A.G. Gancarski
As Jacksonville considers the increasingly less hypothetical question of whether or not to sell its public utility, JEA, a bill (2018-101) filed this week would earmark any proceeds.
The bill, filed by Republican City Councilman Matt Schellenberg, would set up a restricted reserve account, which would require a two-thirds vote to access funds therein.
In a conversation Thursday afternoon, Schellenberg, who has been interested in exploring JEA’s market value for six years, asserted that this would create a “lockbox” for funds created by the sale of JEA or any of its constituent parts.
Schellenberg, the City Council liaison to JEA, believes that JEA’s electrical side probably has value to another company in the industry, such as Florida Power & Light or Duke Energy, and that the true value of the assets won’t be known until the deal is being considered on the open market.
Worth noting: while the total appraised value of JEA assets, at $5.3 billion, is well above the debt load of $4 billion, the electrical side is in worse fiscal shape than water and sewer.
The appraised value of the electrical holdings is just over $2.6 billion, against a $2.3 billion debt burden.
Nonetheless, Schellenberg thinks the electrical side could fetch more than the appraised value on the open market, perhaps bringing in $4 billion.
That money, said Schellenberg, could pay down debt, address the $3.2 billion unfunded pension liability, or be used to defray losses in annual JEA contributions ($116.1 million currently) to the general fund.
A second bill directed to JEA assets was also filed this week by a group of City Council members (Reggie Gaffney, Katrina Brown, Garrett Dennis, Reggie Brown and Sam Newby).
2018-76 would obligate JEA to install sewer lines throughout pre-Consolidation areas of Jacksonville, many of which have waited for decades to be added to the city’s sewer system.
While there is currently a five-year, $30 million commitment to septic tank phaseout, the full project could eventually cost between $300 million and $1 billion.
Both of these bills will be officially introduced at Tuesday’s meeting, setting them up for committee hearings in March.
