The Gainesville City Commission finalized its November ballot referendum for a second time on Tuesday with a unanimous vote, authorizing the city clerk to send the issue to the Alachua County Supervisor of Elections.
The ballot referendum will ask city of Gainesville residents whether they want to remove Section 7 from the City Charter, thereby returning control of GRU to the City Commission.
The GRU Authority has called the ballot initiative into question, and its lawyers have presented their position to the City Commission. Scott Walker, attorney for the GRU Authority, has said that the possibility of a lawsuit remains high as the ballot initiative moves forward.
At the meeting, Gainesville staff also put on record their view of Gainesville Regional Utilities (GRU) earnings in the past several years compared with $68 million more than revenues presented by the utility.
City Manager Cynthia Curry previewed the presentation in a public email on Monday and said she doesn’t want to get into a tit-for-tat relationship with the utility on the matter.
“It’s just important for us to get our analysis on the record and in the conversation as well,” Curry said at the meeting. “We realize that the decision doesn’t really lie with us; it’s really on the GRU side.”
Steve Varvel, director for Gainesville’s office of management and budget, said that looking at a flow of funds perspective—money coming in against money leaving—the general services contribution (GSC) has kept money on the ledgers of GRU.
He said he doesn’t dispute the $68 million more than revenue shown by GRU employees using different calculations, but Varvel said using the flow of funds perspective, also used in annual budget presentations, gets to a net flow of funds that is $37.5 million more than the uses.
The meeting also discussed budgets for the Department of Housing & Community Development, Gainesville Community Reinvestment Area, Department of Sustainable Development, Transportation Department and non-departmental funds.
The presentations continued the practice of showing potential cuts that could occur if the GSC were eliminated. However, the GRU Authority has signaled that it will keep the GSC at some level.
The City Commission also received a presentation from BerryDunn, an outside consultant, on how to move forward with IT services. GRU has raised costs for the services it provides as the general government and utility adjust to a new dynamic.
Erin Provazek, senior manager for BerryDunn, said the study looked at four options, working on a new contract with GRU, creating independent IT services within the general government, outsourcing IT services to a third-party provider or a combination of in-house and outsourced services.
Provazek recommended the city create its own IT team within general government. She said the option would come with initial startup costs but lower long-term expenses, calling it a more efficient and cost-effective option.
She said GRU has a high-quality IT department, but the cost-sharing model has skewed the services compared with costs.
Mayor Harvey Ward, Commissioner Bryan Eastman and Commissioner Casey Willits all voiced approval of creating an in-house team. No vote was taken on Tuesday, but the item will return in the future.
Former GRU General Manager Tony Cunningham presented the risks to the utility if general government stops using its IT services. Those risks included stranded fixed costs and loss of funding for IT.
If the City moves to an in house IT operation, it’ll strand GRU with IT infrastructure larger than it needs. Some of that infrastructure can be shelved, but the $ savings to GRU would likely be minimal.
That said, in today’s world, you don’t need in house hardware or a computer ‘room’. You can get that out in the ‘cloud’, so those high initial set up costs can be abated.
Rather clearly, though, while the long term cost to the City of an in house IT operation would likely be less than what GRU seems to be angling to charge, the total cost equation… GRU’s IT cost + City’s in house IT cost… is going to be more than the actual cost of maintaining a consolidated IT system. Which isn’t good for the City’s taxpayers, because we – the taxpayer – ultimately foot the entire bill through the utility rates and our property taxes.
Which then leads one to wonder the math GRU used to come up with the bill they presented to the City, because it’s NEVER cheaper to go alone than it is to share.. By the same token, one wonders the math used that leads one to conclude its going to cost less to go in house than to continue to pay GRU for IT services. It’s really really easy to understate those costs.
We then have that ballot question. We won’t know how that plays out until.. plays out, and it’d be unwise to set a course of action to split IT services until THAT issue is settled.
This is just one example of the consequences of that brain dead move to take GRU out of the City’s hands.