JACKSONVILLE, Fla. – The Office of Inspector General found in a report released on Thursday that historical policy and recordkeeping gaps led JEA to miss collecting additional capacity fees from commercial customers, including the Mayo Clinic.
The review concluded JEA “historically failed” to manage and collect additional capacity fees in line with governing directives. Contributing factors included incomplete historical records from JEA’s 1997 takeover of city water and sewer systems, system and data integration failures, organizational silos, growth that occurred “behind the meter,” and a lack of formal procedures, the report said.
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Read the full report below.
Capacity fees are one-time charges assessed when a customer connects to JEA’s water, wastewater or reclaimed systems to pay for infrastructure expansion and replacement.
The OIG said JEA’s records show some legacy accounts transferred from the city with missing documentation or baselines recorded as zero.
The review focused on the Mayo Clinic account after internal and external inquiries showed the health system’s water use had grown significantly since the 1990s.
JEA staff estimated Mayo’s current consumption was about 276% above the capacity originally paid for in 1995. JEA documents and proposals cited amounts ranging from roughly $834,331.50 to as much as $7.5 million depending on rate assumptions and time frames, the report said.
The OIG said JEA did take steps to address the problem, including meetings with Mayo officials, internal assessments and the creation of a Capacity Fee Project Team to review large-meter accounts, resolve historical discrepancies and design future controls.
The team paused recovery efforts as of May while seeking legal guidance on statutes of limitations, the report said.
When the OIG asked JEA for a list of entities that owe additional capacity fees, JEA replied, “Such a list does not currently exist,” the report said.
The OIG recommended that JEA leadership share the Capacity Fee Project Team’s solutions and completion dates with the JEA Board of Directors during publicly noticed meetings to ensure transparency and accountability.
JEA’s managing director and CEO, in a written response attached to the OIG report, said the utility supports the recommended corrective action and will share the team’s solutions and timelines with the board.
The response also noted one clarifying timing disagreement about when certain staff were first alerted to the Mayo matter.