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Settlement draws criticism

Belmar residents say it highlights lack of transparency

By Patrick Farrell

BELMAR — A lawsuit settlement for close to $1 million between the borough and Partner Engineering and Science, Inc., is drawing criticism from residents, who say the settlement highlights an ongoing lack of transparency between the borough council and the public.

Borough officials maintain the $925,000 settlement was a victory for Belmar, but concerned residents are questioning why a settlement for such a significant amount of money was never addressed publicly by the mayor or council.

origin of settlement

When the borough’s former engineering firm, Birdsall Engineering Group [BSG], filed for bankruptcy in 2013, the borough was left with an unpaid balance of over $1 million owed to the firm.

On June 21, 2013, another engineering firm, Partner Engineering and Science, Inc., [PES] purchased BSG’s accounts receivable and other assets at a discounted price, and as such, the borough was on the hook to pay off its outstanding debts.

At the time, the borough’s outstanding balance owed to BSG amounted to about $1.3 million.

That amount was never paid by the borough, and as a result, PES filed a lawsuit against the borough seeking payment of the outstanding balance in addition to interest totaling $1.8 million.

Both Mayor Matt Doherty and borough administrator Colleen Connolly said the reason the outstanding balance to PES was not paid prior to the firm filing a lawsuit against the borough stems from the fact that PES purchased BSG’s accounts receivable at a discounted price.

Mayor Doherty and Ms. Connolly said considering PES had paid a discounted price for BSG’s books, it was their hope that the Borough of Belmar would only be liable for a portion of the amount originally owed to BSG.

CONCERNS RAISED

At the borough’s last council meeting on Tuesday, March 3, resident Joy DeSanctis stood before the council and inquired as to why a $925,000 payment was made to PES on Feb. 17.

The payment, tucked between two payments for $254.42 and $595 on the borough’s bill list, had yet to be addressed publicly by the council, and Ms. DeSanctis asked what exactly the payment was for.

Ms. DeSanctis attempted to individually question each council member regarding the payment, however, the officials on the dais to ultimately respond were Council President Brian Magovern and Mayor Doherty.

“I was waiting very patiently for someone on the council, or maybe the mayor, to address it, and no one has,” Ms. DeSanctis said. She then asked Council President Magovern if he knew what it was for.

Councilman Magovern said “off the top of his head,” he was unsure of what Ms. DeSanctis was referring to.

Mayor Doherty explained that the borough attorneys had saved taxpayers around $400,000, to which Ms. DeSanctis responded, “How come nobody knows about it?”

The mayor said it was on the bill list, and he was sure Ms. Connolly had spoken with each council member individually regarding the settlement, while Ms. DeSanctis continued to ask why no mention had been made.

AFTER THE MEETING

Some residents believe council members may have been uninformed of the settlement, and after hearing the comments made by Ms. DeSanctis, the council went back and added a resolution to approve the settlement that never originally appeared on the meeting’s agenda.

The agenda posted on the website, as of yesterday, lacked any mention of the resolution for the settlement, and additionally, a copy of the adopted resolution says the date it was adopted was March 4 — a day after the meeting. Mayor Doherty and Ms. Connolly attributed the wrong date to a “clerical error.”

“Everything should be dated March 3,” Mayor Doherty said. “If by some reason it’s dated March 4, it’s a clerical error — it is not a conspiracy.”

Ms. Connolly said it was a simple mistake, and that the agenda printed for the meeting was different from that offered on the website.

On the borough’s official website [belmar.com], a document labeled “additional resolution” is linked next to the agenda. Those skeptical of the council’s actions believe it was added following the meeting, something Mayor Doherty and Ms. Connolly adamantly deny.

“It was obvious that none of the council knew anything about this $925,000 on Tuesday night,” resident Dave Schneck said, calling the settlement agreed “a fraud.”

“In my opinion, they came up with that [resolution] the day after Joy [DeSanctis] brought it up at the meeting,” he said. “If anything, they should have come clean and said we spent this money, and there was an oversight. In this case, it looks like they’re trying to pull wool over our eyes and pretend they passed a resolution they didn’t have [on the agenda].”

