Heads are spinning as Jacksonville residents try to keep up with the events surrounding the potential sale of the city’s electric-water/sewer utility JEA.
The latest development, less than a week after the announced retirement of the head of JEA, is the decision by former mayor John Delaney to join two local firms that may be major players in any sale.
Delaney, who became president of the University of North Florida after leaving City Hall, will be involved with the premier legal firm Rogers, Towers and also with longtime Republican fund-raiser and lobbyist Mary Fiorentino.
Coincidentally, perhaps, both those firms reportedly have been engaged by Emera Inc., an acquisitive power company that insiders believe could be the first to make an offer for the JEA if it went on sale.
Emera, based in Nova Scotia, interestingly is a former public utility that turned private. It bought TECO, the private utility that serves the Tampa Bay area, a year ago, paying $10.4 billion. It also bought the Peoples Gas operation in Tampa Bay. The growing company has annual revenues of some $6 billion – an increase of $4 billion in four years.
All this happens as the City Council continues on a course to determine the actual value of the JEA, concurrent with a similar effort by the private group known as the Jacksonville Civic Council. The civic council may come forth with a preliminary report next month, Eye has been told.
Although the local property appraiser’s office has a valuation of the JEA’s real property, the council was told it is largely fictional because officials do not bother to do an in-depth appraisal of tax exempt property owned by the city.
What the other entities are considering is the value based on its income, projected over a period of at least 30 years.
If the net proceeds of a sale were invested and produced more income than the $116 million generated by the JEA annually now, it presumably would make sense, strictly from a revenue standpoint.
However, that would only be true if it were invested. The fear is that local politicians would choose to spend it, meaning the only income would be what the city could collect from the new private owner in the form of property taxes and franchise fees. Another concern is the loss of local input on rates, because a private utility would be regulated in Tallahassee.
So, the unanswered questions mount up: Why is McElroy leaving? What is the particular skill set (he has many) that Delaney would bring to the table? Who really is pushing the proposal and what is his agenda?
Stay tuned.
