Friday, September 1, 2017

Breaking: Council not likely to pass Suez contract; Councilman Bhalla recused from vote


City Council rejecting Mayor Zimmer's proposed Suez Contract as Ravi Bhalla recuses himself 

In a story published by Hudson County View confirming MSV's earlier report, City Council members stated there's little interest in voting to approve a Suez water contract presented by Mayor Zimmer.

Councilman Ravi Bhalla in a letter yesterday to City Council members informed them he would be recusing himself from any pending vote on the contract.

MSV noted earlier the opposition to the Suez water contract presented by the Administration was DOA based on three council members seeking further financial details. Eight of the nine members will decide as Councilman Ravi Bhalla will not be voting after recusing himself from all matters connected to the proposed Suez contract.

Bhalla is a law partner in Florio, Perucci who lists Suez on their website as a client.

Councilman Ravi Bhalla, a partner in Florio, Perucci
will not be voting Wednesday on the City's proposed Suez contract.
The above chart is from the law firm website.

Council members Ruben Ramos expressed he will not be voting for the Suez water contract and Councilman Dave Mello voiced doubt he would vote to approve it. The Suez contract requires five votes for approval.

The only council member who may be open to approving the Suez contract is Councilman Jim Doyle who is running for re-election on the Bhalla ticket. All other council members are backing other mayoral candidates. Both Mike DeFusco and Jen Giattino filed to be on the November ballot leading full council at-large slates.

MSV obtained a copy of Councilman Ravi Bhalla's email from non-governmental sources, excerpts of which were published earlier on Hudson County View.

The complete email from Councilman Ravi Bhalla to Hoboken council members, the mayor, business administrator and Bhalla council at-large slate mate Emily Jabbour follows.

Dear Council Members,

I write to respond to questions raised by Council Members Ramos and DeFusco at the last City Council meeting, about whether potential conflicts of interest may exist in connection with our forthcoming vote to authorize the Mayor to enter into a Memorandum of Understanding (MOU) with Suez United Water at the next Council meeting.  I also write to address inquiries and statements set forth in a press release issued by Councilman DeFusco the day following our last Council meeting.

Please be advised of the following:
• I have zero personal or financial interest in the MOU and the subject matter therein, beyond being a water customer of Suez by virtue of my residency in Hoboken and the fact that water is supplied through this utility, an interest shared by virtually all residents in the City, all Council members and members of the administration residing in the City.

• In my legal profession, I am a non-equity partner at the law firm of Florio, Perrucci, Steinhardt & Fader, LLC ("FPSF").  This means that I do share, directly or indirectly, in the profits generated by the firm or firm business.  I am essentially an "at-will" employee of the firm.

• I am not involved in any way, shape or form in any matters involving United Water Suez at my firm, nor have I ever been involved, directly or indirectly, in any matters involving United Water Suez during the course of my employment at FPSF.

• The matters for which FPSF provides services to United Water Suez do not involve the City of Hoboken, nor have they ever involved the City.

• I have no personal, professional or financial interest in the subject matter of the MOU, other than the impact it can have upon me as a resident of Hoboken, a common interest shared by virtually all residents of the City, the Council and Administration residing in Hoboken.

Notwithstanding the foregoing facts, I have decided to recuse myself from any further involvement in United Water/Suez matters.

In response to the aforementioned press release by Councilman DeFusco, please be advised as following:

• I have never had any "business dealings" with United Water/Suez in any professional capacity as a Council Member or attorney;

• As a Council Member, I have never taken part in any negotiations involving the City of Hoboken and United Water/Suez, including but not limited to the MOU that is before the Council shortly.

• United Water/Suez has not paid any legal fees to FPSF.  United Water/Suez is a government affairs client of the firm and all fees are subject to public disclosure, as referenced in the Councilman's press release.

• I have never been present or involved in any way, shape or form in any of the City's negotiations with United Water Suez regarding the MOU or any other matter.

• Councilman DeFusco falsely states that there is an ethics complaint "under active review" by the Local Finance Board.  This is false, as the matter brought by Peter Belfiore, was rejected on two occasions when reviewed by the courts, most recently by the Appellate Decision.  There was no finding of any ethics violation by the Appellate Division in its June 2016 decision, it is not under "active review" in any court or agency, and is a closed matter.

In response to other allegations of prospective conflicts of interest with other clients of FPSF, such as New Jersey Transit, please accept this communication to clarify that if elected as Mayor, I will serve in this capacity full-time, and will sever my employment with FPSF before taking office to avoid any alleged or potential conflicts of interests. 

Any communications by members of the council, campaigns and their vendors, advisors and/or agents that are contrary to the aforementioned disclosures would be false, legally actionable and I expressly reserve all of my rights and remedies against any and all breaching parties thereto.

I appreciate your time and interest in this topic.  Please do not hesitate to contact me if you have any questions.

