Jacksonville City Councilman Ron Salem on Monday outlined his proposed legislation that would put more power in the council’s hands when it comes to short-term incentive plans for the utilities’ employees, if voters approve a change to the city charter.
Salem said the short-term incentive plan has been around since 1990, and there is a conflict of interest because the JEA CEO can approve the plan and can also reap its benefits.
In the past three years, the JEA board of directors has given the CEO that authority twice, according to Salem.
The councilman also said the annual JEA budget doesn’t have to include the short-term incentive plan for council auditors to review.
“I'm not comfortable with that, particularly the way it's structured,” Salem said.
Salem said JEA senior leaders get $4 million to $7 million from the bonus plan each year.
“The only way that we can really control this through future JEA boards is through a change in authority, which will require a charter change and the vote of the people,” Salem said.
The legislation proposed wouldn’t allow the utility to adopt any employee incentive program unless:
The program meets state law and the city charter
The plan is approved by the City Council, along with the JEA Board of Directors
The current short-term incentive plan would be terminated if the bill passes and is approved by voters, unless council and the JEA board choose to renew it.
The proposal would show up as a referendum on the 2020 ballot in November.
Michael Boylan, the chair of the Future of JEA council committee, said he spoke with recently reappointed CEO Paul McElroy, who said it is necessary to keep a short-term incentive plan.
“If you don't incentivize your senior management team to save money, they will spend money,” Boylan said.
However, Boylan said he believes Salem is taking the right approach with the legislation.
Meanwhile, Councilman Tommy Hazouri said there was no right for the council to make decisions on the bonus plan, and it should be left up to the board.
“We don't know what goes on during that course of the year, what justifies bumps or bonuses,” Hazouri said.
Salem said in comparison to JEA’s multimillion dollar incentive plan, the Jacksonville Aviation Authority’s plan for all employees is $150,000 to $200,000.
“I just feel strongly, with the history within JEA, particularly within the last several years, that an additional approval should be required,” Salem said.
The bill will have its first reading at Tuesday’s City Council meeting.
Last year, JEA’s long-term incentive plan was killed amid scrutiny by the City Council. It would’ve netted millions of dollars for JEA’s top executives. Federal prosecutors are currently investigating the plan.
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