Mayoral candidate and Councilman Mike DeFusco is calling for an independent investigation into the recent revelations that the City of Hoboken is carrying an $8.35 million liability to Suez Water for infrastructure repairs over the past three years, a sum that was not accounted for in any recent city budget, or listed on the city’s audit. Speaking about the liability at last night's City Council meeting, the city's auditor claimed he just became aware of the sum “yesterday” while the City's Business Administrator, Steven Marks, first was alerted of the presence of the liability “a year ago” but claimed to have not realized the extent of the debt until “a few months ago.” The liability came to light due to the administration's push for a new long term contract with Suez, seven years before the current agreement is set to expire, and the questions raised by DeFusco and other members of the City Council.
“This unbudgeted, previously unknown liability is a shocking display of either incompetence or obfuscation by the Zimmer administration and its Council allies Ravi Bhalla, who is a member of the Subcommittee on Infrastructure and Council President Jen Giattino, who is also a member of that committee,” said DeFusco. “It's difficult to believe that a publicly traded company would allow a liability to get so large over many years and not say anything to the debtor. This could amount to a 15% tax increase to pay off this unfunded liability, which would be a harmful outcome for our city.”
DeFusco has sent a letter (attached) to the State Department of Community Affairs, which oversees local governments, outlining the situation and requesting an official investigation.
At a previous meeting Councilman DeFusco revealed that Councilman Ravi Bhalla had a potential conflict of interest due to his work as a partner for a law firm that Bhalla has now admitted counts Suez as a client. The firm’s business dealings with Suez date back at least to 2014, which was the year Hoboken began negotiating the proposed new contract. Ravi Bhalla has since recused himself from Suez related discussions and votes.
“As further details come to light, it is becoming more and more clear that the root of this mess was Mayor Zimmer’s intent to try and take this debt off the books through a hasty and ill-planned restructuring of the city’s contract with Suez so she could claim a tax cut for residents going into an election year,” said DeFusco. “It’s not yet clear exactly when Mayor Zimmer became aware of this mounting debt, but her decision, and the willingness of her Council allies, to try to sweep it under the rug rather than publicly acknowledge and address the problem flies in the face of open and responsible government. We need a full and impartial investigation into this matter to determine the extent of the damage that has been caused and the costs that will be eventually passed onto taxpayers thanks to the Zimmer administration's actions.”