Jacksonville City Councilmembers hammer JEA CEO Paul McElroy over inconsistencies

The Jacksonville City Council’s special committee on the “potential sale” of local utility JEA met Thursday for the first time since the Council decided to expand the panel from five to 19 members.

The major item of interest: the testimony of JEA CEO Paul McElroy, previously summoned via subpoena.

McElroy was compelled to address, among other topics, revenue declines and infrastructural damage after recent hurricanes.

McElroy’s star turn was of special interest, especially in light of Mayor Lenny Curry‘s comments Thursday about obstructionists on Council stymying a “mature conversation” about the value of the utility.

Though the dilution of the committee initially led to the conversation Curry wanted, critics of the sale push still had their say.

Council President Anna Brosche, marginalized of late by aggressive political moves from the Curry administration and its Council allies, finally got a chance to ask McElroy some questions as to the sale timeline, in what seemed to be an attempt to establish a pattern of collusion between the Curry administration and JEA senior management regarding the potential sale.

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The highlight of the meeting came three hours in, when Brosche publicly questioned McElroy on a controversial meeting held in February, where the JEA Board and the City Council came together to hear said valuation report from JEA’s consultant, Public Financial Management.

That meeting was held over Brosche’s objections. And involved her refusing to allow Curry to speak.

Brosche compelled McElroy to discuss the exploration of a sale, which he said came out of a Nov. 28 board meeting when “the question was teed up,” and the board engaged Public Financial Management for a valuation report.

Brosche had concerns about the board chair directing the expenditure of funds for the valuation report without a vote. McElroy confirmed that there was no vote.

“I don’t recall another similar situation,” McElroy said.

McElroy said he had discussed with the Curry administration having a joint meeting with the Jacksonville City Council, and that conversation included him, Sam Mousa, Brian Hughes and JEA CFO Melissa Dykes.

The conversation centered on releasing the full report, which happened February 14.

“If we were going to have a meeting with PFM on the 14th,” McElroy wanted the “maximum amount of people” to hear the report.

Brosche noted she was asked by Curry administration members Brian Hughes and Ali Korman Shelton to have a special meeting on Feb. 5, the same day McElroy met with the administration.

“The nuances of the term special meeting were lost on me. I’m going to plead ignorance and beg forgiveness,” McElroy said.

McElroy revealed that Mousa, Curry’s chief administrative officer, urged him to make the call.

Brosche said that McElroy said the board would not take action, but requested that the meeting be structured to take action from the City Council.

McElroy disclaimed this, saying he didn’t know the “nuances and language” of the council. And he said he did not “recall” asking Brosche to set up the meeting to take action.

Brosche noted that the messaging was definitely different from before, though she stopped short of saying there was collusion between the Curry administration and JEA senior leadership.

“I’m not going that far,” Brosche said.

Brosche’s issue: McElroy “asked for a structured meeting,” then said “he doesn’t remember it.”

Brosche also spoke to the dilution of the committee with additional members, even as she tried to be diplomatic.

“I appreciate everyone’s desire [to be part of the discussion],” Brosche said, “but I’m having a hard time connecting that with the empty seats.”

When asked if the Curry administration and allies subverted the committee by adding the whole council to it, Brosche was blunt: “Yes.”

Brosche abruptness continued, spotlighting emails that showed administration members speaking about a JEA sale, including CFO Mike Weinstein saying to Jacksonville senior debt manager Randall Barnes that “we are not working on the JEA effort only you are. Work on it at your own risk, there may be a late night [Council Auditor] email accusing you of selling the JEA while others are not looking” and “We continue to not work on any jea sale analysis. They are on their own.”

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Councilman Garrett Dennis, who had called for McElroy to step down weeks back, took his shots, asking McElroy to mull the seven-year decline in revenues.

“Just showing revenues going down doesn’t mean anything because you could be cutting costs … what is the net profit,” Dennis asked, in the context of retiring $400 million in debt.

General questions for McElroy included one from Dennis about the delayed nuclear Plant Vogtle; Dennis asked if it was a “major liability” for JEA, after a current $40 million investment.

“We’re one city … would you advise me not to talk about Plant Vogtle? It appears that some groups are trying to make that an issue,” Dennis said.

McElroy will provide a document a week from Thursday.

Chairman Crescimbeni advised the conversation happen privately.

Dennis asked McElroy about a Feb. 14 conversation about an “unsolicited bid” to buy JEA from an outside party; McElroy denied it.

Dennis said he should have expanded the question to include a bid to the administration; McElroy said he was unaware of such.

“Whether it’s there or not, I have to be able to tell you what I’ve seen or heard … I’ve not been involved in conversations with any potential buyer,” McElroy said.

“I think in terms of the way I would characterize it … through my time at JEA, I have heard through rumors and innuendos … I cannot recall when those conversations occurred … it could be the last twelve months, could be the last 60.”

“I’ve heard some rumors … in the last 12 to 24 months … that there might be some buyers for JEA,” McElroy said. “They were outside of JEA.”

Dennis also grilled McElroy about the December RFP.

“When did Paul McElroy become aware that PFM sent out an RFP,” Dennis asked, regarding “strategic financial services.”

Dennis said it was in the middle of December, and he was told about it by his finance team, specifically Melissa Dykes.

McElroy also claimed to have gotten just a 24-hour notice regarding meetings with investment bank Moelis, as first reported by First Coast News.

The CEO claimed the finance team told him about these meetings with the investment bank with expertise in utility transactions.

“I understood there was somebody coming,” McElroy said. “There was a call that somebody was coming to visit … Moelis coming in to meet with PFM … quite frankly, I didn’t think much of it.”

Dennis spoke with passion about the day’s events showing why the committee should have been allowed to stay as it was, including subpoena power.

“To all of my colleagues, you need to have a serious look in the mirror, and figure out what we’re doing as a body,” Dennis said.