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An Introduction to JEA’s Budget Process

Just as you have a budget to pay for your household needs, JEA has a budget to pay for its business requirements  to provide reliable services to our 417,000 electric customers, 305,000 water customers and 230,000 sewer customers rain or shine, summer or winter, 24 hours a day, 365 days a year. It is a responsibility we take seriously and includes ensuring the upkeep of our current facilities and technologies, planning for future growth and new technologies, and keeping pace with local, state and federal environmental requirements meant to keep our air and river clean.

We want you to understand how the process works.

Each year, JEA goes through a rigorous budget development process that begins months in advance of the beginning of the next fiscal year. Here’s a look at who works on and approves JEA’s budget and when each part of the process takes place.

March
JEA company area directors and managers assess and document the resources they need for the coming year. Managers submit their budget requests to their directors, who in turn submit their budget request for his/her entire area to his/her executive management team member.

March/April
JEA’s Executive Management Team (EMT) reviews the requests, makes adjustments if necessary, and drafts a preliminary budget. The EMT is made up of the chief executive officer and the operating, financial, information, public affairs and human resources officers, as well as the vice presidents over the following areas: corporate data integration, electric systems, water and wastewater systems, customer relationships, engineering and construction services and environmental services.

April
JEA’s budget office refines the proposed budget based on projected revenues and expenses.

May
JEA Board’s Finance and Audit Committee is presented the proposed budget by JEA staff. The Committee reviews it and suggests changes for clarification or as appropriate.

June
JEA Board of Directors reviews and votes on the proposed budget, usually at the June Board meeting.

July 1
JEA ‘s CEO submits the proposed budget to the President of the City Council. The budget is then turned over to the City Council Auditors to review. They request clarification or additional information as appropriate.

August
Council Auditors review and discuss the JEA budget with the City Council Finance Committee. JEA’s CEO and Chief Financial Officer are present to answer questions.

September
Normally, at the first City Council meeting in the month, the Council holds a public hearing on the budgets for all City departments and independent agencies including JEA. Later in the month, the Council approves the budget.

October 1
The new fiscal year begins and the approved budget is released.

JEA Expenses – The Electric and The Water & Sewer Businesses

JEA’s budget is divided into two distinct business areas—the electric business and the water/sewer business. The graphs below show how each business’s budget is broken down, using the 2010 fiscal year’s budget as an example. Following the graphs is a general explanation of how the money is spent in each area.


click here for larger image

• O&M or Operations and Maintenance includes salaries and benefits, materials and supplies to do our business, vehicle maintenance and repair, pavement repair, roof repair, etc.
  
  
• Debt Service repays loans for electric generation, substations and other very large capital investments. On the water/sewer side, it repays loans for water and sewer plants and other very large capital investments. This would be equivalent to a customer’s mortgage payment.
  
  
• Other Capital Outlay is money set aside to pay for smaller capital projects. Having this fund allows us to pay for these things directly instead of borrowing money. This is the same idea as if you saved up to buy a car with cash rather than borrowing the money and paying all that interest.
  
  
• R&R or Renewal and Replacement dollars go to keep the electric, water and sewer systems in good operating condition. Weather takes a toll on wires, poles and various switching equipment. Periodically they must be repaired or replaced to maintain reliability, as do water and sewer pipes which age and require replacement.
  
  
• City Contribution is the portion of JEA’s electric services budget that is collected by JEA for the City of Jacksonville to support general government services not related to JEA.
  
  
• Non-Fuel Purchase Power is usually to purchase electricity from another source that is less expensive than electricity that we can produce. This is an electric business expense only.
  
  
• Fuel used by JEA includes coal, petroleum coke (a by-product of the oil refining process), natural gas, diesel oil and residual oil. Fuel costs have been extremely volatile since 2003/2004, and fuel now takes a much bigger bite out of JEA’s electric system budget. This is an electric business expense only.
  
  
• Other includes expenses such as an emergency fund, uncollectable accounts, and smaller contracts and contingencies.

Want to Know More?

• JEA 2009 Annual Report
  


• JEA Electric Rates Comparison
  This quarterly survey is a cross section of utilities throughout United States including Alaska. This comparison is for residential customers and includes base rates, fuel adjustment charges, and applicable franchise fees per 1,000 kWh.
  
  
• JEA Water Rates Comparison
  This Southeastern U.S. survey is based on a residential account with a 5/8" meter and 8 ccf or 6 kgals of consumption.