JEA won't fund pensions, may make one-time $120 million contribution
JACKSONVILLE, Fla. – Jacksonville's city-owned utility company has refused to make annual, multi-million contributions to the $1.7 billion pension deficit, but its board gave preliminary approval Tuesday to a one-time $120 million contribution in exchange for lowering the JEA's current annual contribution to the city's general fund by $2.5 million over the next 10 to 15 years.
In exchange, the JEA wants control of its portion of the general employees' pension plan and city support for the utility's growth and economic development and other issues. The utility would also require that the agreement would not result in a rate increase or jeopardize its credit rating.
The proposal, the brainchild of three city leaders, has the support of the JEA staff and Mayor Alvin Brown, who called this an immediate solution, without any tax or fee increase, and it meets the goal of the Pension Task Force."
DOCUMENT: JEA's proposed pension solution
JEA's CEO said this would be a win-win for everybody.
"That holds it rate neutral, so there is no increase in the rates, and its good for our customers and our investors as well," said the CEO's Paul McElroy.
The plan will take City Council approval, but it's not sitting well with some members.
"All you are doing is taking from our general fund, so how do I pay my bills?" asked City Councilman Richard Clark. "The whole purpose of this is they are supposed to come up with a way that does not impact the way we run our government day-to-day."
Council member Bill Bishop, who is also a candidate for mayor next spring, said there are many questions.
"I think there is a lot of work that has to go into it because unthinking he details have not been worked out," Bishop said.
Jacksonville Civic Council also released a statement expressing concern:
"Upon initial review of the JEA proposal, it is clear that this is not a solution to the city's pension funding shortfall, and the suggestion is a distraction to the other shortcomings of the mayor's proposal. We encourage the City Council to continue close scrutiny of the proposal and reject any deal that fails to provide a comprehensive, long term solution."
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