A group of Jacksonville’s most prominent business leaders broke their silence this week on the controversial push to sell JEA, calling it out as the opaque sham it is.
COMMENTARY | The Civic Council’s withering takedown this week of the shambolic, rushed push by JEA executives to sell Jacksonville’s publicly owned utility spotlighted a core issue: This is really all about money, who gets it and what to do with it, and we don’t have any answers about that.
JEA’s leaders have said a private buyer must guarantee City Hall a net profit of at least $3 billion, but to what end? Why does the city need this specific amount of money? And if it does need this money, is there no better way to raise it?
These conversations haven’t happened because there really hasn’t been much of a conversation at all.
Not only did Mayor Lenny Curry not run for reelection on a platform that included selling JEA, he specifically told voters he would not advance such an idea. And JEA’s leaders spent much of the past year denying any privatization effort was under way.
“I've been assured that the direction has been made that we are not pursuing privatization, from the CEO ... on down that we're not talking about privatization ... not withstanding what rumor and speculation may be taking place in the press,” JEA’s board chairman said in May 2018.
Funny turn of events, huh?
Now, that former board chairman, Alan Howard, is on a sweet $500 per hour contract with JEA to guide it through the privatization process — just one of a small army of well-paid consultants pushing this all through.
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“Based on ... JEA's disregard for the law as it applies to public records, and their rush to engage in (negotiations with private buyers) in contravention of common sense and transparency — and in the absence of an urgent need — our belief in the need for rigorous oversight of their actions in this matter has only increased,“ the Civic Council wrote Tuesday to members of the City Council.
The Civic Council is a private group of 80 Jacksonville CEOs, and its voice can have out-sized impact when it weighs in on city policy. Although many of its members have groused quietly for some time about what’s been happening within JEA, this column doubted the group would put its weight behind a public denouncement.
I’m glad to say I was wrong about this.
The Civic Council has been quiet for most of Curry’s term in office, though recently it had been a voice of skepticism when the Duval County School Board sought to have a sales tax placed on the November ballot. They’re not right about everything, and it was frustrating to see business leaders make one of their few public fights the past several years over a much-needed tax for public schools.
But on JEA, these business leaders are dead on, and they came out of the shadows this past week swinging hard. This is not a small thing — it will give city officials cover when voicing their own skepticism of this idea — and it’s a credit to these business leaders.
“Rather than allowing the effort to generate needed revenue through a one-time sale of the city's biggest (and revenue-generating) asset, we respectfully ask that you stop the headlong rush to sell JEA and initiate a thorough, transparent process to determine the city’s financial needs and how to meet them In a sustainable manner,” the group told the City Council.
Beyond the politics, though, the Civic Council’s focus on the underlying financial question is an important one. What would the city do with any extra money? That discussion needs to happen first — not after JEA has been pawned off to a private buyer, as Curry’s office insists.
That discussion might have (for JEA leaders and the mayor) the inconvenient effect of complicating the sale process and slowing it down — but, as the Civic Council accurately noted, JEA is not in a financial crisis and thus no urgency exists to sell it in the first place.
There has also been too much emphasis on the top line purchase price as only a source of revenue rather than a potential alarm bell. City Councilman Rory Diamond, for example, asked the Civic Council CEO at a recent meeting if there was a price the group would find acceptable. This misses the point entirely.
The higher the price, the more skeptical people ought to be. If a company overpays for JEA — hoping to box out competitors — it will simply mean Jacksonville residents will pay more down the road so shareholders get their investment back. The present would gain at the future’s expense: $10 billion to City Hall might look great today. It could be disastrous for future ratepayers.
Beware of sticker shock.
That would be a Devil’s bargain, and this city has made one too many of those in its past. The future can’t afford another one.
Nate Monroe’s City column appears every Thursday and Sunday.
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