JEA employee protections take center stage

JEA will have a whirlwind day Tuesday as its board votes on labor contracts with five unions in the morning and the City Council votes in the evening on a package of enhanced pension benefits that JEA workers would receive if there is a JEA sale or other kind of privatization deal.

The labor contracts would give most union-represented JEA employees pay raises of 3.5 percent per year for each of the next three years. The contracts also spell out the enhanced pension benefits that employees could potentially receive, as well as retention payments to reward employees for remaining with the utility as it goes through negotiations and possibly a deal.

JEA says the cost of retention payments would be about $165 million. The cost for enhanced pension benefits would be $132 million. The expenses would only kick in if there were a sale or other transaction involving privatization of the utility.

The provision for pensions also will come up for a vote by the City Council when it meets. The pension legislation would shift several hundred million dollars of currently unfunded pension obligations from JEA to City Hall if there is a deal for the utility.

That legislation faced pushback last week from some council members who said they want the bill to get more vetting. City Council members Brenda Priestly Jackson and Joyce Morgan are scheduled to meet before the City Council meeting about a filing a floor amendment for the legislation.

At one point Monday, JEA also was on track to be part of the City Council's vote Tuesday night on a 2019-20 budget. A budget amendment filed by City Council member Tommy Harzouri would have clamped restrictions on a $4.76 million portion of JEA's proposed budget that goes for advertising and other kinds of community outreach.

Hazouri decided Monday to withdraw his budget amendment so it won't come up for a vote. But Hazouri said he still has concerns about how JEA will spend money on commercials after he saw a recent spot about the JEA board's decision to seek offers for the utility.

"It's more promotional than it is educational," Hazouri said.

Titled "A Path to a Promising Future," the 60-second spot says JEA is seeking to carry on its 125-year-old "promise of safe, reliable, affordable, sustainable energy and water."

"Now we have a chance to deliver on the promise in a better way by evolving to meet the ever-changing needs of today," the narrator says over tinkling piano notes. The ads ends by referring to a web page set up by JEA about the board's decision to invite offers.

Hazouri quipped the ad sounded like background music in a health spa. He said he plans to convene a future meeting to look more closely at how JEA spends advertising and public relations money, especially since JEA "has a monopoly and is the only game in town."

The City Council's vote on pension legislation might not have the same soothing tones as the piano music.

For JEA employees with pensions, the prospect of not being able to increase the size of that nest egg if there is a deal involving JEA would be a big change in retirement planning.

The pension legislation would enable JEA employees to get a boost by crediting employees with additional years of service -- potentially many more years -- in calculations for their pension payouts.

The legislation would add years of credited service so an employee reaches the earliest normal retirement options, which would be 5 years of service at age 65, or 20 years of service at age 55, or 30 years of service at any age.

For instance, an employee with less than five years experience at JEA would get credit for five years, which is the amount needed to become vested in the pension system. That would give an employee a pension based on 12.5 percent of his or her salary, or 2.5 percent for each year. Pension payments would start at age 65.

For employees who already have at least five years of service when a utility transaction happens, the number of extra years of pension credit would vary based on age and JEA experience, according to sample cases calculated by JEA and the City Council Auditor's office:

• A 53-year-old employee with 17 years of service would be credited with three added years of service to get 20 years of service and start drawing a pension at the age of 56, according to the council auditor. That pension would equate to 50 percent of the employee's final compensation, which is the average salary in the highest 36-month period of the employee's last 10 years of JEA employment.

• A 32-year-old employee with 10 years at JEA would get credited with 20 additional years and start drawing a pension at the age of 52. That pension would be based on 30 years of credited service for 75 percent of the employee's final compensation.

• A 26-year-old employee with six years of service would draw a pension in 24 years. The employee would get a total of 30 years of service credit equating to 75 percent of his salary, with the pension payments starting at the age of 50.

Employees whose age and experience already qualifies them for pensions from "normal retirement" will not receive any additional pension benefits. While younger workers would stand to gain the most in added years of credited service, the final compensation used to calculate their pension benefits would not be as high as it would be later in their careers.

An actuarial report for the General Employees Pension Plan says it would cost $132 million to finance the enhanced pension benefits. The legislation pending before the City Council would authorize JEA to make that payment out of sales proceeds.

The legislation also would commit the city to take over more than $300 million of unfunded pension liabilities that currently are JEA's obligation. The legislation does not say how the city would handle that added pension burden.

City administrators have said if there were a deal, Mayor Lenny Curry would push to use a portion of the sales proceeds to pay off the Better Jacksonville Plan's debt and end its half-cent sales tax, which would enable a half-cent sales tax approved by voters in 2016 for pension debt paydown to start a decade sooner.

The labor contracts ratified by JEA unions also put in writing the JEA board's commitment to provide retention pay to employees. The retention pay says that full-time employees working for JEA on July 23 can receive retention payments that would total as much as 100 percent of the employee's annual salary. The payments would be made in three installments: the date of a transaction, one year after the transaction, and two years after the transaction.

The retention payments and the pension enhancements are part of the three-year labor contracts ratified last week by all five JEA unions.

Union leaders are urging City Council to vote for the employee protections in the event of a sale, starting with the pension legislation up for a vote Tuesday night.

"If for some reason there's a recapitalization plan, at least the employees of JEA get some type of protections," said Ronnie Burris, business manager for LIUNA Local 630.

Valerie Gutierrez, business manager for IBEW Local 2358, said she hopes the provisions for enhanced pension benefits and the retention payments never happen because there won't be a deal for the utility.

"We told management that we're not in favor of any sale of JEA and don't think it's in the best interest of the community or Jacksonville for JEA to be sold," she said.

The JEA board meeting is scheduled for 9 a.m. Tuesday at its headquarters, 21 W. Church St. in downtown. City Council will meet at 5 p.m. Tuesday at City Hall, 117 W. Duval St.

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