Breaking News: Council reverses its direction. It has now decided not to obtain a forensic evaluation of why/how over a period of years the Township had given many employees what appears to be more than $1M in health waiver benefits for which they were not eligible. Twice in the Fall of 2016, Council had unanimously directed the Township Manager to contract with the Township auditor (Bowman & Co LLP) to conduct a forensic analysis to determine how and why the Township had made those unauthorized payments.(See for example this Record story September 7, 20216 click here).
But on January 17, 2017 – when the fact that the Manager had not made the mandated arrangement with the auditor to conduct this analysis was raised by Councilman Alan Sohn – Council voted to tell the Manager not to proceed to obtain the Auditor’s analysis. Councilman Sohn asserted during the meeting that this decision amounted to a “coverup”.
The Friday January 27 Record’s print version ran this story on this reversal click here.
This video provides the complete 15 minute Council discussion and action on Tuesday January 17, 2017. Indeed, this video of the 1/17 discussion demonstrates that the Manager had not yet acted on the Council’s direction. Scroll down to a video of the two previous Council discussions where Council specifically authorized the Manager to proceed to arrange for the probe (9/6 and 11/14, 2016).
The initial arguments made by Council members on 1/17 for not proceeding wed two factors. 1) Cost: The Manager said that the verbal estimate of the cost of the waiver payments analysis was $7-10K; and 2) Concern that the results would lead to seeking recovery of the improperly awarded funds from the employees who had benefited – likely in some or all cases unwittingly. The arguments in favor of not proceeding were variously constructed but their force was “Why do the analysis – and spend the $7-10K – if the Council is not going to sue employees to recover the illegitimate payments?”. Sohn argued that the Township needed to know what had happened in order to be certain that corrective action had been taken and to be assure effective measures would permit subsequent occurrence. (Sohn, it should be noted, had never suggested suing the employee recipients; in fact, the suggestion that recovery from employees would be the post-probe remedy was originated in this discussion by other Council members.)
As seen in the video, the initial vote to drop the probe did not attract the needed 4 votes. The Mayor then sought to get one of two Council people who had abstained to change his vote. In the second round of voting, the 4-1-2 vote, again on a motion by the Mayor, succeeded. Councilman Sohn then moved that there be a 3rd vote – this time to have the probe proceed but doing so with the proviso that the Township would commit ahead of time not seek to recoup the payments from the employees. That vote again was 4-1-2 with no change among any of those voting. No explanation was offered as to why – if the concern had been about recouping and litigating against employees – no Council person changed their vote when “employee recovery” was specifically excluded. The Mayor quickly closed down discussion of the issue as the third and final vote total was announced.
Background: On September 6, 2016 Council had instructed the Manager to add into the assignment given to the Township auditor (Bowman and Co. LLP) for this year a forensic analysis to find out how many Township employees had received health waiver payments improperly, and, for each, the duration and size of the payments. It is currently unknown just how much money ($) had been expended in “unauthorized payments”. Also, it is unclear how or why the Township’s HR and financial and legal review systems had failed to “catch” this major $ mistake. (It should be noted that the Township had, in the Spring of 2016, lost expensive litigation initiated by North Jersey Media Group (The Record) when the Township had denied the Group’s Open Public Record Act request. The Township defended its OPRA denial of the media group’s request about these waivers. However, Assignment Judge Bonnie Misdol’s decision (and its documentation) ruled against the Township on all its claims on the same day she heard the case. The judge’s judgement also required the Township to pay the attorney costs incurred by the media group. Click 5-17-2016 Mizdol Decision on waiver OPRA redactions .
Then on November 14, 2016 Council reaffirmed its commitment finding out what had happened and why when it unanimously instructed the Manager to have Township auditor Bowman conduct this forensic analysis. The occasion of this November decision was in connection with an administration-generated resolution to Council to again hire Bowman as its auditor for 2016. In that discussion, the Manager explicitly said he could include the instruction and resources to do that forensic analysis within the structure of the contract he had already proposed for Bowman’s work (Resolution 260-2016). That resolution was unanimously passed by Council that same night – November 14, 2016. But not a public word about it had been spoken again until the 1/17 meeting. Click here to see the Bowman contract resolution.
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Other News you need to follow: As of September 5, Teaneck’s website’s “Ordinance list” – and the website’s “minutes” packet for April 5, 2016 – both include the words “Effective May 6, 2008” at Section 1 e (1). of the Town’s new health care waiver Ordinance 4-2016. Indeed, TTT had found no website copy of this ordinance (whether draft or final) where this effective date does not appear. The deleted words are now shown as deleted.
