City Council members Katrina Brown, Reggie Brown, Garrett Dennis, John Crescimbeni, council President Anna Lopez Brosche, council members Reggie Gaffney, Samuel Newby and Greg Anderson attend a public notice meeting Tuesday.

Council members seeking details on potential JEA sale

Utility’s board asked for a study of possible privatization.
By: 
Feb. 7, 2018

City Council members want more clarity on how a possible sale of JEA to a private firm could be approved, including whether the city needs to amend the public utility’s charter to allow voters to decide through a referendum. 

The ongoing assessment of JEA’s value and the possible sale was discussed at a public meeting Tuesday called by council members Garrett Dennis and John Crescimbeni. 

“We’ve started the conversation, getting all the council members on the same page,” Dennis said after the meeting.

“It’s our way of putting a stake in the ground for the shareholders to say we’re part of this discussion,” he said.

Garrett Dennis

Council members Danny Becton, Katrina Brown, Reggie Brown, Reggie Gaffney, Greg Anderson, Samuel Newby and council President Anna Lopez Brosche also attended.

The takeaway was that council needs more information from the city’s Office of General Counsel about how it would legally proceed if a sale is approved by the JEA board of directors.

At the Nov. 28 JEA board meeting, Chair Alan Howard instructed CEO Paul McElroy to move forward with an audit after outgoing member Tom Petway suggested the board consider privatization.

The board is expected to provide those results in the next few weeks. 

Since the announcement, Dennis, who chairs the council Finance Committee, has voiced opposition to a potential sale and called for scrutiny by council members. 

“I’m beginning to feel like the sale is definite,” Dennis said. 

Dennis said previously that he thinks Mayor Lenny Curry’s administration is trying to encourage a sale to pay off the city’s debt and to fund city infrastructure and development projects. 

Representatives from Curry’s staff and JEA did not participate in the meeting. 

Curry’s Chief of Staff Brian Hughes issued a statement before the meeting:

“We will work with City Council as JEA approaches the conclusion of research initiated by its senior leadership at the direction of the JEA Board. Commenting or speculating about future decisions before the conclusion of that work is premature,” he said.

“Whatever future decisions that are related to JEA, Mayor Curry is always guided by two steadfast principles: 1. Any future action MUST be in the best interest of JEA ratepayers and the taxpayers of our city, and 2. Such action MUST demonstrate a commitment to the hard work and success of every man and woman working every day at JEA to serve our community,” he concluded.

Concerns were raised at the meeting about the process and whether voters should be allowed to decide whether to sell the utility

Crescimbeni said General Counsel Jason Gabriel told him previously that he believed the city did not need a voter referendum to move forward. 

“If a decision was to be made, then it should be one decided by the shareholders, in this case the citizens of Jacksonville,” Crescimbeni said. 

Crescimbeni said Gabriel’s answer prompted him to ask Dec. 6 for another legal opinion.

“That’s a 60-day old request at this point,” said Crescimbeni, who also wants more details on the process leading to a council decision.

In response to the questions by Crescimbeni, Brosche and Reggie Brown, Deputy General Counsel Margaret Sidman referenced part of the JEA charter that states the sale of more than 10 percent of the utility’s assets would need council approval and that amending the charter to send the issue to voters requires the same consent.

Sidman then laid out the procedure for altering the charter. 

After legislation is introduced, the public would have 30 days to voice an opinion. From there, council would need to wait at least 60 days before acting. Any change would need two-thirds of the 19-member body’s approval and Curry’s signature.

If the plan is vetoed by the mayor, 16 council members would need to support the plan to override his decision. 

In any case, Crescimbeni said, “I would not be able to support a transfer of that asset unless the money or the bulk of that money is going into some sort of protected account,” ensuring that the city didn’t spend it all at once. 

Others were concerned about a JEA memo that was issued and then rescinded that encouraged management-level employees to stay with the utility in the event of a “change of control” or sale, promising a compensation package equal to a year’s pay. That memo was circulated at the meeting.

“It appears JEA has a plan and we’re just finding out about the plan,” Gaffney said. “Right now, I’m troubled about that.”

Several council members, including Katrina Brown, said they had not seen the memo before Tuesday’s meeting.

Brown said she was “troubled” about the content and the message it sends to employees. She said she was not prepared to make a statement supporting or opposing a sale of JEA.

“I can’t give an opinion on something because I haven’t had any information given to me,” she said.

Brown said she plans to host town hall meetings in District 8 to solicit constituent feedback. 

The Tuesday meeting was scheduled in a fourth-floor conference room at City Hall, but was moved to the larger lobby-level council chambers as dozens of JEA employees came to watch or participate in the discussion. 

About a dozen employees raised questions about their compensation, keeping their jobs and how the city plans to make up for the more than $116 million JEA contributes to the city’s $1.2 billion budget annually. 

“It is important that as we move through this process, you are treated fairly,” Anderson said, “because JEA is more than just a financial asset.”

Council members said they couldn’t make any decisions based on the information to date and are committed to keeping the public informed.

“It’s important to remember, we don’t have anything to vote on,” Crescimbeni said.

Crescimbeni and Dennis said additional public meetings would need to focus on what they could control, including whether to pursue legislation that changes the JEA charter. 

The next JEA board meeting is scheduled at noon Feb. 20 at 21 W. Church St., its headquarters.