The needler in the haystack.

Tuesday, December 27, 2011

PMUA's special meeting Wednesday may settle severance dispute


Calculation of former execs' severance is tied  to their compensation
(here from 2009 public records).
Commissioners of the Plainfield Municipal Utilities Authority (PMUA) are set to hold a special meeting Wednesday, December 28 (tomorrow), at 6:00 PM at the agency's headquarters, 127 Roosevelt Avenue (corner of East 2nd Street).

This is the meeting originally proposed for December 21, for which a quorum could not be gathered, I was told.

It is expected the Commissioners will immediately go into executive session to consider settling the severance dispute with former PMUA executives Eric Watson and David Ervin.

You can find my full report on the issues and the proposed settlement here.

Rumor has it that Watson and Ervin are willing to settle for $775,000, quite a knockdown, but still questionable.

Whatever one thinks of that kind of settlement (you have to ask what the Commissioners were thinking in the first place to agree to the contract the two were given in 2010), there are said to be other features guaranteed to enrage ratepayers --

  • Watson and Ervin, whose last working day was 6/30/2011, want their separation date reworked to be 12/31/2011;

  • Watson and Ervin would like a specially crafted 'tax-friendly' settlement;

  • Watson and Ervin want the PMUA to pick up their legal costs, said to be $80,000 for their attorney and $15,000 for the mediator;

  • And finally, a plaque honoring their contributions to the Authority to be put up at the PMUA Headquarters building.
Whatever action the Board takes at its special meeting, the question remains open whether ratepayers will complain to Gov. Christie about any excesses.

Gov. Christie has raised a ruckus over the past year with several authorities, vetoing the minutes of actions taken (effectively undoing any settlements and other payments or contracts), and publicly pressing for the resignations of some commissioners and having a say in their replacements.

The PMUA Commissioners have to be nervous about this one.


-- Dan Damon [follow]

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3 comments:

Anonymous said...

IN DAYS OF YORE HIGHWAYMEN HAD THE COMMON COURTESY OF WEARING A BLACK MASK SO AS TO IDENTIFY THEIR PROFESSION. TODAY, THEY SIT ON AN ELEVATED PLATFORM DISGUISED IN BUSINESS SUITES AND WHEN THEY HEAR DISCORDANT COMMENTS FROM THE PUBLIC THEY REDUCE THE TIME ALLOCATED FROM PUBLIC COMMENTARY FROM 3 TO 2 MINUTES. WHEN THEY CHOOSE NOT TO ANSWER AN EMBARRASSING QUESTION, OR DO NOT KNOW THE ANSWER. THEY HAVE THEIR VOLUBLE ATTORNEY MAKE A REPLY ON THEIR BEHALF. SEVERAL OF THE SAME TEAM THAT MADE 5 TRIPS TO FAR AWAY PLACES FOR "EDUCATIONAL' BENEFITS IN 2007 IS MEETING TO DETERMINE WHAT THE MAGNITUDE OF THE "SETTLEMENT WILL BE FOR THE EXECUTIVES WHO RESIGNED LAST JANUARY SHALL BE. WONDERFUL. WHAT IS THE BASIS FOR THESE CLAIMS? THE EXECUTIVES HAVE ALREADY RECEIVED ALMOST A YEARS PAY FOR UNUSED SICK, VACATION AND PERSONAL DAYS. IT APPEARS MORE AND MORE UNLIKELY THAT THE PMUA WILL EVER BE REFORMED OTHER THAN THROUGH DISSOLUTION.

Anonymous said...

Hello Dan,
Requesting a tax friendly settlement is questionable as it suggests structuring of a slightly different sort than Spitzer's well known structuring attempt. Watson would probably like the Authority to pay him over a period of years as doing so would reduce his total taxes paid given the amount he received each year would probably place him in a lower tax bracket than if he received a lump sum disbursement which would place him in a higher tax bracket and subject him to higher taxation on an overall basis. The Authority should not intentionally structure a payout to Watson so that he may reduce his taxes. I believe there are potential legal pitfalls for the PMUA if they were to engage in active tax structuring for Watson. Instead it would have been better for Watson to specify the payout terms of his settlement with him taking into account the beneficial taxation impact it would have for him.

Regarding Mr. Dunn and Mr. Sanders; both of them will vote in favor of Watson. And additionally both of them or their firms or firms the represented in the past have most likely benefitted from transactions with the PMUA and transactions that were entered into while Watson was the Executive Director.

Contact the Governor said...

This is absurd!

Office of the Governor
PO Box 001
Trenton, NJ 08625
609-292-6000