FAO Select Committee Meeting on Capacity Fee Audit - July 27, 2026
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.
Meeting Transcript
Good morning. Welcome to the first financial audit and oversight select committee meeting. Let me start with introductions to my far left. Brandon Russell, Council Research. Brian Parks, Council Auditors Office. Philip Peterson, Council Auditor. Joe Carlucci, District 5. Ron Salem, group two at large. Good morning, Chris Miller at large group five. Good morning, Nick Howland at large group three. Let me also recognize we've got Matt LaSell here. Where did he go? Oh, okay. From the uh inspector general's office, um, who actually uh requested that the council get involved in this capacity fee issue. We've got uh Rob's Zamatero. I think I pronounced that correctly, who's here from JEA that is the water um person at the head of the head of the uh food chain for JEA. Thank Rob, thank you for coming. We've got uh Joe DeSalvo here, a board member, Mr. DeSavo, we appreciate you coming. And uh let me turn it over to President uh Howland for some comments before we get started. Thank you, Chair Salem. I appreciate it. Am I on extra loudspeaker right now? Or it's crazy. It's like uh we're in an auditorium. Hold on, I'm gonna swap. We can all hear you. All right, how's this? Is that a little better? A little bit more normal. All right, fantastic. Um, welcome to the first meeting of uh the FAO Select Committee. I'm proud to be here. I'm proud uh that you three have agreed to be on it. Um as you recall, the the basis of this committee was um the fact that Doge did a great job winding up all of its outstanding charges. The SIC had wound up almost all of its charges uh that it could work on except for the unbilled water capacity fees. And uh so it stood to reason that we could combine those two into a new committee, a select committee um called the financial audit and oversight select committee. And by our council rule 2.103 B, um a select committee is subject to uh uh it's limited to a single subject matter and a duration of 90 days. And this one is charged with looking at those unbilled water capacity fees that the inspector general asked uh the auditors and uh council to look at. Um the important thing about this FAO committee is um I think the people on it is a critical component of it. Um and you'll see it's chaired by and comprised of experienced council members and um all who uh have experience in finance, governance, and public accountability. It's it's kind of the dream team. I mean, Ron, you've um kind of a long standing finance guru on council. Um Chris, you're a former inspector general in the Army, and Joe, you're likely the next president. So anything that we find that needs action that um needs to go multi-year, um, you can take that action. So uh I'm hopeful this model will prove effective. We stand up, we look at one issue, we have a uh time-defined um period to look at it, we make recommendations or turn it into legislation, and then we stand down. Um, hopefully to stand up when another issue arises that merits the strength of this committee. So hopefully it could provide uh future council leadership with a flexible and efficient oversight tool. Uh so with that back to you, Chair.
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