A City Council Auditor’s report released Thursday says selling JEA could generate $1.7 billion to $5.2 billion for the city, substantially less than the estimates put forward by a consultant hired by JEA.
Beyond the dollar amount, the report says the decision on whether to sell JEA should consider factors such as what it means for the city to keep local control over JEA with a headquarters based in Jacksonville and 2,000 employees, according to our Florida Times-Union news partner.
“While it might be a stretch to say that local control is priceless, it does have considerable value,” City Council Auditor Kyle Billy said in a presentation to a special City Council committee examining whether the city should put JEA up for sale.
He said three of the companies that might bid for JEA have their headquarters in South Florida, in North Carolina and in Canada.
“Would these companies based in other cities, states, and another country make Jacksonville a priority on a day to day basis or after a natural disaster?” Billy said. “Would they work closely with the city on infrastructure projects? The CEO would not be just across the street.”
In laying out the benefits of selling JEA, Billy said the city could get a “large sum of money without increasing debt or raising taxes.” That windfall could go toward paying down city debt, reducing the unfunded pension obligations, building roads and drainage and other public works projects, and paying for large undertakings such as a new convention center, downtown development or an entertainment district.
Billy said another benefit is a for-profit company would pay property taxes and stormwater fees on the utility’s property. The estimated $60 million in city property taxes would be less than JEA’s contribution of $116 million to city coffers. Billy said the city could close that gap by using proceeds of the sale to reduce the city’s debt costs or create an investment fund to generate income.
The Duval County School Board would gain a limited benefit from utility property hitting the tax rolls. The schools would not gain tax dollars for operating costs because of the way the state funding formula works for public education, but the school district would gain about $8 million a year for construction projects, the council auditor report says.
On the flip side of selling JEA, Billy said keeping ownership of JEA would benefit the city by providing financial stability from the annual payments the utility sends to the city.
You can read a longer version of this story that goes into more detail on Jacksonville.com.
