Jacksonville, FL — JEA’s CEO Paul McElroy is stepping aside from day-to-day operations.
A transition agreement approved by the JEA Board Friday says McElroy will be available to the Board and senior leadership through September- when his contract was set to end- to help with the transition, but he is resigning the day-to-day CEO role effective immediately. Several Board members mentioned during the discussion of the transition agreement that they were not expecting to take action like this during this special meeting today, but they thanked McElroy for his service.
“You leave JEA a far better place than when you first arrived,” says JEA Board Chair Alan Howard.
McElroy says the Board had offered him a two-year contract extension, but after serving 5 ½ years as CEO, he instead determined it was the right time for a change in leadership, for the benefit of himself, his family, and the community.
“It is important to recognize that all large organizations move in cycles which require different leadership strengths and styles. My leadership strengths are building great, high performing teams, to strategically plan and execute upon a vision, leading to extraordinary value creation. The path forward for JEA, at least for the next period of time calls for a different set of leadership skills, not better or worse, just different,” he says.
McElroy’s transition agreement included four provisions, and the Board added a fifth which he had requested. First, the CEO responsibilities have been removed, but he remains accessible to consult per the request of Howard, who wanted to be able to tap McElroy’s “institutional knowledge”. Second, McElroy is retaining economic benefits of his current contract through his transition services, including a portion of prorated incentives compensation. The other two provisions are commitments by the City- they will finish actuarial and tax calculations that affect McElroy’s pension by September 1st, and they will honor a contract with Counsel hired for McElroy to represent him before the City Council.
When McElroy was asked if there was anything he did not get as part of this agreement, he said he had requested assurances that the City would provide legal defense if he was named in a lawsuit relating to the discharge of his duties. The Board ultimately adopted that, with an exception for intentional tort.
Howard commended McElroy for how he has dealt with a number of challenges that have faced JEA, including major storm events, pension reform, and flat revenue.
“You have met all those challenges with personal humility and dignity and grace,” he says.
But one of the biggest challenges may still be to come for JEA.
The City of Jacksonville is examining the possible sale of JEA. The review started with a comment by the prior JEA Board Chair, which led to Howard asking for a review. The City Council then began their own review of the issue, and Board Members noted that they need strong leadership to continue to navigate through that process.
“There’s so much going on right now, there’s so much that is publicly being debated that I think we need to have a point person,” says Board Member April Green.
The Board named JEA’s Chief Financial Officer Melissa Dykes as the interim CEO, at least until their next Board meeting. The Board Chair called on all Board Members to think about what they want the search process to look like, and that will be discussed at length during the next meeting April 17th- including whether to do an internal or external search, whether to hire a search firm, and other related questions.
“JEA is a large and complex integrated utility that’s facing challenges consistent with those challenges faced by the entire industry, together with its own unique challenges,” he says.
He says to get through that, they need a leader with strong management and diplomatic skills.
Jacksonville Mayor Lenny Curry’s Chief of Staff Brian Hughes released a statement on the Mayor’s behalf, thanking McElroy for his service.
“We appreciate his years of service and dedication to the citizens of Jacksonville. As Mr. McElroy opts to step down, we have full confidence that the board will select an executive to move this asset forward," the statement says.
For now, Howard says the Board and JEA will continue to cooperate with the City Council, as their exploration of what comes next for JEA moves forward.
McElroy’s announcement comes the same day the five union leaders representing JEA employees issued a joint statement against privatization. They say privatization would have “severe, harmful, and long term detrimental economic impacts” on many parties, from taxpayers to customers to local businesses and employees. The statement says any company that would look to buy JEA would be primarily concerned that it gets its investment back, leaving customers on the hook.
Following McElroy’s announcement, the unions issued another statement, calling the change an “interesting turn of events”. The statement adds that the unions had no involvement, look forward to a “positive future” for JEA and the City, and maintain their stance against privatization.