A slate of local bills passed through the Florida House on Thursday with the majority earning unanimous approval and no debate, but the local bill concerning Gainesville caused an hour of discussion, five proposed amendments and an 81-33 vote along party lines.
Introduced by Rep. Chuck Clemons, R-Newberry, the local bill (HB 1645) has sparked dissent with the Gainesville City Commission and intense discussion over the past month.
The bill transfers management control of Gainesville Regional Utilities (GRU) from the city commission to an independent authority appointed by the governor. The authority will consist of five members—one residential customer who lives outside the city limits, one commercial customer, and three residential customers with professional expertise in related fields like law, energy or finance.
If approved by the Senate and signed by Gov. Ron DeSantis, the bill would create the first municipal utility in Florida controlled by an independent board appointed by the governor. Of Florida’s 33 municipal utilities, six others also have an independent board, but none have governor appointees.
Rep. Yvonne Hayes Hinson, D-Gainesville, said the bill continues a decade-long attempt to wrestle control away from the city commission and open the possibility of a sale. She said other municipalities should take note.
Rep. Angela Nixon, D-Jacksonville, said officials also made her municipal utility appear financially unsteady before an attempted takeover.
“We don’t need any more hostile takeovers in the state of Florida,” Nixon said. “We see time and time again bills that are being passed where corporations have more of a say than the residents here in our say, where our governor has more of a say than the residents of our state.”
Supporters of the bill pointed to unfair charging practices. Rep. Mike Giallombardo, R-Cape Coral, said unincorporated residents outside city limits pay extra surcharges and see profits diverted to general government operations.
He said this represents a hostile takeover of the unincorporated area and called the practice of taxation without representation. The practice happens outside of Gainesville as well, he said, pointing to Miami as an example.
“We’re addressing Gainesville, but this is a statewide problem,” Giallombardo said. “I appreciate you bringing this up because this will spark us going down that hill because we need to address this.”
Hinson filed five amendments to the bill, but all failed to pass without Republican support. One would allow GRU customers to appoint an independent authority instead of the governor, and another would have allowed unincorporated customers to vote to leave GRU and join a separate utility.
She said the city has started a debt-reduction plan and noted that the Joint Legislative Audit Committee had given the Gainesville Commission until October to present the plan. She said Clemon’s decision to then file the bill and take away control was not a good-faith action.
Clemons said the state has compelling interest in all financial matters of the government subdivisions like the city of Gainesville. At $1.7 billion, He said GRU’s debt to equity ratio sits four times the number of similar utilities—a point given by a state auditor during a February audit committee meeting.
“The compelling interest is this: the decisions coming out of the city of Gainesville through the governing board currently is not in the financial well-being of the Gainesville Regional Utilities,” Clemons said in response to a question by Hinson.
He also pointed to transfers taken from GRU to fund general government services as excessive, taking millions of dollars more than the utility earned in net profits. The city of Gainesville has funded around 25% of its budget through money transfers from its utility over the past few years.
“There are people that are hurting not only in the city of Gainesville, there’s people that are hurting in the periphery,” he said, referring to the unincorporated service areas.
The Gainesville City Commission has criticized the bill unanimously and readied for its passage. At the same time, the commission continues its debt-reduction plan, aiming to eliminate $315 million in debt over the next decade. That plan includes a 55% reduction in the GRU transfer to city services, budget savings and increased rates.
The commission has expressed concerns over how the structure would work when issuing bonds and that the bill would cause a downgrade to its rating.
The bill will now proceed to the Senate. Unless pulled for individual consideration, the bill will be bundled with all other local bills for a single vote. Sen. Keith Perry, R-District 9, has co-sponsored the bill with Clemons, and Sen. Jennifer Bradley, R-District 6, who also represents Alachua County, has supported the bill.
