ORLANDO, Fla. — Responding to a scathing audit of its operation, the Florida Municipal Power Agency, the state agency that provides thousands of central Florida residents with power through municipal utilities, met Monday to draft a response.
The audit, dated Jan. 21, 2015, laid out 15 findings spanning from $2,098 for Orlando Magic season tickets for employees to $12,688 spent on parties, including one with alcohol, to questions about the size and scope of the CEO’s contract.
"This was an overall a clean audit. There was no listing of any violations of any federal laws or state statutes," said FMPA Board chairman and Mayor of the City of Newberry Bill Conrad. "The small things that they did find were inconsistent with our own policy, and we're going to update our policy."
In a two-and-a-half-hour meeting Monday, board members discussed crafting a response to the state audit.
During the meeting, one board member called the findings “embarrassing. " But much of the time was instead spent on deciding on correct wording for the response to the auditor’s report, a response that is due by the end of the week.
The board did agree to no longer provide alcohol at parties, but didn’t discuss any other policy changes.
One of the major findings from the report dealt with the benefits attached to CEO Nicholas Guarriello’s contract. According to the audit, “The CEO would receive six months of base salary if terminated for cause. Under these contract provisions, if the CEO was terminated with cause as of Sept. 30, 2014, the CEO would have received a one-time payout equal to 50 percent of his annual salary, totaling $137,500.”
The audit also disclosed, “Contract provisions also indicate that certain healthcare benefits are to be retained after termination for a certain number of months based upon the termination date. The contract provides that the FMPA will either pay for or reimburse the CEO’s health insurance premiums for life and fund the CEO’s health reimbursement account for life.”
“I don’t see any big problems with the manager’s contract,” said Conrad. “We may update a few things on it, but for the most part when you look at the size of this agency when you compare it with Duke or Florida Power and Light, he is paid a far smaller salary and has far fewer benefits.”
The audit also exposed a $247 million loss due to what is known as “fuel hedging," a common industry practice. Fuel hedging allows utilities to establish a fixed or capped cost that allows the utility to operate with stable costs in a fluctuating market.
However, the audit report found the FMPA had lost money in eight of the past 12 fiscal years.
“You always look at best practices and ways we can do things better,” said Conrad.