JEA is ready to make record-high contributions to the city of Jacksonville in a proposed agreement negotiated by Mayor Donna Deegan and the city-owned utility.
JEA has contributed to the city's budget for decades in support of everyday operations such as public safety, libraries and parks. The utility's payments would go up by tens of millions of dollars over a five-year period.
"The mayor's office asked JEA for an increased contribution to support city services, and this was the agreement after several months of discussions and negotiations," city spokesman Phillip Perry said Wednesday.
The proposed agreement calls for JEA to contribute a total of $741 million over a five-year period starting with the current fiscal year and going through the 2028-29 fiscal year. In comparison, JEA paid about $619 million in contributions to the city over the previous five years.
The agreement must win approval by the JEA board and by City Council. The JEA board's Finance, Governance and Audit Committee is slated to vote on the measure during its meeting next Tuesday.
The current agreement struck in 2016 put the annual contribution that year at about $114 million. JEA's contribution then went up by 1% per year, reaching nearly $124 million in the 2024 fiscal year.
The proposed new agreement would boost the annual payment to $137.4 million in the current fiscal year and it would then rise by 1% each year through 2029.
JEA also has made additional payments on top of its baseline contributions. Those add-on payments were $15 million in 2016, $15 million in 2019 and $12.5 million in 2021. All of those were toward septic tank phaseout programs in older neighborhoods .
![The JEA logo on the new building at Adams and Pearl Streets in downtown Jacksonville, Florida Wednesday, March 2, 2022. [Bob Self/Florida Times-Union]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==)
For the next fiscal year starting Oct. 1, JEA would pay an extra $40 million, bringing its total payment to $178.8 million that year. The $40 million would not be directed toward septic tank phaseouts but instead could be used however the city wants to spend it.
Perry said the city won't spend the $40 million in a single year.
"It was JEA's preference to provide a one-time increased contribution instead of splitting it over the agreement," he said. "The $40 million contribution is for four years and it will be spread across multiple years in the city budget."
Most of the $40 million add-on payment next year by JEA would come from $36.4 million in savings the utility achieved with a debt refinancing deal it did in the fall, according to the utility. The other $3.6 million would come from revenue JEA received as a result of higher sales in in the 2023-24 fiscal year and the current year.
"This allows JEA to minimize customer impact while also supporting general city government service," JEA spokesman Joe "Myers" Vasquez said.
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After that big bump next year, JEA would drop back to about $140 million the following year.
City Council member Rory Diamond called the proposed agreement a "backdoor tax increase on our families" because the higher contributions will come from JEA customers for Deegan to "spend on her downtown fantasy projects."
"If JEA has this money, lower our rates!" he wrote in a post on X, formerly Twitter.
The annual contribution by JEA is separate from the franchise fee that JEA pays to the city and the public service tax the city charges to Jacksonville customers when they pay their utility bills. The franchise fee generated about $43.5 million for city coffers and the public service tax raised another $100 million for the city in the most recent fiscal year.
( This story was updated to add new information. )
This article originally appeared on Florida Times-Union: JEA could make record payments to city of Jacksonville budget
