The city of Gainesville discussed two budget scenarios on Tuesday that would fund the general government’s operations for fiscal year 2025, starting on Oct. 1.  

The difference between the scenarios is whether Gainesville Regional Utilities (GRU) will send funding to the general government through the general services contribution (GSC) and what level that funding might be.  

The meeting kicks off the budget season for the Gainesville City Commission. 

Charter officers and department heads presented two proposed budgets to the commissioners. One anticipates receiving no funds from GRU. The other anticipates receiving $15.3 million, the same amount received in the current fiscal year.  

“If that [GSC] number remains stable, very little changes,” Mayor Harvey Ward said at the meeting. “It’s important for the community to understand that this is dependent on decisions made by folks who do not sit at this dais.” 

Since Gov. Ron DeSantis appointed the GRU Authority in October, management of the utility has fallen to the board members of the Authority. The members considered cutting the GSC in January and February but ran into a stalemate with a 2-2 vote.  

However, no one currently knows who will make the final decision about the GSC. 

The entire GRU Authority resigned in March—the result of a lawsuit settlement. DeSantis is expected to appoint the new board members in May, and according to the law passed by the Florida Legislature, this new Authority will need to settle the GSC question by the end of June.  

GRU Authority Chair Craig Carter said he decided not to reapply for a board member position. The other three board members—Eric Lawson, Robert Karow and James Coats—did not say if they reapplied.  

Service agreements between GRU and the general government will also impact budgets for both sides. General government departments manage GRU’s fleet of vehicles, handle payroll services and provide human resources services. GRU provides IT support, and the general government is prepared for an increase in cost of technology support.  

The GRU Authority heard from utility staff that the current payments by the general government for IT services fail to cover the majority of the cost to provide the services. The general government increased its payment to $2.9 million for the 2024 fiscal year, but GRU puts the estimated cost at $5.9 million.  

Gainesville’s Cintya Ramos, executive chief of staff, told the city commission on Tuesday that the budget for IT covers that expected increase under both scenarios—with or without GSC funding.  

The GRU Authority asked staff to review all contracts with the general government to ensure agreements are in writing and fiscally prudent.  

The city’s timeline lists Sept. 12 and Sept. 26 as the dates for the commission’s preliminary and final votes on the fiscal year 2025 budget and millage rate. 

The presentation listed several other fiscal items that need to be confirmed before those votes, including a $1.5 million contract for homeless services with GRACE Marketplace, property tax valuations, fire assessment rate, millage rate, American Rescue Plan Act funds, and state revenue sharing numbers.  

Ward and Commissioner Ed Book said they want budget plans to not include another millage rate increase. The commission increased the millage rate by 16.9% in September 2023 to fund the current fiscal year. 

Both budget scenarios shown Tuesday assume no increase to the millage rate.  

Of the 12 departments presented, nine showed a reduced budget from this fiscal year to the next if no funds come from the GSC. The city attorney department shows a 2.6% increase, associated with personnel expenses like retirement and benefits, and the technology department showed a 61.4% increase, mainly driven by the expected payment increase for GRU’s IT support.  

Combined, these 12 departments would have a budget reduced by around $1.2 million compared with the current year in the no GSC scenario happens. Other departments will present their plans on May 28, including police, fire, parks and public works.  

If GRU sends the $15.3 million, then nine departments will have increased budgets—ranging from 0.9% to 7.9% over the current budgets—in the next fiscal year while three keep reduced budgets.