Jacksonville, FL – (September 24, 2019) – As each council year presents new challenges and new assignments, the Council Term 2019-2020 has District 11 Council member Danny Becton assigned as the City Council Liaison to JEA. It was not until the JEA Board meeting of July 23rd that this role took on a whole new meaning as the JEA Board voted to approve a process that would look at the options to change the corporate governance of the organization.
On that Tuesday, 23rd day of July, the JEA Board approved what is commonly referred to as an “Intent to Negotiate” (ITN) process. This ITN process is described as:
“Inviting interested parties to submit replies detailing strategic alternatives that are aligned with JEA’s goal of maximizing customer, community, environmental and financial value over the long term”.
“As described herein, JEA welcomes Replies contemplating strategic alternatives that build upon JEA’s strengths and seek to eliminate existing business constraints. Potential alternatives can include, but are not limited to, operational changes, structural changes, joint ventures, development partnerships, community ownership, corporate ownership, an initial public offering, private placement, technology conversion, oil and gas conversion, utility conversion, or another recapitalization of the business. As we consider the Replies, we are targeting the following process goals as minimum requirements for maximizing customer, community, environmental, and financial value over the long term, as outlined in the table below:”
Financial > $3 Billion of value to the City of Jacksonville
Customers > $400 million of value distributed to customers.
Environmental Commitment to develop and provide COJ and DCPS with 100% renewable electricity by 2030
Community Impact Protect employee retirement benefits, compensation for 3 years, retention payments and to commit to a new HQ in downtown Jacksonville.
This news was certainly an unexpected start to a council year that was already engaged with an issue regarding the Duval County School System over their half cent tax referendum. The JEA potential of privatization had supposedly gotten sidelined from the previous years Special Committee on JEA and the spring elections, whereby many candidates had voiced opposition to any future change.
As the days and weeks unfolded, the JEA Liaison role of CM Becton began to elevate in importance. It was on September 24th, that JEA CEO Aaron Zahn and City Council President Scott Wilson designated additional responsibilities for that position, instructing CM Becton to be the sole council member who would be responsible to evaluate JEA’s purchasing process in the sunshine, regulate any and all developments that occur in the shade, and represent, as well as, negotiate the Council’s interests in helping provide the research and resources for which the council would need.
Councilman Becton stated at that initial JEA Board of Directors meeting:
“First, I would like to say that it is a pleasure to have been appointed as the Council Liaison for JEA. JEA is a valuable asset of our city and it is my honor to have this responsibility to work with you and to utilize my experiences as a business owner, the past four years on Council and having been an original member of the 2018 Special Committee on JEA that detailed JEA’s value and financial impact within our community. I come to this role with a wealth of knowledge that I am looking forward to utilizing in working with the JEA Board and with the entire team here at JEA.
JEA is at a crossroad. Like many companies that we see in today’s ever-changing world of technology advances and innovation; JEA is no different. Companies who products have become affected by today’s advances have to look to the future, consider change and embrace new sources of revenue or suffer the consequences. It will no longer be acceptable ignoring the facts and not considering bold alternatives that will be offered.
As policy makers and stakeholders, we too must think outside the box and be prepared to explore these expanded benefits that JEA can fill to serve and provide within our community. It will only be together that we solve these issues, plan the future of this utility and serve the needs of our community for years to come. For that, I am committed to helping in that endeavor!
I look forward to this opportunity.”
The discussion to potentially sell JEA has created a city-wide debate. Councilman Becton and the District 11 office has seen an influx of correspondence from residents regarding their concerns and opinions with the procurement process and opposition and perceptions towards the possible sale. Councilman Becton said he is taking all of the correspondence he has received into consideration, and doing his best to respond in a timely manner. He has written and distributed this statement to constituents to explain his role and responsibility at this time:
“As the Liaison to JEA for the Council, it is my effort to make the process as transparent and with as much integrity as I can affect. I certainly understand everyone’s concerns and the perception that many have with the possible outcome. As the Liaison, it is my need to remain objective and unbiased as this process unfolds. When a decision by the JEA Board is made, you can take comfort that I will analyze that recommendation thoroughly, and make a decision based on the facts and ultimately what is in the best interest of Jacksonville. Everyone’s feedback is important and note, it requires a super majority of council (13 of 19) and the majority of voters in a referendum to approve any change greater than 10% of the corporate governance of JEA.”
