UCUA spends $82,000 to recover $21K in stipends

UNION COUNTY — After more than four months of looking into the unauthorized stipend payments made by Union County Utilities Authority Executive Director Dan Sullivan to himself and other employees, a decision was made that the money must be repaid.

Despite the UCUA requiring $21,000 in stipends to be repaid by two employees, it took the authority $82,000 in legal fees to reach this conclusion. In total, $36,000 in stipends were paid out to employees of the UCUA.

According to sources, Sullivan thought he and six other employees deserved the stipends after taking on extra work after the Union County Improvement Authority came under the auspices of the UCUA.

This $82,000 in legal bills, though, does not include legal fees incurred by Sullivan and Brennan, who were allowed to retain legal counsel in order to cooperate with the inquiry.

The decision came after a two-hour UCUA executive board session to discuss the matter in which Sullivan paid himself $15,000 of the $36,000 in stipends.

Attorney Vijayant Pawar of the legal firm Pawar, Gilgallon and Rudy served as the fact-finder in the inquiry, providing a report to the UCUA board on May 21, with a supplemental report submitted June 9. However, although the board was in receipt of these reports in June, decisions regarding how the matter would be handled did not surface until two weeks ago.

According to the resolution passed by the board, after the authority’s Personnel, Procurement and Insurance Committee met with Pawar to review the report, and with the advice of legal counsel, the report was determined to be enough for the board to render a decision.

The resolution noted the inquiry found the payments or stipends made to the UCUA employees involved “were not authorized” by the board and the two employees responsible committed “an error in judgment.”

Nevertheless, while Sullivan was reprimanded, the harshest penalty was saved for UCUA Deputy Executive Director Thomas Brennan. Sullivan received only a reprimand that will end up in his personnel file along with the requirement that he pay back all of the $15,000 he received in stipends.

Brennan, however, received the stiffest punishment.

He will not only receive a formal reprimand that will go in his personnel file but also be suspended for five days without pay because of his actions involving the payment of the stipends.

Brennan also must repay $6,000 in stipend payments he received between Sept. 6, 2013 and January 30, 2014 while Sullivan has to make restitution for the $15,000 he received in stipends by making six $2,500 payments.

According to the resolution, the board found that even though two employees, Sullivan and Brennan, were responsible for incorrectly authorizing such employee payments, neither had any intent to hide or deceive the authority about the stipends.

The other employees, Lisa da Silva, Jeffrey Hummel, Suzanne Kinloch, William Neafsey and Minerva Rosa will not have to pay back the money they received because they had no role in the determination that unauthorized payments were being made to certain employees and these employees did provide “valuable services on behalf of the authority.”

The five employees involved will not have to pay back the six, $500 payments issued to them last fall which totaled $15,000.

Earlier in the year when the UCUA board discovered Sullivan had been handing out the stipends, the board put an immediate kibosh on it. The board also decided to hire a consultant to look into the matter because of the tax issues involved, which was expected to only take several weeks.

However, weeks ran into months and one board member grew frustrated in May with the delays and said so.

“It’s like a train run awry. It just keeps going and going. We need the facts. We need to understand what is going on,” said UCUA board member

Edward Jackus, demanding answers as to why this fact-finding mission was taking so long and costing so much money.

The fact-finding committee, comprised of several UCUA board members, also involved UCUA 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.

There were also additional costs incurred by other legal team members, which in the end came to a total of $82,000.

At the time Bauch insisted the reason things were taking so long was because the entire issue was “complicated.”

While Sullivan has remained closed mouthed about why he authorized the stipend payments without UCUA board approval, he did speak out in February when the board was still debating how to handle the situation.

At the time Sullivan told LocalSource he was disappointed that neither he nor Brennan had the opportunity to present their side of the issue to the board.

He also did not believe he did anything to “shake the faith” the UCUA put in him two years ago when he was appointed executive director.

Aside from the stipend payments, Sullivan was given a pay increase when he assumed the duties of the Union County Improvement Authority executive director, as did UCUA employees Brennan and da Silva.

In February 2011, New Jersey State Comptroller Matthew Boxer reported transparency was lacking at local authorities and commissions. He indicated at the time that only 3 percent of New Jersey’s independent local authorities and commissions post financial reports on the internet and more than a third did not operate a website at all.

“When you have so many different government units spending public dollars, it becomes difficult for even the most attentive members of the public to monitor how their money is being spent,” Boxer said. “Too often the public never hears about these local agencies until scandals unfold. But we pay for these agencies every day when we pay tolls, when we pay our water bills and when we pay our property taxes.”

Out of 587 local agencies, only seven satisfied all transparency measures.


CORRECTIONIn a previous version of this article, LocalSource incorrectly stated the amount of money recovered by the UCUA as $36,000. The utilities authority recovered $21,000, of which $15,000 was recovered from Dan Sullivan, and $6,000 from Thomas Brennan. It is the policy of this company to correct all significant errors that are brought to the attention of the editor. If you believe that such an error has been made, contact Regional Editor Patrick Bober at pbober@thelocalsource.com, or call 908-686-7700.