The JEA board of directors voted unanimously May 5 to rehire former CEO Paul McElroy to lead the municipal utility as it seeks a permanent chief executive.
McElroy will serve as interim CEO for six months and continue part-time after that if the board does not have a contract with a long-term replacement.
The board approved McElroy’s contract 7-0. It is effective May 11 through Nov. 8.
McElroy will be paid $280,183 for the six months. If he continues part-time, he will be paid a $323 hourly rate at 50 hours every two weeks.
JEA board Chair John Baker II said the salary is based on McElroy’s last contract with JEA approved for fiscal year 2017-18.
That contract paid McElroy about $550,000. Had McElroy’s tenure continued, his contract would have offered an annual 3% raise, bringing his pay in 2020 to $552,083 per year.
JEA limits former utility employees receiving pension benefits to six months of full-time employment if they are rehired. Baker said McElroy’s contract reflects that policy.
“There is not a desire to have people double-dip — retire, collect a pension and then come back to work and earn a salary while they’re also collecting pension. So there are some hurdles you have to get through,” Baker said.
McElroy said May 5 that he wants to “lay the tracks for a successful transition,” and Baker said in a virtual news conference after the meeting that McElroy will not seek the permanent CEO position.
“He’s been very clear to me. All (McElroy) wants to do is help, he does not want the job,” Baker said.
After 16 years, McElroy left JEA in 2018 after his contract expired and he told the board he did not want a new one.
He left the utility during its first round of discussions with City Hall officials to possibly privatize JEA, a move McElroy said he does not support.
McElroy replaces former interim Managing Director and CEO Melissa Dykes, who was fired without cause by the board April 28. McElroy hired Dykes in 2012 as JEA’s chief financial officer.
The previous JEA board elevated Dykes to chief executive after it fired the utility’s last permanent CEO, Aaron Zahn, on Jan. 28.
The board fired Zahn after city attorneys investigated and accused him of willful misconduct, gross negligence/gross neglect of duties and/or breach of fiduciary obligations.
A federal grand jury served a subpoena April 21 as part of an FBI and U.S. Attorneys Office investigation into JEA’s failed push to sell the utility. It covers much of the time Dykes was JEA’s chief operating officer and Zahn’s time as CEO.
‘A core breakdown’
“There really was a core breakdown and I really think it was more in the upper levels of JEA,” McElroy said May 5. “It’s not in the rank-and-file and the folks that do the hard work inside the organization.
“But there needs to be a restoration in the JEA code of ethics and full understanding and commitment of our team of the responsibility of public service,” McElroy said.
McElroy sent a letter after the April 28 meeting to the board and Chief Legal Officer Jody Brooks stating his interest in returning as interim CEO.
“Over the past six months, I have been contacted by many leaders in our community to discuss JEA,” McElroy wrote. “I have told them that if the Board thinks I can play a role in facilitating their goals, and ultimately their success in restoring public trust in JEA, I will help in any way I can.”
McElroy submitted a document to JEA detailing his record as CEO and stating how he views JEA’s culture shifts since his departure.
“In the days and months since his resignation in April, 2018, it has been well-documented that when McElroy left JEA, the once highly respected utility was thrown into disarray, employee morale was decimated, and customer confidence fell,” the document states.
Baker, who made the motion April 28 to fire Dykes, told news reporters the board intends to leave additional staffing changes in the senior leadership team to McElroy.
“Our role as the board is to appoint the CEO, and it is not to tell him to hire people or fire people,” Baker said.
“If the team is not performing then we replace him,” he said.
During his tenure as CEO, McElroy reduced JEA’s debt by more than $2 billion and increased the utility’s bond ratings.
He was hired as CEO in 2012 following the brief tenure of Joseph Belechak. McElroy was JEA’s CFO from 2002-12.
He came to JEA after serving as vice president and general manager for Bombardier Capital Corp. in Jacksonville and Colchester, Vermont,from 1995-2001.
Search firm
The board began its search for a permanent CEO, voting 7-0 to issue a request for proposals for national executive search firms.
JEA Vice President & Chief Supply Chain Officer John McCarthy said selecting the firm would take three weeks.
Board member Zachary Faison Jr. said he wants to ensure the firm has an emphasis on diversity in its search. Board member Leon Haley Jr. said he thinks the fee structure is important, but does not want the lowest bid to be a top qualifier for the search contract.
Baker will lead JEA staff in scoring the firms.