Lawmaker calls for resignation of Gainesville mayor, GRU general manager

Florida Rep. Chuck Clemons is calling for Gainesville Mayor Harvey Ward and Gainesville Regional Utilities General Manager Tony Cunningham to resign from office for their handling of bond issuance that is expected to cost taxpayers millions more than originally planned.

The debate centers around a letter from a GRU employee who accuses Ward of directing the municipal utility to delay the decision with a looming interest rate spike. Cunningham has said other city commissioners agreed with the decision, raising questions over possible sunshine law violations.

In an interview with The Gainesville Sun Wednesday afternoon following an Alachua County Legislative Delegation meeting, Clemons said he wants the mayor and Cunningham to resign and called for a full-court investigation.

“I’ll be the first to call today for the mayor to resign office based upon how this has gone down," he said. "I will call for [Cunningham] to resign his position from the Gainesville Regional Utilities because this has gone down. There’s been untoward out-of-the-sunshine meetings. I will not rest until those facts are uncovered and seen by all the residents of Gainesville and the state of Florida.”

More: Vote from state lawmakers to investigate Gainesville, mayor voided due to committee rule

Ward, who has denied any wrongdoing, declined to comment on the representative's comments but defended himself during an Oct. 16 Joint Legislative Auditing Committee meeting, where lawmakers blindsided him and Cunningham with questions about the bond issue despite the fact the hearing was intended to be about a near-two-year-old audit about city finances.

JLAC members voted to relaunch an investigation into the city’s finances and look into any possible misconduct. The vote, however, has since been voided as it garnered a 4-2 affirmative vote from JLAC House members but failed to reach a majority from the Senate with a 2-2 tie. Lawmakers are expected to recast their votes again at a future meeting.

Timeline of bonds

Republican lawmakers are accusing Ward of acting outside his role in Gainesville's weak mayor system and point to a May 11 memo from GRU CFO Claudia Rasnick as the smoking gun.

In it, Rasnick states that Ward "directed" the delay of bonds until after the legislative session ended on May 5. She writes that Cunningham met with Ward on March 15 to discuss issuing $151 million in new bonds for GRU and that he "directed" GRU to hold off until the legislative session ended on May 5.

Ward has said that he didn't think it was wise to move forward at the time, despite risking having to pay a higher amount later due to interest rates and GRU being ready to act.

Rasnick also wrote that GRU finance employees later met with commissioners individually and shared that an unnamed member of the commission - "so as to not violate any Sunshine Laws” - made a directive to hold off on the deal. A majority also agreed it should wait.

At the time, officials were fresh off their February JLAC meeting, where lawmakers urged city officials to sort out a debt repayment plan and take "bold actions" with its upcoming budget. State Sen. Jason Brodeur at the meeting warned officials not to take on any more debt and suggested increasing property taxes to help with a debt payment plan.

City leaders had also begun working on a 10-year debt reduction plan that is expected to save taxpayers about $315 million.

Also on March 15, Clemons publicly stated that GRU was "headed for bankruptcy," Rasnick's letter says, a sentiment he has shared multiple times.

On April 26, Ward penned a letter to Clemons asking him to withdraw House Bill 1645, calling it "problematic at best" and citing a potential credit downgrade of the city. The bill, not yet approved, stripped away the city's control of its municipal utility, instead placing all decision-making powers with a five-member board appointed by Gov. Ron DeSantis.

The heated public battle drew concerns from Barclays − the bonding agency the city was negotiating with − which Rasnick also notes.

"GRU Finance was informed May 10, 2023 that Barclays may be withdrawing their offer," the letter states. "Two days prior to this notification Barclays submitted due diligence questions specifically referencing the statements made by Representative Clemons and Mayor Ward."

Though the full impact ended up being $2.9 million, Rasnick notes that it "was unknown at that time what the additional costs would be incurred."

Initially, city leaders placed the blame on the Legislature for the increased price and also pointed to concerns raised by Barclays − the bonding agency they were negotiating with. Eventually, the city contracted with TD Bank for its willingness to approve the bonds prior to HB-1645's July 1 effective date and to further delay action. Commissioners feared waiting any longer would result in the bond deal being rejected.

An Aug. 8 memo from PFM Financial Advisors described the transition as "fair" but also said that Barclays' decision to wait was for "sound reason."

Clemons, however, disagrees and believes commissioners should also be held accountable for the increased cost.

"... The mayor and Commissioner Bryan Eastman took to social media and other public outlets to place blame directly on the Legislature for the increased costs which was never true," Clemons said in a statement to The Sun. "The mayor and Commissioner Eastman doubled down on their narrative and will now have to back up their statement with facts, probably under oath."

He also called for the resignation of Cunningham for not intervening.

"It is unconscionable that Mr. Cunningham knew full well that the delay of this bond underwriting was neither reasonable or financially prudent and still refused to exhibit good judgment on behalf of the customers," he continued. "This bad decision cost $2.9 million. This is not monopoly money. He should be held accountable."

More: State audit committee blindsides Gainesville officials by ordering new investigation

Defending the decision

In an article published Tuesday by the Alachua Chronicle, the conservative blog site reports that Cunningham recently asked Rasnick whether the PFM memo supported delaying the bonds, to which she emailed him "no." The website also falsely stated The Sun reported as much, though PFM never offered a formal recommendation, only guidance.

The article goes on to detail a series of events and suggests Ward hasn't been truthful in his explanation of the bonds issue, which may have played a role in Clemons' comments.

Ward told JLAC members on Oct. 16 that he was "at a loss for words" as to why Rasnick said he "directed" the delay and has maintained he did nothing wrong.

“I have no capacity to direct," he said. "It is my habit to say ‘I am one vote … here’s how I would move forward if asked to vote on it."

Cunningham also backed Ward up at the JLAC meeting that it wasn't an order, but also acknowledged to JLAC that waiting for the bond deal had no impact on the city's long-term debt plan. He was cut off from speaking by Rep. Mike Caruso before being able to continue explaining the issue.

Ward offered at the delegation meeting to mend the relationship between the city and the Legislature hours before Clemons called for his resignation.

"I recognize that my fellow city commissioners and I have work to do to bridge gaps between us and you as our elected representation in Tallahassee, and I fully intend to build those relationships on behalf of the people we all serve," he said.

Regardless, Clemons wasn't having it.

"What the mayor has done, I believe, is both unethical and against the laws of the state of Florida," Clemons told The Sun after the meeting. "I will call for the House Committee on Ethics, Elections and Open Government Subcommittee to open an investigation as to these irregularities."

This article originally appeared on The Gainesville Sun: State lawmaker calls for Gainesville mayor, GRU manager to resign