JEA Board chooses interim CEO, commits to elevating CFO

Jacksonville, FL — JEA has an interim CEO- and could see an additional executive position added to their organizational chart through the transition.

There were two people who had expressed interest in the post- JEA's Chief Financial Officer Melissa Dykes, who has been serving as interim CEO since the prior one stepped down; and Aaron Zahn, who recently stepped down from the JEA Board in order to seek the interim position.

The Board has voted unanimously to extend Zahn the interim CEO position. While they declined Dykes as interim CEO, they have voted to create a new contract position for her that currently doesn't exist on the organizational chart. That role could be something similar to a Chief Operating Officer, which would tap Dykes' experience with day-to-day JEA operations- especially given that this interim period will overlap with the hurricane season, and Dykes has been with JEA for the past six years, which includes two active storm seasons.

WOKV told you earlier this month that JEA's then-CEO Paul McElroy resigned, saying the utility needed a new set of leadership skills that were outside of his strengths. While he immediately resigned the day-to-day CEO responsibilities, he agreed to serve as a consultant through the transition, at least through the end of his contract in September.

Zahn told the Board he intends to immediately ask the City Council and Mayor to halt talks about JEA privatization, in order to give a sense of stability and squash any sense of fear that has surfaced from these talks.

“I watched a public discourse around a crown jewel asset of this city become toxic and unproductive. It is time for our bridge city to start building bridges. It is time for our organization, starting with the CEO, and working in unison with this Board, to take a leadership and ownership position in the conversation of JEA’s future,” Zahn told the Board.

He also wants to change JEA’s management structure, in order to allow the CEO to focus on the strategic vision of the utility moving forward. Zahn proposed the idea of something like a COO over day-to-day operations before the Board suggested Dykes could be the right person to fill that role. Both indicated during the meeting that they would be willing to work with each other, although nobody on the Board directly questioned Zahn on his thoughts for Dykes in that role. The Board vote commits to contract negotiations with Dykes, without a defined title, salary, or set of responsibilities at this stage.

"It's critical that even during an interim period, we not take our foot off the gas. It's critical that we leverage our changing world and the power of technology to further reduce expenses," she says.

Upon a question from the Board, Zahn said he would intend to seek the permanent CEO position, if his skills matched what was needed.

Council probe will continue

The decision to hire Zahn came without  much public questioning overall, with both saying they had already spoken individually with the Board Members. Zahn has served on the Board only a couple of months, and even acknowledged in Tuesday’s meeting that this role is a “dramatic departure” from his personal and professional career, but he wanted to provide leadership for the community.

The Board’s action Tuesday drew some quick scrutiny from some of the key stakeholders Zahn hopes to immediately engage.

“We all have wish lists. I have a wish list that includes Board Members thoroughly discussing things like hiring a new CEO, and that didn’t happen today,” says Jacksonville City Councilman John Crescimbeni, who is leading the Special Committee on the Potential Sale of JEA.

It’s a similar message to one expressed by Council President Anna Lopez Brosche, who says there have been a series of events in recent months that did not have “full and transparent vetting” by the JEA Board. She wishes Zahn success, but says she will be closely watching Board and JEA action moving forward.

“While I would have expected choosing someone with experience commensurate with the magnitude and complexity of leading and managing a highly regulated $1.8 billion operation with 2,000 employees, I look forward to Mr. Zahn bringing stability, clarity, and transparency to the organization and to the community,” she says in a statement to WOKV.

Crescimbeni says he has no intention of stopping the committee’s examination of the potential sale, despite what Zahn said to the JEA Board.

"I have no doubt that any attempt to make this go away today will only be met with a revisit, a resurfacing of this conversation some time in the future, and I would just rather be prepared when that happens, with all my facts, and not have to restart a deep dive in to all the things that the PFM Report said a Council like us should look at as we decide whether to move forward with a discussion on a sale," he says.

Crescimbeni says he’s still working to get more information about how the Public Service Commission operates, what the Civic Council thinks of the sale, and related areas, before he’s willing to bring an end to the Council’s investigation. He believes that could happen by the end of June, with the next committee meeting this Thursday.

Brosche says she supports Crescimbeni’s decision to keep moving forward with their fact finding.

“It is the JEA Board (or representatives thereof) that launched a series of missteps leading to the Special Committee’s work to understand what privatization might mean to the community. This is not the first time privatization has come up, and it won’t be the last,” she says.

WOKV has reached out to the Mayor’s Office for a comment about Zahn’s position to end privatization talks, but we have not yet heard back.

CEO search

For the long-term CEO search, JEA’s Chief Human Resources Officer Angelia Hiers says they have gotten some push back among search firms. Hiers says one company told JEA they would not be interested in taking on the search, because of the current climate around talks of possibly privatizing JEA- which is a statement that Hiers says she had never seen in her three decades of HR experience. Hiers says some companies are concerned about the impact that will have on their ability to find quality candidates.

Nonetheless, the Board has decided to solicit proposals from executive search firms who are interested in taking on the task. They’ve waived certain requirements in that solicitation process, which will allow them to conduct this step in an expedited manner. A search firm that currently works with JEA- ZRG Partners- can be considered as an option. Hiers had initially recommended the Board move forward with ZRG, citing their experience in the utility industry, low cost, and prior high ranking and good results for JEA.

Several Board Members wanted to make sure they were considering all viable options, with Board Member Kelly Flanagan saying it’s possible other firms may be worth a higher price if they bring forward better candidates.

“It’s just difficult to know that in isolation today,” she says.

Another worried about engaging a search firm before they had defined what they were looking for in the next CEO. These concerns ultimately led to the Board’s decision to solicit proposals from interested parties.

The Board then discussed some of the characteristics they want to see in JEA’s next executive, and “strategic vision” was at the top of most of their lists. This again ties back to the ongoing talks about whether to privatize JEA, with one Board Member saying this is not about whether to sell, but about how to move JEA forward in a quickly evolving industry.

“I think somewhere along the line, this has become a binary conversation in our community. Is it- do we privatize or do we not privatize. And I actually think what that fails to have people recognize is that’s really not the decision I think we’re on. It’s a question of do you privatize, or- to be blunt about it- do you change the JEA charter to make it more relevant for the next hundred years. I don’t think it’s a question of do we privatize or just remain status quo,” says Board Member Husein Cumber.

Board Member Reverend Frederick Newbill also pointed out the need for a CEO who can be the “face of JEA”- someone who can clearly communicate with stakeholders and who understands the role the community plays in the organization. Cumber also highlighted how JEA is different than other utilities, because of the government interaction, and said it would be helpful to have someone with experience in that.