRU is transitioning to complete independence. Other items like Broadcast and City Auditor services will be reduced according to usage.
These items are part of the Full Cost Allocation Plan monthly payments, and differ from money allocated at the GSC pot.
"We're not getting these services this year, so we should not be paying this year," said CEO Tony Cunnighan.
City Manager Cynthia Curry said she was apprehensive about the cuts, considering the city's budget has been established since the beginning of fiscal year 2024.
"Full transition is inevitable, but I do not think it can be done tonight. Or next week," she said. "We cannot change [the budget] in the middle of the year."
Nevertheless, the board has decided to make the cuts. The document presented in the meeting foresees a reduction of $180,906 per month for the remainder of the fiscal year.
Cunningham and Carter will meet with city officials to thoroughly investigate how the cuts would impact the budget and which departments would be affected.
Adjustments to the reductions will be made accordingly.
Finally, the board decided on the ongoing recruiting process for replacing the CEO Tony Cunningham. The board will continue the search for CEO candidates, which will probably take six to eight months and a budget of $100,000.
Coats postponed the discussion of two agenda items, the Integrated Resource Plan and the selling of unused properties, for future meetings.
The meeting ended past 10 p.m. Multiple rate payers, City authorities and nonprofit representatives spoke up their minds about the controversial topics.
Confronted by the many difficult decisions piling up, board members remained transparent.
"We need help," said Carter.