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Jax Daily Record Thursday, Mar. 12, 202005:10 AM EST

The Mendenhall Report: Legislation aims at reining in JEA

Council members are pushing bills that urge limits to independent authority executive perks.
by: Mike Mendenhall Staff Writer

City Council member Ron Salem introduced legislation March 10 urging some of the city’s independent authorities to limit executive contracts only to CEOs. 

Resolution 2020-0193 is nonbinding, but Salem said it lets officials at JEA, the Jacksonville Port Authority, Jacksonville Aviation Authority and Jacksonville Transportation Authority know the Council’s position on contracts that include long lists of incentives and perks for authority executives.

“I’m of the belief that having the CEO under an employment contract for continuity and stability is appropriate,” Salem said. “Beyond the CEO, it’s unnecessary and not right for the city of Jacksonville.”

It’s the latest reform bill filed in response to JEA’s failed push to sell the city’s utility.

Salem worked with the Council Auditor’s Office to examine all executive contracts at the four authorities. They found that outside of JEA,  a JTA vice president is the only official to hold an executive contract other than the CEO. 

The JEA board approved 13 executive contracts July 23 and the Invitation to Negotiate a sale to private companies.

The board fired former JEA CEO Aaron Zahn for cause Jan. 28, and interim CEO Melissa Dykes fired former CFO Ryan Wannemacher via email Dec. 27.

Outgoing JEA board Chair April Green and Carla Miller, city Ethics Compliance and Oversight Office director, sent a joint letter Jan. 9 to Dykes asking all 11 remaining utility executives to voluntarily cancel their employment and separation agreements.

When Council member Randy DeFoor asked JEA Vice President of Energy and Water Planning Steve McInall under oath at a March 9 hearing who negotiated his executive contract, McInall said it was never discussed.

“It pretty much appeared after the (July 23) board meeting,” he said. 

Despite the letter from Miller and Green, McInall said he has not been asked to give up his contract.

Salem’s bill excludes the Downtown Investment Authority and the Jacksonville Housing Finance Authority, which contract only with their CEOs.

Other reforms

The most sweeping proposed change to JEA since the utility ended the sale process Dec. 24 is the balance of power in who appoints JEA’s seven-member board of directors.

Council member Garrett Dennis wants to split the appointment power between Council and the mayor. That would require a voter referendum to amend the city charter.

Ordinance 2020-0100 asks Duval County voters to allow Council to appoint four JEA board members, including one person recommended by JEA employee groups. The mayor would appoint three board members.

The mayor appoints and Council confirms all JEA board members under existing charter  language.

The Council Rules Committee approved the bill 7-0 on Feb. 11 but the Finance Committee deferred it.

District 13 Council member Rory Diamond, who chairs the Council’s Special Investigatory Committee into JEA, has two active bills to strengthen Council oversight of the independent authorities. 

The independent Council Auditor’s Office, and the city Office of Inspector General and Office of Ethics, Compliance and Oversight  provide watchdog functions for city government. 

Ordinance 2020-0040 amends the charter, requiring independent authorities to respond to the Council Auditor within 48 hours of receiving a request. For large data and records requests, the bill will require a timeframe for submitting the information.

Diamond said in January the legislation rectifies JEA’s failure to respond to emails from Council Auditor Kyle Billy and his staff as they investigated the utility’s now-canceled Long-Term Performance Unit Plan. 

Billy’s office found the incentive program for JEA employees would have cost the city more than $600 million if JEA had been sold.

Diamond hopes the legislation will give the Council Auditor “more teeth to force compliance to the office’s requests.”

A companion bill, Resolution 2020-0123, advises independent authorities to draft a policy for responding to Council Auditor requests. 

Council approved the bill March 10 in a 17-0 vote.

Future charter changes

Other JEA charter changes likely will come from Council member Michael Boylan’s Future of JEA Committee.

Salem and Council member LeAnna Cumber advocate that any JEA-related charter change requiring a voter referendum be vetted by Boylan’s committee and later compiled into one omnibus bill for Council consideration.

Salem wants more Council oversight in JEA’s short-term incentive program for nonunion employees, including the utility’s executive team.

The program gives JEA officials an annual bonus ranging from 6% to 12% of the employee’s annual salary.

According to Salem, the plan began in 1990 and is approved as part of JEA’s annual budget. 

Salem wants to amend the charter so the short-term incentive must be approved by the JEA board and Council in legislation separate from the annual budget.

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