Jacksonville inspector general orders review of JEA’s disputed capacity fees tied to Mayo Clinic expansions

Investigation and audit request focus on water and sewer capacity fees tied to long-term growth

Jacksonville’s Office of Inspector General has opened an investigation into whether JEA, the city-owned utility, is owed millions of dollars in unpaid water and sewer capacity fees tied to large-scale property growth—disputes that include a long-running disagreement with Mayo Clinic’s Jacksonville campus.

In a memo released Tuesday, March 10, 2026, the inspector general requested a special, limited-scope review by the City Auditor. The stated purpose is to determine whether additional capacity fees exist, estimate the amount JEA believes it is owed, and assess whether any private property owners could face retroactive bills.

What capacity fees are and why they matter

Capacity fees are generally one-time charges assessed when a property connects to water and sewer service. They are typically based on projected demand at the time of construction. The central question raised in the current inquiry is whether some facilities expanded their water and sewer usage far beyond original projections without paying additional capacity charges that JEA says should apply when usage increases substantially.

JEA’s publicly posted development guidance states that additional water and wastewater plant capacity charges may be required for expansion or increased flow at existing facilities. As of April 1, 2023, JEA lists water plant capacity base fees of $4.68 per gallon of average daily water use and sewer plant capacity fees of $25.57 per gallon of estimated average daily sewer capacity, subject to applicable conditions and calculations.

Mayo Clinic dispute: more than $12 million at issue

One of the largest identified disputes involves Mayo Clinic, where JEA asserts more than $12 million in additional capacity fees are due. The disagreement centers on whether increased water and sewer usage over time should trigger new fees beyond what was paid when the campus first connected to the system in 1995.

In legal filings described in recent public reporting, JEA contends Mayo Clinic’s usage grew dramatically compared with initial projections. A memo prepared for JEA in October 2025 describes water and sewer usage rising from about 142,000 gallons per day in 1995 to more than 546,000 gallons per day in recent years—an increase of more than 380%.

Mayo Clinic has disputed that it owes the additional charges. Its attorneys have argued that the utility did not identify the full scope of water use until 2022 and have cited a 1986 agreement with the City of Jacksonville that they say affects whether capacity charges apply.

What the city review is expected to examine

• Whether additional capacity-fee obligations exist for expanded properties and how they should be calculated.
• The potential scale of any unpaid amounts and which accounts may be involved.
• Whether retroactive billing is legally and administratively feasible for any affected property owners.
• Whether JEA’s internal processes adequately track expansion-driven capacity-fee triggers.

JEA has stated it is developing a program to better track, identify, and bill for additional capacity fees associated with growth and expansion, and has said it is working with Mayo Clinic to review historical records and reach a resolution.

The City Auditor’s limited-scope review is expected to help establish the factual baseline—how much, if anything, is owed, by whom, and under what terms—before any broader policy or enforcement steps are considered.