City Council publishes investigative report on the failed sale of JEA

JACKSONVILLE, Fla. — A special City Council committee has been looking into the sale of JEA and the implementation of a Performance Unit Plan that would benefit senior leadership for over a year now. After hours of interviews, looking at documents, and tracing the steps of the sale, the final report has been published.

The findings of the report show that Mayor Lenny Curry’s administration was involved in exploring the sale as early as 2017 and appointed Aaron Zahn in order to help facilitate the sale.

“The Mayor apparently hoped that he could advance a JEA sale effort to a point that a purchaser would offer billions of dollars to the City, and that with so much money on the table the Mayor would have sufficient support in the City Council to secure Council approval, and, with a further promise of $400 million distributed to JEA customers (approximately $840 per electric customer), the public would pass a referendum approving the sale,” the report stated.

The report also details a coordination between the Curry administration and NextEra (owner of FPL) with the sale of JEA. In December 2017, the Curry administration issued a request for proposal to ask financial advisers to help with the privatization of city assets. One day later, Tim Baker - a former political consultant to Curry - entered into a consulting contract with Florida Power and Light. Baker did not disclose any documents or information about his consulting services with FPL to the committee.

On December 12, 2019, Curry attempted to intervene by issuing a letter asking JEA’s Board to “tell the senior leaders and their advisors to conclude the ITN by the end of January” and to provide the “top tier of proposals” to City Council to review. However this meeting was canceled following a public outcry about the PUP and the sale.

The conclusion of the report states that the City needs to enhance and better enforce transparency - specifically the Jacksonville Ethics Code, Florida’s Public Records Act and Florida’s Sunshine Law. The report then goes into several recommendations that City Council can do to help prevent from this scandal from happening again.

  • Requiring all or material City procurement documents, including solicitations, notices of intent to award and procurement contracts, be posted on a publicly accessible website.
  • Prohibiting or limiting the outsourcing of procurement responsibilities to third parties - this stems from former JEA Board Member Alan Howard’s interview where he said that there was an effort to shield the bidder responses from the city due to Sunshine State laws.
  • Clarifying prohibited communications to avoid future arguments that the City Council cannot have discussions about or legislate regarding procurement matters.
  • The Council should implement a City-wide public records policy that addresses preservation, collection and production of public records on personal mobile devices for all City employees, including JEA.
  • The Council should consider imposing fines or other penalties in excess of the $500 fine provided by Florida’ Public Records Act, to discourage the non-compliance the Committee discovered in its investigation.
  • The Council should have required approval for any retention program or similar compensation initiative. This stems from a memo that retention program authorized at a July 2019 JEA Board Meeting would have cause the senior JEA leadership team to receive, if terminated, more than $18 million. This excludes the PUP payments.
  • Presentations, resolutions and any other information offered to the Boards of the City’s independent authorities for consideration should be posted on the authority’s website and made available to the public no less than four days before the governing body takes action on that information. This suggestion stems form the July 23, 2019 meeting where the JEA Senior Leadership team withheld the complete agenda package until the day of the meeting. The report states that withholding this package prevented the JEA board and the public from “adequately” assessing JEA’s privatization initiatives, the PUP, and implications.
  • To ensure that decisions are made in the best interests of the City, rather than individuals, City employees should, absent approval by the City Council and Mayor, be prohibited from receiving any financial benefit related to privatization, any procurement process or any other transaction in which employees have direct involvement or influence.
  • To enhance transparency, all consultants providing services in connection with any privatization or recapitalization of municipal assets should contract directly with the applicable agency unless the governing body authorizes otherwise at a public meeting. This suggestion comes from Foley & Lardner and Pillsbury (JEA’s outside counsel) being subcontracted with several consultants without OGC approval.

One change that has already occurred has been the change of JEA’s charter. The bill proposed by Councilmember Michael Boylan addressed issues regarding the structure, management and any proposed sale or reorganization of JEA.

When asked about the report at a COVID-19 vaccination press conference Monday afternoon, Curry said he had not read it yet.

“An independent contractor hired by the city council to produce a report that will talk about some of the people in my administration, and we not only have we not seen the report, I’m told we don’t have access to it. So they want to get to get it to you guys. So a narrative would start without our reaction. But here’s what I’ll say. I expect the report to make claims stated as facts that aren’t based on facts, based on what we’ve seen over the last year, the way they’ve released their interviews. And I’m not going to react to that. You guys have had access to me throughout all of the discussions of any issue we face, facing the city of Jacksonville, particularly this issue over the last couple of years. And I’ve answered those questions with great clarity. Take their report, do what you think is right with it. I’m moving on for the city of Jacksonville and making sure people get vaccinated.”

Councilmember Brenda Priestly-Jackson, the chair of the committee, released a general statement when the report was published.

“The Committee found that the efforts to market and sell JEA from 2017 to 2020 were pursued by advancing a false narrative of JEA’s financial soundness, conducted with less-than-appropriate transparency, in many instances purposefully, and were further encumbered with an egregious plan by JEA’s senior management to personally profit from the sale. The report contains substantial detail supporting these findings, and makes recommendations to improve the City Charter and City ordinances regarding procurement, ethics, transparency and legislative investigations.”

The investigation was not a criminal one, and in fact, due to the investigation being done by the Department of Justice, several witnesses, including Aaron Zahn, Melissa Dykes, and Ryan Wannemacher, were not interviewed. Other limitations in the report also included JEA’s delay and incomplete disclosure of documents and information. For example, JEA did not tell the committee that some of its ITN representatives used JEA-provided tablets during negotiations, meaning that the committee never recovered information from those devices. JEA does not have a formal policy for preservation and collection of information from employees’ mobile phones, tablets and other electronic devices and the utility did not preserve and collect information from some of those electronic devices, as required by the January 2020 preservation letter the Council sent to JEA. In fact, JEA relied upon custodians to self-collect and self-select information to produce to the Committee. Some custodians, according to the report, were incentivized to destroy or conceal information related to this investigation or criminal charges.

The report also details that several key-individuals, including Tim Baker, JEA Board Member Camille Lee-Johnson, and other consultants and lawyers, did not fully cooperate with the Committee’s requests. Council Members Aaron Bowman and LeAnna Cumber also did not provide the committee with their any disclosures of interactions with individuals involved in the sale process, as requested by the Committee chair.

The full report can be found here.

Hannah Lee

Hannah Lee

Hannah Lee is a General Assignment Reporter for 104.5 WOKV.