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JACKSONVILLE: City's savings have been drained

The city's three-legged financial stool is showing sure signs of being broken.

Make no mistake: The stability of JEA along with the financial health of the city and the integrity of pension funds for city employees are connected in important ways.

There are reports that excessive borrowing, unchecked spending of savings and a failure to face financial facts have wracked JEA.

The public-owned utility has gone from a $100 million surplus to a $250 million deficit in its fuel reserves, and it has taken a ratings hit by bonding agencies.

In a scramble to recover, JEA's board has enacted two recent rate increases, and the board approved automatic increases in the future. Other drastic steps may soon follow.

At City Hall, City Council Auditor Richard Wallace says over the last two years the city has spent around $170 million of the city's reserves (savings) on recurring expenses.

As a result, the city's savings are drained and unavailable for emergencies and other one-time expenses. When the city's recurring expenses for programs come back next year, there will be a funding shortage to pay for them. That probably means drastic cuts, a tax increase or a combination of both.

To raise needed revenue, the city has imposed $3.7 million in new and increased fees. And, as columnist Ron Littlepage recently suggested, city officials are discussing whether or not to remove the 14-year-old, voter- approved limit on increasing property taxes.

The third leg of this stool belongs to the city's pension funds, which are reporting a potential $600 million deficit. They will require a new $25 million contribution from the next city budget.

In addition to these facts, the city has recently borrowed $142 million for capital projects that will cost $10 million annually from taxes and fees to be repaid for the next 30 years.

This is above the $2.5 billion for capital projects already obligated for the Better Jacksonville Plan, which is almost $150 million over budget.

As a result of this financial instability, taxpayers may be facing tax hikes and more electric rate increases, as well as drastic cutbacks in city services and programs.

All of this can impact our cost of living and the quality of life we enjoy in Jacksonville. It can also influence future capital investment and job growth.

If we have a city-owned JEA and a City Hall in financial disarray, it can have a negative impact on our efforts to recruit major companies to relocate to Jacksonville.


consultant, Jacksonville

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