According to JEA’s website, the public utility said it’s time for change. “For 125 years, JEA has brought you safe, reliable, affordable and sustainable energy and water services. Today we're looking at new ways to meet your ever-changing needs and help our community grow and prosper. For our children and theirs. Seeking new paths as a non-government entity, JEA could be flexible to grow while thriving in a changing energy marketplace and providing new opportunities.”
The following bullet points are summarized reasons explaining the publicly owned utility company’s argument and why change is necessary:
Even as more customers connect to JEA, revenues are decreasing due to:
- Customers using less energy
- More energy-efficient appliances
- Growing renewable energy options
- Emerging smart technologies
- Limited services we can offer as a government entity
If JEA doesn't change in the face of these trends, we could face:
- Rate increases up to 52%
- Deep cuts in staff and capital investments
- Fewer technology and infrastructure improvements
- Slower customer service
- A gradual decrease in the value of JEA
The Jax Daily Record reported “any possible decision-maker or stakeholder in the JEA sale is prohibited from speaking about the specific terms of ITN with constituents, members of the media, on social media or with possible respondents to the solicitation.”
Councilman Becton explained to the JDR reporter the purpose of his oversight role in regards to this, and said “Council President Wilson and I have heard our colleagues over the course of the last month or so saying they didn’t have influence into the ITN and they didn’t know what was going on. This, perhaps, is a step in that direction to allow me to be a part of the process — not an evaluator, not a negotiator but have a seat at the table.”
JEA’s CEO Aaron Zahn told JDR “the move to include Becton is to provide information to the Council and “ensure the integrity” of the solicitation process.”
“We don’t want to do anything to violate the cone of silence, and we also don’t want to do anything to jeopardize his ability to vote should it ever become a reality that his vote is necessary,” said Zahn.
This article will be continuously updated with new information regarding JEA’s procurement process as it becomes available.
ITN 00. 129-19 JEA-Invitation-to-Negotiate-2019.08.02
ITN 01. 127-19 Addendum 1
ITN 02. 127-19 Addendum 2.pdf
ITN 03. 127-19 Addendum 3.pdfITN 04. 127-19 Addendum 4.pdf
ITN 05. Add4 - Attachment 01 - JEA Defeasance Summary.pdf
ITN 06. Add4 - Attachment 02 - Gross Revenue and Franchise Fees for Atlantic Beach and Mayport.pdf
ITN 07. Add4 - Attachment 03 - Telecom Information.pdf
ITN 08. Add4 - Attachment 04 - Master Tower Data.pdf
ITN 09. Add4 - Attachment 05 - IWRP.pdf
ITN 10. Add4 - Attachment 06 - 2019 JEA Depreciation Study Report.pdf
ITN 11. Add4 - Attachment 07 - FY16 FY17 FY18 Salary and Benefits.pdf
ITN 12. Add4 - Attachment 08 - IRS Letter Tax Status.pdf
ITN 13. Add4 - Attachment 09 - JEA Tax Exemption Certificate.pdf
ITN 14. Add4 - Attachment 10 - JEA Master Rates History File.pdf
ITN 15. Add4 - Attachment 11 - IWRP Final Report.pdf
ITN 16. Add4 - Attachment 12 - JEA 2019 IWRP DSM SOW 05-MAR-2019.pdf
ITN 17. Add4 - Attachment 13 - MEAG.pdf
ITN 18. Add4 - Attachment 14 - Net Proceeds Calculation.pdf
ITN 19. 127-19 Attachment 1 Respondent Certification.pdf
ITN 20. 127-19 Attachment 2 Conflict of Interest Certificate.pdf
ITN 21. 127-19 Exhibit A JEA Procurement Code.pdf
ITN 22. 127-19 Exhibit B 2018 Annual Report.pdf
ITN 23. 127-19 Exhibit C 2019 Annual Disclosure Report Electric System.pdf
ITN 24. 127-19 Exhibit E March 2019 Quarterly Analysis of Financial Performance .pdf
ITN 25. 127-19 Exhibit E March 2019 Quarterly Analysis of Financial Performance.pdf
Presentation of Analysis of Future Forecasts
ITN 26. Presentation - JEA Status Quo - Energy Assumption.pdf
ITN 27. Presentation - JEA Debt Service by System as of Oct 11 2019.pdf
ITN 28. Presentation - JEA Service Map for Electric.pdf
ITN 29. Presentation - ITN JEA Service Map for Water.pdf
ITN 30. Letter from AZ to CDB - 10-11-19.pdf
By Tiziana Onstead, District 11 Executive Council Assistant
Posted on Tue, September 24, 2019
by Tizana Onstead