In its first meeting since a financial evaluation detailing JEA’s potential sale value, the utility’s board of directors unanimously agreed Tuesday to hold a workshop about its next step in exploring whether or not to privatize.
The JEA board, led by Chair Alan Howard, commissioned the financial audit in November.
It has remained silent outside of public meetings, allowing Howard to speak on its behalf.
The board consists of Howard, a mergers and acquisitions attorney with Milam Howard Nicandri Gillam & Renner; the Rev. Frederick Newbill, who leads First Timothy Baptist Church; Husein Cumber, executive vice president at Florida East Coast Industries; Kelly Flanagan, Jacksonville Jaguars chief financial officer; and April Green, chief financial officer and chief operating officer of Bethel Baptist Institutional Church of Jacksonville and chief operating officer of Baxter Technology Group.
On Feb. 14, JEA’s financial adviser, Public Financial Management Inc. released its evaluation of the city-owned utility, concluding it could be worth $2.9 billion to $6.4 billion to private investors after JEA addresses nearly $4 billion in debt obligations.
Newbill applauded the board for having the utility’s assets evaluated, regardless if a transaction takes place.
“If I have a home and I paid $1 million for it and somebody offers me $100 million for it, I’m going to look at it even if I’m not going to sell it,” Newbill said.
Green, the newest board member, said a workshop would be productive only if more information is available in addition to the financial audit, “so that we can have a viable conversation.”
Flanagan praised Howard and JEA CEO Paul McElroy for their “fair and unbiased” presentation Feb. 14 to City Council.
She said the board, through Howard, has made it clear that it has not decided to recommend a sale and called the workshop “a great idea for a sound next step.”
Cumber, the only board member not appointed by Mayor Lenny Curry, said the group needed to address issues facing the utility industry prior to any workshop,
“I was probably a little naive that we would have a little bit of a conversation as a board before this kind of exploded out there,” Cumber said.
Cumber said the financial audit was “but a small component of the information we need,” saying it would be up to the board to figure out where the utility industry is headed as technologies like solar power and large-scale battery storage systems begin to emerge.
“Those are the policy issues that PFM is not going to help us walk through,” he said.
Howard said after the meeting the board had a “fiduciary duty” separate from the council in assessing the utility’s value and in deciding on privatization.
He said a workshop was the appropriate next step.
“I suspect that at some point the JEA board will be called to weigh in on the issue of privatization,” said Howard, who added that he did not intend to get into a political debate.
“I’m disappointed that the politics of this have gotten in the way, but that’s not the JEA province,” he said.
The decision to host a workshop came at the suggestion of Matt Schellenberg, the council’s liaison to the independent authority.
“Monopolies only last as long as somebody doesn’t find a better solution,” said Schellenberg, who supports privatization.
Schellenberg cited changes in retail and the taxi cab business, disrupted by companies like Amazon.com and Uber, as reasons the board should anticipate changes.
Also Tuesday, council President Anna Brosche issued a memo appointing a special committee to look at a potential JEA sale.
The council committee will be led by John Crescimbeni and include Danny Becton, Garrett Dennis, Joyce Morgan and Brosche.
While she did not provide a specific date to complete the committee’s review, Brosche said she expects the group’s conclusions to be available by June 26, the last meeting of the council year.
Brosche’s term as president ends June 30.