Entire JEA Board Stepping Down After Voting To Fire Former CEO Zahn With Cause
Within hours of JEA's board voting unanimously to terminate former General Manager and CEO Aaron Zahn with cause, Mayor Lenny Curry announced the entire JEA Board of Directors would leave their positions by the end of February.
The JEA Board of Directors unanimously voted Tuesday to terminate former CEO Aaron Zahn with cause during the utility's board meeting Tuesday morning, citing "gross negligence" and "willful misconduct."
Next, Board Chair April Green announced at the same meeting she was resigning. Soon after the conclusion of the meeting, WJCT News received the following statement from Mayor Curry:
I’ve talked to Fred Newbill, Camille Lee-Johnson, Dane Grey and Henry Brown and each informed me it is their desire to end their service with the JEA Board of Directors. I have asked all board members, including April Green who resigned earlier today, to continue to serve until the end of February, and all agreed. Kelly Flanagan will also continue her service until her term expires on February 28th.
To the Board of Directors, I want to thank you for your dedication and service throughout your individual terms. I am grateful for your time, contributions and the incredible commitment this has required.
Moving forward, I will work with City Council to identify and appoint a new executive Board of Directors as soon as possible. Understanding that among their first orders of business will be rebuilding public trust and strengthening the future of this vital and valued community asset.
In conclusion, I am confident there is a positive path forward and I am focused on working together for the best interests of all citizens.
Zahn's termination came after the board’s Office of General Counsel concluded its investigation on Zahn and cited 24 pieces of evidence at the meeting.
“Over the last six weeks, a team of OGC attorneys and staff with assistance from the city’s inspector general and her staff conducted over 30 witness interviews and reviewed thousands of documents and emails,” said Sean B. Granat, a Deputy of General Counsel on the Tort Litigation Department. “After careful consideration of the witness testimony and documents reviewed, OGC has concluded that evidence does exist to support the termination of Mr. Zahn’s employment for cause.”
“The evidence demonstrates that Mr. Zahn’s conduct included, but not limited to, willful misconduct, gross negligence and gross neglect of duties, and/or breach of fiduciary obligations,” Granat said.
The misconduct listed in the investigation included:
- Providing inaccurate, biased, misleading or selective information regarding material issues to the board, such as JEA’s financial future.
- Failing to inform JEA’s board of directors about aspects of multiple issues, including employment agreements, the long-term Performance Unit Plan (PUP) and it’s vetting process from the Office of General Counsel.
- Misrepresenting the cost of the PUP to the board.
- Presenting a compensation plan to the board in July 2019 that was inconsistent with the previous month’s compensation plan framework.
- Failing to inform the board of his personal financial interest in the PUP if JEA were to be sold to a private company.
- Initiating the Invitation to Negotiate process in a manner that has exposed JEA to litigation with neighboring counties.
- Causing the Invitation to Negotiate to be cancelled as a result in part of getting the board to approve the PUP without complete analysis and disclosure.
- Speaking with a board member before the July 2019 meeting to engage in the member’s professional services in connection with the Invitation to Negotiate process and failing to tell the board about the discussions and conflict of interest.
- Altering a document prepared by a third-party consultant and presenting it to the board in its altered form and inducing the board to take action on that altered document.
- Providing false testimony at a public hearing on December 16, 2019.
- Failing to preserve text messages relating to JEA business.
- Including the JEA OGC attorneys as participants in the PUP, creating another conflict of interest.
- Causing damage to JEA’s reputation, standing with neighboring governmental entities, the public utility community, and the general public.
- Failing to cooperate truthfully and openly with the OGN investigation, and failing to disclose personal and business conflicts of interest.
- Violating provisions, Florida statutes and Jacksonville ordinance codes by engaging in conduct that misused his position.
- Creating a conflict of interest between himself and JEA and other members on the senior leadership team, preventing the board from fairly evaluating issues before taking action.
If the board had decided to terminate Zahn’s contract without cause, JEA would’ve had to pay him $842,925. That included 20 weeks of pay, a 12-month consulting contract worth $634,000, and insurance payment benefits.
Mayor Lenny Curry released the following statement regarding the outcome of Tuesday's board vote:
I asked our Office of General Counsel for a thorough review and investigation into this matter so that the JEA board would have all of the facts necessary to make its decision. The JEA Board of Directors consists of dedicated leaders in our community who volunteer their time and expertise. I have always maintained my faith and confidence in the board and stand behind the decision today.
Shortly after the statement was released, Florida Times-Union news reporter Christopher Hong, responded to the mayor’s statement with this tweet:
Well, @lennycurry just issued a statement attempting to take credit for the investigation into Zahn.— Christopher Hong (@FloridaHong) January 28, 2020
Reminder: the JEA board, not the Mayor's office, ordered OGC to investigate. And Curry's most recent appointees were initially opposed to firing Zahn for cause.
The Times-Union is a WJCT News partner.
On December 17, JEA’s board of directors offered Zahn a reduced severance package, with a deadline to accept the offer by December 30.
It wasn’t until January 13 that Zahn reached out to the city Office of General Counsel, stating he would accept the reduced package, but it was past the deadline, and the board did not reward him the payment.
The city's Office of General Counsel explained in the meeting, Zahn can appeal the termination through arbitration.
In that case, a neutral third-party arbitrator would listen to both JEA’s case and Zahn’s defense and come to a decision on whether he should be awarded a severance package.
According to a tweet from News4Jax reporter Kelly Wiley, a lawyer for Zahn said in an email they plan to appeal the board’s decision. News4Jax is also a WJCT News partner.
BREAKING: Lawyer for former CEO Aaron Zahn shares they plan to appeal the boards decision, saying they are “disappointed in the outcome.” @wjxt4 #JEA pic.twitter.com/ajPgsazXeD— Kelly Wiley (@KellyWileyNews) January 28, 2020
Later in the meeting, the board discussed creating a CEO search committee along with a nomination committee, as interim CEO Melissa Dykes has previously said she will not look to permanently take the role.
- WJCT's Bill Bortzfield contributed to this story
Sky Lebron can be reached at email@example.com, 904-358-6319 or on Twitter at @SkylerLebron.