Public Utility Back in Fold of Jacksonville Pension Reform Plan

Jacksonville public utility company JEA is back on board with the city’s pension reform plan.

The company is helping to finance much of the city’s current reform proposal; JEA will make a $120 million lump sum payments to the city’s Police and Fire Pension Fund.

Last week, it was unclear whether JEA would go through with the plan.

More from the Florida Times-Union:

After a series of fast-paced negotiations between Mayor Alvin Brown’s administration and top JEA officials, prompted by a public rift last month, a plan to use the financial wherewithal of JEA and the city to pay the hefty price tag of Jacksonville pension reform is back on track.

JEA audit and finance committee members Thursday unanimously approved an agreement that stipulates the utility would — in exchange for financial and administrative concessions — make a $120 million lump sum payment to the city. Brown wants the city to use that payment, plus an additional $120 million the city would borrow, to more quickly pay down the $1.62 billion debt to the Police and Fire Pension Fund.

[…]

JEA’s annual general fund contribution currently increases by $2.5 million each year, maxing out at a total $114.2 million in 2016. That contribution formula — which expires next year — means that even as JEA’s revenues have declined in recent years, its contribution to the city has ballooned, a gulf that has become a top concern for JEA officials in recent years.

In exchange for borrowing $120 million for pension reform, however, the city had agreed to, in broad terms, reduce those JEA contributions by $2.5 million for the next several years and ultimately revert to a formula linked to JEA revenues.

JEA’s participation isn’t yet fully guaranteed; the utility’s board will meet later this month to vote on its participation.

Photo by  pshab via Flickr CC License