Florida 2023 2023 Regular Session

Florida House Bill H1645 Analysis / Analysis

Filed 04/20/2023

                    This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives. 
STORAGE NAME: h1645.SAC 
DATE: 4/20/2023 
 
HOUSE OF REPRESENTATIVES LOCAL BILL STAFF ANALYSIS 
 
BILL #: CS/HB 1645    City of Gainesville, Alachua County 
SPONSOR(S): State Affairs Committee, Clemons 
TIED BILLS:    IDEN./SIM. BILLS:  
 
REFERENCE 	ACTION ANALYST STAFF DIRECTOR or 
BUDGET/POLICY CHIEF 
1) State Affairs Committee 	14 Y, 5 N, As 
CS 
Mwakyanjala Williamson 
SUMMARY ANALYSIS 
Established in 1912, the Gainesville Regional Utilities (GRU) is a municipal utility system providing electric, 
natural gas, water, wastewater, and telecommunications services to approximately 93,000 customers in the 
City of Gainesville (City) and surrounding areas. GRU is governed by the City commission, who appoints a 
general manager to manage the day-to-day operation of the utility.  
 
The bill amends the City charter to establish the Gainesville Regional Utilities Authority (Authority) to govern 
GRU. The bill details the Authority’s governance and leadership structure, as well as duties and powers. In 
summary, the bill: 
 Establishes the Authority as a unit of city government, free from the direction and control of the City 
commission and City charter officers, for the purpose of governing the utilities operated by GRU. 
 Establishes the powers and duties of the Authority. 
 Provides that the Authority will consist of five members appointed by the Governor, to include at least 
one member from outside the City boundaries, serving four-year terms. 
 Sets qualification requirements for Authority members and provides for a citizen nomination solicitation 
process. 
 Provides that an Authority member may be removed or suspended by the Governor for cause under 
general law. 
 Provides for the continued service of GRU personnel under the chief executive officer/general manager 
(CEO/GM). 
 Requires the performance of all acts necessary to ensure an orderly transition of GRU governance to 
the Authority. 
 Limits transfers from the utility fund to the City to the aggregate of utility system net revenues less the 
flow of funds and requires any remaining funds after the transfer to be dedicated to additional debt 
service or used as equity for future capital projects. 
 Requires the Authority and CEO/GM to the make all policy and operational decisions for the utility 
based only on pecuniary factors and utility industry best practices. 
 Repeals section 3.06 of the current City charter relating to the general manager for utilities. 
 
The Economic Impact Statement filed with the bill states that the bill is not expected to have a fiscal impact. 
   STORAGE NAME: h1645.SAC 	PAGE: 2 
DATE: 4/20/2023 
  
FULL ANALYSIS 
I.  SUBSTANTIVE ANALYSIS 
 
A. EFFECT OF PROPOSED CHANGES: 
Present Situation 
 
Municipal Utilities 
 
Pursuant to s. 2(b), Art. VIII of the State Constitution, municipalities have the governmental, corporate, 
and proprietary powers to enable them to conduct municipal government, perform municipal functions, 
and render municipal services. Municipalities may exercise any power for municipal purposes, except 
when expressly prohibited by law.
1
 The legislative body of each municipality has the power to enact 
legislation on any subject upon which the Legislature may act with certain exceptions.
2
 Under their 
home rule power and as otherwise provided or limited by law or agreement, municipalities may provide 
utilities to citizens and entities within the municipality’s corporate boundaries, in unincorporated areas, 
and even in other municipalities.  
 
Many municipalities own and operate electric utilities and natural gas utilities and govern the operation 
of those utilities through ordinance, code, or policies. Currently, there are 33 municipal electric utilities 
in the state.
3
 Municipal electric and natural gas utility rates are not directly regulated by the Public 
Service Commission (PSC), however, the PSC does have jurisdiction over municipal electric utilities for 
matters related to rate structure, power plant transmission line site certification, general reporting 
jurisdiction, service territory and territory disputes, energy efficiency reporting, 10-year site plans, 
reporting on system hardening and resiliency, reporting on net metering, audits related to regulatory 
assessment fees, monitoring renewable energy, reporting on facilities inspection and vegetation 
management, and grid bill jurisdiction.
4
  
