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Daily Record JACKSONVILLE
THE JEA REPORT
‘Lack of transparency’ Daily Record
City Council investigation into the abandoned sale of JEA says the effort was pushed amid possible Sunshine Law violations.
A yearlong Jacksonville City Council investigation shows evidence that Mayor Lenny Curry’s administration engaged in a “multi-year” effort from 2017-19 to sell JEA and shielded some actions from the Florida Sunshine Law and the public. Council’s independent attorney, Steve Busey of the law firm Smith Hulsey & Busey, released the 132-page report and companion 242-page chronology of events Jan. 4. The report, led by the Council Special Investigatory Committee into JEA Matters, gives a narrative account of three phases used by the Curry administration and now-former JEA officials in the effort to privatize Jacksonville’s municipal electric and water utility: ■ A Dec. 20, 2017, request for proposals for financial services related to a sale. ■ JEA’s strategic planning process led by fired CEO Aaron Zahn. ■ The utility’s August 2019 Invitation to Negotiate with private companies interested in buying the utility. “Knowing that public sentiment disfavored transferring JEA to private ownership, the city’s effort to market JEA was conducted with a purposeful lack of transparency,” the report states. According to a news release Jan. 4 from the Office of the City Council, copies of the report were distributed to Council members and the mayor’s office. HIDDEN RFP
THE REPORT
EXECUTIVE SUMMARY
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BY MIKE MENDENHALL STAFF WRITER
JACKSONVILLE
The committee’s report details how the Curry administration began working to advance a JEA sale quickly in late 2017 after then-JEA board Chair Tom Petway recommended the utility explore the benefits to the city of private ownership. Curry endorsed the idea publicly the same day, Nov. 28, 2017, that Petway made the statement.
The report prepared by Smith Husley includes a 132-page report and a 241-page chronology in PDF format. To view the documents, along with an excecutive summary and more than 1,000 PDF documents and statements, visit jeainvestigation.com
THE COMMITTEE
The Special Investigatory Committee on JEA Matters comprises: ■ Council member Brenda Priestly Jackson, chair ■ Council member Randy DeFoor ■ Council member Rory Diamond (February – September) ■ Council member Scott Wilson (February – November) ■ Council President Tommy Hazouri (November – December) ■ The committee retained Stephen D. Busey of Smith Hulsey & Busey as special counsel to assist the committee in its investigation.
But the report shows Curry’s team issued a request for proposals to find an adviser for JEA privatization outside of the city’s traditional procurement process. According to the report, the solicitation that led to hiring Morgan Stanley Inc. to manage JEA’s privatization in 2018 was not posted to the city Procurement Division’s public portal. The RFP selection process was outsourced to city-contracted Public Financial Management Inc., the same financial advisory firm that created a public report that showed JEA’s market value in 2018 at $7 billion to $11 billion. The report cites sworn testimony from former JEA board Chair Alan Howard, who told investigators that using PFM to handle the RFP was likely an attempt to hide the action from the public.
The following is from the report’s executive summary:
JACKSONVILLE
From February through December 2020, the Committee and its Special Counsel interviewed dozens of witnesses and reviewed over 600,000 documents. The investigation revealed that the Curry administration and JEA engaged in a multi-year effort, from at least 2017 through 2019, to explore selling the City’s municipally-owned utility. Knowing that public sentiment disfavored transferring JEA to private ownership, the City’s effort to market JEA was conducted with a purposeful lack of transparency. In a move that would further burden the opaque sale effort, the Mayor positioned Aaron Zahn as CEO of JEA to facilitate a sale of JEA. Mr. Zahn and JEA’s senior leadership advanced the sale effort with intentional misrepresentations and omissions regarding JEA’s financial health. Mr. Zahn also used his position to design and to cause the JEA Board to approve an ill-conceived “Long-Term Performance Unit Plan” for JEA. The PUP would have provided senior JEA executives millions of dollars in compensation in the event of the City’s sale of JEA.
JACKSONVILLE
“I would speculate there was an effort to shield the responses from … Florida Sunshine laws and open reference laws,” Howard told investigators. The RFP was not made public until former Council Auditor Kyle Billy discovered the document and supporting material in February 2018. Former Council President Anna Brosche was unaware of the RFP, according to the report. Busey’s team states that Brosche was approached by then-Curry Chief of Staff Brian Hughes in February 2018 to consider emergency legislation to consider “next steps” in the JEA sale process. According to the report, the Curry administration denied Brosche’s statement. Despite Curry administration officials’ assertions and the fact that the official RFP
The Mayor apparently hoped that he could advance a JEA sale effort to a point that a purchaser would offer billions of dollars to the City, and that with so much money on the table the Mayor would have sufficient support in the City Council to secure Council approval, and, with a further promise of $400 million distributed to JEA customers (approximately $840 per electric customer), the public would pass a referendum approving the sale.
did not specifically mention JEA privatization, documents referenced in Busey’s report show J.P. Morgan and Morgan Stanley understood the RFP was related to selling the utility. A Feb. 4, 2018, email referenced in the report from law firm Holland & Knight reinforced the investigator’s findings. The report states the firm wanted to represent the city in JEA privatization talks. “Jacksonville’s new young Republican mayor is out to shrink government and wants to privatize JEA - quickly, while the mark is ‘right.’ He says within 3-5 months,” the report states. “Obviously, Plant Vogtle and the (purchase power agreement) greatly affect valuation,” the email stated. “Speed and time are of the essence to JackSEE JEA, PAGE 2
Tim Tebow sells one of his homes in Glen Kernan Former Florida Gators quarterback Tim Tebow and his wife, DemiLeigh Nel-Peters, sold one of Tebow’s two Glen Kernan Golf & Country Club homes. The couple sold a two-story, five-bedroom, 4.5-bathroom home at 4538 Swilcan Bridge Lane N. for $1.395 million. The deed was recorded Dec. 29. Records show Tebow paid $1.4 million for the 0.73-acre property in June 2014. The almost 6,600-squarefoot house was built in 2000. Tebow continues to own a larger home in Glen Kernan that he bought in June 2019 for $2.99 million.
VOLUME 108, NO. 34 • ONE SECTION