Mayor Glenn Cunningham said that the reason he terminated the financial advisor and a legal representative to the Jersey City Municipal Utilities Authority was not because of a controversial memo that the financial advisor wrote.
Cunningham said that he fired Financial Advisor Jay Booth and Attorney Elise DiNardo because of a disagreement in how the MUA would proceed with recently announced sewer connection fees that were implemented by ordinance in April.
“Jay Booth was trying to privatize the MUA, and [DiNardo] was going to make $2,000 on each of the connection fee contracts,” Cunningham said.
In April, the city passed an ordinance setting sewer hookup fees for developments. But developers of projects that had already been passed complained that they had not been aware of the fees when they applied to build, and they filed a lawsuit.
These connection fees were estimated to bring in $10 million to $15 million for the MUA, which oversees the city’s sewerage operations, in the next fiscal year. Most municipalities use these connection fees to raise revenue, and Cunningham said it was his idea from the beginning of his term to put them in effect. “I was the one who told them to do the hook-up fees,” Cunningham said.
Booth contends that Cunningham talked about scaling back the fees for developments already in progress after he spoke with his political allies. Those allies, Booth charged in a memo on April 29, are being paid $20,000 per month by developers to influence Cunningham’s decision in regards to those connection fees.
“When I advised you that your political directors [Joseph] Cardwell and [Bobby] Jackson were receiving at least $20,000 per month from the waterfront corporations mostly affected by these rate charges, you immediately alleged that you had no knowledge of this fact,” Booth’s memo states. “You also claimed that Bobby and Joe had not asked you to roll back these fees and charges.”
Cunningham denied the charges in the memo.
Along with the pending lawsuit, Cunningham said that the connection fees also affected some affordable housing projects, causing him to rethink how to implement them.
He said that he terminated Booth because Booth wanted to privatize the MUA and restructure the debt service.
The reason for firing DiNardo, Cunningham said, had to do with a provision she put in the connection fee ordinance that would have required a legal fee to be paid to her firm with each connection.
“That is a fee that is unjustifiable, to charge a developer for legal work that [DiNardo] is already contracted to do as a legal representative of the JCMUA,” said Bill Ayala, Cunningham’s chief of staff. “That is why the mayor supported the termination of both of them.”
DiNardo could not be reached for comment.
Booth said that the MUA is already privatized – the water delivery component of their operation is handled by United Water, a private corporation – and he denied submitting a formal proposal to restructure the debt service that was turned down.
“I was on the job for two months,” Booth said. “The termination was based on the unwillingness of professionals, myself included, to roll back the fees.”
The administration flat-out denied every accusation made in Booth’s memo.
As far as Cunningham is concerned, the connection fees will remain in place.
Ethics officer hired
Following the release of Booth’s memo to the press and the City Council last week, Cunningham put forward two initiatives attempting to give the public good faith in government. Those initiatives, carried out through by executive orders, called for an attorney in the corporate counsel’s office to be designated an ethics officer, and ordered all lobbyists to register with the city. Cunningham said that these initiatives were in the works since he came into office, and not a response to the allegations made in the memo. But other city officials argue that this is a fast-track response to those allegations, and should be done through a City Council ordinance rather than executive order.
Ward D Councilman William Gaughan said that an ethics officer is unnecessary because the city’s six-member Ethical Standards Board has the jurisdiction to make official ethics decisions already. “Here in [Cunningham’s] infinite wisdom, he might be trying to get rid of the Ethical Standards Board,” Gaughan said. “My point is that it’s creating an extra level of government that isn’t required.”
The board presently meets once a month. Ayala said that having an ethics officer in the Law Department would give city employees a resource to get an answer to a question without having to wait for the monthly board meeting.
“The Ethical Standards Board can hear complaints, conduct investigations, and have rulings,” Ayala said. “This [ethics officer] is solely available to provide advice.”
Designating an ethics officer follows the example set by the federal government and U.S. Marshals Service, Ayala said. He said that the ethics officer and the board are “two distinct entities without overlapping jurisdiction or authority.”
Gaughan disagrees, and believes that any advice offered by the ethics officer ultimately would have to be approved by the board.
Aside from the ethics officer, the issue of requiring lobbyists to register has also upset council members who proposed the idea more than a month ago. According to Gaughan, “Cunningham is trying to control the City Council by way of executive order.”
Gaughan has also called for an investigation into the claims about Caldwell, who serves as the chief of staff for County Executive Bernard Hartnett. “[The City Council] formally request an official investigation of the allegations leveled by Jay Booth in his memorandum,” Gaughan said.
“Jay Booth’s accusations have zero merit,” Ayala said.