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No Golden Parachute

Zahn must be terminated with cause

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On Tuesday, Jan. 7, the JEA Board of Directors was set to decide if JEA’s former CEO Aaron Zahn was going to be terminated with or without cause. Then, the day before, the Office of General Counsel intervened and asked for a postponement “until further notice.” The request was immediately granted. Why does all this matter? If Zahn is terminated without cause, he will be able to walk away with a severance package of more than $800,000. That would be a travesty, and it would have Mayor Lenny Curry’s fingerprints all over it.

Let us start with what should be obvious by now: Curry seems to be influencing everything the JEA board does. Its members are, after all, his appointees. Zahn is his buddy, who beat two experienced candidates for the top spot at JEA in November 2018 despite the fact that he himself had no utility experience. In July 2019, the board authorized Zahn to start negotiating a sale. The very same day, Curry praised the “wisdom and experience” of the JEA Board in considering privatization. Meanwhile the JEA board approved a bonus plan that would have allowed JEA employees and some unspecified non-employees to profit from any potential sale. Then, on November 25, as criticism of the sale grew, Curry appeared before the Jacksonville City Council to state his support for continuing the negotiations.

Meanwhile, the Florida Commission on Ethics had begun investigating possible conflict-of-interest violations. Curry’s cabal apparently tried to accelerate the timetable as the pressure mounted, but public outcry became overwhelming. Finally, on December 23, Curry seemed to have decided to get in front of the scandal. He called for an end to the sale process; as if by magic, the board convened the very next day to make it so.

Thus, it is clear that the JEA board is essentially in Curry’s pocket. Simply put, it does whatever he tells it to do. In fact, under the City Charter in Article 21(a), “The members [of the board] may be removed by the mayor at any time with or without cause, but a removal must be approved by a two-thirds vote of the [city] council.” Accordingly, he may have the power to remove board members who vote to fire Zahn without cause. In short, if the JEA board decides to fire Zahn without cause and to walk away with more than $800,000, it will be because Curry wants the board to do that.

A strong case can be made that Zahn should be removed with cause. First, during his hiring process, he never disclosed that his prior employer BCR Environmental, Inc., had terminated him in 2017 for, in the words of one investor, John Semanik, wrecking the company. He also did not disclose that the fact that the sewage treatment facility BCR built for the city of Starke never operated without repeated problems and that the supposedly cutting-edge sewage treatment facility is non-operational today.

Second, it appears that Zahn has improperly managed JEA. For example, during his recent testimony before a City Council meeting, he stated that he did not know who had prepared the infamous bonus plan that would have allowed him to make millions of dollars at the city’s expense. A CEO who does not know who prepared a bonus plan dealing with millions of dollars is not doing his job.

Third, it appears that Zahn violated a 2018 JEA resolution that prohibited JEA executives from pursuing privatization. In light of that fact, how did JEA prepare the contracts for the financial advisers and attorneys it hired to assist in the sales process when the ban prohibiting any JEA executive from taking any step towards privatization had only been lifted the day before the contracts were signed? Either Zahn was ignorant and incompetent or he violated the resolution.

In short, the JEA board must fire Zahn with cause. If it does not do so, then Curry must take the blame for Zahn’s sweetheart severance.

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Bork is a Jacksonville-based attorney with more than 20 years’ experience.

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