State warned city not to build ‘Taj Mahals’ with borrowed $35 million before giving go-ahead | Paterson Times

State warned city not to build ‘Taj Mahals’ with borrowed $35 million before giving go-ahead


When the state’s local finance board granted the city’s wish to borrow $35 million and put down another $1.7 million in down payment in order to spend $36.75 million in repairing primary roads, it did so with a great deal of concern and on scanty information of on what much of money will be spent on, shows records of the board’s September 10th, 2014 meeting.

“It is a large amount of money that we’re talking about,” said Thomas Neff, director of the state’s department of community affairs. “The division had asked for the city to provide additional information about what the project costs were, how they were determined to be $36.75 million. And we recognize the infrastructure repairs that are needed in Paterson, but I don’t think we have a real level of specificity in terms of exactly what this money’s being spent on.”

Seven days later, some council members were scratching their heads as to what exactly the large sum would be used to purchase. During the vote adopting the ordinance to appropriate the monies needed to implement the plan, which will presumably result in the reconstruction of some 175 primary roads, council members sought information on the manner in which the roads were selected.

They were handpicked by the city’s engineer with little or no documentation. Nellie Pou, business administrator, stated there was no engineering report.

The city’s engineer, Fred Margon; bond counsel, Ed McManimon; acting finance director, James Ten Hoeve; financial advisor, Neil Grossman; and auditor, Fred Tomkins presented themselves before the board during the day of the vote that would allow the city to increase its debt by 35-percent.

McManimon provided a brief explanation of the plan to the board: where the down payment was coming and the urgent need the city has for better roads. “The City of Paterson has for many years essentially kicked the can down the road improvements and doing them on a spot basis,” said McManimon to the board.

Most council members, who were on the fence borrowing such a large sum, voted in the affirmative due to the condition of city roads.

Neff recognized the need, but added a condition to the application. The director recommended the board approve the plan, but that every contract that is associated with the project that is awarded must be approved by a state monitor. Erin Nedler, the monitor assigned to the city, would review each contract to “look to make sure that the contracts that are being let are being let appropriately with competition and that there’s some — that are projects that are being undertaken are reasonable and necessary.”

Even before the council’s vote residents and officials expressed concern on exactly what the money would be used for. Some suspected the entire amount would not go towards fixing bad roads, but some of it would inevitably be used for other things.

“We don’t Taj Mahals being built and stuff like that,” stated Neff. “It’s a verification from our staff to make sure that what’s being done is reasonable and necessary and not otherwise excessive for a municipality that’s receiving transitional aid.”

The director said the monitor would not only ensure the funds are expended on reasonable projects, but that proper procedures are followed during the contracting process when consultants and companies are hired.

Asked if the city was okay with the additional scrutiny, Ten Hoeve consented.