Jacksonville, FL. (February 25, 2018) After several weeks of mis-representations and upon a Florida Times-Union (FTU) editorial misstating District 11 City Council Member Danny Becton’s views on a potential sale of the city-owned utility JEA, CM Becton corrects the record and speaks out in an editorial published in the FTU on February 25th, 2018.
The editorial was sparked by the disclosure that the JEA Board in their February 14th special city council meeting had spent approximately $100,000 on a “valuation” study that should have been an “evaluation” of the pros and cons concerning the possible sale of the utility. The report estimated such a sale could net the city between $3 and $6 billion as part of the study by Public Financial Management Inc. (PFM) who was asked if they were even certified to give such an analysis? However, per the JEA’s Board chair’s remarks that City Council would have to give its approval to first sell JEA before any movement forward on this issue would be initiated, CM Becton responded that perhaps, “the cart was before the horse” in this process.
The first for which the City Council officially heard about the study was after it was completed and members received a draft copy on February 7th. The final version was presented to the Council on February 14th. It was at this meeting that CM Becton spoke about the process and how JEA Board might have been more well served to ask the policy question, “Do we even want to sell JEA, no matter what the price, first?” He questioned spending $100,000 on a study that may not be needed if the City Council were to decide not to support the sale of JEA no matter what the price. He contended that the JEA Board might have gotten the City Council’s thoughts about the subject before spending money on such a study.
At the meeting, Becton compared the sale of the utility to that of a homeowner pondering the sale of their house. The homeowner would not pay for an appraisal until he had first decided to sell.
The Times-Union, which editorially has seemingly been advocating to study the feasibility of selling JEA, accused Becton of being close-minded on the subject saying “he should take a much broader view.”
Becton responded to that editorial with one of his own that ran on February 25:
“I am open to a discussion about the evaluation of selling JEA or the prudence of holding on to this city asset,” he wrote. “This is the discussion that should have occurred before spending $100,000 on what turned out to be a valuation study.”
This is not the first time a JEA sale has been discussed. Valuation studies were conducted in 2007 and 2012. This most recent study fell short on its assignment. “Here we are again in 2018 and the JEA board has spent approximately $100,000 for an ‘evaluation presentation’ by Public Financial Management (PFM) that did not include all of the facts but only a perceived valuation of the utility that PFM is not certified to give,” Becton’s editorial stated.
Becton wanted details about JEA’s unfunded pension liability and a return on equity analysis of the city’s contributions and dividends. Both were not included in the report.
Becton is serving on the newly created Special Committee on the Potential Sale of JEA. It’s hoped this committee will perform the evaluation study and determine if there is a will in the community to sell the utility. If that is the case Becton then wants to “spend the money to get it appraised by a certified, third-party source.”
In Becton’s view, by exploring a sale and commissioning a study before the will of City Council has been expressed, not only has JEA needlessly spent $100,000 but it has also jeopardized losing valuable and experienced employees who now fear for their future employment with the utility.