JACKSONVILLE, Fla. – JEA's board of directors has signed off on some safeguards that would preserve employees' financial futures in the event the publicly-owned is sold.
During Tuesday's meeting, human resources director Jon Kendrick said the utility wrapped up negotiations as part of JEA's collective bargaining with all five of its unions last week.
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Kendrick said hard questions were asked about the fate of employees' pensions, and the retirement plans coming to them, should JEA make the decision to sell the utility to a private company.
On Tuesday night, the bill regarding city retirement and pensions amended to include JEA employees passed 16-3. Councilman Garrett Dennis, Councilwoman Randy DeFoor and Councilwoman Brenda Priestly Jackson were the "no" votes.
"Look, we have 1,600 union-represented employees, both on the water side and on the energy side," JEA CEO Aaron Zahn said. "One of the most significant concerns is their retirement."
"They wanted to ensure that whatever the outcome, the retirement they have been working for -- whether it's five years, 20 years or 30 years -- is protected," he added.
The sale of JEA has been floated as the source of a potential windfall for the city's coffers. The utility has hired some high-powered consultants to explore privatization, but few details have been released because the consultants have insisted on a "cone of silence" curbing the spread of information.
"The goal here is that city council knows we want them to be included, be inclusive of the proper channels through the liaison, while also complying with the cone of silence, Sunshine Laws and the procurement statutes that we need to comply with a government entity," Zahn said.
Zahn noted that the protections are only in place in case the board of directors decides to sell the utility, which would require the backing of the council and voters. In the meantime, he asked for patience.
"Let us do our job," he said. "Let us get the facts, let us collect the data and then you can make the policy decision with the information in hand."
The City Council is on the hook to pay the pensions of JEA employees, but Zahn said the utility would contribute to that effort, paying employees a lump sum to help cover their benefits.
JEA also provided an explanation of its ITN process, in which they will explore options for re-capitalization.
The options include converting JEA into a corporation and a placement of equity shares with private investors, community ownership or JEA becoming a public entry listed on a selected stock exchange. The latter would mean JEA would operate its utility services through franchise agreements with the city.
There will be a public meeting Oct. 7 when JEA plans to reveal the number of bidders.
"The reason at the initial bid opening, which will be on Oct. 7 will not be provided, is in order to make sure JEA receives the highest and best value. That being said at the end of the process all names, all information will be provided to the public for their digestion and for them to make their own decisions," said Zahn. "I would encourage customers, stakeholders, civic, policy makers - let us do our job. Let us get the facts, let us collect the data and then you can make the policy decision with the information in hand."
The third phase of the competitive bid process, negotiations, is estimated to begin in late October.
Zahn told News4Jax the utility's residential sales are down 20% per customer and commercial industrial sales are down 30% per customer.
"The traditional utility response is a continuation of the last 10 years. It's raising rates, it's cutting costs, it's cutting overhead, deferring cutbacks and continuing to pay off debt," said Zahn.
The JEA Board of Trustees also discussed finding a way to give City Council a larger seat at the table while also complying with the cone of silence during the procurement process.
"The goal here is that city council knows we want them to be included, be inclusive of the proper channels through the liaison, while also complying to the cone of silence, sunshine laws and the procurement statutes that we need to comply with as a government entity," said Zahn.