Water Industry News

Jersey City awards $1.1M bonus to United Water

March 03, 2005
By Earl Morgan
Journal staff writer

During an action-packed meeting of the Jersey City Municipal Utilities Authority, two rate increases were tabled, the board of commissioners reorganized itself and then approved a $1.1 million payment to United Water, despite the written objections of its financial manager.

The agency is running a deficit of approximately $27 million, according to officials.

The board also fired its senior counsel on Thursday night for reasons of "economy and efficiency," a move that drew a written protest from one commissioner.

One proposal on rates would have increased fees for water meters from the current $1.50 per month to $6 a month in one- and two-family homes. High-rise and multiple dwellings would have seen an increase from $376.25 per month to $1,304.36 per month.

A second proposed increase would have raised fees to connect to sewage lines from $850,000 to about $1.8 million. Both were tabled by the board.

George Kelly replaced Howard Jackson as the agency's chairman and Gerard Letezia, a recent appointee to the board, was elected vice chairman.

Senior Counsel Mark Curtis was given his walking papers after the board approved his termination, effective March 17.

Despite a memo against it written by Jennifer R. Bloom, director of administration and financial management, to Executive Director Tom Kane, the board approved a $1.1 million billing collection incentive bonus to United Water.

United Water manages Jersey City's water operations, including the city-owned reservoirs at Split Rock and Boonton. The company also sells Jersey City water to other municipalities.

Bloom's memo said that while she is prepared to abide by the commissioners' decision, there "were ongoing calculations by JCMUA consultants that would, in all likelihood, reduce the $1.1 million proposal."

Commissioner Janet Gaita voted against the $1.1 million payment, citing a forensic accountant's report submitted to the board that makes a number of allegations about the management of the city's water resources by United Water.

Among the allegations was that United Water diverted $1 million in water from Jersey City between 2000 and 2003 without compensating the MUA, a charge the company denied at the time, calling it a fabrication.

Rich Henning, a spokesman for United Water, called the forensic accounting document "an act of pure fiction on the level of a Disney fable."

Henning said questions about the formula used to determine the bonus structure and payment for billing collections have been raised by the authority and that meetings are currently being held to resolve the issue.

The MUA's general counsel, Elnardo Webster, declined to discuss the report.

"No one here will talk to you about this issue," Webster said at the meeting, when asked for further information about the report. "We are in negotiations with United Water and hope to reach an agreement with the company in 60 days."

Gaita also read a statement into the record detailing her objections to Curtis's termination.

"The decision to dismiss the authority's in-house counsel Mark Curtis is unconscionable," Gaita said. "Since being appointed a commissioner in 2004, I have observed Mr. Curtis in the discharge of his duties . I have rarely seen a more efficient and knowledgeable staff member.

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