GRU Authority Addresses GM Search & GSC Legality

The Gainesville Regional Utilities (GRU) Authority met yesterday to receive an update on the search for a new general manager (GM) and hear presentations from GRU’s state lobbying firm, power district properties, and cybersecurity team. The government services contribution (GSC) was also a significant topic of discussion, despite it not being on the agenda.  

Following the pledge of allegiance, former Gainesville city commission candidate Jo Beaty made a point of order, criticizing the agenda for placing chair Craig Carter’s comments above the adoption of the agenda. She also criticized the board for having chair comments separate from member comments, which permits the entire board to share their thoughts. 

The authority’s attorney, Scott Walker, said it would be typical to have the adoption of the agenda happen after roll call. Carter said that the board would do that, and he thanked Beaty for bringing it to his attention. 

During chair comments, Carter brought up the upcoming meeting with the Gainesville city commission, which is being held to discuss GRU’s power district and the GSC. He said it was necessary, accusing the city government of having a history of “handshake” and “wink-wink” deals regarding the GSC since the 1980s, saying they needed to legally establish the GSC’s purposes in writing. 

Member Robert Karow questioned the legality of the GSC and made a motion to ask the Florida attorney general if the transfer of money from GRU to the city would be allowed under House Bill 1645, which established the board. Karow said he believed the bill would allow the transfer; however, he sees the bill as envisioning a transfer only happening once GRU has less debt and makes a profit. 

The motion to ask the attorney general about the legality of the GSC transfer was seconded by Vice-Chair James Coats and passed unanimously. 

During general public comment, Debbie Martinez criticized the GSC, saying the city government has abused the transfer of funds.

“This authority continues to hear from former and current members of the Gainesville city commission talk about how it is standard practice for municipal utilities in Florida to transfer funds to their city to help fund their government. What these former and current members of the Gainesville city commission do not tell you is that no other city in the entire state of Florida has abused the fund transfer system like Gainesville, leaving their customers paying the highest utility bills in the state, sitting on a mountain of unsustainable debt.”

During attorney comments, Scott Walker went over a pending lawsuit against the City of Gainesville over the authority. Plaintiff Nate Doutey alleges that House Bill 1645 took away his right to vote for the electorate in Gainesville. Walker disagreed with his assessment. 

“We set rates, we operate the utility, and we govern the utility; we do not have a function over other areas of municipal government. We don’t have to have an elected body; we are not a municipality… We’re a unit of government within the city of Gainesville.”

Moving onto the first agenda item, the board heard a presentation over Facetime from GRU’s state lobbyist, Ryan Mattews, with Gray Robbinson Law Firm. 

Matthews talked about his law experience, his firm, and the current legislative session in Tallahassee, going over bills that the board should be paying attention to. Among them is House Bill 1277, which would impose a 10% GSC cap on revenues collected from customers outside of municipal boundaries; however, he said it would be unlikely to pass in the current legislative session due to it being stuck in committees that aren’t meeting. 

The board moved on to hear an update on GRU’s power district from Kinnzon Hutchinson and then an overview of GRU’s cybersecurity from Walter Banks and T.C. Kelly. 

Following up, member Eric Lawson, who had previously been placed in charge of finding a new GM for GRU, gave an update on where he was at in the search. He said he is working with Human Resources to revise the GM’s job description as being under the authority of the city commission instead of the city commission, as well as reviewing the GM’s employment agreement with the recruiting firm chosen by GRU, Mycoff Fry Partners LLC. Lawson went over potential concerns brought up by Fry. 

“In the last decade, municipal-owned utilities have become very politicized across the U.S., so that is having an impact on individuals willing to apply for positions... With us having a separate utility board now, that’s somewhat of a positive side. Another thing he wanted to point out is that because we're in Florida, this process will have to be completely in the sunshine, so any candidate that puts their name in at any point in the application process will become public information… We can expect a much higher number of candidates who are unemployed. If candidates are employed at an existing utility, if they apply here, their name is going to become public, and it could impact their current status. 

Vice-chair Coats asked Lawson to elaborate on what he meant by “politicized.”

Lawson responded, “It’s sort of why we came into being. It's not uncommon for municipally owned utilities... that other agendas sometimes get imposed, or if you look at the history of our own utility, sometimes the commission was using the utility for things that didn’t completely align with the mission of the utility. Industry leaders see that, and it sometimes steers them in other directions.”

After Carter thanked Lawson for undertaking the GM search, Beaty stood up to recommend the board look into hiring a turnaround manager, much to the chair’s dismay. 

During member comment, Karrow expressed confusion over what member comment was, as well as the purpose of the upcoming meeting between the city commission and the authority. The board members discussed various reasons why the meeting was being conducted.

Before adjournment, Coats floated the idea of taking stormwater and waste disposal off ratepayers’ bills. Cunningham went over the advantages and drawbacks of having the service. 

“We do get a payment from the general government of somewhere in the high $700,000 that really helps cover our fixed costs associated with our billing system and call center… The negative of us doing that would be that when someone opens their GRU bill, there are other things on the bill: 'refuse  and stormwater.’ That isn't revenue that comes to GRU; we're billing it for someone else, but they look at their bill as all of it together, so there is a perception issue for customers in seeing that additional cost on there… All anybody cares about is what’s the bottom line, and they associate that as a GRU bill. There are some… perception benefits to removing it from the bill." 

Cunningham clarified that if the board were to decide to do away with part of the GRU bill, it would take up to a year to implement. 

Coats said a cost analysis should be done on the service, asking hypothetically if it was costing them more than they were receiving. 

“Are we spending $900,000 so we can make $700,000? I’m not saying that’s the case, but that we, as a board, should look at it and understand.”

The upcoming meeting between the GRU authority and the Gainesville City Commission is being held February 28, 2024 at 1:00 pm, at City Hall Auditorium on 200 East University Avenue.