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Monday, April 15, 2024

GRU Authority delays decision on Government Services Contribution

The future of $15.3 million transfer to be decided in joint city commission meeting

In its Wednesday meeting, The Gainesville Regional Utilities Authority board voted to reduce payments it makes for unused city services, and to organize a joint meeting with the city commission to discuss alternatives to cutting GRU’s annual $15.3 million Government Services Contribution (GSC). 

These cuts would help GRU consolidate its debt and reduce rates. However, it could also lead to job losses and cuts in public services. 

Unused services 

GRU General Manager Tony Cunningham outlined to the authority the percentage of city services utilized by GRU. In his report, Cunningham estimated GRU is due to pay $1.4 million this year for city services the authority doesn’t use, or could be conducted independently of the city. 

These include clerical, auditing and broadcasting services. 

Cunningham’s recommendation was to reduce these payments, which are grouped under GRU’s Full Cost Allocation Plan, by $180,906 every month of the fiscal year, starting in February. The motion passed 3-1.

Possible GSC cuts

Last year, the city commission authorized the reduction of the Government Service Contribution — formerly called the General Fund Transfer — from $34 million in fiscal year 2023 to $15.3 million this year. This move aimed to consolidate some of the debt accrued by the utility.

Now the control over the GSC lies in the newly formed GRU authority, which sought Wednesday night to cut the fund by a further $7.8 million or to completely eliminate it. 

In a memo released Wednesday, City Manager Cynthia Curry wrote that the previous reduction led to increases in property and utility taxes, as well as the loss of 125.5 city jobs. 

The GSC’s $15.3 million makes up for 9.8% of the city’s general budget for fiscal year 2024. While last year’s cut only impacted 13 out of the city’s 20 departments, Curry said further cuts would be applied evenly across the budgets of all city departments. This would include cuts to public safety departments, such as fire and police.

Another consequence ​​would be community organizations losing city funding in fiscal year 2025. These include GRACE marketplace, the Early Learning Coalition, the Hippodrome and more. 

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The Alachua County Labor Coalition held a press conference Tuesday to push back against any cuts to the GSC.

“[The GSC cuts] are going to be such a wrecking ball,” ACLC Coordinator Bobby Mermer said. “It’s going to affect everything from police and fire to summer programs that working class and poor children rely on.”

The board was also hesitant to cut the GSC. It emphasized it wanted to make the best financial decision for the utility but also its ratepayers, and reasoned the city would find ways to force the ratepayer to recoup the lost GSC revenue.

“I want to reduce [the GSC] as low as I can,” said chair Craig Carter. “But I also want to make sure that I’m not going to get a victory here, and a loss for our less fortunate citizens.”

The board ultimately decided to meet jointly with the city within the next 45 days to discuss alternative strategies to help alleviate GRU’s debt. However, it left cutting GSC on the table, if no other deal could be struck. 

The joint meeting has not been scheduled as of Thursday afternoon. GRU meets again Jan. 31.

You can contact Henry at Follow him on X @Hadeangelis

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Henry DeAngelis

Henry DeAngelis is a third-year journalism major and the City and County Commission reporter for the Alligator. In his free time, you can find him on the basketball court or deep in a good book.

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