 
Most municipal utility systems are governed by the municipality’s governing body (i.e., the city 
commission). Six municipal electric utility systems in Florida are governed by separate utility boards, or 
“authorities,” which are typically appointed by the municipality’s governing body.
5
 These utility 
authorities vary in structure, though the charter documents for each generally address the powers and 
duties of the authority (including terms related to rate-setting, financing, acquisitions, and eminent 
domain), the selection process for authority members (including qualifications and terms of office), the 
management and personnel of the authority, the transfer of revenues from utility operations to the 
municipality, and the degree of continuing oversight by the municipal governing body. 
 
Current law authorizes municipalities to raise amounts of money necessary for the conduct of the 
municipal government. A municipality may do so by taxation and licenses authorized by Florida’s 
constitution or general law, or by user charges or fees authorized by ordinance.
6
 Municipalities routinely 
transfer a portion of their utility earnings to their general funds for non-utility purposes, though the 
amounts and percentages may vary widely among municipalities.
7
 These transfers may be limited in 
some circumstances by ordinance, but they are not governed by state law. 
 
Extraterritorial Jurisdiction  
                                                
1
 Section 166.021(2), F.S., provides that any activity or power which may be exercised by the state or its political subdivisions is 
considered a municipal purpose. 
2
 Pursuant to s. 166.021(3), F.S., a municipality may not enact legislation on the following: the subjects of annexation, merger, and 
exercise of extraterritorial power, which require general law or special law; any subject expressly prohibited by the constitution; any 
subject expressly preempted to state or county government by the constitution or by general law; and any subject preempted to a 
county pursuant to a county charter adopted under the authority of the State constitution. 
3
 Presentation on Florida Public Power, Florida Municipal Electric Association (herein Florida Public Power), slide 2, available at 
https://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?PublicationType=Committees&CommitteeId=3226&Session=2023
&DocumentType=Meeting+Packets&FileName=ecc+2-9-23.pdf (last visited Apr. 13, 2023).   
4
 Id. at slide 3.  
5
 The Keys Energy Services Utility Board is the only utility authority in the state with elected board members. Key West has an elected 
board, with two of the five members from outside the city limits. Florida Public Power, slide 8. 
6
 S. 166.201, F.S. 
7
 Florida Public Power, slide 6.  STORAGE NAME: h1645.SAC 	PAGE: 3 
DATE: 4/20/2023 
  
 
A municipality that operates a water or sewer utility outside of its municipal boundaries may impose 
higher rates, fees, and charges on consumers receiving service outside of its corporate boundaries as 
compared to the rates, fees, and charges imposed on consumers within its boundaries. The 
municipality can accomplish this in two ways: 
 First, for consumers outside of its boundaries, it may add a surcharge of up to 25 percent of the 
rates, fees, and charges imposed on consumers within its boundaries. This mechanism does 
not require a public hearing.
8
 
 Second, it may set separate rates, fees, and charges for consumers outside its boundaries 
based on the same factors used to set rates for consumers within its boundaries. It may add a 
surcharge of up to 25 percent of these charges, provided that the total of all such rates, fees, 
and charges for service to consumers outside its boundaries may not exceed the total charges 
to consumers within its boundaries by more than 50 percent for corresponding service. Rates 
set in this manner require a public hearing at which all users served or to be served by the 
water or sewer utilities and all other interested persons will have an opportunity to be heard 
concerning the proposed rates.
9
 
 
Gainesville Regional Utilities 
 
Gainesville Regional Utilities (GRU) was established in 1912 as a city-run electric utility.
10
 It is the fifth 
largest municipal electric utility in Florida, serving approximately 93,000 retail and wholesale customers 
in the City of Gainesville (City) and surrounding areas.
11
 GRU offers electric, natural gas, water, 
wastewater, and telecommunications services.
 
