ECUA Grand Jury Report: Utility bullied landowners, cost ratepayers millions and board ‘grossly negligent’

Late Friday afternoon, State Attorney Bill Eddins released, pursuant to Order of the Circuit Court, the Grand Jury Report regarding Escambia County Utilities Authority, which was originally issued on July 17, 2018. The release of this report had been delayed because of objections that were filed to prevent the release of the report, which were ultimately denied by the First District Court of Appeal.

The report reveals what happens when an executive director and the utility’s attorney get too comfortable and handle issues as they see fit without public scrutiny or board oversight.

The executive director, Steve Sorrell, was able to resign and receives a nice pension for his years of service without any charges or penalties. Sorrell was paid $190,000, plus benefits, and served as executive director for nearly 16 years at the time of the grand jury.

Attorney Bradley Odom had worked for ECUA since 1994. His firm, Odom and Barlow, P.A., and its predecessor had represented the authority since its inception, according to the grand jury report.

The report was kept from the public through the 2018 primary and general elections. In 2018 GOP primary for District 4, incumbent Dale Perkins beat former city councilman Charles Bare, 55%-45%. In the general, incumbent Republican Lois Benson defeated Democrat Gloria Horning, 63%-37%. Delaying the release helped Benson and Perkins avoid a public scandal during the election cycle.

After Hurricane Ivan, the ECUA board, with the help from FEMA, agreed to relocate its Main Street Sewage Plant to the central part of the county, next to Gulf Power’s Crist Plant. To expedite the process, it gave Sorrell “unlimited authority: to make decisions regarding the relocation”—in other words, a blank check to do whatever he saw fit without little oversight.

The Grand Jury wrote: “Evidence we have received indicates that this grant of unlimited authority violated the Board’s duty to supervise Sorrell and also constituted an improver delegation of the Board responsibilities.”

A simple easement that should have cost no more than $31,000 ended up costing ratepayers over $1.3 million because Sorrell wouldn’t agreed to routine hold harmless and indemnification agreements. And the legal dispute – which lasted more than 10 years – was never brought to the board for a vote.

“Not one Board member was aware of the total amount paid in this litigation (with Bear Marcus Pointe LLC),” wrote the Grand Jury.

The Grand Jury also reviewed an eminent domain issue involving Palafox Partners Ltd. and its North Palafox Street property behind the old Medical Center/Health Department. ECUA only offered $145K for the land and tried to take the land under eminent domain. After two years of legal wrangling, Sorrell agreed to settle for $1.395 million:

Land $441.672
Severance damages $588,454
Palafox Partners’ legal fees: $241,281
Palafox Partners’ other costs: $123,592.

According to the report, ECUA could have saved a “substantial amount of money” had the initial appraisal been correct.

The Grand Jury also had issues with Sunshine Law and public records. Shade meetings – meeting outside of the public to discuss litigation – had discussions that went beyond settlement negotiations or strategy sessions a review of the meeting transcripts revealed. While the board did eventually vote in public meetings, the public should have been allowed to hear some of the discussions.

“Attorneys for ECUA testified that this procedure was necessary for strategic reasons,” wrote the Grand Jury. “This is not necessarily true. In several litigation meetings we reviewed, the parties had already agreed to and signed settlement agreements at the time the session was held. The purpose of the litigation session was for the Board to approved previously agreed terms. In these cases, there was no need for the litigation session to be kept secret.”

The Grand Jury was concerned two ECUA board members used private email addresses to conduct ECUA business because it “might result in the loss or failure to maintain public records.” Also ECUA didn’t have a email archiving system.

On the behalf of the ECUA board, Sorrell signed several warranty deeds, enrichment agreements and over real estate documents recorded with the Clerk of Courts. The Escambia County Commission chairman signs such agreements. “The only reason for ECUA not following this same procedure was that signing of such documents is a ministerial function and that it might be inconvenient for the Board Chair to sign.”

Read Grand Jury Report – ECUA