Gainesville in February: Authority finances, affordable housing, and legislative session
February is a slow month for the Commission, but a fast month for everything happening around us. Between the Legislature and the Authority, how this next month goes will determine a lot of the future
February is both a slow month and fast month for the City. We don’t have a lot of items on the agenda this month, but there’s a lot going on off the agenda. The legislature will be making decisions that will impact our city, and the GRU Authority is starting to ramp up its positioning against the city. What happens over the course of this month will dictate a lot for our city in the months and years ahead.
First, some good news
The Hoggetown Medieval Faire was a great success. We were close to not having it this year, but staff pulled together a fabulous event at Depot Park. The smaller venue meant it lacked some people’s favorite performances, like jousting, but thanks to be downtown surrounding businesses were able to join in with Medieval-themed events and it brought people downtown.
In other news, the Arts Culture & Entertainment Districts are up and going starting in the new year. Happy 50th Birthday to the Devil’s Millhopper State Park in Gainesville. The Gainesville Chamber celebrated 100 years of being in our local community.
In more personal news, my proposal to lower minimum lot size standards to incentivize more affordable starter homes passed the Commission 4-3 in January. That will come back to us in the next few months in a more final form.
The Mayor is doing his “State of the City” address at Santa Fe Blount Center at 10 am on February 13th. Come join us and hear what the City is working on and the things we’ve been able to do over this past year.
GRU Authority & the City
It’s going to be a very lively month between the GRU Authority and the City Commission, with a lot at stake. At the end of the month the City Commission and the GRU Authority will be having our first joint meeting to discuss the finances between GRU and General Government.
A lot has happened in a short time, and more is coming this upcoming Wednesday at 5:30 PM for the GRU Authority Meeting. Here’s where we stand:
Reneging on 2022 payments
The Authority told City staff late in January that in two weeks, February 1st, they will be reneging on their agreements to pay for certain services in 20221. Essentially they say they are no longer going to pay in arrears for services rendered, they will not use the City Auditor or City Equal Opportunity Director, and they won’t be paying for many other services, despite having agreed to all of these before. So, with only two weeks’ notice2, they reduced their payments for to the City by $1.4 million over the year and will likely come back to us for more money in the future.
As anyone who has ever worked in a business or overseen a contract knows, this isn’t how agreements work. You don’t get to unilaterally decide how many services you receive and how much you’re going to pay for those services after the fact. That’s called a “default”.
This action reminds me of that scene from “Father of the Bride” when Steve Martin tries to rip out hotdogs and buns at a grocery store and tells the cashier how much he’s going to pay for them. This turned out poorly for Steve Martin.
Father of the Bride is funny. Playing games with millions of dollars and the lives of city workers and critical city services isn’t.
As the arrest of George Banks makes clear, this isn’t how the world works. If you want to negotiate, negotiate, but agreements are a two-sided thing, and GRU can’t afford to lose the services we provide to them. This isn’t how any credible “business” would run itself.
Because this cut comes suddenly midway through our fiscal year, the City Commission is going to have to decide if we lay people off in these departments or cut money from other areas to shore their budgets up. We don’t have wiggle room, seeing as we gave GRU $19 million per year last year, so something has to go.
And of course, we won’t just throw our arms in the air and say, “Yes GRU Authority, whatever you want. Don’t pay us money. Change the terms of agreements with no forewarning. Expect the same level of service. Exempt yourself from independent audits and federally required equal opportunity requirements. Whatever you want, we’re fine with it.”
So preparing our response is happening now. But that’s just how we started the month, here’s what’s coming up this upcoming Wednesday:
Complete elimination of the General Services Contribution
On Wednesday the GRU Authority is considering completely eliminating the $15.3 million in transfer this year and placing it into “escrow”. Up until this time the conversation has been around cutting next fiscal year, which they are legally required to wait until as per our Charter. Now the conversation is shifting to doing it right now.
Whatever putting the transfer funds in escrow means in this scenario, the result is a drastic and sudden slash to revenues, bringing the transfer down to zero immediately. This would, of course, completely break the City’s budget, which is a carefully constructed, balanced budget that was submitted to the state through statutorily mandated budgeting processes.
Doing that would be insane. But even if they don’t follow through on gutting the City budget mid-year, putting something this crazy on the agenda creates chaos and even more uncertainty around governance stability at GRU and the City. That hurts employee morale and increases the risk of a bond ratings downgrade. It is also, to put it mildly, not “running GRU like a business3”.
Eliminating our main affordable housing fund, “ConnectFree”
Connect Free is the City’s primary, and in many cases only, funding source for low-income affordable housing. It is paid out of surcharge fees on water/wastewater connections in the unincorporated area to help pay for water/wastewater connections for low-income developments in that same service area.
