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Jax Daily Record Monday, Feb. 12, 201811:59 AM EST

Mayor calls special meeting Wednesday of JEA board, City Council on financial audit of utility

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Audit is being prepared to offer insight into possible sale of publicly owned utility.
by: David Cawton Staff Writer

Mayor Lenny Curry has called a special joint meeting of City Council and the JEA board of directors hours after saying his administration would “facilitate” the public discussion of a financial audit of JEA.

The audit is being prepared for JEA to provide insight into how the city would move forward if it decides to sell the public utility to a private buyer. The final version is expected to be released Wednesday morning.

The public meeting will “introduce and facilitate” the audit and “entertain any inquiry, comments or questions.” The meeting is 3 p.m. Wednesday in the council chambers on the first floor of City Hall at 117 W. Duval St.

The announcement comes after City Council President Anna Brosche declined an invitation by JEA CEO Paul McElroy to host the joint meeting, citing pressure from the mayor’s office to possibly act on legislation to approve any next steps in the sales process.

In a written response to McElroy on Monday, Brosche said she felt the meeting was premature.

“Essentially, the Mayor’s Office is asking City Council to consider passing legislation as an emergency, upon introduction, without the public involvement afforded by the normal legislative process and without an appropriate analysis of and response to the final valuation report by the Council Auditor,” she wrote.

Brosche said that council wouldn’t take any action on the matter until separate analysis from city General Counsel Jason Gabriel and Council Auditor Kyle Billy are completed. 

“This potential transaction would have a significant impact on the Northeast Florida region and the City Council will be deliberate and transparent in its due diligence,” she wrote.

Curry addressed the meeting for the first time Monday morning.

“I can’t speak to why the council president would do that, what I will tell you is that it’s unfortunate,” Curry said.

A mayor’s office spokeswoman said Monday afternoon Curry had no plans to introduce emergency legislation Wednesday.

Monday Curry said he had not read a draft released by JEA on Thursday detailing the financial viability by the utility’s financial advisor, Public Financial Management.

“I think we should all see it at the same time, and I will work to facilitate that as I always have,” he said.

Curry said the two most important questions for his administration will be how a JEA sale could impact ratepayers and the utility's employees.

“We can’t answer those questions until we see the results of the study and the report that’s been done,” Curry said.

“Then we can evaluate and determine if we can answer those questions. If not, we decide where to go from there,” he said.

On Nov. 28, outgoing JEA board member Tom Petway used his final remarks to the board to suggest it look at privatization, saying it could benefit the city.

JEA Board Chair Alan Howard then instructed McElroy to conduct a financial audit of the utility’s assets, which are estimated to be valued in the billions.

The draft released Thursday did not provide those figures.

“Stay tuned for something on Wednesday,” Curry said.  “I don’t know what that will look like, but we’re going to lead.”

To replace Petway, Curry nominated Aaron Zahn, managing partner and chief executive officer at Pascal Partners who specializes in the operational aspects of start-ups, mergers and acquisitions among other responsibilities.

Zahn’s nomination must be approved by the City Council, a process which will take another few weeks.

“When you look at many of the folks I’ve appointed, it’s a combination of their professional skills, how they interact with people,” Curry said.

The mayor said he’d worked with Zahn for years, and that his success in the business world was one reason he was nominated.

When asked if his experience specifically with mergers and acquisitions was another reason for his nomination, Curry said “it never crossed my mind when I appointed him.”

 

 

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