Three investigations are now open into JEA’s failed sale process

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Left in the dark about the details surrounding the proposed sale of JEA, a new community-based organization has formed in Jacksonville, Florida, to shed light on what happened during the process of getting bids from buyers interested in the municipal utility.

Although the invitation to negotiate was canceled on Dec. 24, Michael Hightower, a former JEA board member and a director of OurJax.com, said his group is focused on ensuring there is transparency, integrity, accountability and local control at JEA. Jax is short for Jacksonville.


“None of those four principles were part of the ITN process,” Hightower said in an interview with The Bond Buyer.

OurJax.com will “attempt to find out how we got here and make sure it never happens again," he added.

Hightower contended that much is still unknown about the procurement process and that JEA is withholding documents related to it. OurJax.com plans to raise funds in order to ensure that media outlets get access to records without being charged, he said.

The organization is the third entity to investigate the failed privatization of JEA, formerly known as the Jacksonville Electric Authority.

Carla Miller, the city’s ethics director, said in Jan. 17 letter to JEA interim managing director Melissa Dykes that a federal grand jury is also investigating the utility.

That disclosure followed a Jan. 13 announcement by the Jacksonville area’s elected state attorney for Florida’s Fourth Judicial Circuit, Melissa Nelson, who said that she had turned the results of her office’s investigation into the failed sale attempt over to federal prosecutors.

At a news conference on Monday, City Council President Scott Wilson said that he had created a three-member investigative committee to conduct a public probe to into how and why the controversial sale process was undertaken.

“The public has the right to know exactly what happened, why it happened, how it happened and who was involved,” Wilson said, adding that the committee will take testimony from witnesses.

Wilson appointed District 13 Council member Rory Diamond, a former U.S. Department of Justice attorney who specialized in public corruption and financial fraud prosecutions, as chairman of the committee. Diamond did not immediately respond to a request for comment about the committee’s meeting schedule.

District 10 Council member Brenda Priestly Jackson and District 14 member Randy DeFoor were also appointed to the special committee. Both are also attorneys.

Hightower said OurJax.com fully supports the City Council’s call for a full investigation into the procurement process “to ensure this type of hurried, heavy-handed, secret deliberations never happen again.”

After Wilson’s announcement, JEA issued a statement saying that the utility appreciated the council's investigation and that utility officials will work to provide the city with any information “pertinent” to the review.

Dykes will add a discussion item to the JEA board of directors meeting Tuesday to ensure “that any future conversation concerning structural changes in the operations of JEA which require legislative consideration are done in cooperation with the City Council and community,” the statement said.

In a separate memo, Dykes said that it is her “strong belief” that JEA will best serve the community by remaining owned by the city of Jacksonville. She will make that recommendation to the board at Tuesday’s meeting.

Dykes will also recommend that the board dispense with further consideration of two other scenarios that were being reviewed under the future strategic planning process. Those were turning JEA into an electric cooperative or conducting an initial public offering.

“I do not believe either of these scenarios best serves the interest of our community,” Dykes said. “To ensure we are operating transparently I believe the information should be reviewed openly, not as a path forward but to determine if there are lessons in the work that will help make our government-owned utility even better.”

Dykes was named interim managing director Dec. 19 after the board fired former manager Aaron Zahn for what were believed to be irregularities in the procurement process, including questions about an employee bonus pay plan that would have taken effect if JEA had been sold.

The board fired Zahn without citing a reason, which made him eligible for a separation package worth between $500,000 and $600,000. However, the city attorney’s office is still determining if Zahn should be terminated for cause, a move that would severely curtail his payout.

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