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Jax Daily Record Thursday, Apr. 12, 201805:06 PM EST

Former Mayor John Delaney could enter JEA sale debate

He's joining group hired by the energy firm Emera to keep tabs on potential sale of city utility.
by: David Cawton Associate Editor

When former Mayor John Delaney joins Rogers Towers and The Fiorentino Group on June 1, he could be stepping into the JEA sale debate.

Emera Inc., the owner of Tampa Electric Co., also known as TECO Energy, engaged The Fiorentino Group and Southern Strategy Group, also a government relations firm, to represent it on issues.

It also engaged the Rogers Towers law firm to represent it on the legal side. 

The city Office of Ethics Lobbyist Tracking System lists members of The Fiorentino Group and Southern Strategy as lobbyists for Emera and for Teco. The system shows Emera as a client of Rogers Towers.

Marty Fiorentino, president of The  Fiorentino Group, said Emera hired the firms to monitor what is happening with JEA, the city utility that is being analyzed for sale.

Asked if Delaney will be working on that, Fiorentino said: “I hope so.”

Delaney declined to say if he’ll lobby on behalf of Emera or TECO. 

“I still have to get in the firm and see where they want to use me,” Delaney said. 

“If Marty and Fred want to see me involved in it, then we’ll do what we need to do then,” he said of Fiorentino and Rogers Towers Managing Director Fred Franklin Jr. 

Delaney is joining the firms after serving as University of North Florida president for the last 15 years. He will become a shareholder of Rogers Towers and a principal with The Fiorentino Group.

He said he will have a flexible role, “obviously, working on city and state government issues,” but he also could find himself in the courtroom as a defense attorney.  

“I was at the State Attorney’s Office for 10 years as a litigator, so we’re going to see what develops,” he said. 

Delaney said he could become involved in the debate over privatizing JEA, although “it’s probably a little premature to say just yet.” 

“We’ve discussed it,” he said. 

Fiorentino said his group represented TECO for several years locally, and when it was bought by Emera, “they asked if we would get involved in monitoring what is going on with the JEA.”

“Along with a lot of other companies, they certainly are interested in what is going on in Jacksonville, especially with their acquisition of TECO,” Fiorentino said.

He said the acquisition “has been very successful.”

Fiorentino said the alliance of his group and Rogers Towers can be a resource as the JEA situation is reviewed and analyzed at City Hall and that the group has a good relationship with the mayor, his office and City Council. 

In July 2016, Emera Inc. of Nova Scotia completed the acquisition of TECO Energy, the Tampa-based parent of the utility that provided electricity to that city and Hillsborough County for more than a decade.

The $10.4 billion deal was announced in September 2015. Emera paid $6.5 billion for outstanding shares of TECO stock and assumed $3.9 billion in debt.

TECO’s footprint is similar to JEA, but TECO is in the gas business and JEA is in the water and sewer business. TECO was a public company and JEA is municipally owned. 

A Feb. 14 report from JEA’s financial advisory firm suggested the city could net between $2.9 billion and $6.4 billion on the open market after settling debts and liabilities. 

That estimate could fluctuate if bids are officially solicited from interested companies, including Emera. 

Delaney said the issue of privatization came up when he was mayor from 1995-2003 and when he served as general counsel during the prior term under Mayor Ed Austin.

“You kind of do a quick run on the numbers, and at the time when we looked at it, the property taxes generated would more than make up for the annual contribution makes to the city,” Delaney said. 

Because JEA doesn’t pay property taxes, it makes an annual payment in lieu of that lost revenue. For the 2018-19 fiscal year, that contribution is estimated at $116 million. 

In December, the Duval County Property Appraiser’s Office estimated that privatizing the public utility would lead to a $54 million shortfall in city revenue.

Delaney said if a sale is approved, “there should be enough cash generated to make up that difference.” 

He said the energy industry and JEA’s own financial position has changed dramatically since he was in office. 

“The circumstances are different now, with interest rates as low as they are, with JEA paying off as much debt as it has and with some of the consolidations nationally,” Delaney said. 

Although he declined to say if he supports or opposes a sale, Delaney said he agrees with statements Mayor Lenny Curry made to WJXT TV-4 anchor Kent Justice during the April 8 edition of “This Week in Jacksonville.”

“We have to have an adult, mature conversation about the strategic future of this utility in this market,” Curry said during the interview. 

Curry then said accusations that his office is pushing for a sale “are false.” 

 “I think he’s right,” Delaney said. “City Hall may end up backing away from it, as they take a look, but I think it needs to be looked at.” 

During much of Delaney’s first term as mayor, he successfully sold his legacy project, the Better Jacksonville Plan, approved by voters in 2000.

He said marketing his $2.25 billion package of infrastructure and municipal projects was a much different task than what supporters of a potential JEA sale could face. 

“It’s a harder concept to explain to the public than the Better Jacksonville Plan,” he said. “I think the more that thinking is done in public, the healthier that conversation is.” 

Supporters of a JEA sale, including council members Bill Gulliford and Matt Schellenberg, have suggested using the proceeds to pay off the remaining Better Jacksonville Plan and general fund budget debts, about $3 billion in total, or placing the proceeds in a trust fund to gain interest.  

“The city has infinite infrastructure needs,” Delaney said. “I’m probably getting ahead of myself, but the needs are there.” 

When he joins the alliance, he said he’ll have working space in both offices at Riverplace Tower on the Southbank. 

Rogers Towers is based there and The Fiorentino Group is relocating from a Northbank building to another floor at the tower.

Delaney anticipates having a “soft start” in June so he could ease into the role so by September he could have more of a “hard start.” 

“But I already see some things coming up in June, and so I think that hard start is moved up,” he said. 

“That may include JEA.” 

Editor Karen Brune Mathis contributed to this report

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