UNION COUNTY — It has been four months since the Union County Utilities Authority board decided to look into the unapproved stipends being paid to several employees by Executive Director Dan Sullivan. Last week, one board member took the board and attorney to task for allowing this to drag out for so long.
In February, when Utilities Authority board commissioners discovered Sullivan had been handing out stipends to a select number of employees, the board put an immediate end to that. The board also decided to hire an outside consultant to look into the matter, because of the legal ramifications and tax issues involved.
Unapproved stipends began being paid when the Utilities Authority started overseeing the Union County Improvement Authority in August, after the Local Finance Board found inconsistencies in former Improvement Authority Chairwoman Charlotte DeFilippo’s $160,000-a-year salary and benefits.
Shortly afterward, DeFilippo resigned and Sullivan was tapped to oversee both authorities. Sullivan, a longtime freeholder who has received $130,000 a year since 2011 as executive director of the Utilities Authority, gave up his freeholder seat, in order to head both authorities in August.
Although the employees receiving the unapproved stipends have yet to be named, a resolution by the Utilities Authority on Jan. 15 approving a 2 percent salary increase for select employees infers their identity. The resolution approving this raise does not go into detail about the reasoning behind the increase for these employees, other than to say these eight employees, including Sullivan, assumed duties at the Utilities Authority that involved handling “other operational programs at the county and authority.”
The eight people named in the resolution are Sullivan, Chief Financial Officer Thomas Brennan, Lisa M. da Silva, Joseph C. Bodek, Jeffrey Hummel, William Neafsey, Suzanne Kinloch and Minerva Rosa. According to sources, the board never knew that, since September, Sullivan had been approving stipends for these individuals.
The paying out of unapproved stipends has been kept from the public because it involved personnel issues; however, while the board met multiple times in closed session regarding the issue, some information was gleaned from resolutions the board passed in the last four months.
One example is the board approving the hiring of outside consultant Saiber LLC in early March to handle the fact-finding mission regarding the inquiry into the stipends, but setting a cap of $25,000 for this expenditure.
By the end of March, the board had to pass another resolution dropping the law firm of Saiber LLC, because it had a legal conflict of interest with the Utilities Authority. It has not been explained why this consultant was not properly vetted prior to being hired to do the inquiry.
At the March 19 meeting, the board also agreed to pay for an attorney to represent Sullivan during the stipend inquiry, when it was found he would have to be interviewed during this process. According to the resolution approving this, the authority’s by-laws provide that Utilities Authority employees acting within the scope of their employment were entitled to have “reasonable” legal fees paid by the Utilities Authority, when there is an investigation. There was no cap set on this expenditure.
In early April, the Utilities Authority board agreed by resolution to pay for Brennan’s “reasonable” legal fees because he also would have to be interviewed as part of the fact-finding mission.
On April 17, the board approved hiring the second consultant, Pawar, Gilgallon and Rudy LLC of Rahway, to replace Saiber LLC in the fact-finding inquiry. A cap of $17,500 was approved for this expenditure.
Little else was said about the inquiry until last week, when the board approved yet another resolution to increase the expenditure cap for Utilities Authority labor attorney Rich Bauch of Bauch, Zucker Hatfield. Bauch requested and received a $25,000 increase in addition to the $25,000 cap, which was approved in the beginning of the year for labor relations. According to information obtained by LocalSource, he spent $2,187.86 more than the $25,000 cap in April, supposedly because he was involved with handling labor issues for the employees involved in the stipend inquiry.
The board never explained why Bauch needed the increase, but the passage of this resolution was enough to raise the ire of Utilities Authority board member Edward Jackus, who demanded answers as to why this fact-finding matter was taking so long and costing so much money.
“I want all of you to know I wasn’t very happy in February with this fact-finding committee,” he said.
The fact-finding committee, comprised of several Utilities Authority board members, also involved Bauch.
“Attorney Bauch was supposed to act as a liaison to ensure the bills didn’t run awry, but I don’t see that happening,” Jackus said, adding “the bills have run awry.”
“This is outrageous. I’m very close to asking Attorney Bauch to resign in regard to the fact-finding mission,” Jackus said flatly, pointing out that the entire inquiry was supposed to take “two or three weeks.”
“I think Dan Sullivan and the rest of these people that are part of the fact-finding inquiry should actually know what is going on,” he said, stressing he had “a major problem” with how this was being handled.
“Its like a train run awry. It just keeps going and going and going. We need the facts; we need to understand what is going on,” said Jackus, adding “taxpayers are paying a lot of money for something that was supposed to take two or three weeks.”
Bauch responded by saying the inquiry “was more complicated than we thought,” but nothing more. The only other board member to voice concern regarding the length of time the inquiry was taking was Utilities Authority alternate board member Angelo Bonanno.
“Are we going to get a complete update on this?” he asked, but was told the inquiry was “not completed.”
“At what point in time can we expect a conclusion to this fact finding mission?” Bonanno inquired, but other than that the inquiry was ongoing, none of the legal team present had more to say with regard to that question.
When it came time to vote for the resolution approving the increase in cap for Bauch, Jackus let it be known that he was not expecting this kind of expense for a fact-finding inquiry.
“I’m not very happy about what is going on here. I felt it was wrong in February and I continue to think its wrong,” Jackus said.
In the end, Jackus voted against approving the cap increase, while Bonanno abstained. The rest of the board approved the measure.
There is no indication when the fact-finding inquiry will be completed or how much it is going to cost taxpayers.