Should Jacksonville sell (privatize) JEA?

[jaxrox]

Given the City's experience with the original Shipyards deal, the Courthouse garage, etc., why in the world would we expect not to get hosed in a deal that JEA's own consultant called "one of the most complex of its kind in the United States."

Chicago got royally screwed when they sold off their parking meters and garages.

Is Jacksonville going to field better attorneys and negotiators than FP&L?  Wall Street?  Hedge Funds?

If you're looking around the table and can't tell who the mark is, it is definitely YOU.

+1
The takeaway:
Dear Jacksonville leaders, please learn from the mistakes that have already been made in this city and Chicago. Others too, I'm sure, if I take the time to dig deep enough

[jaxrox]

http://www.jacksonville.com/news/20180315/city-council-panel-will-subpoena-jea-executive-to-testify-under-oath

Another giant red flag, hmmm they refuse to testify under oath?!?!? IDGAF about the excuses they give! This is just a bad idea all around, selling jea..
Like just scrap this whole selling jea idea, NOW, and if the city truly needs more revenue for whatever reason, then find other ways to generate it! There must be a better way. That's my two cents

[MusicMan]

"Welllllllll, one thought here, the city is sitting on how many vacant buildings and land parcels? They could sell some of those to start with..
**ducks to avoid the flying objects I'm sure that some of y'all might chuck@me 4 that comment **"

Great idea, but good luck pulling it off. Evidently the ONLY WAY for the COJ to dispose of something they own is by RFP, whereby the peruse the offerings they get and PICK A WINNER.  LOL


I do believe, if the COJ owned a dumpster they would have a RFP in order to dispose of IT.

[jaxrox]

Haha you may be right

[DrQue]

I do find it interesting that FP&L is currently running an advertising campaign in the Jacksonville market. I know they provide service in counties neighboring Duval. It just seems very coincidental for them to be running a PR campaign in Jax right when a JEA privatization is being discussed.

[Tacachale]

Ouch...

Former Mayor Godbold to Mayor Lenny Curry: I don't believe you

By Nate Monroe

Posted at 11:30 AM
Updated at 12:58 PM
     
Former Mayor Jake Godbold told Mayor Lenny Curry the contentious debate surrounding a potential sale of Jacksonville's electric and water utility has damaged Curry's credibility and that he's been getting bad advice that "does not appear to flow from what is in the best interest of of Jacksonville."

The harsh observations — which Godbold shared in a previously unreported personal letter he delivered to Curry last week — amount to an eyebrow-raising upbraiding from the former mayor, who has a well-known gruffness and sharp tongue that he's used liberally over the years.

"Despite your frequent statements that you've not made up your mind on the JEA's future, I am one of a whole lot of people in Jacksonville who are having a hard time believing you," Godbold wrote.

His letter is filled with needling opinions.

"I had no interest in being anything but mayor of Jacksonville," Godbold wrote of his own tenure. "I (am) not sure the same can be said for you, which is perfectly fine," he told Curry.

"As a former mayor, every day I communicate with a lot of people in this community," Godbold said. "The public disagrees with selling the JEA, something you should know from your PAC's polling."

...

http://www.jacksonville.com/news/20180418/former-mayor-godbold-to-mayor-lenny-curry-i-dont-believe-you

[Snaketoz]

I am very suspicious of this new "interim CEO" of JEA. How did this guy, Aaron Zahn, get to be on the JEA board?  What were the requirements for, and what requirements does he possess to become a member of the board?  Who on the board enabled him to become a member?  Something is very fishy.  This guy has no experience in utility management.  I think this needs to be investigated. Zahn's only experience I'm aware of is running a failed human waste recycling business in Central Florida.  The business used city of Haines City's $300,000 to purchase land for the facility.  The company spent $60,000.  He is already saying he will explore the best future for JEA.  I think he's saying he will take the lead in selling JEA.  This needs some thorough investigating.

http://www.jacksonville.com/news/20180418/in-past-job-interim-jea-ceos-company-lost-waste-recycling-contract-last-year-over-odor-controversy

[DrQue]

How did this guy secure the interim position over Dykes? She has been CFO for 5-years and has extensive experience in the field. This a billion dollar company we're talking about; a company with billions of dollars in public debt where decisions and expertise from the top matter.

This seems like giving the Icemen's GM the keys to the Jaguars.

[Snaketoz]

The latest on the shenanigans at JEA.  http://www.jacksonville.com/news/20180420/mark-woods-something-stinks-and-it-isnt-sewage-plant-in-haines-city

[Steve]

Well, this just took an interesting turn:

STATEMENT FROM MAYOR LENNY CURRY, CITY OF JACKSONVILLE



Since the consolidation of city and county government 50 years ago, we have had a countywide, electric utility. With the 1997 addition of public water and wastewater services, JEA is a community-based, taxpayer-owned electric and water service provider. Through its agreements with other private and public partners, we have been served by a locally-controlled production of electricity and clean water for decades.



