Interesting Facts of Bill 1645
Don't let the GCC fool you!
The House Bill 1645, also Dubbed “The GRU Takeover Bill”, has been sent to the Governors desk to be signed. Let me start by saying this could be fairly long, but somethings need to just be addressed . I have heard all kinds of rumors, people saying they have read the bill and others twisting it completely to fit their narrative. So, I have decided to go in and explain or put to rest some of the most common talked about mis-truths.
I continue to hear that the state is taking over the utility, that it is not going to be part of the city. I know this is said in the wrong manner whether they know what they are saying or not. This being said the city has also made it seem as though the board would be able to sell the utility, and that the city can impose fees. all of this is tied together and fairly hard to not talk about all at once, but I will certainly try.
Will the utility be owned by the state?
There is created a regional utilities authority to be known as
the "Gainesville Regional Utilities Authority" ("Authority").
Gainesville Regional Utilities shall be governed by the
Authority upon installation of the Authority's members pursuant
to this article. The Authority shall operate as a unit of city government and, except as otherwise provided in this article, shall be free from direction and control of the Gainesville City Commission. The Authority is created for the express purpose of managing, operating, controlling, and otherwise having broad authority with respect to the utilities owned by the City of Gainesville.” (HB1645, Article VII, 7.01)
This means that GRU is an entity of the city, being run by a board, or an extension of the city government. This means that the Utility is still an asset of the city. I will soon get in to talking about what that actually means! So, The utility is still owned by the city.
Will the Board be able to sell the Utility?
(f) To dispose of utility system assets only to the extent
and under the conditions that the City Commission may dispose of
such assets pursuant to section 5.04 of Article V. (HB1645, Article VII, 7.03 (1)(f))
This refers to the the city charter
This literally says in Article V, 5.04
5.04. - Disposal of utilities.
The commission may not, in any manner, dispose of or agree to dispose of the following city utility systems, or any part thereof, so as to materially reduce the capacity of that system to produce, distribute or treat:
(1)
Electric system;
(2)
Water system;
(3)
Natural gas system;
(4)
Wastewater system; or
(5)
Telecommunications system.
Unless the commission first adopts an ordinance approving of the disposition and submits that ordinance to referendum vote and such referendum is approved by a majority vote of the qualified electors of the city voting at the election for the purpose of approving the ordinance.
(Ord. No. 191120 , § 1, 6-18-20/Ref. 11-3-20)
So, No, the Utility can not be sold without a referendum by the city commission to sell the utility. That then would mean if the utility were to be sold it would be the fault of the city commission to put it to referendum, and the voters would then decide.
Can the city impose a franchise fee?
The short answer is no! The city in no way can impose a fee to its own entity, nor can it force a general services contribution or general fund transfer. If the board so chooses to send money over to the city general government then they can as long as it does not exceed net revenues, after all is paid.
(4) No franchise, right-of-way, license, permit or usage
fee or tax may be levied by the City upon the Authority or the
utilities unless allowed by general law. (HB1645, 7.10, 4)
7.11 Limitation on government services contribution.—
(1) MAXIMUM CAP ON GSC.—For any fiscal year, the GSC may not exceed aggregate utility system net revenues less flow of funds. (HB1645, 7.11,1)
Governor Appointed Board and the actions to get there.
Per the bill the Governor will put out a Public Notice of nomination, this nomination period will last 30 days. After the 30 days the Governor will then look at the nominees. This process can take up to 60 days giving the Governor the time to choose and check out the nominees and find the best suited for the position of the board. There will be three experts, one rate payer outside the city and a large rate payer of 10,000 kWh monthly.
(1) The Governor shall issue a public notice soliciting
citizen nominations for Authority members within 120 days after
the effective date of this article. The nomination solicitation
period shall remain open for at least 30 days after the date of
the public notice.
(2) The Governor shall appoint initial members to the
Authority from among the nominees within 60 days after the close
of the nomination solicitation period. The initial terms of
office for the five members shall commence at 12 a.m. on October 1, 2023. The terms of the initial appointments shall be as
follows: one member shall be designated to serve until 12 a.m.
on October 1, 2024; one member shall be designated to serve
until 12 a.m. on October 1, 2025; one member shall be designated
to serve until 12 a.m. on October 1, 2026; and two members shall
be designated to serve until 12 a.m. on October 1, 2027.(HB1645, 7.05, 1,2)
7.04 Authority members.—
(1) There shall be five members of the Authority appointed by the Governor. Each member shall be a person of recognized ability and good business judgment as identified by the Governor who is expected to perform his or her official duties in the best interests of GRU and its customers. Appointments shall be made as follows:
(a) One member shall be a residential customer with substantial knowledge of GRU, its operations, and its history.
(b) One member shall be a private, nongovernment customer consuming at least 10,000 kilowatt hours per month of electric usage during each of the previous 12 months. This member may be the owner or representative of the customer.
(c) Three members shall be competent and knowledgeable in one or more specific fields substantially related to the duties and functions of the Authority, including, but not limited to, law, economics, accounting, engineering, finance, or energy.(HB1645, 7.04, 1,a,b,c)
If you have any other questions that may need an answer or rumors that you have heard please reach out to me via leave a comment.
