Jacksonville City Council subpoenas CEO to testify on potential JEA sale

Council weighs pros, cons outlined in auditor's report

JACKSONVILLE, Fla. – As the Jacksonville City Council continues to weigh the benefits and costs of potentially selling JEA to a private entity, the utility's CEO was handed a subpoena Thursday, ordering him to appear and testify at a committee meeting next week.

The City Council auditor broke down what Jacksonville stands to gain and lose from selling the utility during a special meeting Thursday.

READ: City Council auditor report on potential JEA sale

The auditor's report indicates the sale could generate $1.7 billion to over $5 billion for the city. JEA would be worth even more, but the utility is carrying debt, like a billion dollar commitment to buy nuclear power from a Georgia plant

If sold, the billion-dollar -- or more -- windfall could be used to pay off city debt. The city would also be able to collect property taxes on JEA's land, which is currently city-owned and doesn't generate revenue. The school district would also benefit from those property taxes.

But if JEA is sold, the city would no longer receive its yearly contribution of nearly $117 million and would lose local control of the rates the utility charges for electricity and water.

The sale could also cost the city jobs and affect how quickly JEA responds to repair storm damage.
Because JEA is city owned, the city needs to consider what impact a sale would have on the city's pension program.

The auditor said that, if JEA is sold, the money should be used for one-time expenses and not for recurring elements of the city budget, like operating expenses.

If JEA isn’t sold, the auditor said, the city needs to look for other ways in which the utility could make a profit, such as more solar or natural gas energy.

The City Council hasn't made any decisions yet, and will have another committee meeting next week to address the issue.

JEA CEO Paul McElroy will speak at that meeting, after being subpoenaed to testify. He declined to be placed under oath at an earlier meeting and said he was disappointed the council felt the need to subpoena him.

DOCUMENT: Subpoena of JEA CEO Paul McElroy

“I am a public servant,” McElroy said.

But many question what McElroy and others, like former board member Tom Petway, stand to gain financially from the potential sale of JEA. Petway, a mover and shaker in Jacksonville, initially suggested the sale in November.

“I know Mr. Petway, worked very closely with him. I have tremendous admiration for him. There is no way he stands to benefit from this,” McElroy said. “There is no way any of our senior executives stand to benefit from this. And I don’t. My contract runs another six months, and we'll see what happens.”

About the Authors: