JEA Board Digs Into Privatization Billing And Disconnection Numbers

Jul 28, 2020

JEA is still on the hook for millions of dollars to 23 different vendors that provided services during the now-infamous inquiry into its failed privatization attempt. 

In a Tuesday JEA Board meeting, the situation was laid out in front of the board members. 

Steve Tuton, JEA’s interim chief compliance officer, said six of the vendors were already paid in full. The board unanimously voted to approve the payment of $1.5 million to another 10 vendors, while voting to have an outside source look at the other vendors to determine if the utility needs to pay the full amounts requested. 

Overall, JEA received $13.4 million in invoice requests from the vendors, and with the latest vote, over $4.6 million will have been paid. Meanwhile, another $11.2 million - including some of the money that’s already been paid - will be under review by an outside legal agency. 

“We think all the invoices have been identified, but perhaps that's not the case,” Tuton said. He believes there could be other invoices that no one has caught yet. 

The bulk of the money under review surrounds invoices from four legal firms - Pillsbury Winthrop Shaw Pittman, Foley & Lardner LLP, Holland & Knight LLP, and Milam Howard Nicandri Gillam & Renner, P.A. - which make up around $8.2 million. Roughly $2.4 million has already been paid. 

Also under review is McKinsey and Company, a sub-contractor from Pillsbury Winthrop Shaw Pittman. The management consulting company sent an invoice for $2.9 million. 

Charges from Xact Data Discovery and Calvary Strategies are also under review. Xact invoiced $10,098 it hasn’t received, and Calvary, a public affairs firm, has already been paid its full amount of $39,200. 

“The seventh we're looking at is actually a public affairs firm. Interesting thing there is the documentation trail was incomplete and I think we found out that they were actually brought in by the Dalton Agency, so we wanted to look it down, even though they've been paid, just to look at the relationship there, [and] how they came to be involved in the ITN [Invitation to Negotiate],” Tuton said.  

JEA Board member Joseph DiSalvo said its key that the invoices go under “very close scrutiny.” 

“To make sure what's legit, and what isn't just so we're not giving money to somebody that was illegitimate,” DiSalvo said.

Board Chair John Baker countered that by saying it’s important to keep a strong reputation of JEA paying its bills.

“If they were hired and legitimately did work that JEA offered or asked them to do then whether we like the result or not, I think it's important that we keep that in mind,” Baker said. 

After hearing from other speakers, the board spent an hour in a closed meeting discussing how to handle its lawsuit with MEAG Power and the Plant Vogtle lawsuit. 

The board was behind closed doors for more than an hour, and upon returning, unanimously agreed to attempt to have JEA’s legal team reach a settlement on the lawsuit, while also looking at ways to reduce the cost JEA has to pay for Plant Vogtle’s power. 

In June, a U.S. District judge ruled against JEA in the lawsuit effort, saying the contract the public utility set up with the power plant is still valid. 

On Wednesday, City Councilwoman Brenda Priestly Jackson filed a piece of emergency legislation  “approving and encouraging the mayor to settle the litigation.”

“The nature of the emergency is that there are upcoming litigation matters requiring immediate attention, and it is in the best interest of the City to have finality in this matter as soon as possible,” the bill reads. 

The board also heard the latest on utility disconnections, which resumed on July 10. 

Bruce Dugan, JEA’s Interim VP and Chief Customer Officer, said JEA has shut off utility services to approximately 3,000 customers. Of those, 186 remained disconnected as of July 28, and some of the places are vacant. 

“Thirty-eight percent of customers who are disconnected have been reconnected in an hour or less, and 85% in one day or less, and so the reconnection rate in total is 93%,” Dugan said. 

Dugan said the number of customers eligible for disconnection peaked around 24,000, including nearly a thousand businesses. 

“We cut that high number in half, mainly through communication, flexible payment terms, reduction in fees, and so forth. So that's a fairly good success story,” Dugan said. 

As of July 28, the number of customers still eligible to be disconnected is 11,285, largely due to the City Council’s program that got 10,000 customers $200 prepaid cards that customers could use to pay off their overdue balance. 

According to Dugan, over 50% of customers receiving the card made payments of exactly $200 to their balances. 

Dugan said the goal is to get back to around the average number of disconnections, which is about 2,000, by August.  

While utility disconnections are continuing, JEA will continue waiving reconnection fees, late fees, and credit card convenience fees until October. According to a chart from JEA, customers have saved nearly $1.2 million from the waiving of those feels in the past few months. 

6,751 JEA customers are currently under extended payment plans, with many of them being a year long rather than the standard 3 month plans. 

Baker called the repayment program and situation with disconnections a “wonderful success story.” 

“I think it probably is one of the great reasons why you want to have a municipal utility instead of a business providing you with your power,” Baker said. 

The latest budget adjustments for the JEA 2021 fiscal year were also looked at by the board.  JEA has so far taken a $103 million dollar shave off of its capital budget, with $22 million coming off of its operations and maintenance budget. Three million dollars in the operations and maintenance budget were added for COVID-19 supplies and cleaning expenses.

Sky Lebron can be reached at slebron@wjct.org, 904-358-6319 or on Twitter at @SkylerLebron.