Area May 23, 2012 THE VILLADOM TIMES II • Page 3 Suit: Village owes $4.4M in water fee refunds by John Koster The Village of Ridgewood is accused of overcharging the ratepayers of the Ridgewood Water Utility more than $4.4 million over the past four years. Attorney Joseph Fiorenzo, a former Wyckoff mayor who is representing Wyckoff, Midland Park, and Glen Rock, says Ridgewood owes Wyckoff $1,640,492, Glen Rock $1,049,165, and Midland Park $619,635 in over-billed water fees that were not necessary to cover expenses of the Ridgewood Water Utility. Fiorenzo said the money was used by Ridgewood to cover police and fire department salaries and other expenses not related to water supply. The recent 26 percent water rate increase in all four towns, Fiorenzo said, was not justified by the needs of the water company for water operations, but by the needs of the Ridgewood municipal government to cover other budgetary items. “Ridgewood has been bilking the ratepayers of Wyckoff, Glen Rock, and Midland Park by having the ratepayers pay for a substantial portion of the operating expenses of the Village of Ridgewood,” Fiorenzo said last week at a press conference in Wyckoff Town Hall. “In effect, the residents of Wyckoff, Glen Rock, and Midland Park have been subsidizing the Village of Ridgewood’s operating budget so that, during periods of economic difficulty, Ridgewood does not have to make the tough choices that all other communities make by reducing expenditures.” Fiorenzo said Ridgewood owes its own resident water customers a reported $2,475,300 because a substantial amount of the money collected in the form of water bills was used for departments outside the water company operation. Ridgewood Mayor Keith Killion, contacted separately, said he could not comment on the charges due to litigation. Glen Rock Mayor John van Keuren and Midland Park’s Bud O’Hagan were present at the press conference, but did not speak. Ridgewood Village Manager Ken Gabbert declined to comment at press time. Fiorenzo said Ridgewood had engaged in “sham accounting to artificially inflate the costs of the water utility and decrease the expenses of the Village of Ridgewood.” As the principal attorney for the three municipalities suing the Ridgewood Water Utility, Fiorenzo said that improper expenses, which water customers in all four towns had paid, included $2,413,737 for health insurance, $645,362 for the Ridgewood Police Department, $570,374 in municipal attorney fees, $435,995 for engineering, $189,864 for the police and paid firefighters’ retirement system, $180,600 for the fire department, and $29,996 for the consolidated police and firefighters’ retirement system, for a total of $4,465,928 for Ridgewood municipal expenses paid for by water bill fees, but not related to supplying water to customers in Ridgewood, Glen Rock, Midland Park, and Wyckoff. Fiorenzo provided specific numbers and details for a pattern that a Glen Rock official had noted when he went over the books with other officials from Glen Rock, Midland Park, and Wyckoff some months ago. Residents of the other three towns, reeling under a 21 percent water rate increase in 2010 and an added five percent increase in 2011, were astounded, they said, to see that substantial amounts of money from Glen Rock, Midland Park, and Wyckoff residential water bills had gone to subsidize Ridgewood expenses that were not part of the Ridgewood Water operation. Fiorenzo noted that the process appeared to have begun some time after 2007, when water rate increases no longer had to be justified to the New Jersey Board of Public Utilities. He implied that water rates for Ridgewood Water Company water before the last two increases -- the first new increase had been requested in 2009 and approved by Ridgewood Village Council in 2010 – were not part of the figures for what he said Ridgewood owed the water customers in the other towns. Since consumers in all four towns pay the same rate per gallon, the Board of Public Utilities did not have to sign off on the two latest rate increases in 2010 and 2011. Ridgewood, and only Ridgewood, had to approve the recent rate increases. Sources close to the investigation said the process started under a previous administration and stopped when Gabbert took over as village manager. Fiorenzo acknowledged, without mentioning Gabbert, that the use of water bill money to cover expenses such as the Ridgewood Police Department and Fire Department had recently stopped – which Fiorenzo said was a tacit admission of wrong-doing. Fiorenzo said he had a deposition from Ridgewood Water Company Director Frank Moritz in which Moritz reportedly said the Ridgewood Police Department provided only “limited” services for the water company, and that he had conveyed this opinion to then Village Manager James Ten Hoeve. Fiorenzo said he also had depositions regarding improprieties from other employees, not named, that suggested that water rate money had been diverted to other departments not directly involved with water supplied to the member towns even before the rate increases. “The whole system that they have initiated is basically a one-way street,” Fiorenzo said. The lawsuit against the Ridgewood Water Utility was initiated by Wyckoff, and Wyckoff Mayor Christopher De Phillips and Deputy Mayor Kevin Rooney were present at the press conference. Glen Rock and Midland Park joined the suit later. All three towns sent delegates to the last Ridgewood ordinance vote to argue that the increase in water rates was not justified. Defenders of the Ridgewood Water Utility have argued that Ridgewood’s water rates are comparable to those of surrounding communities and that the water quality is superior. Ridgewood uses artesian wells, many of which are located in the other member towns. The water utility operates offices in Ridgewood, and a testing center in Midland Park. The utility also sub-contracts water testing to other communities in northwest Bergen County, which produces an additional ratable for Ridgewood. No date has been set for the court case in which Ridgewood officials or their attorneys will answer the charges formally. Fiorenzo said that, since this was a civil action, no criminal charges were likely to result, but that serious wrong-doing had obviously taken place. Other officials declined comment due to the litigation.