An audit for Fiscal Year (FY) 2021-2022 states that 
GRU in September 2022 had $1.9 billion in capital assets
12
 and operating revenue of $525 million.
13
 
GRU’s residential electric utility rates in February 2023 were the highest in the state among municipal 
utility providers.
14
 
 
The City’s charter provides that the City commission appoints an at-will general manager for utilities 
who is responsible for the efficient administration of the utility system.
15
 The City commission is 
comprised of seven members: four elected from single member districts, two elected at-large, and one 
who is elected as mayor.
16
 
 
The charter sets forth the general manager’s powers and duties, which provides that the general 
manager is: 
 Responsible for and has exclusive management jurisdiction and control over operating and 
financial affairs of the utility system including, but not limited to, the planning, development, 
production, purchase, sale, exchange, interchange, transmission, and distribution of all 
electricity; the planning, development, purchase, sale, exchange, interchange, transmission, 
and distribution of all natural gas; the planning, development, supply, treatment, transmission, 
distribution and sale of all potable water; and the planning, development, collection, treatment, 
disposal and billing of all wastewater now or hereafter provided by the City;  
 Required to submit to the City commission for its consideration a yearly budget for the operation 
of the utility system; 
                                                
8
 S. 180.191(1)(a), F.S. 
9
 S. 180.191(1)(b), F.S. 
10
 GRU, Milestones, https://www.gru.com/100thAnniversary/Milestones.aspx (last visited Apr. 13, 2023). 
11
 GRU, About GRU, https://www.gru.com/AboutGRU.aspx (last visited Apr. 13, 2023). 
12
 GRU, Financial Statements and Independent Auditors’ Report, Gainesville Regional Utilities, Gainesville, Florida, September 30, 
2022 and 2021 (herein Financial Statements and Independent Auditors’ Report), 8, available at 
https://www.gru.com/Portals/0/2023%20Updates/Audited%20Financial%20Statements%20for%20the%20Year%20Ended%20Septemb
er%2030,%202022_final.pdf (last visited Apr. 13, 2023). 
13
 Financial Statements and Independent Auditors’ Report 14. 
14
 Florida Municipal Electric Association, Electric Bill Comparisons, https://assets.noviams.com/novi-file-
uploads/fmea/Rates/2023/2023_february_rates.pdf (last visited Apr. 13, 2023). 
15
 City of Gainesville Charter, Art. III, s. 3.06. 
16
 City of Gainesville, City Commission, https://www.gainesvillefl.gov/City-Commission (last visited Apr. 13, 2023).  STORAGE NAME: h1645.SAC 	PAGE: 4 
DATE: 4/20/2023 
  
 The purchasing agent for all equipment, materials, supplies, and services necessary for 
operating and maintaining the utility system subject to policies promulgated by the City 
commission; 
 Required to propose ordinances to designate the job titles of subordinates that are to be 
considered directors of departments;  
 Required to appoint and, except as otherwise provided in the charter, remove all directors of 
departments at will; 
 Required to recommend to the City commission all measures necessary and expedient for the 
proper governance and management of the utility system;  
 Required to keep the City commission fully advised as to the management, governance, and 
needs of the utility system; and 
 Required to perform all other duties prescribed by law, the charter, ordinance, or direction of the 
City commission.
17
  
 
The charter also prohibits the City commission from disposing of, or agreeing to dispose of, in whole or 
part, the City's electrical or water production or distribution facilities so as to materially reduce the City’s 
capacity to produce or distribute electrical energy or water, except by ordinance with the prior approval 
of a majority vote of the qualified electors of the City.
18
 
 
Chapter 27 of the City’s Code of Ordinances sets forth regulations pertaining to each municipal utility 
system.
19
 
 
Prior to 2016, the City utilized an “Energy Advisory Committee” comprised of nine members appointed 
by the city commission. This committee had the following responsibilities: to serve as a 
communications channel between the City commission, utility staff, and the citizens of the City, in order 
to understand and solve the problems relating to energy; to promote public access to information on the 
City’s facilities, services, policies, and programs concerning energy, and consider the future energy 
needs of the community with respect to the utilities as well as general government; to assist utility staff 
by suggesting and reviewing policies affecting programs and services that affect acquisition, delivery, 
or utilization of energy resources within the community; and to perform any other duties, which may be 
within the purview of the committee and which may be assigned by the City commission.
20
 In addition, 
a “Regional Utilities Committee,” comprised of three City commissioners and an ex-officio member 
representing Alachua County, had the responsibility to report to the City commission on GRU-related 
matters.
21
 
