SMUA reorganizes with significant changes

Richard Ricco was replaced as chairman of the Secaucus Municipal Utilities Authority Monday in one of a series of moves that may spell the end of a decade-long multi-million dollar lawsuit. The moves, made at the Feb. 6 SMUA reorganization meeting, also may have demonstrated a flexing of political muscle from Mayor Dennis Elwell’s office. The SMUA voted to replace Ricco as chairman with Michael Atillio, a member of the SMUA for five years. Anthony Iacono, both an SMUA commissioner and the town administrator, was elected vice chairman. Richard Kellenberger, who was not present, was tentatively appointed secretary and treasurer, pending his accepting the appointment at the March meeting. Newly-appointed commissioner George Jensen was elected assistant secretary. “I have some big shoes to fill,” Atillio said in taking his new post as chairman. “Over the last five years since I’ve been on the board, Richie Ricco has taught me a lot.” Newly-elected Vice Chairman Anthony Iacono, who had differed with Ricco in the past on how to handle a multimillion dollar lawsuit (see below), said in a phone interview last week that the change of chairmanship was not a criticism of Ricco’s tenure. “This has nothing to do with how Richard Ricco did his job,” Iacono said. “For the last six years, Ricco has been an excellent chairman. But a new administration is in Town Hall, and this reflects that change.” Ricco has been credited with refinancing the SMUA’s $34 million debt and modernizing the authority’s business practices. Under Ricco’s tenure, agreements were forged that have lowered overall costs. Ricco, who has served as chairman since 1995, has staunchly opposed settling a multi-million dollar lawsuit with various contractors for work they did in 1989, claiming that settlement figures have been too low. The SMUA has been suing numerous contractors and insurance companies over the last decade in order to recover as much a $15 million in cost overruns from the upgrading of the Koelle Boulevard Sewerage Treatment Plant in 1989. In 1990, the agency’s executive director and chairman were convicted of bid-rigging in connection with the upgrade. The $15 million project eventually reached $30 million due to the overruns, leaving the SMUA to seek some sort of relief through the courts. Since then, the suit has dragged on, partly because many of the original contractors went out of business or were bought up by out-of-country concerns. Legal fees have exceeded $20,000 a month, and members of the SMUA have disputed the total amount expended throughout the decade. Early in 1999, Iacono angered some members of the SMUA when he openly condoned settlement and sought meetings with several of the litigants in order to further discus settlement options. Ricco, who opposed that move, has held out for the case to come to trial. But his position has been gradually losing ground as more and more members of the seven-member board shifted toward Iacono’s position. Several gadflies who have watched the SMUA case unfolding claim the change in leadership is designed to shut the books on the issue forever, thus leaving the public in the dark as to exactly what transpired during the 1989 scandal that rocked the town and the SMUA. Activist Tom Troyer – based on copies of legal depositions he’d read from the case – believes that other people were not charged in the scandal who should have been. “The changes made at the SMUA meeting are designed to seal the records of what really happened during that scandal and protect all the people who so far got away,” said Troyer, one of the early whistleblowers on the scandal. While estimates on the total cost of legal fees over the last decade have run as high as $3 million, the settlement offer given to the SMUA in July was about $905,000. Under this offer, the town would have to pay about $300,000 in outstanding contractor claims. Continuing negotiations would have the bonding company pay the town $905,000 as well as the $300,000, far short of the once projected $10 million the town sought when first filing the lawsuit. This does not include a related lawsuit by Joe Lynch, the former engineer for the SMUA, who sought millions in a claim that the SMUA had failed to pay him.