JEA’s proposed $1.8 billion budget for fiscal 2013-14 currently includes a record contribution of $109 million to the City’s general fund and does not include rate changes for either electric or water and sewer systems.
The draft budget was presented to the JEA board of directors Tuesday at its monthly meeting Downtown. The board could vote on the budget at its June meeting and send it to City Council for consideration.
The board is required by City ordinance code to send the utility’s budget to Council by July 1.
The City budget year runs Oct.1-Sept. 30.
“Our biggest challenges going into the FY14 budget are the combination of very slow growth in sales — which we are expecting (in) both the electric and water systems — and cost pressures, mainly increased costs in pensions in the next fiscal year,” said Melissa Dykes, JEA chief financial officer.
It included a weather contingency in each budget, “because our budget is so weather dependent,” said Dykes.
Although customer rates remained the same in the latest budget proposal, JEA’s contribution to the City’s general fund rose.
JEA will contribute more than $109 million to the City’s general fund, in addition to $87.5 million in public service tax fees and $40.6 million in franchise fees.
Combined, the total is about $237 million, an increase of about $7 million from fiscal 2012-13.
Dykes predicted the utility’s contribution would equate to 25 percent of the City’s overall budget.
JEA collects a public service tax on any electric service it serves in Jacksonville, Atlantic Beach, Baldwin and the unincorporated portions of Clay County. The tax is collected on behalf of and remitted to each entity.
The monthly tax is 5 percent of the taxable portion of electric base revenue for Atlantic Beach, 10 percent for Baldwin and Jacksonville and 4 percent for Clay County.
Franchise fees are charges made by governments to utilities for exclusive and non-exclusive rights to operate within municipal boundaries.
The City’s fee is 3 percent on the electric, water, irrigation and sewer usage of JEA customers living in Jacksonville.
City ordinance directs JEA to collect the fee on behalf of the City, which receives all revenue the fee produces.
In the budget proposal, JEA plans to pay down about $210 million in debt across the electric and water and sewer systems.
Also Tuesday, the board voted to reinstitute a pay-for-performance program for JEA employees approved in May 2012. The vote continues the program in the current fiscal year.
“We believe that a pay-for-performance program would encourage our employees to stay fully focused and engaged in moving our performance forward,” said Angelia Hiers, JEA chief human resources officer.
The economic downturn caused the board to suspend the program in 2007, but it was recently renewed.
With hurricane season starting June 1, JEA staff recommended board approval of the program to reward employees for achieving performance goals in safety, budget management and customer satisfaction.
Staff predicted that if the goals are met, the utility could save about $23 million with a payout of less than $3 million.
The board approved the program with a 6-0 vote.
Board Vice Chair Cynthia Austin attended by phone, but could not telephonically vote.
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