JEA’s newly installed board of directors unanimously voted to fire interim Managing Director and CEO Melissa Dykes without cause and could bring back former CEO Paul McElroy in her place as the utility faces City Council and federal investigations.
The board’s decision April 28 places Dykes on paid administrative leave for 30 days until her employment termination takes effect.
“It’s my view, and it’s just my view, that she was the president and COO during an administration so filled with improprieties, that there is a certain degree of taint that’s on her, whether warranted or unwarranted,” said John Baker II, who was elected JEA board chair April 28.
He said he has been contacted by McElroy, who is willing to be named interim CEO until a permanent chief executive is hired.
Dykes was JEA’s chief operating officer from April 26, 2018, through Dec. 17, 2019. That is much of the time frame from Jan. 1, 2018, tothe present that is subject to the FBI and U.S. Attorneys Office probe into JEA’s failed push to sell the utility.
Dykes was hired as JEA’s CFO in 2012 and served briefly as interim CEO when McElroy announced in April 2018 he would not renew his contract. The board replaced Dykes in the role two weeks later with now-fired Aaron Zahn.
Dykes was the first woman tapped to lead the utility since its creation in 1895. She joined JEA after serving as a vice president at JPMorgan Chase.
A federal grand jury served JEA a subpoena April 21 that demands documents, communications and records from top utility officials, including Dykes by name, and Mayor Lenny Curry administration officials related to the invitation to negotiate and the hiring of Zahn.
The JEA board named Dykes interim CEO on Dec. 17 after it voted to fire Zahn without cause.
Zahn was later fired with cause Jan. 28 after city attorneys accused him of willful misconduct, gross negligence/gross neglect of duties and/or breach of fiduciary obligations following an investigation.
Baker said the federal grand jury investigation exacerbates employee morale issues and concerns with the utility’s integrity if Dykes remains in a leadership role.
“The CEO is the face of JEA, and I don’t think it’s appropriate under these circumstances for her to lead that,” Baker said. “If we turn a blind eye to this issue, we would lose all credibility, certainly with the employees who would say ‘it’s just more of the same,’ and I think a lot with the citizens of Jacksonville.”
Baker recommended JEA Vice President and General Manager of Energy Caren Anders be placed as interim CEO until the board’s next meeting where they will interview McElroy.
The board decided to notice a special meeting to interview McElroy. Baker said he’ll take more recommendations from the board on interim CEO choices.
A vote to issue a request for proposals to hire a CEO search firm to recruit candidates for the permanent position was tabled until the special meeting. According to the JEA operating code, the board has to provide notice two working days before the meeting can be held.
All seven board members praised Dykes for her handling of the transition and on-boarding process for the new board members, who were confirmed April 14 by Council.
“On the one hand, it’s been fantastic working with Melissa. But John, I agree that we have to stand up … we’ve got to show the community that we are making a new start,” said Bobby Stein, JEA board vice chair.
Board Secretary Marty Lanahan made the motion to terminate Dykes' employment, and Stein seconded.
Dykes’s employment contract entitles her to a six-month consulting contract at full pay, as well as 20 weeks of pay, 20 weeks of COBRA insurance benefits and vesting in JEA’s pension plan if she’s fired without cause.
Dykes’s annual salary was $422,011 as of Jan. 17, according to documents from the city Office of Ethics, Compliance and Oversight.
The consulting fee is similar to language in contracts for Zahn and 12 other senior leadership team members approved July 23, the same meeting where the JEA board approved its Invitation to Negotiate. The ITN led to negotiations for a sale with nine private companies.
Baker called the consulting fees in the JEA leadership contracts as “an effort to get around the law.” City Deputy General Counsel Sean Granat told board members city attorneys are investigating if the consulting provisions are defensible.
Former JEA board Chair April Green and city ethics director Carla Miller attempted to get JEA’s senior leadership to voluntarily give up those employment contracts. The contracts are still in place as of April 28.
In her final CEO report April 28, Dykes praised the work of JEA employees and defended her actions as interim CEO.
“While leading JEA through this transition, I have fully cooperated with investigations,” Dykes said. “In late 2019, I reached out to the State Attorney’s Office and told I was willing to assist with its investigation.
“In January, I did the same with the U.S. Department of Justice, the United States Attorney and the FBI. I am proud I have fulfilled that commitment without wavering. This will not change.”
Mayor weighs in
Curry addressed questions from Daily Record news partner News4Jax.com April 28 about Dykes and the possibility of McElroy taking her place while the board’s action unfolded.
The mayor said he didn’t know what the JEA board was considering, but he expressed support for both Dykes and McElroy.
“As it relates to the two individuals you referenced, look, I have observed Melissa Dykes operate under stress and pressure and I think she’s been a steady hand in this process. I have tremendous professional respect for her. And I have the same tremendous professional respect for Paul McElroy,” Curry said.
“So, the board was recently appointed, they’re independent and it’s their job to make these decisions. Wherever they land, I will be supportive of their decision but I continue to say I have tremendous professional respect for both of those leaders.”