PerspectivesSherry Magill Jacksonville Today Contributor
Ex-JEA CEO Aaron Zahn leaves federal court after his guity verdict on March 15, 2024. | Will Brown, Jacksonville Today

OPINION | Can’t get it out of my mind

Published on March 21, 2024 at 8:00 pm
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With the federal conviction last week of JEA’s former chief executive officer Aaron Zahn, our local morality tale about extreme self-interest at the public’s expense comes to a close. Almost archetypal, the story includes myriad villains and local heroes, pits private self-interest against the public good, and reminds us of an ancient truth: Greed is a deadly sin.

But it’s not the only story: 2 threads

Woven throughout that greedy narrative are two separate yet overlapping threads: the JEA board’s tenacity to sell our publicly owned utility, despite opposition voiced by JEA’s union, City Council, and voters, as well as behind-the-scenes machinations of a mayoral administration determined to sell the utility despite public pronouncements to the contrary.

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Public opinion and the people’s elected representatives

The first began innocently enough, with a retiring JEA board chair asking two questions in late 2017: “Would JEA customers and the people of Jacksonville be better served in the private marketplace?” and “Should JEA and the city consider the financial benefits that would come from the privatization of JEA?”

JEA’s board instructed staff to pursue these twin questions, which they did by hiring consulting firm Public Financial Management, which conducted an analysis of JEA’s value and released The Future of JEA: Opportunities and Considerations in February 2018.

Following the report’s release, City Council engaged in a serious conversation over several months about JEA’s financial value and its importance to the community. They sought the public’s opinion in a non-binding straw vote in which 73% of voters wanted a say in any future sale effort, and in late November 2018 passed legislation requiring 60% of voters to approve any sale of JEA assets exceeding 10% of those assets.

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Administration machinations and palace intrigue

While City Council’s process proceeded, a second narrative began behind the scenes and played out over 24 months: In late December 2017, the administration’s finance department—not JEA’s board—contracted separately with PFM to conduct a search for “financial advisory services related to” the “lease, sale, and/or disposition of city assets,” presumably including JEA and, if so, arguably premature.

Upon discovering the search contract, the City Council auditor alerted City Council to its existence in late February 2018, after which all hell broke loose.

Between that discovery and year’s end, JEA’s seasoned CEO resigned, and a new, mayorally appointed, inexperienced board member who’d been appointed in February gave up his board position, took up residence as interim CEO, and successfully competed for the permanent position, getting hired by the board in November. All this despite a City Council president who questioned the interim’s credentials, and despite more qualified candidates competing for the permanent position.

Recently convicted in federal court, JEA’s new CEO did by July 2019 convince the JEA board that the utility’s financial future was bleak, and presented the board with two choices: immediately terminate 25% of JEA’s workforce or sell JEA. This despite the report a year earlier showing JEA in a “strong financial position.”

JEA’s board made two critical decisions at its July 2019 meeting: Members voted to sell JEA and they approved a bonus plan.

By mid-December, the board had received multiple bids from potential buyers, all while the City Council auditor raised questions about bonus plan’s legality, and the city’s ethics officer tracked administration secret meetings designed to expedite a sale, or as she said, “charge to the finish line.”

As it turned out, the bonus plan destroyed the board’s determination—championed by the sitting mayor—to sell the utility.

On December 23, 2019, Mayor Lenny Curry asked JEA’s board to terminate sale negotiations. The next day, Christmas Eve, JEA’s board in an emergency meeting voted to terminate all negotiations on selling the publicly owned utility.

December’s activities alone warrant case study treatment. What the city’s ethics officer called the mayoral administration’s “charge to the finish line,” including secret meetings held between December 3-17, was, if not an abuse of power, certainly a breach of the public’s trust.

We should never forget it.

JEA’s board’s role: the nagging tale we cannot forget

Curiously, and despite voter and City Council opposition to a sale, JEA’s board continued to pursue selling JEA throughout 2019.

What started as two reasonable JEA board questions in November 2017 ended in an eye-popping personal bonus plan the size of which brought the board’s and mayor’s plans to negotiate a sale to a screeching halt in December 2019.

Incredibly, and in what should be a jaw-dropping public realization, JEA’s former chief operating officer testified during Aaron Zahn’s trial that, while she understood the bonus plan’s lucrative payout possibilities, she was nonetheless surprised to learn JEA’s board did not understand these possibilities when approving the plan at its July 2019 meeting. She assumed Zahn explained the details to board members in “private conversations” to which she was not privy.4

All of which raises serious questions about how our numerous independent authorities are governed. How do board members understand their fiduciary responsibilities? Is it common for CEOs to meet with individual board members to explain complex business dealings? When staff presents information, do board members pose serious questions and engage in healthy debate?

Do they kick the tires? Or do they just go along with CEO recommendations? And how would we ever know?


Lead image: Ex-JEA CEO Aaron Zahn leaves federal court after his guity verdict on March 15, 2024. | Will Brown, Jacksonville Today

This column appears in partnership with the JaxLookout.

author image Jacksonville Today Contributor Sherry Magill founded the JaxLookout in 2018 to reflect on local issues and encourage local citizens to engage as she was retiring from the Jessie Ball duPont Fund presidency, ending a 27-year career in private philanthropy. During her tenure, Magill spearheaded the development of the defunct Haydon Burns Library into the Jessie Ball duPont Center, a nationally recognized nonprofit and philanthropic center. Sherry currently chairs the Local Initiatives Support Corporation-Jacksonville (LISC) advisory committee and the Charles F. Kettering Foundation board and serves as member of the board of directors of Virginia-based Locus Bank.

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