by Robert “Hutch” Hutchinson
The new Utility Authority board met in October for swearing-in and getting organized. Their Nov. 1 meeting dealt with some sobering business.
The accumulated debt of Gainesville Regional Utilities (GRU) and the rates for electricity are two preoccupations of the Utility Authority, as they should be. Over the years, GRU has created one of the nation’s most complicated financial portfolios, with a bewildering array of short- and long-term debt. Almost every day, large amounts of it roll over, and the companies that provide assurances to institutional investors are showing signs of concern. One “liquidity facility” has indicated they are discontinuing their coverage of GRU debt until governance issues are resolved.
In 2024, around $400 million in various forms of debt will have to be re-financed. The attorneys who advise the City on financial matters have said the Utility Authority, as a new and unique critter, has to go through a legal process called “bond validation.” It’s actually a trial in local court where the Utility Authority is the plaintiff and the State Attorney, representing the public’s interest is the defendant, anybody else with an interest in the matter can join in. A judge examines the evidence, listens to the arguments, and issues a Pass/Fail verdict. A pass means two things—the bond markets can be confident that the validated organization is capable and motivated to repay loans. The other outcome is that most challenges to the Authority’s authority disappear and cannot be raised again.
There are currently four active lawsuits that Gainesville Residents United, or people we know, have filed against the State or the City. Whether or not we decide to intervene in the bond validation proceeding, the impact of our litigation, which contains reams of legal arguments and case law about the unconstitutionality of this particular Utility Authority, will have an effect on the outcome.
At the Authority’s meeting in November, Joe Little, attorney and/or plaintiff in three of the cases, told the Authority members that the very existence of their “unit” of City government is unconstitutional and that HB-1645 needs to be repealed immediately for the health of the City. As President of Gainesville Residents United, I took a different tack; I spoke three times to argue that the Utility Authority should re-write the bill to resolve the legal issues we have raised. The Authority responded that doing this was out of their lane – even though they were told by attorneys that the Utility’s credit-rating is being damaged by the unprecedented law that created them. Gainesville Residents United might re-write the bill, and attempt to create a mediation environment where somebody can shuttle between the Utility Authority, our local Legislators, the Litigants, and other parties to come up with a solution that provides a form of governance we can all live with.
There was an interesting moment in the meeting when a person whose career was operating powerplants said she had been fired without cause from her brief employment at a GRU powerplant. She told the Utility Authority that she had discovered some safety issues, and had also asked other employees on their lunch break about joining the union – she speculated these might have been the reasons she was terminated. The Utility Authority Chair said dealing with personnel matters was not within the board’s purview, and referred her to the Utility Manager. But it raises the question of what is her recourse if the Utility Manager does not give her a fair hearing. If the Utility Authority board won’t hear complaints, then her next step would be the Governor. This is just one of the uniquely odd aspects of our governance.
People want to know what can they do, especially since these issues have rapidly evolved from being all about civic education and political activism into what is now inside baseball and legal wonkery. It is important to attend Utility Authority meetings, even if it’s just for the first thirty minutes during citizen comment. The board is made up of people who really are trying to right a listing ship, and none of them had anything to do with the creation of the board they are now volunteering to serve on. It does help to amplify messages that Gainesville Residents United puts out on our website and social media, as the news coverage is scant.
For more info or to support our litigation fund: www.GRUnited.org. For more about the GRU Authority – board members, agendas, presentations, etc, see www.GRU.com.