JACKSONVILLE, Fla. – After reviewing his options, Jacksonville City Council President Kevin Carrico announced on Wednesday that he will be forming a Special Investigatory Committee to look into JEA, after the city’s Office of Inspector General (OIG) asked for council help reviewing allegations about millions of dollars in potential unpaid capacity fees owed to the city-owned utility.
Carrico said in a news release that more information about the committee and its scope would be announced at a news conference at 10 a.m. Wednesday outside City Hall.
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Council Member Ron Salem, who is the City Council’s liaison to JEA, will serve as Chair of the Committee, and Council Members Rory Diamond and Ju’Coby Pittman will also serve as members.
“The situation at JEA is increasingly untenable and requires careful attention and accountability,” Carrico said in the news release. “The Inspector General’s request underscores the seriousness of the concerns that have been raised. The people of Jacksonville and the employees at JEA deserve clear answers, full transparency, and accountability wherever it may be warranted.”
The Inspector General sent a memo to Carrico on Tuesday, regarding claims that JEA “failed to adequately collect capacity fees from certain commercial customers over a period of several years.”
Capacity fees, which utilities charge when a property first connects to water or sewer service, are typically based on how much service a building is expected to use when it is constructed.
As Jacksonville has grown rapidly, questions have surfaced about whether some properties expanded their usage far beyond what was originally projected — without paying additional capacity fees.
The memo asked for the council’s help to assess the financial impact on the city and JEA of any uncollected fees.
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The Inspector General requested in the memo that the City Auditor conduct a special, limited-scope review to determine whether the fees exist and, if so, how much money JEA believes it is owed.
The review could also determine whether private property owners may be required to pay the fees retroactively.
Carrico said the Committee will work closely with the City Council Auditor and other relevant oversight offices to ensure a thorough review of the issues raised.
Carrico wants to take the investigation into JEA beyond the issue of capacity fees, pointing to concerns previously raised about the work culture at the city-owned utility.
Carrico said the special investigatory committee will be tasked with the following objectives:
- Determining, with the Council Auditor, the extent to which capacity fees may not have been collectedin recent years and identifying the amount, if any, that may be owed to the City and JEA.
- Investigating and ensuring that JEA and the City are in compliance with bond commitments and reporting requirements, including but not limited to any provision of services forfree in violation of those commitments.
- Based on recent allegations made to the JEA Board regarding racism and the toxic culture existing atJEA under the leadership of the current JEA Chief Executive Officer, conducting an independentreview of recent employee allegations regarding workplace culture at JEA.
- Evaluating JEA compliance with applicable whistleblower protection laws and policies.
- Proposing legislation as appropriate based on the committee’s findings.
“This Special Committee will focus on the facts,” Carrico said. “If capacity fees were not properly collected, taxpayers deserve to know how much is owed to them and why those fees were not collected. At the same time, we must ensure that allegations raised by employees regarding workplace culture are reviewedindependently and fairly.”
One city councilmember has claimed the total amount of unpaid capacity fees could reach $100 million, but that number has not been verified.
Dispute with Mayo Clinic
According to a legal memo, Mayo paid a capacity charge when it first connected to JEA’s system in 1995. That fee was based on projected water and sewer usage at the time.
Since then, the medical campus has expanded significantly, with development projects totaling more than $1 billion.
JEA claims the campus’s water usage eventually grew 380% higher than what was originally calculated.
However, attorneys for Mayo argue the utility did not discover the actual level of water use until 2022. They also say the clinic is exempt from additional capacity charges under a 1986 agreement.
Other properties may be involved
News4JAX has learned that several other private property owners are involved in similar disputes with JEA over capacity fees.
Last week, City Councilmember Rory Diamond posted on social media, claiming the unpaid fees could total $100 million, calling the situation another JEA scandal.
Diamond did not return calls from News4JAX seeking comment.
City Councilmember Matt Carlucci said he sees the situation differently, describing it as a financial dispute rather than a scandal.
“I don’t believe this to be a scandal. And Rory Diamond has been calling everything a scandal, and every time he does, nothing turns out to be scandal,” Carlucci said. “That’s the kind of politics we need to avoid. I don’t want to speak ill of my colleague, but I just know that we’re moving into an election year. And when you move into an election year, then people say things to try to excite and to ignite the voters. That’s not what we need right now. ”
JEA released a statement which reads:
JEA strives to ensure that its rates and capacity fees charged for water and sewer service are applied in a fair and equitable manner for all customers. All new connections are charged an applicable water and sewer capacity fee for associated development. A program on how to properly track, identify and bill JEA customers for “additional” capacity fees due to customer growth and expansion is currently being developed by JEA. In the case of the Mayo Clinic expansion, the issue is not related to uncharged fees, but rather to determining what capacity and associated fees were previously paid for. As you are aware, Mayo Clinic has been an important part of the community since the 1980s and JEA did not acquire the City water/wastewater utility services until the mid-1990s. As a result, identifying the terms and payments that were originally established has proven challenging. JEA is continuing to work collaboratively with Mayo Clinic to review the historical records and reach a fair and reasonable resolution.
Resolutions with customers or the implementation of a program on the billing and collection of additional capacity fees will have no impact on JEA’s bond commitments. We are aware and welcome the audit and are actively working on a solution.
JEA Spokesperson