 
In 2016, the City replaced the Energy Advisory Committee with a “Utility Advisory Board” (UAB) to 
serve as an advisor to the City commission on all policy and governance decisions regarding utility 
services.
22
 The UAB is comprised of seven members and meets at least once a month. All members of 
the UAB must reside within GRU’s service territory and receive utility service. A minimum of one 
member must reside outside of the City’s boundaries. The membership is comprised of the following: a 
representative of a major business (defined as having 25 or more employees) that is a GRU 
commercial customer; a person with utility management experience; a person with investment banking, 
financial, or certified public accounting experience; a licensed attorney with business, contract, or 
corporate law experience; a person with engineering experience; and two persons with any 
qualifications the City commission deems relevant or beneficial to service on the UAB. The UAB must 
make independent recommendations to the City commission and the general manager of GRU 
regarding all aspects of utility governance, including all items that the general manager intends to place 
on a City commission agenda.
23
 
 
                                                
17
 City of Gainesville Charter, Art. III, s. 3.06(2)(a)-(h). 
18
 Id. at s. 5.04. 
19
 City of Gainesville Code of Ordinances, ch. 27, art. I-VI. 
20
 Navigant Consulting LLC, Re: Independent Investigative Review of the Gainesville Regional Utilities (GRU), April 15, 2015, at 171-
172. 
21
 Id. at 171. 
22
 City of Gainesville, Ordinance No. 140384, §2 (Nov. 19, 2015).  
23
 City of Gainesville, Code of Ordinances, ch. 2, art. V, div. 7.  STORAGE NAME: h1645.SAC 	PAGE: 5 
DATE: 4/20/2023 
  
2013 Report by the Gainesville Area Chamber of Commerce and Council for Economic Outreach 
 
In November 2013, the Gainesville Area Chamber of Commerce and Council for Economic Outreach 
submitted a report to the City.
24
 The study was conducted by a 12-member Energy Study Group that 
produced a report providing four policy recommendations for the City “to help Gainesville remain a 
competitively advantaged community for sustainable economic development as it relates to overall 
energy costs.”
25
 The fourth recommendation provided that the method of governance be changed to an 
appointed utility authority.
26
 The report noted that JEA (formerly known as Jacksonville Electric 
Authority) was the largest municipal utility in Florida at that time
27
 and it had a governance structure 
under which the board was appointed by the Mayor of Jacksonville, subject to confirmation by the 
Council.
28
 The report also noted that the Orlando Utilities Commission board appointed its own 
members from a pool of candidates identified by a city nominating committee,
29
 and that Lakeland 
Electric had a Commission/Customer Committee Hybrid.
30
 The report also stated that the City of 
Tallahassee had a city commission governance model.
31
 According to the report, Florida cities with an 
appointed utility authority “are more competitive than Gainesville in commercial and industrial customer 
class electricity costs,” noting that Jacksonville, Orlando, Kissimmee, Fort Pierce, and New Smyrna 
Beach each have an appointed utility authority and that “[c]ommercial and industrial customer class 
electricity costs in those cities are significantly lower than in Gainesville.”
32
 
 
Effect of Proposed Changes 
 
The bill amends the City’s charter to establish the Gainesville Regional Utilities Authority (Authority) to 
govern GRU’s utility systems. The following chart summarizes the provisions of the charter 
amendment: 
 
ARTICLE VII - GAINESVILLE REGIONAL UTILTIES AUTHORITY 
7.01  Establishment 
  Creates a regional utilities commission, named the “Gainesville Regional Utilities 
Authority.” 
 Provides that GRU will be governed by the Authority upon the installation of the 
Authority’s governing members pursuant to Article VII. 
 Provides that the Authority operates as a unit of City government, but is free 
from direction and control of the City commission and City charter officers. 
 Lists express purposes for the Authority, including “managing, operating, 
controlling, and otherwise having broad authority with respect to [GRU].” 
7.02  Definitions 
  Defines the following terms for the purpose of Article VII: “Authority,” “City,” “City 
Commission,” “County,” “Customer,” “Flow of Funds,” “GRU,” “Government 
Services Contribution,” “Member,” “Net Revenues,” “Service-Level Agreement,” 
and “Utilities.”  
7.03  Powers and duties 
  
