On Air Now

Listen Now

Weather

cloudy-day
60°
Cloudy
H 64° L 47°
  • cloudy-day
    60°
    Current Conditions
    Cloudy. H 64° L 47°
  • cloudy-day
    58°
    Evening
    Cloudy. H 64° L 47°
  • clear-night
    48°
    Morning
    Clear. H 66° L 47°
Listen
Pause
Error

The latest top stories

00:00 | 00:00

Listen
Pause
Error

The latest traffic report

00:00 | 00:00

Listen
Pause
Error

The latest forecast

00:00 | 00:00

Local
JEA Board approves exploring non-government ownership
Close

JEA Board approves exploring non-government ownership

JEA Board approves exploring non-government ownership
Photo Credit: JEA web stream

JEA Board approves exploring non-government ownership

It was framed as an either-or decision: does JEA shrink in to the future, or does it grow?

“We’re talking about exploring options to grow and protect JEA from what would otherwise be a slow but certain death spiral,” says JEA Board Member Alan Howard.

After months of detailing relatively grim options for the future involving layoffs, rate hikes, and more, JEA’s Senior Leadership Team has now put forward details of an alternative “non-traditional” response, which would spare those consequences by removing JEA from the City of Jacksonville’s government structure. The Board of Directors voted Tuesday to move forward with exploring that “non-traditional” response- to solicit and study community or private ownership of the utility.

“We did not vote today to sell JEA. I think it’s important that we say that. What we exactly did today, specifically what did today, was we gave leadership direction to pursue an unconstrained, non-traditional response to make JEA better for the employees, for the community, as a whole,” says JEA Board Chair April Green.

This all comes as part of JEA’s strategic planning process. Leadership has said in recent months that continuing on JEA’s path without any change would lead to electric rates climbing 52% by 2030, with water rates up 16%. This is the result of several factors, including continued moves toward energy efficiency by customers, which largely means less revenue for the utility. To avoid this outcome, JEA rolled out a proposal for what they deemed “austere” changes last month, involving 574 layoffs and more moderate rate hikes.

“We are accustomed as a leadership team and as a team of employees to providing excellence in everything we do for our customers. Under this scenario, the cost cuts are so deep, and the personnel cuts are so deep, that there’s no way we could continue to provide that level of excellence to our community,” says JEA President and Chief Operating Officer Melissa Dykes.

Dykes confirmed Tuesday that the layoffs were projected to take place within the first seven months of moving forward with this scenario. Last month, JEA’s Board of Directors voted to move forward with planning for that proposal, but said at that time that they wanted more information about other paths that could be taken. New concerns were raised Tuesday about whether these steps would even go far enough.

“Unfortunately, the traditional utility response doesn’t fix the problem with the declining business. Although the austere response shifts some of the financial burden of the cash gap away from our customers, at the end of this period, JEA is still left with far too much debt for a business that’s facing the external competition that we’re expecting,” Dykes says.

“When you talk about the traditional response, whether it’s [option] 1 or [option] 2, it’s like writing your own obituary,” says Board Vice Chair Frederick Newbill.

JEA leadership had previously talked about an alternate “non-traditional” approach, but Tuesday’s Board meeting was the first time more information was provided about what that would look like.

“While it would still require a process with an uncertain outcome, it is a local process, where we as a community get to decide the best path for our community utility, so that it can continue to serve this community for generations to come,” says JEA Chief Financial Officer Ryan Wannemacher. 

There are several different possibilities, but the commonality is removing JEA from the city government structure and putting it in to the hands of community or private ownership. The Board ultimately voted to move forward with this option instead, saying they want to work on growing JEA in to the future, and this is the way to do it. 

JEA’s Managing Director and Chief Executive Officer Aaron Zahn says they only started delving in to these non-traditional options in the last month, after the Board said they wanted other ways to move forward. In that time, he says they have put together the general framework for different possibilities, although they have not yet fully analyzed how each would work with key metrics like customer rates and environmental stewardship. The options they laid out include a range from community control to running as a private operation to partnering with some other company, including major tech or oil and gas.

