Mayor Lenny Curry told City Council members at Monday’s JEA fact-finding workshop that he will oppose any effort to stop Jacksonville’s public utility from exploring a possible sale.
In 5 minutes of prepared remarks, Curry weighed in for the first time on JEA’s privatization process in front of Council, putting his support behind the utility's efforts to explore a sale.
Curry said he would not let JEA’s planning process end “because of baseless conspiracy theories, and unprecedented negative onslaught from a small segment of the media, or because the conversation is simply difficult to have.”
“I philosophically believe that less government is better for the people and the limitations of a government-run utility monopoly does not serve the best interests of our community in the long term,” Curry said.
The mayor echoed the rationale of JEA officials for exploring a sale: that emerging renewable energy technology and efficiencies were driving down revenue and energy sales despite an increase in JEA's customer base.
During media interviews following his remarks, Curry said he “has a pretty good idea and pulse on what people want to talk about,” including the debate over selling JEA.
“People are not uncomfortable in the process as long as they know what’s happening in the process,” Curry said.
“Part of what I wanted to communicate here today was, we must do this, we must talk about it, we must make sure the people are informed and if we arrive at a decision, it will go to the voters,” he said.
A Nov. 7 poll from the Public Opinion Research Lab at the University of North Florida found that 59% of respondents oppose the sale of JEA in general, with 26% in support. UNF pollsters said the sentiment appears to be bipartisan opposition, with 58% of Democrats and 63% of Republicans opposed.
Curry argued that the polling doesn’t show that JEA ratepayers are opposed to researching a possible sale and reiterated that if a recommendation to sell passes both the JEA board and City Council, Jacksonville voters would have the final say through a referendum.
The mayor conceded during his prepared remakes and interview that the strategic planning process has been “aggravating” to watch, but he did not state specifically what needs to be improved.
“The planning process that JEA launched has been rocky and frustrating at times, but that doesn’t mean we should abandon it and stick our heads in the sand as it relates to protecting our value in the asset and planning for the brightest future for our community,” Curry told the Council.
Monday’s hearing followed a week of public scrutiny for JEA and its senior leadership’s handling of the possible sale.
Godbold speaks out
On Monday, The Florida Times-Union published a full-page ad of an open letter by former Jacksonville Mayor Jake Godbold calling Council members to “pay attention to what JEA’s customers — your constituents — are saying.”
Godbold, 86, served as Jacksonville mayor from 1978-87 and has been voicing opposition to selling JEA in media interviews.
“If this charade continues much longer, I predict there will be a citizens revolt and you will most certainly meet their anger and wrath head on,” Godbold wrote.
Curry’s news conference pulled most of the media from the Lynwood Roberts Room at City Hall and away from Godbold’s address to Council.
The former mayor repeated many of the points in his letter and added that he declined pressure to sell JEA while he was in office.
Although Godbold did not criticize JEA Managing Director and CEO Aaron Zahn by name Monday, he did suggest a change in leadership.
“Do your duty and put a good manager over there (at JEA),” Godbold said. “Not to tear it apart but to build it and grow it and keep it. I wish all of you and me were loved as much as our JEA.”
When asked about Godbold’s criticism, Curry said: “He’s entitled to his opinion. Every opinion matters.”
Also Monday, JEA announced that three city executives - city Deputy Chief Administrative Officer Stephanie Burch, city Treasurer Randall Barnes and city engineer Robin Smith - will replace four JEA senior officials as negotiators in the possible sale.
The city officials will replace JEA COO Melissa Dykes, Chief Administrative Officer Herschel Vinyard, Economic Development and Real Estate Director Jordan Pope and board Secretary Camille Lee-Johnson, who were negotiating with nine private companies that submitted bids to purchase some or all JEA’s assets.
The State Commission on Ethics is expected to issue an informal advisory opinion in the coming weeks on whether retention bonuses JEA executives would earn as part of any utility sale would make their involvement in the negotiations a conflict of interest.
Curry was told by the city Office of General Counsel that the move to replace JEA officials with members of his administration removes the conflict.
Zahn told Council President Scott Wilson in a Nov. 19 letter that JEA’s management will recommend its board terminate its Long-Term Employee Incentive Plan as early as Dec. 7, after Council Auditor Kyle Billy found it could put unlimited financial liability on Jacksonville’s public utility.
The mayor’s statement came near the end of 90 minutes of discussion focused on the financial and civic value of JEA as part of the second in a series of Council fact-finding workshops into the public utility’s yearlong strategic planning process.
Council members heard from two experts who conducted independent an analysis of JEA’s value in 2018 when the utility last considered selling more than 10% of its assets.
PFM Asset Management Inc. representative Michael Mace said that JEA could be valued higher today than the estimated range of $7.9 billion to $11 billion in his February 2018 report, based on current market conditions.
Mace’s report found in 2018 the city could net $4.1 billion to $7.6 billion in proceeds from selling JEA after the outstanding debt and liabilities are paid.
If JEA and city leaders decided to use a portion of the proceeds to buy out its $1.2 billion obligation in the Plant Vogtle nuclear facility near Waynesboro, Georgia, the proceeds could range from $2.9 billion to $6.4 billion.
PFM has been contracted as a financial adviser by JEA for 17 years and provides financial advice to municipal utilities nationwide.
Billy’s March 2018 assessment estimated a lower net gain to the city from a JEA sale, ranging from $1.7 billion to $5.2 billion.
Billy told the Council that JEA's annual contribution to the city's general fund would not be the cause of any future rate hikes if the utility stays municipally owned.
He said ad valorem tax from a private utility would be roughly $60 million annually and would only partially replace JEA’s annual contribution to the city's general fund, estimated in fiscal year 2019-20 to be around $118 million.
Billy also listed historical services JEA has provided to the city beyond its market value. He cited $53 million in utility infrastructure JEA installed at Cecil Commerce Center and $3.6 billion in capital improvements in the city's water system since 1997 as examples.
By: Mike Mendenhall