A government-owned power company that supplies wholesale electricity for 31 small Florida cities plans to pay its chief executive's six-months salary and health insurance premiums for the rest of his life if he is fired, according to a preliminary audit report that has angered some city officials.
The Florida Municipal Power Agency also spent tens of thousands of dollars on flowers, holiday parties, travel costs and gift cards to staffers for birthdays, according to the state's Auditor General. The Orlando-based agency's members cover about 2 million residents, or about 10 percent of the state's population.
"We are extremely disappointed in what we see," Councilman Mitch Timberlake of Green Cove Springs said Friday. "The FMP, in that report, is not performing to the standards that we would expect."
While it is too early to take action since the final report hasn't been completed, Timberlake said, city officials were drafting a letter expressing their concerns and disappointment.
The FMPA is owned by cities stretching from Key West to Jacksonville Beach that sell electricity to their residents. Customers in member cities have higher rates than those that get their power from investor-owned utilities like Florida Power & Light and TECO, whose rates are subject to approval by the Public Service Commission, the preliminary report said.
The agency said it plans to respond to the audit within 30 days.
Chief Executive Officer Nicholas P. Guarriello said in a statement that the agency had tried "to faithfully administer the contracts for our members, their customers and our bondholders." Agency board chairman Bill Conrad, who is the mayor of Newberry, said the audit's findings merited consideration. The agency's five-member board consists of Conrad, a town manager and three municipal power company officials from around the state.
The preliminary findings faulted the board for agreeing to a compensation package that includes paying Guarriello half a year's salary worth $137,500 if he is fired, as well as funding his health insurance premiums for life and also paying for his health reimbursement fund for the rest of his life. Both come to more than $14,000 annually.
The agency spent more than $12,000 on flowers, almost $5,000 on tourist attraction tickets for a summer picnic and $2,000 on Orlando Magic season tickets from October 2012 to last June. Those expenditures were part of almost $24,000 spent on employee activities that did not show evidence that the public purpose was being served" according to the report.
On two occasions, agency officials spent more than $3,000 at a Washington, D.C., restaurant, where meals averaged more than $100 per person, and they twice paid more than $14,000 on hotel rooms during an annual conference that included rooms for the chief executive's, the general counsel's and the board chairman's family. Those officials reimbursed the agency for family members only after the Auditor General began looking into the matter, the report said.
Over the past dozen years, the agency has incurred more than $247 million in losses from its fuel hedging activities, a practice used to offset changes in the cost of fuel, said the report, which also faulted the agency for not following industry practices in this area.