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
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
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

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