Wednesday, September 13, 2017

City Council President Jen Giattino Calls for Facts on Suez and Rebukes DeFusco

Official release:

City Council President Jen Giattino Calls for Facts on Suez and Rebukes DeFusco

There are inconsistent and misleading statements circulating concerning the events leading up to last week’s City Council meeting and the public discussion about the $8.3 million unfunded liability.  This is a serious governance issue for Hoboken and it's critical that we get the right facts and that we are all fully transparent with the public. 
The terms of the proposed Suez contract were given to me by the Administration at an Infrastructure Subcommittee meeting I attended the evening before they were sent out to the entire public and the rest of the City Council on July 12th .  Councilmembers Tiffanie Fisher and Ravi Bhalla were also in attendance at that meeting with Mayor Zimmer, Business Administrator Stephen Marks and City consultant Dennis Enright.  In that one hour meeting, we were presented with the terms for the first time and the focus of our questioning was whether Suez was going to continue to receive an excessive amount of our water revenues.  When asked at that meeting if the proposed terms were market terms, the City consultant replied that the proposed contract was above market, but declined to say how much above market. 
After Councilman DeFusco raised concerns at the August City Council meeting about Councilman Bhalla's potential conflict with Suez due to his employment, we moved the oversight of the proposed Suez contract from the Infrastructure Subcommittee, which Councilman Bhalla chaired, to the Finance and Revenue Subcommittee and Peter Cunningham, who is on that subcommittee joined us for a meeting on August 29.   It was at this meeting with Director Marks and Mr. Enright that we first were told of the nature of the $8.3 million liability, that it related to contractual expenses and costs that had been incurred in prior periods and that it was potentially unfunded and not disclosed. The following morning Councilwoman Fisher as Chair of the Finance and Revenue Subcommittee immediately acted and sent an email to Mayor Zimmer and Director Marks, cc’ing Councilmen Cunningham and me, calling for a meeting with the auditor and legal counsel to discuss the accounting, appropriation and disclosure requirements for the $8.3 million liability and whether they were properly followed.  Although a subcommittee meeting occurred on September 4th with Director Marks and members of Hoboken’s finance team, the Administration declined our request to have the auditor present and also our third request for the financial underwriting of the proposed contract.
It was only at the City Council meeting on September 5th that we were able to have a detailed discussion with the auditor and the financial consultant about the historical events and activities surrounding the $8.3 million liability.
Please see the email below that I sent to Councilman DeFusco requesting that he correct his statement and the allegations he made about me. Further I believe that Mayor Zimmer and Councilman Bhalla both need to disclose all of their knowledge and activities on this subject that occurred prior to the announcement of the proposed contract on July 12.  I reiterate that we will need to do further investigation into this matter so that we can make sure we are doing what is right for Hoboken residents.

Subject:  Regarding Your Statement on Suez

Dear Councilman DeFusco –

Although we share the sentiment that the administration was insufficiently transparent in the information it provided on the Suez contracts, I want to correct your version of the “hard facts” you sent to Hoboken residents.  They are misleading.

I cannot speak for what the Mayor or Councilman Ravi Bhalla knew or when they knew it, but as Councilwoman Tiffanie Fisher described in public at the City Council meeting on September 5th, it was not until the Finance Subcommittee meeting on Tuesday August 29th that we, along with Councilman Peter Cunningham, first became aware that the $8.3 million liability related to prior year costs and expenses that appear to not have been previously funded or disclosed.  It is also crucial to properly identify what is included in the subject liability as we look ahead – primarily bulk water charges reflecting increased rates and capital improvement costs in excess of Suez’s required contribution amounts; not just the latter as you inaccurately described in your letter.

There was an infrastructure subcommittee meeting chaired by Councilman Bhalla on July 11th which I attended along with Councilwoman Fisher, at which the Administration presented us with the terms of the proposed contract that they then circulated to the public the next morning.  At this meeting – which included Mayor Zimmer, Business Administrator Stephen Marks, and City consultant Dennis Enright – the focus of our questioning was meant to understand whether Suez was getting excessive profits under the new proposal.  The Mayor did not disclose the nature of the $8.3 million liability at that meeting.  It was only at the later subcommittee meeting on August 29th, a week before the council meeting, where we learned from Director Marks and Mr. Enright more about the characteristics of the liability.

This is a critical governance issue for Hoboken, and one that relies on getting the facts straight.  I am requesting that you correct your false allegations, put politics aside, and help set the record straight for the benefit of the Hoboken residents.


Jen Giattino