 
 Provides the following powers and duties of the Authority: 
o To manage, operate, and control the utilities and do all things necessary to 
effectuate an orderly transition. 
o To establish and amend the rates, fees, assessments, charges, rules, 
regulations, and policies governing the sale and use of services provided 
through the utilities. 
                                                
24
 Gainesville Area Chamber of Commerce, A Gainesville Solution: Energy Competitiveness Report, November 2013, 41. 
25
 Id. at 7. 
26
 Id.  
27
 Id. at 51. 
28
 Id. at 50. 
29
 Id. 
30
 Id. 
31
 Id. 
32
 Id. at 7.  STORAGE NAME: h1645.SAC 	PAGE: 6 
DATE: 4/20/2023 
  
o To acquire real or personal property and to construct projects as necessary 
to operate, maintain, enlarge, extend, preserve, and promote the utility 
systems in a manner that will ensure the economic, responsible, safe, and 
efficient provision of utility services. 
o To exercise the power of eminent domain pursuant to ch. 166, F.S., to 
acquire property for the purpose of obtaining, constructing, and maintaining 
utility facilities. 
o To authorize the issuance of revenue bonds by resolution establishing the 
form, terms, and purpose of the bonds, for the purpose of financing or 
refinancing utility system projects; prohibit issuance of general obligation 
bonds; require bonds and other forms of indebtedness to be executed and 
attested by officers of the City designated by the Authority. 
o 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 
the City charter. 
o To prepare and submit an annual budget to the City commission at least 
three months before the start of the City’s fiscal year, including the amount of 
any transfer to the City, which is subject to the limitations provided in section 
7.11 of the City charter. 
o To appoint and remove a chief executive officer/general manager (CEO/GM). 
o To recommend, by resolution to the City commission, the acquisition of a 
new utility system. 
7.04  Authority members 
7.04(1)  Provides for the appointment of five members by the Governor: 
o One member must be a residential customer with substantial knowledge of 
GRU, its operations, and its history. 
o One member must be the owner or representative of a private, non-
governmental customer consuming at least 10,000 kilowatt hours per month 
of electricity during the previous 12 months. 
o Three members must be competent and knowledgeable in one or more 
specific fields including, but not limited to, law, economics, accounting, 
engineering, finance, or energy. 
7.04(2)  Provides that members of the Authority must: 
o Maintain their primary residence within the electric service territory of GRU’s 
electric utility system. 
o Receive GRU electric utility system service at all times during the term of 
appointment; 
o Have no felony conviction; and 
o Be a qualified elector of the City, except that at least one member must be a 
resident of the unincorporated area of Alachua County or a municipality in 
the county other than the City of Gainesville. 
7.04(3)  Provides that the composition of the Authority must be adjusted at the expiration 
of each member’s term to reflect the ratio of electric meters serving customers 
outside of the City boundaries to electric meters serving all customers (e.g., if 40 
percent of GRU electric meters are serving customers outside of the City 
boundaries at the time of a vacancy, a second Authority member must be 
appointed from outside of the City boundaries). 
7.05 Member terms 
7.05(1)  Requires the Governor to issue a public notice soliciting nominations for 
Authority members within 120 days of the effective date of the article. 
 Requires a nomination solicitation period of at least 30 days after the date of the 
public notice. 
7.05(2)  Requires the Governor to appoint initial members of the Authority within 60 days 
after the close of the nomination solicitation period for the following terms: 
o Initial member term starts at midnight on October 1, 2023. 
o Staggered initial terms: one member each for a one-, two-, and three-year 
term, two members with four-year terms.  STORAGE NAME: h1645.SAC 	PAGE: 7 
DATE: 4/20/2023 
  