Very truly yours, 
Ravi S. Bhalla

Talking Ed Note: Councilman Bhalla notes many reasons, mostly unrelated items suggesting where he's not conflicted but doesn't indicate the basis for his recusal from further deliberations on the Suez water contract raised at the prior council meeting. 

When the issue was raised by Councilman Mike DeFusco, a mayoral candidate rival at the prior council meeting, Bhalla stated he would defer to the Corporation Counsel for a review on his further participation. It's unclear what if any governmental body inside or outside Hoboken offered any ruling or advice on the matter.

Councilman Bhalla's letter concludes with vague notions of actionable comment(s) about his recusal involving other council members, campaigns, their vendors and/or agents contrary to his stated opinion in the letter would be "legally actionable." 

A source familiar with the 2010 ethics complaint insists the case is not ultimately decided but awaits further action by the Local Finance Board. The board is said to lack a quorum to make any final deliberation so the saga is in limbo. Ultimately, the next NJ governor will make the nomination to satisfy the board quorum requirement.


Official release: Office of the Mayor

Suez Water will be making a presentation to the City Council on leak detection technology that could prevent major water main breaks by detecting leaks early on. The proposed $2.5 million investment in the technology is part of the proposed amended agreement with Suez Water which includes a total of $31 million in infrastructure investments.

The Council agenda will also include a resolution to adopt the proposed agreement as well as an ordinance to mandate that funds received through the agreement be dedicated towards water main system improvements.

Hoboken’s existing agreement with Suez Water which extends through 2024 only requires Suez to make $350,000 per year in capital investments in the water system – less than the amount needed just to make emergency repairs. Under the existing agreement, the City is responsible for repairs exceeding $350,000 per year as well as excess bulk water costs as of 2014. The City’s current liability to Suez under the existing agreement is $8.35 million and is estimated to total $17.8 million through 2024.

The proposed agreement would extend the contract through 2034, forgive the existing liability, and provide an estimated $31 million investment in Hoboken’s water system. The proposed agreement would shift bulk water and capital repair costs from the taxpayer to the ratepayer. 

The proposed agreement was introduced to the City Council on July 11th, presented and discussed at City council and subcommittee meetings, and the following provides the second set of responses to Council members’ questions regarding the proposed agreement:

Talking Ed Note: MSV recently changed its longstanding policy of not commenting under official City of Hoboken releases. 

Mayor's Zimmer's request to the City Council is Dead-on-Arrival.

Earlier today three members of the City Council: City Council President Jen Giattino, Peter Cunningham and Tiffanie Fisher expressed reservations asking further financial analysis be provided to the council. 

MSV sources confirm Councilman Ravi Bhalla who was challenged for a potential conflict by Councilman Mike DeFusco at the earlier council meeting where a Suez presentation was made will not be able to participate in the discussion and vote. 

Councilman Bhalla is a law partner at Florio, Perucci and Suez is a client of the firm. Sources confirm Councilman Bhalla has recused himself. 

Corporation Counsel at the earlier counsel meeting said there would be no legal analysis on a conflict of interest on the matter of Suez and Councilman Ravi Bhalla's participation "on the fly" during the meeting. Apparently, some legal analysis by members not conflicted in the legal matter, possibly an outside State agency provided guidance to the City of Hoboken.

The City Council would consider the Suez contract before eight participating members. It's highly unlikely there are five members willing to entertain a vote approving the mayor's request next Wednesday.

It's far more likely a discussion will be held and/or no vote contemplated or a motion to table. 

Whatever action the City Council chooses, Councilman Ravi Bhalla will not be participating.

Councilmembers issue statement about potential contract with Sue

Official release:

Councilmembers issue statement about potential contract with Suez

Hoboken City Council President Jen Giattino, Councilman Peter Cunningham, and Councilwoman and Chair of the Revenue and Finance subcommittee, Tiffanie Fisher have issued the following joint statement concerning the Suez Water contract:  
On Wednesday evening we had an ad hoc subcommittee meeting comprised of members from both the finance and revenue subcommittee and the ad hoc infrastructure subcommittee.  We were joined by representatives from the Administration and its financial consultant who has advised the Administration to date on negotiations with Suez concerning the contract for water services in Hoboken.  Councilman Michael Russo was also invited, however did not attend.  The primary purpose of the meeting was to review the Administration’s responses to the many questions that were posed by City Council members during the council meeting on August 2nd concerning the proposed contract extension between Suez Water and the City of Hoboken.   
During our review and discussion of the Administration’s prepared responses, we expressed additional concerns about the proposed contract.  And we requested again to be provided with the detailed financial analysis supporting the proposal.  In correspondence the following day, we recommended to the Administration the following next steps prior to having the City Council vote on the proposed contract:  to have a subsequent subcommittee meeting to address the concerns we have raised and for the Administration and its consultants to meet with the entire City Council during an executive session to discuss the proposal in detail.  Both meetings have been scheduled for next week.
This is a critical and long-term financial and operating contract for Hoboken.  We need to have full transparency and ensure that we are making the right decisions for Hoboken taxpayers and rate payers.