FAO Select Committee Meeting on Capacity Fee Audit - July 27, 2026

The first meeting of the Financial Audit and Oversight (FAO) Select Committee was held on July 27, 2026, at 10:00 AM in the Council Chamber. Chaired by Council Member Ron Salem, the committee was established to examine unbilled water capacity fees, as identified by the Inspector General. The meeting focused on an update from the Council Auditors on the extent of uncollected capacity fees and the path forward for resolution.

Discussion Items

• Capacity Fee Audit Findings: Brian Parks of the Council Auditors Office presented the audit results. The maximum amount not collected by JEA since 2003 on meters 3 inches and larger is approximately $75 million, of which about $20 million is related to multifamily units. After further analysis, the true maximum may be around $55 million. Parks emphasized that not all flagged customers necessarily owe additional fees, as the tariff requires a change in operations, not just exceeding 20% of baseline flow. The auditors' calculation method yielded $75 million, while JEA's method resulted in $25 million. The difference stems from methodology: auditors re-established baseline each year the 20% threshold was tripped, while JEA used a single baseline from 2003-2005. Recent years (post-2021) account for about $35 million of the potential amount due to higher capacity fee rates.
• Legal and Collectibility Questions: Council members discussed the statute of limitations (typically 5 years for written contracts) and whether amounts are uncollected or unbilled. Council President Howland noted that since no invoices were sent, it is more accurate to call them "unbilled" fees. Chair Salem raised the question of customer responsibility to report expansions. Council Vice President Carlucci asked about the impact of the statute of limitations, suggesting that amounts pre-2021 may be irrelevant.
• JEA's Response and Plans: Rob Zimintero, JEA Chief Water System Officer, stated that JEA is working on two separate policies: one for going forward (modifying billing systems and writing a policy for who identifies the 20% threshold) and one for retroactive collection. Both policies are expected to be presented to the JEA Board by early next year. JEA aims to be fair and equitable, and will address customer appeals and outreach.
• Accountability and Oversight: Council Member Miller asked about accountability for the 55-year-old issue. Zimintero acknowledged it was a long-standing miss that became business as normal, but current leadership is committed to fixing it. Inspector General Matt LaSelle confirmed that JEA has been cooperative and that the CEO has committed to conducting the process in the sunshine. He supported the auditors' follow-up review once policies are implemented.
• Future Reporting: The committee discussed the need for periodic progress reports. Chair Salem suggested reports every 60 days, but it was noted that the FAO committee has a 60-day lifespan (effective July 20, ending September 18, 2026). President Howland proposed that after the committee ends, reports could go to the Finance Committee. The auditors will conduct a follow-up audit in early 2027 to ensure the new system is working.

Key Outcomes

• No formal votes were taken. The committee reached consensus on the following directives:
  • JEA will develop two policies (forward-looking and retroactive) and present them to the JEA Board by early 2027, with the process conducted in the sunshine.
  • JEA will provide periodic progress reports to the Council, initially to the FAO committee and then to the Finance Committee after the FAO committee expires.
  • The Council Auditors Office will conduct a follow-up audit in early 2027 to verify that the new billing system and policies are functioning as intended.
  • The Inspector General's office will continue to monitor the situation and coordinate with the auditors on the follow-up.