Will true cost to ratepayers of $1M PMUA 'giveaway' be $10 million?

Magic 8-ball reconsiders.

Is it possible that decisions of the new majority of Plainfield Municipal Utilities Authority (PMUA) commissioners (Malcolm Dunn, Cecil Sanders and Alex Toliver) can already be set to cost Plainfield ratepayers $10 million?

In addition to the $1 million cash settlement giveaway to former execs Watson and Ervin?

That is what I was told over the weekend.

Here's the story.

The Plainfield Municipal Utilities Authority is one of 72 members of the NJ Utilities Authorities Joint Insurance Fund (see website here and the umbrella Municipal Excess Liability website here). Or, at least it was -- until the JIF got wind of the shenanigans with the PMUA.

Joint Insurance Funds are a kind of shared service whereby many entities in New Jersey -- from local municipalities to county governments to other governmental and quasi-governmental agencies -- pool their insurable risks (whether worker-related, liability related or administrative-related) to save taxpayers and ratepayers money by 'self-insuring' as opposed to going into the open commercial market for insurance.

I am told that the JIF has gotten very nervous about potential exposure through the goings on at the Plainfield Municipal Utilities Authority, especially with regard to actions of the Commissioners, and has 'kicked them out'.

What is not clear is whether the PMUA has been removed from the Directors and Officers rider ONLY, or from the JIF ENTIRELY.

Removal from the Directors and Officers coverage would expose each and every Commissioner to the possibility of liability lawsuits for a variety of actions taken by the Board of Commissioners (for instance, terminating an arbitration proceeding improperly and making a settlement offer to former executives who had previously voluntarily resigned).

Expulsion from the JIF entirely would cast the PMUA on the tender mercies of the commercial insurance market, and that is where I am told the $10 million figure arises. Would that be an annual premium? I don't know anything about insurance rates, but this does not sound to me like a believable number; perhaps an extra zero or two has been inserted into the figure?

Quite an unhappy outcome for turning bulls loose in the china shop, and quite a mess for the Commissioners to take up at their Tuesday meeting.

On the other hand, trouble with JIF could explain why insurance mogul Gary Taffet of Reliable Insurance Group LLC in Woodbridge would care to contribute to Tracey Brown's city council campaign fund. (As an aside, Reliable is already the Board of Ed's insurer, and has been blocked from being named by the Robinson-Briggs administration as a city insurer because of the Council's resistance over there being no public bidding of the contract.)

Meanwhile, Mayor Sharon Robinson-Briggs, with an exquisite sense of timing, has resubmitted her nominations to the Council, giving Dunn sidekick Cecil Sanders a full seat (he is currently an alternate) and former Councilor and Mayor Harold Mitchell an alternate's seat (he is currently the chairperson).

Watch your pocketbooks, ladies and gentlemen.

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TUESDAY, JUNE 12 TRIPLE-HEADER

6:00 PM
Plainfield Municipal Utilities Authority (PMUA) Commissioners
127 Roosevelt Avenue (Corner of East 2nd Street)
Parking in PMUA lot or on the street.

7:30 PM
City Council Agenda Session
City Hall Library
515 Watchung Avenue
(Parking and entry in the rear of building)

8:00 PM
Board of Ed
PHS Conference Room
950 Park Avenue
(Parking in school lots or on street)

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• Websites --
• "NJ Utilities Authorities Joint Insurance Fund"
• "Municipal Excess Liability JIF"

-- Dan Damon [follow]

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