It is used by low-income families and groups like Habitat for Humanity and the Gainesville Housing Authority to lower the cost of their water/wastewater connections. But most importantly it is used as leverage for state and federal funding for larger affordable housing projects.
This leveraging of money has brought in roughly $100 million of outside investment to our area for creating mixed-income and low-income housing like Deer Creek Senior Housing, Arbours at Tumblin Creek Veteran Housing, and Royal Park. In total, 441 units of affordable housing have been created since 2018 with the help of ConnectFree. That’s an incredible return on investment, roughly $118 for every $1 invested into the program.
The loss of this money is going to gut our community’s affordable housing goals, and with the Authority gutting our general fund along with it it’s hard to see how we get it back. The result is going to be more families without homes and millions in lost investment for our neediest residents.
Forcing City taxpayers to pay for GRU operations costs
For over 50 years the City and County have had an agreement where we service their streetlights in exchange for the right to locate GRU utility infrastructure along County roads. It’s a common payment called a “franchise fee”, although an uncommon arrangement through trading services for this instead of money4. Local governments own roads and “right-of-way” and utilities pay the governments a rental fee to use that land to place their electric, water, and gas lines.
As GRU made very clear in a “Streetlights and Fire Hydrants” report from 2005:
Gainesville Regional Utilities infrastructure resides in Alachua County and City of Gainesville right-of-way. Compensation for right-of-way usage or consideration such as franchise fees is common. In all of the actions and agreements between the City of Gainesville and Alachua County there has been recognition of consideration for infrastructure in the right-of-way. Linking the payment for streetlights and fire hydrants to surcharge collections, as well as the City of Gainesville responsibility for unincorporated area streetlights and fire hydrants have been forms of consideration.
Now GRU staff is recommending that the City taxpayers pay for this, despite City taxpayers receiving nothing in return for GRU placing utility infrastructure along County roads. It is wholly and clearly a GRU operational expense. Why they believe City residents should pay for this GRU operations expense I have no idea.
Whatever the reason, the result is a loss of about $1.1 million per year. Another significant blow to our budget, one that seems arbitrary and totally unreasonable.
Moving forward
It’s hard to tell how all of this will turn out, but if the GRU Authority goes through with it we are going to be in a crisis, both at GRU and the City of Gainesville. My hope is that one day the GRU Authority will focus on running an efficient utility that provides reliable service for an affordable rate.
There’s a lot that needs to be done at GRU: high rates, high debt, massively overbuilt utility infrastructure, and a changing utility landscape. That will take a lot of time to go through. Instead, this Authority’s time is focused on extracting as much money from City taxpayers as possible.
There has not yet, to date, been a single discussion at the GRU Authority about lowering GRU rates, improving efficiency at GRU, the long-term plans for energy infrastructure, or any of the things I would expect this Authority to be working on. Every agenda is primarily focused on the City Commission and General Government and trying to pry as much money from us as possible. To put this into context, the transfer makes up about 3% of GRU’s budget.
Our City Commission and city staff have been very patient with the GRU Authority as they try to figure this all out. Patience may be a virtue, but it has its limits.
Legislative Session
The Legislative Session is at the midway point and entering its final month, with the final day, Sine Die, happening on March 8th. Compared to last year the legislative session is pretty tame, but there are some bills we are keeping our eye on.
Live Local Act Glitch Bill
I’ve spent a bit of time in Tallahassee at the end of January to lobby for a fix to an affordable housing law loophole that will have a huge impact on our City. Due to a “student loophole” in the Live Local Act our local community stands to lose millions from tax exemptions for luxury student apartments, as well as students displacing low-income residents in subsidized apartments.
For some background: The Live Local Act was passed last year and grants zoning flexibility and tax exemptions to apartments that serve low-income residents. It’s a bill I’ve been watching carefully since it was filed last year.
Unfortunately, the bill has some flaws, the main one for us being that it considers full-time students as “low-income” under it’s provisions. Because full-time students use parents money and student loans to pay their rent it doesn’t count as “income”, so they appear as low income on paper, even though the vast majority aren’t poor. The result for a college town like Gainesville is going to be a rush of student apartments claiming tax exemptions and students moving into subsidized homes meant for working-class families.
That’s exactly what appears to be happening. The first apartments claiming tax exemptions under the “Live Local Act” have come out, and Alachua County has the third highest in Florida with 7. All but one are student apartments located within one-mile of campus.
The apartments are Alsander GNV, Aero on 24th, Anthem House, Campus Circle, Residences At Market West, Theory Gainesville, and RISE Thirty Fourth. All are collecting rents of $1,550-$1,700 per month for a one-bedroom apartment. Together they contribute over $4 million to the local taxes of our City, County, and School Board. That’s money that could go away unless this bill is amended before the end of the legislative session.