Past coverage
- February 24: Panel warns GNV to make GRU changes
- February 27: GNV: All options on table to deal with debt
- March 17: Local legislators back bill to alter GRU control
- March 23: City readies lobbyists, counsel against GRU bill
- April 6: GNV votes on salaries, updated on budget freezes
- April 13: GNV faces $16M loss to general budget to lower debt
- April 19: Tallahassee committee signs off on GRU bill
- April 21: Opponents sound off on GRU bill at city meeting
Sad 😥 sad news
Sad, not sure what you mean. This is the best news citizens of Gainesville have had in years! Former mayors, Henrahan, and Poe along with Lackey city commissioners, who never had a professional job in their life, like Ariola and Santos, nearly bankrupted the city of Gainesville, with the radical, silly ideas that even a six grader would have known wouldn’t work. With inexperienced people like Paul, Santos, and Ariola, making decisions about the operation of a large city utility is one of the worst ideas anybody could have we will be much better off with appointed professionals than we ever would with inexperienced city commissioners, who would not know how to run a small fast food, business, much less a large, regional utility and operation of a city. Thank God we are free of those people , never again!
Everyone needs to watch the online meeting. Hinson Rawls has help cause GRU’s debt and yet still supports it. Watch the meeting and please tell me why she feels like yelling, smirks and upheaval with shallow comments are necessary or appropriate in this meeting. The prejudice supporters she enrolled were as clueless as she is. She is truly a mentor for the party of hate.
Yep, you are on target Juan! At the City Comm meeting on this, at the end, Hinson spoke about the offense against this should not be public. Then a week later, ridiculous derogatory text messages from non-existent sources began to appear containing absurd comments and false information. Was that her idea of a private offense?
Seth, your continued coverage of this fundamentally important issue that effects the wellbeing of Gainesville, other Florida cities and democratic principles is appreciated. There are details in this story that are helpful in understanding what is going on in Tallahassee. Thank you.
The City Commission has repeatedly proven that they can not make good decisions for GRU. They are the ones who loaded up GRU with $1.7 Billion in debt and have just agreed to another expensive PPA to buy solar from a private entity for top dollar.
The City Commission sold GRU to Wall Street Bond Holders when they bought a used Biomass Plant for $750 Million which was more than 3x’s the price for a new plant of the same size. Last year the City Commission voted to fired the GM without cause. Since then GRU hasn’t even been able to get out an accurate utility bill, no less in a timely manner. GRU needs a professional independent board to make sure that GRU returns to it original mission, to deliver reliable services at a reasonable price.
Lots of disinformation has been disseminated about this issue, especially by Mr. Clemons. As did Annie, he misinforms about the difference between bondholders and shareholders. Bonds represent money loaned to a company. Shares represent partial ownership of a company. Shareholders have a vote on corporate policy, while bondholders do not. Citizens of Gainesville are equivalent to shareholders, since they reside within the city and have more of a stake in city policies. They vote on city matters or on those who will represent them in those matters. GRU bonds are very highly rated; its debt is prized by bondholders. GRU is only a part of the city government, NOT an independent corporation. The name “Gainesville Regional Utilities” is a fictitious business name (see: https://www.law.cornell.edu/wex/fictitious_business_name#:~:text=A%20fictitious%20business%20name%20is,in%20the%20articles%20of%20incorporation). “GRU” is the City of Gainesville doing business as GRU. Good luck disentangling the two.
You left out that in cases where bond holders aren’t paid, and owners are in default, bond holders often become owners and any other ownership or stock is worthless or sold for pennies on the dollar.
Good news for GRU customers
Just another hostile takeover by the DeSantis and the state GOP. That’s who Clemons and Perry work for, not the citizens of Gainesville or Alachua County. One of Hinson’s offered amendments, would have allowed those on GRU who are in the city to opt out, eliminating those who don’t have a voice in GRU – as Gainesville citizens now do – from the “problem”. How anyone claiming to be conservative can celebrate taking property away from voters without their consent and giving authority to a board unanswerable to anyone but a governor who hates the city, and couldn’t get elected mattress label sheriff there, is beyond belief. In fact, they aren’t conservative, or I play center for the Lakers.