GAINESVILLE, Fla. (Jan. 17, 2024) – At today’s meeting of the Gainesville Regional Utilities (GRU) Authority, board members are expected to consider withholding $1.4 million owed the City of Gainesville for services that General Government departments supplied to the Utility approximately two years ago.

The $1.4 million is a portion of the $3.9 million in efforts and services the City has documented providing to GRU over the course of Fiscal Year 2022, the year for which the most recent financial audit has been completed. This amount was included as a revenue source when the Gainesville City Commission adopted its balanced budget for Fiscal Year 2024 last September. 

General Government and GRU traditionally have used a cost allocation study to determine the value of services provided to the Utility by General Government, such as audit, equity and inclusion, clerk responsibilities, broadcast support and more. To keep this accounting accurate and settle a finding from the State Auditor General, a cost allocation study is conducted annually in a process agreed upon by both General Government and the Utility.

The financial audit that will calculate what is owed the City for Fiscal Year 2023 will be completed this March. The City is still providing the Utility with services for Fiscal Year 2024. That arrangement would end tonight if the GRU Authority Board votes to reverse the existing financial agreement.

The Gainesville City Commission sets a budget for General Government every year.

Although today’s discussion centers on payment for specific departmental services — the $1.4 million the GRU Authority board members will address at tonight’s meeting — that is only one part of a larger financial picture.

As you know, the Gainesville City Commission sets a budget for General Government every year. Much of that budget involves the General Fund. Like a household checking account, the General Fund covers the cost of many of General Government’s day-to-day operations.

General Government and GRU traditionally have agreed on a General Fund Transfer — now called the Government Services Contribution (GSC) — as part of that fund.

The Government Services Contribution has been a substantial part of the budget process but this began to change as we planned for Fiscal Year 2024.

In 2023, the transfer was more than $34 million — nearly one-quarter of General Government’s approximately $154 million budget.

In Fiscal Year 2024, the Gainesville City Commission lowered the GSC to $15.3 million, eliminating 125.5 full-time equivalent positions and raising the millage rate from 5.5000 mills to 6.4297 mills.

In all, 13 of 20 General Government departments reduced their operating budgets to close the $19 million gap in revenue.

The Government Services Contribution is now out of the hands of the Gainesville City Commission.

Transferring money from a municipal utility to support public services and programs is common in the industry. Whether this will continue in Gainesville is up to the members of the governor-appointed GRU Authority Board.

We know the possibility of reductions in services and programs is a concern for many neighbors.

Our goal is to keep neighbors aware of the budget situation that General Government may face.

In the spirit of transparency, we are communicating early and often. This includes messages to community organizations that have received the City’s financial support in the past. We are encouraging these groups to consider developing Fiscal Year 2025 budget plans that do not rely on any City funding.

Budget discussions are conducted strategically and with precision.

It is too early to speculate about specific impending changes but all departments will be asked to suggest further spending reductions. This will include our public safety agencies.

A number of services and programs will remain intact.

General Government has other funding sources, such as enterprise funds and special revenue funds. These generate their own revenue streams, usually by collecting a fee for service or a special levy.

Separate funding will remain in place for areas such as trash collection and recycling; the Regional Transit System (RTS); projects funded by the Wild Spaces Public Places surtax; infrastructure improvements funded by the Streets Stations and Strong Foundations surtax; programs funded by the Gainesville Community Reinvestment Area (GCRA); and projects paid for through the Tree Mitigation Fund.

Programs that received grants from the American Rescue Plan Act (ARPA) also will keep their funding. The largest of those involves $12.3 million the City has invested in support of affordable housing. 

Additional grants, such as the $8 million from the U. S. Department of Transportation to add important safety improvements to University Avenue, will also remain in place.

The Gainesville City Commission will make the final budget decisions.

Budget season includes departmental discussions along with public meetings and workshops. Neighbors have multiple opportunities to share their opinions as

commissioners consider recommendations from the City Manager and make their

final decisions. 

The final balanced budget is submitted to the State along with the approved millage rates that support the budget. 

Sincerely,

Cynthia W. Curry

Gainesville City Manager