These services are integral to our daily life; we need them to work, live and play. Also necessary is the need for our government and public entities to account for those things that belong to the taxpayer - from the assets of our municipal utility, to public buildings and spaces, and even the fleet vehicles our employees use. Next to public safety, I have no greater responsibility than to protect taxpayer investments and ensure budgets that are fiscally prudent.



So when the JEA Board and senior leaders of the organization undertook an effort to know the financial value of our municipal utility's assets, I was supportive. Our tax dollars and the hard work of public employees created that value, and city government has an obligation to preserve it. The discussion moved to privatization, and as city law speaks to this I felt an obligation to understand what impact the value had on future planning.



Since 1999, there has been a mandate written into our city ordinance code, Sec. 21.302, for anyone serving as mayor of Jacksonville, and the executive branch administration, to consider if essential government functions traditionally served by government could be better served through privatization. It is not simply a suggestion but a responsibility to consider this and for the mayor to make such policy decisions. As this law states, if and only if, the mayor submits a privatization plan would it then proceed to City Council.



As the elected leader of the executive branch, I take my responsibilities as mayor very seriously. I never proposed any privatization plan, nor did I ever suggest or say to anyone that I would propose such a plan. Instead, as I have consistently stated, I did not believe I had enough information to correctly contemplate such a proposal. That is why I wanted to gather information and talk to stakeholders about these issues. In this effort, I met with JEA leaders, municipal utility experts, financial experts, union representatives and workers from JEA.



Unfortunately, a clear and reasonable process to discuss these issues was hijacked by a few special interests and politicians with an agenda to put politics above all else. Fixated on the false choice of "sell" vs "don't sell" they created an environment fostering misinformation and mistrust. Despite this, the valuation undertaken by JEA leadership did yield evidence of important strengths we have in our community utility's balance sheet. It also revealed real weaknesses.



Technology and innovation are making renewable power more affordable, while efficiencies are reducing our water and electric needs. The result is data showing that JEA customers may increase in number, but revenues will decrease. We also learned that for a decade, a move toward nuclear power — although it was perhaps well-intended — has left Jacksonville saddled with at least $1.2 billion in obligations. Worse is that those dollars committed years ago, may never yield any real value to JEA customers and taxpayers whose backs this liability rests upon. When you combine falling revenue and billions in liability on the balance sheet, you have to take a hard look at the future.



The challenge of such a look forward requires leaders to strategically prepare solutions to the problems we've uncovered. We must also recognize that an organization unfairly spun into frenzy by politicians is leaving generations of JEA employees and customers feeling uncertain. This is why I am supportive of the recent efforts of the JEA Board and senior leadership to steady the organization and embark on internal reviews that strengthen the organization for the years ahead.



This strategic planning and long-term commitment to JEA employees and customers is also why I am choosing to state unequivocally that I will not submit any JEA privatization plan to the City Council.



I have consistently outlined that my priorities at JEA are protecting the investments made by taxpayers and customers, while also keeping the promises made to generations of JEA employees. Those priorities ensure consistent power and clean water for all of us, and I remain committed to these results.



– Mayor Lenny Curry

[Adam White]

Someone needs to discuss proper comma usage with this guy.

[DrQue]

Technology and innovation are making renewable power more affordable, while efficiencies are reducing our water and electric needs. The result is data showing that JEA customers may increase in number, but revenues will decrease. (...) When you combine falling revenue and billions in liability on the balance sheet, you have to take a hard look at the future.

So we acknowledge that energy demand will inevitably decline or flatten at best, thus lowering utility revenues. That in itself makes a case for public utilities. Privately owned, for-profit utilities by definition will always look for ways to grow revenues along with minimizing costs. Consequently, ratepayers would eventually bear the burden of private sector return demands, while a publicly owned utility is not necessarily bound to the same incentives.

Regarding his liabilities comment, he could also acknowledge the substantial debt pay downs that occurred under the prior CEO's term, reducing the utility's risk profile.

[Tacachale]

Interesting...

[Snaketoz]

http://www.jacksonville.com/news/20180525/starke-officials-say-interim-jea-ceos-old-firm-didnt-deliver
This interim JEA CEO and the methods used to get him in this position need some explaining.  This is not getting enough attention.  Zahn is a charlatan with absolutely no experience in running a utility.  He has a shady past, especially in small towns, and now somehow he is getting a very important job running Jacksonville's biggest asset.  WTF?

[bl8jaxnative]

Moody's has already downgraded JAX bonds.   Ownership of JEA is a huge liability for the city.  They don't need to own the utility to accomplish 95% of things they want to do via ownership.  The city can get it done other ways without the expense and risks of ownership.


https://www.bondbuyer.com/news/jacksonville-jea-slapped-with-downgrades-over-lawsuit