Mayor Andre Sayegh’s controversial sewer reforms lead to a laundry company being overbilled $500,000 in sewer fees, according to a claim notice filed with the city.
Brite Services, operators of Star Laundry, claims the city issued the excessive bills based on incorrect water usage invoices.
Star Laundry operates out of three buildings at 436 East 16th Street. Its complaint states the Sayegh administration breached an “implied contract” engaged in “fraud and conversion.”
Brite Services filed the claim notice, dated October 27, 2020, to seek a resolution to the excessive sewer bills.
The claim notice indicates Brite Services paid the excessive amount.
“My client would prefer to resolve this matter amicably, however, he is prepared to file suit in New Jersey Superior Court, if necessary,” wrote Paul Weiner of the Coughlin Duffy law firm, attorney for Brite Services, in the claim.
Sayegh has been criticized for his botched sewer reforms that resulted in property owners getting hit with large bills.
As recently as Monday, councilman Alex Mendez described the mayor’s sewer reforms as robbery. He said the Sayegh administration was “robbing” property owners through the reforms.
“We were definitely robbed. We are owed money,” said Yaakoub Hijazi, owner of Star Laundry.
Hijazi said the amount is much higher than the figure mentioned in the October claim notice. He estimated the excessive billing in the neighborhood of $900,000 to $1.5 million.
His firm has been operating in Paterson for 14 years. He has 400 employees, mostly Paterson residents.
Hijazi said the issue remains unresolved. He tried to resolve the issue with the city, including by trying to meet with the mayor.
“But as soon as we get there, he would cancel the meeting and send in his crew that basically tells you everything you don’t want to hear,” said Hijazi. “To get a response from the city of Paterson takes forever.”
Hijazi has been operating at 25 percent capacity because of the pandemic. The excessive billing by Paterson has not helped the situation.
Three months ago, the city struck a settlement with St. Joseph’s University Medical Center to resolve a claim that it overbilled the hospital by $1.8 million.
Sayegh hasn’t fully rectified the problems from the sewer reforms. He could not immediately be reached for comments on Wednesday morning.
Acting finance director Javier Silva earlier in the month said there was a surplus in the sewer utility. The city’s governing body passed the sewer reform measures to collect just enough in revenues to make the sewer system self-liquidating rather than to build surpluses for the city.
Sayegh changed the sewer billings and linked it to water bills. He also sent out a one-time bill, that some described as a money grab, to raise $3 million to plug a hole in the budget. Members of the City Council have publicly said Sayegh and his then-chief of staff Kathleen Long, now business administrator, misled them during the sewer presentations.
Council members have talked about rescinding the sewer reform measures over the past months, but haven’t taken any concrete actions.
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Updated 2:02 p.m.