JEA
JEA Board approves exploring non-government ownership
Close

JEA Board approves exploring non-government ownership

Photo Credit: JEA
JEA Board approves exploring non-government ownership

JEA
JEA Board approves exploring non-government ownership
Close

JEA Board approves exploring non-government ownership

Photo Credit: JEA
JEA Board approves exploring non-government ownership

As part of this exploration, JEA says there will be “minimum requirements” to any deal. That will include customer rebates, base rate stability, protections for employee compensation and retirement benefits, moving forward with a new Downtown headquarters, and more. The Board also committed to a one-time cash payment to the City of around $3 billion, in lieu of future annual contributions. Zahn says JEA does not have that kind of liquidity, and rather this would be something they anticipate any prospective future partner to come to the table with.

Multiple Board members spoke about the importance of these measures, in wanting to ensure the community, customers, and employees alike are all cared for by the current service and as they look at what the future holds. There were concerns expressed at the start of Tuesday’s meeting, with several union representatives urging the Board to act with the employees in mind.

“We advise our members to focus on safety and concentrate on their job, but it is extremely difficult after the last couple of Board meetings focused on solutions that were not only detrimental to our member’s livelihoods, but were completely lacking some hope at times,” says Jesse Ferraraccio, with IBEW Local 2358.

JEA
JEA Board approves exploring non-government ownership
Close

JEA Board approves exploring non-government ownership

Photo Credit: JEA
JEA Board approves exploring non-government ownership

Removing the government control element is vital for the future of JEA, according to the utility, because of the barriers for future growth that exist in the current dynamic. Leadership cited examples like provisions of the Florida Constitution that could preclude them from working in electric vehicles, terms of the City Charter that prevent geographic growth, public records laws that could put them at a competitive disadvantage in new developments, and more. While they projected they could have some success in changing the City Charter, they estimated a change to the Constitution to be a costly battle with a very small chance of success. 

They, therefore, believe that removing themselves from the government arena is the most effective way to get rid of those existing barriers for growth.

Tuesday’s vote triggers what is expected to be a roughly year-long process, during which time the Senior Leadership team will actively solicit offers and study the different non-government ownership structures they presented, as well as any they have not. They will then present those to the JEA Board, along with the “traditional response” that involves layoffs and rate hikes. The Board will vote, and if they decide to take on a restructuring, the decision would then have to pass through the City Council, and then the voters.

JEA
Timeline for JEA's non-government ownership exploration
Close

Timeline for JEA's non-government ownership exploration

Photo Credit: JEA
Timeline for JEA's non-government ownership exploration

Several Board Members questioned how confident the leadership team was about the grim projections and the need to act on them. Dykes acknowledged that there have been big events that have led to inaccurate projections in the industry before, but says they factored in more than two dozen variables in this analysis.

“Is it gunna be 100% right? It’s not. But this is our best guess and our best projection of where this business is headed over the next ten years,” she says.

“The true value of a projection or forecast is that it enables us to envision where we could end up in the future, while there is still time to pull the respective levers and change the course of the organization, versus getting to our destination and merely reporting back on what happened,” says Board Member Kelly Flanagan.

JEA has floated privatization in the past, which ultimately led to a politically charged debate and the creation of a special City Council committee to study the matter. At the time, the idea was put out as a desire to understand the value of JEA, but leadership argues it became a debate on whether to sell, which they say is not what they had intended. 

That prior “exploration” stalled out early last year, when Jacksonville Mayor Lenny Curry said that he would not put forward any privatization plan for City Council consideration. Given that, WOKV reached out to the City for a response to today’s vote by JEA’s Board, and a statement from Curry says whatever path JEA takes must have guarantees for the community.


The City Council liaison, Danny Becton, says there needs to be some out-of-the-box thinking.

“JEA is at a crossroads. Like many companies that we see in today’s ever-changing world of technology advances and innovation, JEA is no different,” Becton says.

Privatization talks in the past raised a number of concerns, including that a private company would not be eligible for the same disaster relief funding that the municipal-owned JEA gets, and that it could also lead to a dynamic where the utility is less responsive to community needs and concerns.

WOKV asked Zahn if the utility is in a good position for the next year, so that they can stay financially sustainable while considering these options, and not have to make any immediate rate changes or layoffs.