Mr. Schneck said two things specifically led him to believe the resolution was not voted on.

First, Mayor Doherty made no reference to the resolution when answering Ms. DeSanctis’ inquiry at the meeting, and second, Councilman Magovern seemed “completely surprised” when asked about the money.

“He had no idea what she was talking about,” Mr. Schneck said. “If he was looking at it in front of him on an agenda, or had voted on it prior, he would have known.”

Resident Ted Ehmann said the way the settlement was handled, he was led to believe the council had little input on the borough’s decision-making.

He said in Belmar’s strong mayor, weak council form of government, it is the council’s obligation to investigate the administration.

“When you relinquish your responsibility as a council person, because basically you trust what’s going on at 601 Main Street, this is what happens,” Mr. Ehmann said. “As somebody who’s had his nose in the bills paid and has been doing this since the fall of 2012, this is commonplace.”

Mr. Ehmann noted the settlement money had been paid already, and as such, the resolution did nothing more than memorialize a payment that had already been made.

In past years, he said, former councilman Jim Bean would have enacted what came to be known as “Jim Bean’s rule.”

That rule, according to the former councilman, is he would refused to vote on “anything where the work is already done because his wouldn’t count anyway.”

Mr. Bean said in this case, he believes the council backpedaled to pass the resolution, and said he is not surprised no council members mentioned, nor questioned, the settlement, prior to Ms. DeSanctis’ inquiry.

“‘It doesn’t amaze me at all,” he said. “It’s par for the course.”

“This is another reason why it’s important to have council members that have to answer to the public, not the mayor,” Mr. Bean said.

COUNCIL INPUT

Councilman Magovern later said he was in fact aware of the settlement and the resolution, and he had it on the dais with him at the meeting.

“I must have known about it, and I really can’t say for sure, but I probably knew about it about a week to 10 days before the last council meeting,” Councilman Magovern said. “The reason I know that is because whenever the settlement was reached, I happened to be in the [borough] office.”

The councilman said when Ms. Connolly told him about the settlement, “she was very upbeat about it, because she felt as if [Belmar] got a good deal.”

“She was glad we didn’t have to go to court over it, and glad that we got a settlement,” he said. “I don’t think there’s anything sinister here. We didn’t brag about it, and we didn’t advertise it, but no matter what, we got a great deal with the company.”

When reached for comment, other council members agreed the settlement was a good deal for the borough, but could not comment on the specifics of the settlement, or the resolution.

Councilwoman Jennifer Nicolay said she “did not know offhand” when she was first briefed on the settlement with PES by Ms. Connolly, and as such, it would be hard for her to comment.

She noted that she thought Ms. DeSanctis’ comment was directed at the bill payment, not a resolution, saying only “I knew that in the end, we paid a lot less than we would have.”

Councilwoman Janis Keown-Blackburn directed all questions toward Mayor Doherty and borough attorney Michael DuPont.

“I haven’t looked at every specific little word carefully enough,” Councilwoman Keown-Blackburn said. “I like to go over things three or four times, and I haven’t had a chance to look over it three or four times.”

When asked if she had voted to approve the resolution despite that, she declined to comment, saying only that she was “comfortable with what [the council] did the other night.”

Councilman Tom Brennan confirmed the council had been informed of the settlement, but did not say specifically when, and he called the settlement “a win-win” agreement between the borough and PES.

“I think Colleen Connolly did a really nice job with the attorneys negotiating down,” he said. “They saved us a lot of money.”

Addressing those skeptical of the settlement, Mayor Doherty said “the implication that somehow there are secret meetings a day after a council meeting is as ridiculous as the people who are proposing it.”

“This is the fantasy of people who wear aluminum foil hats,” he said. “Why would anyone come up with a conspiracy to hide the fact that they saved taxpayers $400,000?”

*Reprinted with the permission of the Coast Star.

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This document was created March 4 at 8:56 AM:

Still think I’m “wearing a tin foil hat”?  You can get “document properties” and see for yourself.

Resolution “adopted March 4”:

Check was cut February 17:

“CC” is Colleen of course, but can anyone tell who the other signatures belong to?