Newspaper article The Florida Times Union

Council Members' JEA Talk Captures Essence of Debate; by David Bauerlein

Newspaper article The Florida Times Union

Council Members' JEA Talk Captures Essence of Debate; by David Bauerlein

Article excerpt

Byline: dbauerlein@jacksonville.com

City Councilman Bill Gulliford on Wednesday floated how the city could use a possible $5 billion windfall from selling JEA, but fellow council member John Crescimbeni called it an unrealistic "pie in the sky" presentation.

Gulliford said the city could pay down a huge chunk of its debt, undertake needed construction and development projects across the city, cut the property tax rate, and still have enough left over to more than cover the loss of JEA's annual contribution to the city budget.

Gulliford said other council members might have different thresholds than the $5 billion figure he would want the city to gain from a JEA sale. He said that's a discussion the council needs to have so there is a consensus on what kind of financial benefit would make it worthwhile to sell JEA.

"In conversations with the average guy on the street, it's been expressed to me over and over again that how we would use that money is as important as whether or not we sell JEA," Gulliford said at a meeting he convened with Councilman Matt Schellenberg.

Schellenberg said Gulliford's presentation "shows how transformational" selling JEA would be for the city.

Crescimbeni, who is chairman of a special City Council committee that is examining the possible sale of JEA, pressed Gulliford on what the sales price for the utility would have to be for

the city to net $5 billion.

"I think $5 billion is a stretch," Crescimbeni said. "I understand you wanted to do an exercise. You could have chosen $10 billion. You could have chosen $15 billion. It needs to be realistic."

A consultant hired by JEA told City Council in February that if the city sold the entirety of JEA -- electric, water and sewer services -- a buyer would pay in the range of $7.5 billion to $11 billion. After taking care of existing JEA obligations such as its debt and the utility's costs for the Plant Vogtle nuclear generators being built in Georgia, the city's net would be $2.9 billion to $6.4 billion, Public Financial Management concluded.

Crescimbeni noted that Gulliford favors the city keeping the water-sewer side of the operation, so selling just the electric operation would result in a much lower sales price. …

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