7.05(3)  Requires subsequent Authority members to be selected from nominations 
solicited from the public for at least 30 days. 
 Provides for four-year terms for subsequent appointments, taking effect at 
midnight on October 1 of the year in question. 
 Provides that members appointed to complete an unexpired term must serve 
from the time of appointment until the end of the term. 
7.05(4)  Requires the Governor to fill any vacancy for the unexpired portion of a term 
within 60 days after the vacancy becomes known, if more than 90 days remain. 
7.06 Member compensation 
  Beginning October 1, 2023, provides that necessary expenses of members 
incurred in carrying out and conducting Authority business must be paid in 
accordance with Authority policy and procedures, subject to the approval of a 
majority of the Authority members. 
 Provides that no supplemental benefits may be provided for a member position. 
7.07 Authority, oath, organization, and meeting 
7.07(1)  Provides for an initial meeting to be held on October 4, 2023, at 6:00 p.m. at the 
chambers of the City commission. 
7.07(2)  Requires each Authority member to take an oath or affirmation, given by the 
mayor or designee, similar to the oath or affirmation required of a member of the 
City commission. 
7.07(3)  Specifies that the first official act of the Authority is electing a chair and a vice 
chair from among its membership. 
7.07(4)  Requires the Authority to meet at least once each month, except in the case of 
unforeseen circumstances. 
 Requires meetings to be noticed and open to the public. 
 Requires minutes of each meeting be kept, except that meetings related to 
settlement of pending litigation may be held in accordance with law. 
7.07(5)  Specifies that GRU’s general manager (GM) or designee is responsible for 
making arrangements for and providing adequate notice for the initial meeting. 
7.08 Removal and suspension of members 
7.08(1)  Provides that a member may be removed or suspended by the Governor in 
accordance with s. 112.501, F.S., or for failure to maintain the qualifications 
specified in section 7.04 of the charter. 
7.08(2)  Provides that the Authority may recommend to the Governor that an Authority 
member be removed or suspended based on the grounds that the City 
commission may remove or suspend an official, and provides a process for the 
Authority to take such action (reasonable notice, written statement of the 
grounds, and an opportunity to be heard). 
7.09  Management and Personnel 
7.09(1)  Makes the CEO/GM responsible for direction and administration of utility 
functions, subject to the rules and resolutions of the Authority. 
 Provides that the CEO/GM serves at the pleasure of the Authority. 
 Empowers the Authority to appoint or remove the CEO/GM by majority vote. 
 Provides that the sitting GM of GRU, until appointment of a CEO/GM by the 
Authority, serves as the CEO/GM.
33
 
 Provides that a sitting member of the Authority may not be selected as the 
CEO/GM. 
7.09(2)  Provides that all officers and employees of the City who serve under the 
supervision and direction of the sitting GM of GRU serve under the CEO/GM. 
 Grants the CEO/GM exclusive authority to hire, transfer, promote, discipline, or 
terminate employees under his or her supervision and direction. 
7.09(3)  Authorizes the Authority to fix the salary of the CEO/GM. 
                                                
33
 This language provides continuity in the period from July 1, 2023, to October 4, 2023, when the current GM position appointed by the 
City has been eliminated but the governing board of the Authority has not yet taken office.  STORAGE NAME: h1645.SAC 	PAGE: 8 
DATE: 4/20/2023 
  
