Latest JEA sale revelations roil Jacksonville City Council

JEA board to be reshuffled, again.

Did the mayor’s office move toward a sale of Jacksonville’s utility before Council had a chance to weigh in?

And what does that mean for the process going forward?

A profound rift has emerged between Jacksonville Mayor Lenny Curry and the City Council on the question of JEA privatization. And, say some Councilors, existential questions loom about the way forward.

It sets the stage for what will be a heated public notice meeting at 2:30 at City Hall.

The latest developments, reported Wednesday night by multiple media outlets including the Florida Times-Union: Requests for proposals for, as Council auditor Kyle Billy put it: “Financial Advisory Services that would be needed to solicit bids to purchase JEA, evaluate those bids, assist city staff in negotiations, and assist in bringing the transaction to financial and commercial close.”

Billy “thought it was unusual because it appears to be a City of Jacksonville RFO, but the responses were not coming to the city. The responses were to be returned to PFM.”

PFM is Public Financial Management: the same private company that conducted a valuation study that, per Council President Anna Brosche, was intended to facilitate emergency legislation to push sale efforts forward.

The RFP, as reported first by News 4 Jax, had a January 15 deadline for proposals, which ask for detailed information on facilitating “complex financial transactions” between parties, including the “lease, sale, and disposition of city assets.” There is a scoring matrix.

Sources say that parties such as Goldman Sachs, Ernst and Young, and JP Morgan are involved, but we have yet to see the responses, some of which allegedly directly address an ability to facilitate utility transactions.

Administration members pushed back: Chief Administrative Officer Sam Mousa said that “for the last two years, the Administration has been approached by private equity providers and affiliated operating companies interested in either monetizing our City public infrastructure or entering into public/private partnerships for new City infrastructures. Infrastructure such as parking garages, airport, seaport, bridges, roadways and various other City public infrastructure have been presented for consideration.”

However, as a special committee prepares to ramp up regarding the exploration of JEA privatization, it is notable that Council members have questions about the process, which they are beginning to see as circumventing the ordinance code (as the procurement head was looped out of the process) and Council’s prerogatives as the legislative body.

Council President Brosche voiced concerns Thursday morning.

“The terms of the RFP in question line up a little too closely with the potential sale of JEA.  I am perplexed by a number of things,” Brosche asserted, “not the least of which is that such RFP was not issued through the City of Jacksonville’s Procurement Department.”

“While I have learned the Finance Department is legally allowed to do so, that this RFP exists and how it was handled raises questions about who is really driving this bus.  I look forward to getting answers to the many questions I have,” Brosche added.

In the context of ongoing revelations, Brosche questions the ability even to have a good faith consideration of the proposition.

“I have a lot of questions.  There have been multiple instances so far where I have felt we put the cart before the horse and it appears we have another glaring example of the same.  I am committed to ensuring this exploration travels through a path of transparency and to protecting the citizens and their hard-earned taxpayer dollars.  In light of these developments,” Brosche said, “it is becoming increasingly difficult to have an honest discussion regarding the merits of a potential sale and the benefits a potential sale may bring to the community.”

Other Council colleagues on the special committee, including a former rival for the Council presidency in John Crescimbeni, echo these concerns.

Crescimbeni noted that the responses to the RFP were “sought and collected” before the City Council was even considering the question of a sale and that the latest revelations are potentially “polluting the waters,” raising “transparency” questions, and precluding a discussion of the sale on its merits.

Crescimbeni holds to his position that voters should participate in the decision.

Councilman Garrett Dennis, who filed a bill this week to have an August straw ballot on the question of a JEA sale, likewise has “more questions than answers.”

Dennis likewise questions the transparency, saying it appears that “citizens and the City Council have been lied to” by the Mayor’s Office, which he adds has a history of attacking Council members that stand athwart its plans and proposals.

“What if there had been a bill and it had been an in and out emergency? We would have a private company owning JEA right now,” Dennis said, describing this move as an attempt toward “the biggest heist in history in Jacksonville.”

Dennis believes that the administration exploited a “rubber stamp” mentality on the questions of the Kids Hope Alliance and pension reform, and became emboldened to “do whatever whenever they want to do it.”

The gap between demonstrated reality and Mayor Curry’s declared agnosticism on a potential sale also nettles Dennis, who asserts that Curry’s “lost credibility” and wonders how the mayor can govern given these questions about the JEA process.

“I hope I’m not the only Council member thinking ‘what else’ [is next],” Dennis added.

Another committee member, Danny Becton, shares many of the same concerns, even as he tries to reserve judgment.

“Being a member of the Special Committee regarding the Potential Sale of JEA, I am leaving my views and opinions open concerning the recent and past developments of the issue; allowing me to gather the facts of what has happened, who might or might not be involved and to get a clearer picture of what ethical questions need to be put forward,” Becton said.

“In the interim,” Becton added, “I will state that I do find the recently received information troubling in regard to the transparency and repeated statements of culpability related to the underlying issue, how this issue has been portrayed and folks being disparaged so far in this process. Public trust and confidence is paramount and, on the surface, the perception of what is being seen here is concerning.”

There are those who claim that people in Mayor Curry’s political orbit are helping to lobby Council members, though aren’t registered to do so.

Perhaps in that context, the city’s ethics director seeks to tighten the code to prevent undue influence.