Unfortunately, however, the deleted change to the ordinance is STILL IN ERROR. The Council took a formal roll call — as it must do to amend an introduced ordinance. It did NOT amend it by voice vote as the official ordinance history now says it did! And why has the clerk inserted this erroneous statement about the amendment process into the formal ordinance where it clearly does not belong? Please check out the discussion and video below
Background: Remember on March 22 Council had specifically told the Township Attorney to REMOVE those specific words – because Council wanted first only to address the present and future – not to try to remedy whatever its policies and failed practice had cost us since 2008. But Council clearly did not want to exonerate – cover over – everything since 2008 as the words “effective since May 6, 2008 would convey.
However, the attorney did not take out those words when the ordinance was presented for final hearing and passage on April 5. Indeed, he said that he & the Acting Clerk agreed that Council had not directed the words to be removed. That is not how any member of Council remembered it!
In the 14 minute video below is found every word uttered by the Council and the Attorney on April 5 2016. It turns out that Council 
unanimously remembers that it had directed the removal of “effective May 6, 2008”. Indeed, you will hear Council conduct two roll calls – first to declare their purpose and then second formally to amend the faulty ordinance it had been presented. Incredibly, the Acting Clerk had prepared minutes for approval in the September 6 2016 meeting that obscure the Council’s action. One assumes Council will now – with a revised ordinance finally on the website on September 6 direct that both the minutes and the ordinance be corrected. The question is – why are the attorney and administration fighting so hard to include these words or to minimize the formality of the Council’s amendment process?
Recent Record stories on waiver policy:
click top line below for full story
The Record, August 18, 2016 Local – Page 1
- By MARY DIDUCH STAFF WRITER
Teaneck not clear on cost of its error
What the Record said after the April 5 meeting —
Yep – the Record thought the “effective May 6, 2008 wording was gone! see line in bold red type below
April 7, 2016, 2:42 PM Last updated: Thursday, April 7, 2016, 3:02 PM
Teaneck formalizes policy for paying employees who opt out of health coverage
By MARY DIDUCH
STAFF WRITER |
The Record
TEANECK — The Township Council has formalized how it distributes stipends to employees who opt out of health insurance through the township, saving the township around $280,000.
The ordinance, which the council adopted unanimously on Tuesday, would pay a township employee who receives health insurance elsewhere 25 percent of the township’s savings or a maximum of $5,000. Employees who waive coverage also must certify that their alternative coverage is not through a public program — such as the State Health Benefits Program, which Teaneck uses as its provider or a similar one for public school teachers.
Mayor Lizette Parker was absent.
The payments are allowed under state statute as a means for municipalities to save money by paying a stipend in lieu of more expensive health care for some employees. In 2014, the township spent close to $400,000 on the payments.
The new ordinance would lower the total amount that the township spends on the stipends to around $118,000 a year. Rupp said last month that 27 employees currently opt out of health care coverage through the township.
In Teaneck, the payments came under scrutiny over the summer when an audit of the township’s 2014 finances found that 17 employees received the payments improperly. The employees also were paid varying amounts depending on when they signed up for the incentive payments. Though the issue uncovered by the audit has been fixed, the township discovered earlier this year that 18 employees were paid the stipends even though they did not qualify for them.
Before adopting the measure, the council removed the words “Effective May 6, 2008,” from a portion of the ordinance that details when the township first authorized the payments. (emphasis added)
When the measure was introduced, on March 22, the council asked Township Attorney William Rupp to remove references to dates that explain the history of the payments. Before it was introduced, the ordinance included one reference to the May 6, 2008, date plus two clauses referencing a date in 2010 when the state statute permitting the stipends was changed.
Some residents on Tuesday questioned why the 2008 date was still included in the ordinance given the council’s request. (The two clauses referencing the 2010 had been removed.) Some council members also noted that they asked on March 22 that the references to the dates be stripped from the ordinance.
Rupp said that the ordinance presented Tuesday reflected what the council had requested.
The removal of the dates could be significant if the council tries to recoup any money that was paid out improperly. On that date in 2008, the council passed a resolution authorizing the stipends. But resolutions expire when councils change, as Teaneck’s does every two years, and there is a township ordinance that appears to prohibit the payments. Some residents and council members have pointed to that ordinance as proof that the township never should have administered the payments to begin with.
Rupp said at the March 22 meeting that the council had not acted illegally when it approved the stipends. But he also said that by removing the date from the new ordinance, the council is “essentially leaving in limbo everything that has occurred prior.”
A resident, Art Vatsky, on Tuesday called for the township to recoup any money that it had paid out to employees improperly.
“It was improperly distributed — our money, my money, your money — and there should be no question that that money should be returned back to the people whose money it is,” he said.
After the meeting, Rupp said the council has been discussing in closed session whether it could recoup the improper payments from employees. He said that a decision has not been reached.
Email: diduch@northjersey.com
