JACKSONVILLE, Fla — Jacksonville City Council members are “strictly prohibited” from discussing the minimum conditions JEA is requiring potential buyers of the city-owned utility to meet until the utility selects a buyer, according to City Hall’s top attorney.
The legal advice concerned council members who are frustrated that they’ve had no involvement in JEA’s attempt to sell itself, and it comes on the heels of JEA’s own efforts to limit what its employees say about the utility and city leaders.
The prohibition applies to conversations with constituents, interviews with the media and other public discussions, including ones on social media, according to a memorandum released Tuesday by Jason Gabriel, the city’s general counsel.
Gabriel wrote that council members cannot discuss the merits of any of the terms JEA is asking potential buyers to meet, which includes a purchase price of at least $3 billion and offering at least $400 million in customer rebates.
Council members are still allowed to discuss whether or not the utility should be privatized, Gabriel said in an interview on Wednesday.
Gabriel said the memo wasn’t binding and was offered as “mere advice” in response to a council member’s request to clarify the JEA’s “code of silence” provision, which was created to prevent interference with competitive bidding processes.
But the memo asserts that state law and JEA rules “strictly prohibit” conversations about the utility’s terms for the sale.
“They can take the advice and heed it, or they can ignore it,” Gabriel said. “It’s not trying to stymie anyone’s ability to weigh in and consider these issues.”
Still, council members said it’s still unclear what they can and cannot discuss as JEA evaluates the proposals behind closed doors, adding to their existing frustration of having virtually no involvement in the utility’s decision to explore privatization, which would be one of the biggest changes ever made to Jacksonville’s city government with major and long-lasting consequences for taxpayers and JEA’s ratepayers and employees.
“We’re in a position where we’ve had no input, and we’re being told we can’t talk about the (invitation to negotiate),” said City Councilwoman Randy DeFoor. “When you don’t know what you can and can’t talk about, the effect of that is to prevent any type of conversation at all.”
Earlier this summer, JEA’s board of directors unanimously voted to explore privatization at the urging of JEA’s CEO Aaron Zahn, who said the utility needed an “untraditional” response to the existential threats it faced, like declining power consumption and advances in solar technology that would allow customers to create their own electricity, to avoid steep rate hikes and sweeping layoffs.
Two weeks later, the agency released an 87-page document, sometimes referred to as an “Invitation to Negotiate” or “ITN” for short, requesting potential buyers to submit proposals and describing the minimum requirements any proposal must meet in order to be considered.
After that, JEA enacted a “code of silence” that says interested entities can only communicate with two designated JEA employees in the procurement department or at formal meetings that are part of the procurement process.
City attorneys said the same rule prohibits council members, as well as Mayor Lenny Curry and his “immediate staff,” from discussing the merits of JEA’s minimum requirements of the sale.
Any privatization deal approved by JEA would also need approval from the council and Duval County voters. Since council members will evaluate and vote on any potential deal, Gabriel said any comments they make before the bids are submitted and evaluated by JEA could be seen as interference and could allow losing bidders to protest the scoring results.
“I suppose — and maybe it’s far-fetched — if it in any way interfered with one vendor’s ability to bid, then that’s where it could be a potential issue,” Gabriel said.
Privatizing JEA has proven to be a highly controversial topic, if not an unpopular one, according to recent polling.
While an effort by JEA to explore privatization in 2018 was derailed after council members expressed serious concerns, JEA has so far been able to keep the council on the sidelines this time around.
On Wednesday, several council members said Gabriel’s advice has added to their frustrations of being excluded from the process.
“The idea we’re part of the “cone of silence” limits us. So yeah, I wish I could talk about the [invitation to negotiate],” said Council President Scott Wilson. “I can’t at this point in time. I’ve told JEA and the [Curry] administration if and when something comes across our desk, we’ll take as much time as needed to answer our questions.”
Councilman Matt Carlucci said JEA hasn’t convinced him that it needs to be privatized, and he doesn’t want the “cone of silence” to interfere with his fact-finding.
“There are a lot of council members losing confidence in the process when the “cone of silence” is being interpreted differently by different people,” he said. “I need to know more about it to try and engage in the process and conduct our job of checks and balances we are charged to do.”
While the General Counsel’s opinion seeks to restrict what City Council members say, JEA tried to control what its employees say about the utility and local government leaders.
Union leaders said their members refused to give up their First Amendment rights.
“There is no gag order,” said Ronnie Burris, business manager for LIUNA Local 630. “There was no way that was going to fly.”
When the JEA board voted in July to seek offers for the utility, the board authorized offering retention bonuses to employees as an incentive to keep working at JEA amid career uncertainty.
To receive the bonus, which would be paid in future installments in a total amount equal to 100 percent of an employee’s salary, an employee would have to sign an agreement spelling out conditions in advance.
At the July 23 board meeting, JEA officials said the agreement would require employees to “not make any unauthorized public statements about, among others, JEA and government officials of the city of Jacksonville.”
If employees violated that condition, they would forfeit receiving retention payments, and would have to repay any of the bonuses received up to that point, the July board presentation said.
The terms of the retention payments were subject to collective bargaining. Unions refused to sign off on a ban on “unauthorized statements.”
The labor agreements approved Tuesday by the JEA board say that nothing in the retention agreements will prevent employees from engaging in “lawfully protected” First Amendment activity.
IBEW Local 2358 President Valerie Gutierrez said that while JEA employees are on the job, they should focus on the job. But when their shifts end, they have full ability to make their views known, including going to City Council meetings and speaking out.
“We made that plain as day,” she said. “There’s no way you’re going to stop us from speaking in opposition to any sale of JEA.”
In response to complaints from City Council members who say they’ve been sidelined, JEA said Tuesday it would work to make City Council member Danny Becton more involved in oversight of the process JEA uses to negotiate with entities that make offers.
It’s not clear, however, how much information would flow to Becton, who is the council’s liaison to JEA.
For instance, when JEA opens bids on Oct. 7, the only information that will be released to the public at that time will be the number of bids. JEA will not identify the names of those bidders and has promised entities thinking about making offers that their identities won’t be disclosed.
Utility CEO Aaron Zahn said that will strengthen JEA’s negotiating leverage because companies will not know who their competitors are.
The closed-door negotiations will be recorded and after JEA completes negotiations and announces its top-ranked entity in early 2020, the recordings will be available to the public.
JEA officials say that “invitation to negotiate” format is an option that is part of JEA procurement code and based on state law.