Single-use plastics preemption
HB 1641 completely eliminates all city regulations on single-use plastic pollutants. It would mean much of our zero waste work these past few years on limiting single-use plastics will go away.
Single-use plastics are one of the more egregious forms of waste. They’re ubiquitous, from our shopping bags to our straws to our Amazon Prime packages. But they require fossil fuels to create, and they never fully break down after being thrown away, creating microplastics that permeate everything.
Reducing the use of these has been a priority of the City Commission in prior years, this would put a big end to that.
Banning of public camping
HB 1365/SB 1530 would make it illegal for cities to allow sleeping or camping on public lands or public rights-of-way. The goal is to essentially criminalize homelessness and force cities to more aggressively enforce anti-homelessness rules.
Of course, every city in Florida bans camping on roads and public areas, including Gainesville. The problem is that aggressive enforcement of these rules doesn’t solve the problem and simply creates more. Homeless people have nowhere else to go, there aren’t enough beds for them to sleep in, so by kicking someone out you’re just shifting the person from one part of town to another.
What this bill does is put that broken process on steroids, allowing local businesses and homeowners to sue the city if a homeless person is sleeping near their property. That’s a huge liability for the City, one that will require lots of police resources used to punitively push people around with nowhere else to go.
The answer to this problem is to invest in more homes, provide access to resources, and be thoughtful about when and where you utilize enforcement. This bill takes that careful planning away from cities with a sledgehammer.
NE 9th Street Redesign
The City is planning to repave and redesign NE 9th using “Streets, Stations, and Strong Foundations” funding (the road portion of Wild Spaces & Public Places). A few weeks ago about 40 neighbors packed into Howard Bishop Middle School to learn more and give feedback.
I’m incredibly excited to see this done. Northeast Ninth is a big pet peeve of mine for road design. It’s a road in a highly walkable residential neighborhood (Duckpond) that leads directly to one of Alachua County’s largest middle schools: Howard Bishop. It should be a safe and walkable street where parents can feel comfortable letting their kids walk or ride bikes to their middle school.
Instead it’s a very wide road with both bike lanes and on-street parking where cars speed well above the posted 30 MPH level. The reason for that is it’s a road with mostly empty on-street parking that feels more like a highway-sized road than the residential road it is. In short, people speed because the road is designed for speeding.
Here are the layouts the city is considering for redesigning the road.
Keep it the same with 4’ bike lanes, on street parking, and 12’ lanes
Larger bike lanes with buffers or physical protection
A cycle track on the right-hand side on the road, creating a Hawthorne Trail style path within the road.
I have a lot of thoughts about all of this, but we really want to hear from the people who use this road frequently. Take this City survey and let us know how you’d like the road to be redesigned.
Some Local Highlights
District 4 Business
With Valentine’s Day coming up I wanted to highlight a really great date spot in District 4: the Fat Tuscan cooking classes. The Fat Tuscan is on the corner of NE 8th Avenue and NE 1st St and most probably remember it as a great little Italian restaurant.
That changed a few years ago and now they provide small, intimate cooking classes instead that are a lot of fun. Check out their list of classes upcoming from Cheesecake making to Buschetta. It sells out quickly, so look ahead a month or so if you want to get in!
Local Music Highlight
My favorite local Gainesville band at the moment is Trustfall. They’re a group of incredible musicians making music that is very hard to classify. It’s indie, it’s progressive, it’s hard rock, it’s jam rock, it’s easy listening.
Mostly it’s a lot of fun. The lead singer, Angela Hughes, sings cute lyrics on a ukulele while surrounded by an incredible drummer and a guitar/bass team that trade instruments back and forth throughout the set. The melodies are intricate and bounce off each instrument in a playful yet prog-rock style.
Trustfall seems to be playing everywhere I go recently, so you’ll probably see them around at First Magnitude, outside the Streeterie, or anywhere else you see your local music:
To give credit where credits due, C. Eric Lawson, the CEO of North Florida Regional Medical Center voted against this decision.
I know I’ve already mentioned the two-weeks thing, but it needs to be repeated.
GRU isn’t a business, it’s a municipal utility that should be run efficiently and effectively as every organization should. This is a big talking point of the Authority, to “run GRU like a business”, so as a person who has run my own business for years and run entrepreneurship training programs I like to point out when they come up short of this goal.
It’s an arrangement that has worked out very well for GRU. If they were paying standard franchise fees they’d be paying the County roughly 7 times more than they are now.
Brian:
your emails are so very informative. I love them. i especially like the info on GRU. It's scary as hell.
Thank you so much for this very clear explanation of how the city's budget will be impacted by GRU's actions and all the other proposals to break our city. What can a private citizen do?