ST. JOHNS COUNTY, Fla. – The St. Johns County Government and JEA are locked in a standoff over water and sewer infrastructure located in St. Johns County.
JEA currently controls the water and sewer service for about 35,000 households in the fast-growing area in Northwest and Northeast parts of St. Johns County. The county now asserts that the potential sale of JEA, which began last year, opened the door for the county to begin negotiations to buy out JEA, based on a contract that dates back to 1999. Lawyers for JEA disagree, according to emails between the county and JEA lawyers obtained by News4Jax, arguing that door is closed now that the potential sale is off.
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In the contract between St. Johns County and JEA, known as the Interlocal Agreement (ILA), the county has the first right of refusal and the chance to buy its portion from JEA at a favorable rate if the utility is ever up for sale.
When JEA started to explore the possible sale of the city-owned utility last year, the St. Johns County Commission in October also started looking into buying out the JEA territory within its boundaries. Even though the potential sale process was canceled Dec. 24 amid a host of scandals, county lawyers contend the option to buy out JEA in St. Johns County is still on the table.
“Our Board of County Commissioners on Tuesday voted to continue with our due diligence in exploring those possibilities to determine if it would be in the best interest of the county as a whole to purchase our service area back from JEA,” St. Johns County spokesman Michael Ryan told News4Jax. “We are in communication regarding the window of opportunity to negotiate and our disagreement on its status.”
A JEA lawyer fired back in an email to the county on Tuesday.
“After conferring with our client, JEA, regarding the letter, we want to reiterate that all discussions and negotiations related to JEA’s Invitation to Negotiate #127-19 (the “ITN”), including any discussions related to the Interlocal Agreement terms, were terminated by the JEA Board on December 24, 2019,” Deputy General Counsel Lawsikia Hodges wrote. “As such, any discussions to date between JEA representatives and the County regarding the sale of JEA assets under the Interlocal Agreement are void and of no effect. Further, JEA does not intend to continue any discussions with the County regarding this topic.”
JEA and St. Johns County not only disagree that negotiations are still possible, but the dollar value is also in dispute.
JEA believes the “current purchase price for JEA assets in SJC will exceed $300 million, as per the formula contained in the inter-local agreement,” according to a spokesperson.
“We disagree that that value would be the dollar amount that we would have to pay based on the language of the contract,” Ryan responded. “We believe that our contract provides much more favorable terms of purchase than average street value.”
JEA also started discussions with Nassau County, which has a similar agreement with JEA, but JEA lawyers said those discussions died at the same time as the potential sale.
It’s unclear how the disagreement between JEA and St. Johns County will be resolved, but it’s possible it could end up in court.
The disagreement is going on at the same time JEA is in the midst of federal and city-council led investigations relating to the potential sale process.