Council Calls for Scotch Plains Management Corp. to Stop Spending Money

The Scotch Plains Township Council passed a resolution Tuesday night strongly urging the special improvement district to suspend any further use of its funds and to halt any contractual obligations until the council can revisit the ordinance that created it in the first place.

After a heated hour-long conference session and an even lengthier debate in the council chambers, the council voted 3-1 for the measure, which essentially seeks to freeze a recent decision by the Scotch Plains Management Corp. (SPMC) to spend about $43,000 of its annual budget on hiring both a consulting firm and the treasurer's wife to manage the group's efforts going forward.

"The bottom line is that $43,120 out of a $62,000 budget sounds a lot like two-thirds to me, and it sounds like too much of taxpayers' dollars going toward salary and administration," Mayor Nancy Malool said. "It would be wise for the board to heed our resolution until we can figure out what to do to get back on track."

Malool also called for the SPMC to return the $400 assessment fees it was paid last year by local businesses, insisting that it's only fair since the SID hasn't been well-focused during its first two years in existence. Council members Kevin Glover and Dominick Bratti voted in favor of the resolution. Councilman Jeffrey Strauss opposed and Councilwoman Mary DePaola was absent.

The SPMC's Board of Directors approved the hiring of FirsTEAManagement and Lisa Schiller at its Jan. 27 meeting. FirsTEAManagement, an East Orange and Plainfield-based group that specializes in downtown development management and consultation, would be paid $1,250 per month, or $15,000 a year, to consult the SMPC on operating a special improvement district, while Schiller, the SPMC's previous promotions chair and the wife of Ted Schiller, the treasurer, would be paid $20 an hour for 20 hours a week, or $20,800 a year, to serve as the "face on the streets" for the group locally.

For some members of the township council, the problem lies in the fact that the SPMC hired two managers when it could have saved money by hiring just one. Councilman Dominick Bratti particularly took issue with the hiring of Schiller, calling her connection to the treasurer an "appearance of impropriety."

"We have to deal with perceptions just as much as whether there's an actual conflict," Bratti said during the council's conference session. "You should have seen the perception of conflict; you were told by the mayor and you ignored it. That's poor business judgment."

The debate during the conference session at times turned into a shouting match, with Bratti arguing that the SPMC's decisions "smelled funny" and with members of the SPMC accusing the mayor of trying to exercise her power simply because she's losing control of the group she helped create.

"You're not getting what you want, and that's the problem," Ted Schiller told the mayor. "You're telling us we're not capable of making our own decisions and that you need to make them."

The SPMC was legally established in 2008 as a self-governing entity that is supposed to be guided by the decisions of the board of directors, a group of local business owners all appointed by the mayor. Mayor Malool was integral in getting the SPMC started and serves as council liaison. The group, which is funded through $400 assessment fees paid by local businesses, is supposed to help boost business in the commercial sector. The SPMC points to the Memorial Day Music Festival and the creation of a TV show highlighting local businesses as some of its greatest successes from last year. Still, some argue that the group has gotten off to a slow start. Many considered the hiring of a manager the missing piece needed to get the group on track.

The township council approved the SPMC's budget in June 2009, which SPMC Chairman Jim Watson said included an allocation of $44,000 to cover all the costs of the manager position. With the hiring of FirsTEAManagement and Schiller, he said, the total comes to $43,120 (including office space and workman's compensation for Schiller).

"We budgeted $44,000 in June 2009. I don't understand why all of a sudden those are bad numbers," Watson said.

"Because you could get the same thing accomplished for $22,000 without office space or workman's comp," Malool said Tuesday night, arguing that the SPMC has broken several laws and ordinances because it suffers from a lack of knowledge on how to run a SID and that by hiring just FirsTEAManagement, they would have gotten the professional guidance they needed at a lower cost.

"The people who objected to the SID in the beginning didn't want to see money going down the rat hole," Councilman Bratti said. "I didn't think it would happen, but I was wrong. The perception is that businesses are paying an extra tax, and now it's going to pad someone else's pocket in town."

When asked during the conference session if she views her hiring as a conflict of interest, Lisa Schiller agreed that she could see the cause for concern given the fact that her husband is treasurer, but pointed out that he has offered to step down from that role and from the board of directors altogether if need be. Ted Schiller also noted that the entire board must vote before he writes any checks as treasurer and that he abstained from the vote on his wife's hiring and salary.

Councilman Strauss, the lone member of the council in favor of the SPMC's decision, argued that the council needed to stop sticking its "elected noses" into the group's matters.

"What we're doing as elected officials is substantially what we want them to do," Strauss said. "We want to establish control over them. It's encroaching upon the authority that was given to this independent organization."

Strauss, who attended the SPMC meeting when they voted to hire the two managers, said he didn't see anything improper in their actions.

"I see a group of people who are energized," he said.

Several local business owners also showed up to the meeting Tuesday night to defend the hiring of Lisa Schiller. Nick Losavio of John's Meat Market stated that he's been highly impressed with her work thus far.

"The last year was the first time I've seen something going," he said. "I saw someone have energy. Are we going to go back to where we were before, doing nothing? I think she did a fantastic job. She took control."

Former Councilwoman Paulette Coronato, also in attendance, advised the council to be careful passing a resolution like the one it approved.

"If the council starts getting involved in micromanaging, we may end up creating something we didn't want," she said.

Malool noted, though, that she's received several recent calls from residents and business owners commending her and the council for standing up to question the actions taken by the SPMC.

"I'm not a popular person here tonight, but that's ok," Malool said. "Instead of being accused of making decisions because it's what I want, it's supposed to be a partnership between the business community and the governing body, and I don't think that's what's going on here. The bottom line is that the SID is not going in the direction we wanted it to go."

Malool called for the SPMC to "get back to the basics": recruiting and retaining businesses and retaining pedestrian traffic.

"This council has an inherent responsibility to the SID to make it work," Councilman Glover said. "My vote on this is to get those communications going. … I firmly believe that this council, whether we disagree on certain points or not, we're all committed to improving the vitality in our downtown."

Still, members of the SPMC on Tuesday expressed fears that by passing the resolution, the council was "putting the brakes" on any momentum the group has already built in improving downtown.

"If we keep staggering," Chairman Jim Watson said, "We are going to whither. And if we whither, we are going to die."