City Commission OKs Hunzinger resignation agreement

Published: Thursday, October 17, 2013 at 11:32 a.m.
Last Modified: Thursday, October 17, 2013 at 7:38 p.m.

After years of persistent backlash over the city's biomass contract, Gainesville Regional Utilities General Manager Bob Hunzinger will step down in mid-November with severance pay.

The City Commission passed the agreement 5-2, with Randy Wells and Yvonne Hinson-Rawls casting the dissenting votes.

Wells' and Hinson-Rawls' decisions to oppose Hunzinger's resignation agreement apparently stem from a legal memo that has come to light involving a rate increase that Hunzinger approved for the biomass plant — apparently going against attorneys' advice — that is projected to cost GRU and its ratepayers $3.5 million more annually, or $101.5 million more over the 30-year life of the contract.

The memo and Hunzinger's decision to approve the contract change and thus impose a biomass rate increase apparently had no bearing on Hunzinger's decision to resign.

The decision in question dates back to March 2011, but the memo advising Hunzinger against approving the change did not become knowledge of current city attorneys or commissioners until now, City Attorney Nicolle Shalley said.

In March 2011, Hunzinger approved the increase in the rates paid to the biomass plant owner in response to a "change in law" or any change in laws, regulations, permits or ordinances governing the plant.

He signed off on a contract modification that increased the contractual rates after the Florida Department of Environmental Protection required a more expensive emissions control system for the plant.

A few months earlier, in December 2010, the utility's contracted attorneys with the firm Orrick, Herrington & Sutcliffe had issued an opinion saying GRU should not bear those costs, according to the memo.

Those attorneys said that, "although not necessarily expected," the DEP decision was not a change in law because it kept with the agency's longstanding practice of requiring the best available pollution control technology.

Shalley said her staff was not aware of the memo until Commissioner Wells began making requests for legal opinions, including those from Orrick, related to change-in-law provisions of the contract.

Hinson-Rawls questioned if this information was being brought forward now in an effort to show Hunzinger could be terminated with cause and receive no severance. Shalley said that, because Wells had seen the memo, she felt other commissioners should have access to it to decide if it was relevant to their decision.

Shalley said her staff was continuing to review whether Hunzinger had authority to commit the city to the rate increases in the biomass contract and if the city had grounds to launch a legal fight to have the changes he approved rescinded.

Wells and Hinson-Rawls said that, in light of the memo, they did not have enough information to vote in support of Hunzinger's resignation agreement.

Hunzinger's attorney, Tad Delegal, questioned why a 2-year-old memo surfaced on the "eve" of the vote on Hunzinger's resignation. He said there was no assurance that the legal opinion expressed in the memo was correct.

"If all attorneys' advice were 100 percent right all the time, there would be a lot fewer of us," he said.

As for the resignation settlement, the City Commission on Thursday approved an agreement that will pay Hunzinger 20 weeks of base pay, or roughly $85,700 of his $222,850 annual salary. The agreement includes a condition that he not pursue any legal action against the city.

The prior terms of Hunzinger's contract called for 26 weeks' pay if he was terminated without cause but had no provision for a severance package if he resigned.

Hunzinger also will receive payment from the city equal to 20 weeks of the city's contributions to his health insurance, life insurance and retirement.

In early September, Mayor Ed Braddy initiated a series of meetings with Hunzinger on his eventual resignation and the transition to an interim general manager.

"I ultimately came to the conclusion that it was in the best interest of all parties at this time," Hunzinger told commissioners on Thursday.

Hunzinger declined an interview request.

Meantime, three internal candidates for interim general manager identified Thursday were David Beaulieu, the assistant general manager for energy delivery; Kathy Viehe, the assistant general manager for customer support services; and David Richardson, the assistant general manager for water and wastewater systems and acting chief financial officer.

Hunzinger began with the city in March 2008 and soon after was charged with overseeing staff's negotiations on the contract for Gainesville's new biomass plant. Along with some former and current members of the City Commission, Hunzinger has been the subject of criticism over the terms of that biomass contract, which has the city paying more than $130 a megawatt-hour for electricity. The contract will increase electric rates that already rank among the highest in the state.

In sometimes pointed words at meetings over the past few years, members of the public opposed to the contract have criticized Hunzinger for negotiating terms they say are financially unfavorable to the city and its ratepayers.

There also have been allegations that Hunzinger overstepped his authority and violated a city ordinance when he began using the fuel charge on current electric customers to build up a fund to ease the rate hikes when the plant goes online.

In August, with the city mired in an arbitration battle with the biomass plant owner, Hunzinger said he had not signed any proposed settlement that would grant concessions that the biomass company sought.

At the next meeting, he said he had misspoken and indeed had signed a settlement. The City Commission had the final authority to approve such a settlement. Commissioners eventually rejected the settlement and the biomass company dropped its arbitration counterclaim in August without receiving contract concessions.

A few weeks later, Braddy initiated his meetings with Hunzinger.

On Thursday, Commissioner Yvonne Hinson-Rawls asked if Braddy had the authority to unilaterally begin discussions with a charter officer on his or her resignation.

"I am not surprised there is an effort to make me the issue," Braddy said. "I can handle it."

Braddy said he approached Hunzinger speaking for himself as one elected official, not the entire City Commission. Any agreement would need the approval of Hunzinger and at least four commissioners, he said.

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