GREEN COVE SPRINGS – The City Council not only picked a new mayor during Tuesday night’s regular meeting, but it also took the first step toward addressing its electric company financial shortfall by agreeing to an immediate increase in rates 12% across the board as soon as July 2.

Mayor Thomas Smith unexpectedly resigned Monday due to growing business responsibilities. The first item on the agenda for the remaining four council members was to retain Ed Gaw as Vice Mayor, and they voted 4-0 to appoint former Camp Blanding Commander Matt Johnson as the new Mayor. The council also approved conducting a special election on Sept. 23 to replace Smith.

The newly repositioned council then revisited one of the most persistent issues it has faced all year, a significant increase in electric rates for the city's residents.

Three different budget studies revealed significant deficiencies in cash reserves, which would leave the electric company insolvent. By not addressing increasing costs and failing to replace spare equipment, the city’s financial and infrastructure reserves have been depleted.

The original plan suggested in one study by Leidos was for an immediate 14% increase and a 6% increase in October. The increase would result in an extra $19 for every 1,000 kilowatt-hours of use.

City Hall was packed with residents who argued against the increases. The council voted down the original plan during a first reading on May 20.

City staff returned with a smaller request on Tuesday – one that will add years to the city’s effort to replenish its electrical coffers.

“We’re going with some risk, going with 12%,” Johnson said. “I believe that rate study is accurate.”

Assistant City Manager Mike Null said staff now proposed an ordinance for a 12% increase in July, no increase in 2026, a 6% bump in 2027, 7% in 2028  and 3% increases in 2029 through 2032.

“I believe 12% is bad, but it’s not that bad,” Councilman Darren Stutts said.

The ordinance also included a plan to increase electrical hook-up rates for each new home from $2,200 to $2,600, switching streetlights to LED bulbs and increasing new service fees for hookups from $125 to $200, although Stutts suggested it should be $300.

Glee Glisson joined Stutts, Johnson and Gaw in voting 4-0 to approve the first reading.

 The second and final reading will be presented at the city’s next meeting on July 1.

In other business:

• Council approved to pay $284,537,73 to DB Civil Construction for the Bayard Stormwater Improvements.
• Approved the payment of $294,380 to CPH for permitting and design services for the Magnolia Point Reclaimed Water System and Potable Water System Improvements.