“It is a calculated risk that we are taking to delay action today by 6-12 months to see if the minimum requirements set forth today can come to fruition,” he says.

He hopes the steps they’re taking to be deliberate in the management of JEA will prevent any fiscal crisis like he says they could face without change.

Read More

The Latest News Headlines

  • Jacksonville Police are still searching for a man they say abducted a woman at gunpoint.  She was found safe on Saturday. Police say 36-year-old Tyrone Davis is wanted for breaking into a home off Edgewood near Moncrief through a back window early on Saturday.  JSO called the abduction 'domestic-related'.   A neighbor told Action News Jax that JSO came to his door asking if his surveillance cameras captured anything early this morning. The neighbor said the area is usually quiet.  Davis had a gun and dragged the woman out of the house by her hair, according to police.  JSO is asking anyone with information about Tyrone Davis’ location to contact the Jacksonville Sheriff's Office at 904-630-0500 or email JSOCrimeTips@jaxsheriff.org .  To remain anonymous and receive a possible reward up to $3,000 contact Crime Stoppers at 1-866-845-TIPS. 
  • It’s going to be a damp start to the work week.  Action News Jax Chief Meteorologist Mike Buresh is tracking three systems that will bring at least some rain this week, with nice weather in-between.  “This disturbance moving through with some rain, but amounts look to be less than a tenth of an inch pretty much across the board today. So, we’ll get this disturbance out of here by this evening. Skies will clear tonight, and it’ll be chilly, down into the lower 40’s but a couple of really nice days ahead after that”, said Buresh.   Tuesday looks to be the nicest day of the week with sunny skies and temps in the upper 60's.  Wednesday afternoon is our next disturbance, and the third comes through on Friday.  Overall temps will be near average in the mid-60’s this week, with some fluctuations when it rains. 
  • Police are asking for the public's help to identify a child dropped off at a metro Atlanta Walmart. Gainesville police said the boy was found inside a the Walmart at 440 Shallowford Road. Officers believe the child is 3 years old and may be named Brandon. His father's name is possibly Alejandro. Police believe the child was possibly dropped off by a Hispanic man driving a white Ford cargo van. Police are asking anyone with information to call Hall County Dispatch at 770-534-5251.
  • President Donald Trump’s legal team will continue his defense Monday as his impeachment trial goes into its sixth day. The president’s attorneys began presenting the case Saturday following three days of presentation from the U.S. House managers. Here is how you can watch the proceedings on television and online: What time does it start: The Senate will reconvene at 1 p.m. and the trial will continue then. How can you watch: The trial will be live on cable news networks like CNN, Fox and MSNBC as well as CSPAN-2. It will also be broadcast live on ABC, CBS, NBC and PBS. You can catch coverage on the channels online sites by going to the homepage for each network and finding a link to live coverage. The networks also have YouTube channels where the livestream of their coverage of the trial can be accessed. Most local television and newspaper sites will also have livestreams on their websites. Go to the TV or newspaper homesite and look for a link. What to expect: On Monday, the president’s attorneys will continue their presentation. They have roughly 22 hours left to present their case. Harvard Law professor Alan Dershowitz is expected to make a presentation about the constitutional aspects of impeachment. Ken Starr, the independent counsel who prosecuted Bill Clinton, has joined Trump’s defense team and may make remarks today. The trial could end this week if a vote to call additional witnesses fails. If it passes, the trial could run for several weeks.
  • Three students from the University of Washington, Seattle, campus are being screened for the new coronavirus, according to a release Sunday from the university’s Environmental Health and Safety Department. University officials said the school was notified by Public Health – Seattle & King County. The students recently traveled to Wuhan, China, where the new virus first appeared, and developed symptoms after returning, according to the release. The students were tested, and two who live on campus are waiting for test results to be returned, officials said. The third student, who lives off-campus, tested negative for the infection. The two students are being monitored by health officials and were moved to isolated housing until they are cleared by PHSKC. Officials said testing is a precautionary measure that’s being taken but anticipate more people that are tested will not have the infection. None of the students were hospitalized and all are doing well, health officials said. Only one case of the coronavirus has been confirmed in Washington state and five cases total in the United States.

The Latest News Videos