 Authorizes the CEO/GM to fix the salaries of all other employees under his or 
her direction, consistent with the Authority’s approved budget. 
 Provides that the sitting GM of GRU, and all other officers and employees of the 
City who become subject to the supervision and direction of the CEO/GM, must 
continue without any loss of rights or benefits under the pension plans and civil 
service merit system of the City. 
7.10 General provisions 
7.10(1)  Requires the City and the Authority to perform all acts and create such 
instruments as are necessary and proper for an orderly transition of governance, 
operation, management, and control of all utility systems, properties, and assets 
held in possession of GRU as of January 1, 2023, to the Authority.  
 Provides that, notwithstanding the change to the governance structure, the utility 
system will continue to be operated as a single enterprise and the new board 
does not constitute a change in ownership. 
7.10(2)  Provides that all City ordinances, policies, rates, fees, assessments, charges, 
rules, regulations, and budgets related to operation of the utilities remain in 
effect until modified by the Authority. 
 Provides that these charter amendment provisions govern in the event of a 
conflict with any City charter provision, ordinance, resolution, decree, or part 
thereof, provided that the resolution of any such conflict is not intended to 
interfere with existing contractual arrangements between the City and Alachua 
County. 
7.10(3)  Provides that all rights, responsibilities, claims, and actions involving GRU as of 
the transfer to the Authority continue, except as may be modified by the 
Authority under its powers. 
7.10(4)  Prohibits the City from levying on the Authority or the utilities a franchise, right-
of-way, license, permit, or usage fee or tax, unless allowed to do so by general 
law. 
7.10(5)  Provides that any utility advisory board created by the City commission does not 
have an advisory role as to the Authority. 
7.10(6)  Provides that Authority members are not individually responsible for Authority 
debts or liabilities. 
7.10(7)  Requires the Authority to develop an ethics policy and code of business conduct 
and review those polices at least biennially. 
7.10(8)  In order to provide for the transitional administrative needs and orderly 
compliance with the provisions of the act, authorizes the chairperson or 
designee to execute documents required for the transition. 
7.11 Limitation on Government Services Contribution 
7.11(1)  Limits the “government services contribution” (transfer of utility revenues to the 
City to use for general government purposes) to the aggregate of utility system 
net revenues (gross revenues minus fuel revenues) minus “flow of funds” 
(amount required for debt service, necessary operation and management 
expenses, a “reasonable contribution” to the utility plan improvement fund, 
identified service-level agreement losses, and any other lawful purpose provided 
in bond covenants). 
7.11(2)  Requires any remaining funds after flow of funds and government services 
contribution to be dedicated to additional debt service or used as equity for 
future capital projects. 
7.12 Limitation on Utility Directives 
7.12  Requires the Authority and CEO/GM to consider only pecuniary factors and 
utility industry best practices that solely further the fiscal and financial benefit of 
the utility system and its customers in making all policy and operational 
decisions. 
  STORAGE NAME: h1645.SAC 	PAGE: 9 
DATE: 4/20/2023 
  
In addition, the bill repeals section 3.06 of article III of section 1 of the City’s charter.
34
 This section 
authorizes the City commission to appoint a GM for utilities. Because the charter amendment makes 
the selection of the GM for GRU a power of the Authority, this section of the charter would become 
obsolete. As noted above, the bill creates section 7.09(1) of the charter, which provides that the current 
GM appointed by the City must be retained as the CEO/GM absent action by the Authority. 
 
The Economic Impact Statement filed with the bill states that the bill is not expected to have a fiscal 
impact. 
  
B. SECTION DIRECTORY: 
Section 1: Repeals section 3.06 of article III of section 1 of ch. 90-394, Laws of Fla. 
 
Section 2: Creates article VII of ch. 12760, Laws of Florida (1927), as amended by ch. 90-394, 
Laws of Fla., Gainesville Regional Utilities Authority. 
 
Section 3: Provides an effective date of July 1, 2023. 
II.  NOTICE/REFERENDUM AND OTHER REQUIREMENTS 
 
A.  NOTICE PUBLISHED?     Yes [X]     No [] 
 
      IF YES, WHEN? March 9, 2023. 
 
WHERE? The Gainesville Sun, a newspaper published in Gainesville, Alachua County, 
Florida. 
 
B.  REFERENDUM(S) REQUIRED?     Yes []     No [X] 
 
      IF YES, WHEN? 
 
C.  LOCAL BILL CERTIFICATION FILED?     Yes [X]     No [] 
 
D.  ECONOMIC IMPACT STATEMENT FILED?     Yes [X]     No [] 
III.  COMMENTS 
 
A. CONSTITUTIONAL ISSUES: 
None. 
 
B. RULE-MAKING AUTHORITY: 
None. 
 
C. DRAFTING ISSUES OR OTHER COMMENTS: 
None. 
IV.  AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES 
On April 19, 2023, the State Affairs Committee adopted a proposed committee substitute (PCS) and reported 
the bill favorably as a committee substitute. The PCS amended the City charter to create the Gainesville 
Regional Utilities Authority, established the governing structure of the Authority, and established limitations on 
the transfer of funds from the utility system to the City. 
 
                                                
34
 Ch. 12760 (1927), Laws of Fla., as amended by ch. 90-394, s. 1, Laws of Fla.  STORAGE NAME: h1645.SAC 	PAGE: 10 
DATE: 4/20/2023 
  
The analysis is drafted to the committee substitute adopted by the State Affairs Committee.