UCCF – 5/16/13

By John Bury | May 17, 2013

Police Activity:

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Leads to Romankow:

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Executive Session on Solar Panel Bust:

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Berkeley Heights Secession and a Modest Proposal:

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Kobitz and Hehl:

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Watchdog Motion:

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State Health Benefit Plan:

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LaCorte & DeFilippo & All Hell

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RC Basketball:

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6 Responses to “UCCF – 5/16/13”

  1. NFS says:

    The freeholders are really despicable. That Hudak saying that employees deserve some respect. How about showing some respect to the taxpayers he supposedly represents? Hudak is in an obvious conflict while his daddy, John Hudak, (esq.) collects pension and health benefits by working for Linden and Roselle, boosting his retirement pension, and doing a little side action with the UCIA.

    Can’t wait to see the solar scam minutes.

    A bunch of know- nothing, self-serving, arrogant jackasses.

  2. G. Albritton says:

    John Bury must hate being proven right all of the time, having warned the Freeholder Board time and time again for YEARS now that the taxpayers would be left holding the bag when the absurd financing of the DeCotiis-dictated UCIA solar-power venture fell apart. Well, it’s falling apart, and quickly too, right now. Invoking the OPMA exception for “attorney-client privilege/contract negotiations” for that Executive Session behind closed doors was almost certainly a phony pretext by the County Counsel and the Freeholders for what was actually furtive and desperate DAMAGE CONTROL. But they can keep the cap on for only so long.

    Every month now the Tioga LLC operating the UCIA solar system is required to come up with lease payments of $132,331.00 to deposit in the Revenue Account maintained with the Trustee for the $14 million in related UCIA bonds remaining outstanding. There is no way that the payments for the trickle of electricity generated and the pitiful SREC sales proceeds (estimated originally to represent 20% and 80%, respectively, of project revenues) are coming anywhere close to that number. Likely much less than half. So who’s making up the rest and who will be doing it long term, when the relentless debt service on those UCIA bonds totals $1,557,972.00 this year alone?

    Is the County contributing now? It could be or might be considering making such contributions under NJSA 40:37A-79 which statutory authorization could be abused by the Freeholders to subsidize their folly. Where is that $600,000 for the UCIA in the 2013 County budget going? But they can’t do it totally out of view since there is a requirement in the law for appropriation for and/or agreement with the UCIA, and that would require one or more resolutions.

    Is Tioga Energy, Inc. (the parent company of the cashless Tioga LLC operator) making up the shortfall on the side or could it be doing so under its $4 million limited guaranty? But wouldn’t a call on that guaranty first require the operator/lessee to default, and if so, wouldn’t that default be something that the UCIA and the County should be aware of and have disclosed?

    If there has not yet been such a default, and if Tioga Energy, the County and/or the UCIA for appearances is otherwise propping up the payments of the bonds, then the County will shortly have a decision to make – because the quiet prevention of such an event of default over the next year might cost the County $3,000,000.

    From the Official Statement of the UCIA for the Bonds dated May 4, 2011: “Provided there is no event of default by the Company…, the Guarantor has the right, exercisable upon at least thirty (30) days prior written notice to the Authority at any time after the third anniversary of the [Tioga Limited Guaranty $4 million] Guaranty Agreement [(which third anniversary is May 1, 2014)]to substitute a cash deposit in the amount of one million dollars ($1,000,000) to secure the obligations…. [Upon} the funding of such account by Guarantor, the Guarantor’s obligations under the Guaranty Agreement shall be satisfied by the funds in such account and the Guaranty Agreement shall terminate.” (See http://emma.msrb.org/EA463576-EA359222-EA755238.pdf — page 22)

    If for the sake of avoiding bad publicity the County and/or the UCIA somehow artificially prevents such a default by the lessee Company, or allows such a default to be prevented otherwise through May 30, 2014, they will almost certainly lose access to $3,000,000 in security, an amount that thereafter ONLY the County taxpayer’s guarantee would supply instead. Even a Freeholder Board accustomed to squandering millions on themselves should be very uncomfortable with the prospect of having to explain why they let that kind of money get away.

  3. Javagold says:

    Srec will wreck the taxpayers in 2014. Get answers NOW !!!

  4. G. Albritton says:

    It’s not too early to suggest a headline for the Star-Ledger or Westfield Leader story:

    “Union County Improvement Authority’s Mini-Solyndra Threatens County Taxpayers With Big Bill”

    Of course, the non-public Executive Session on May 16 was necessary since this story certainly can’t be allowed to break before the primary election on June 4, and maybe it can even be hushed up until after election day in November….

    BTW, in 2009 under Ordinance 695-2009 the County bankrolled the “preliminary costs” related to the UCIA solar energy program by loaning the UCIA $500,000, appropriating $25,000 and BORROWING the $475,000 balance of the funds so loaned. (The Freeholders might as well have just written the check directly to DeCotiis.) Having put up the money allowing the UCIA to get itself and the County into this mess in the first place, are the Freeholders now considering throwing good money after bad to get them out?

  5. bpaterson says:

    possibly now we know why the golf operations are being transferred to the UCIA. If there is profitability on this golf/banquet operation in the near future, the UCIA can commingle monies behind the scenes to keep itself afloat. Union county govt and the UCIA is exhibiting some desperation. As a note, back around 1997-98 the republicans in charge of the county govt at that time were noting golf operations were making $2-3 million a year profit for the taxpayers. Then the fake dems got in control and you know the rest of the story……

    Full detailed audits of cash flow must be done to see how financially shaky the county govt and the UCIA has become.

  6. G. Albritton says:

    Bruce, you are right and the degree of financial shakiness for the UCIA and the County overall may be an open question, but the financial failure of the UCIA renewable energy initiative has already been admitted. As the related Star-Ledger article quoted last September 30: “’We’re going to have to dig in to our own coffers to make the bond repayments,’ said Marc Roper, [Tioga Energy’s] vice president of sales and marketing.”

    How deep and for how long they will have to dig, and whether and when the County taxpayers will be invited to join them, remains to be seen. The UCIA and Tioga, and probably the Union County Freeholders, have the numbers and many of the answers but they aren’t saying. We might be able to figure it out ourselves but they have recently made it more difficult, if not impossible. In the September 2012 UCIA “final” report, the public was invited “to monitor the energy and production for the UCIA system by logging on to http://surepathprofile.tiogaenergy.com/entry.” But that webpage now requires a user name and password for access. What a surprise!

    It should not be forgotten that the Union County “Evaluation Team” who originally sold this deal to the UCIA and the County in 2010, and who selected Tioga Energy as the successful bidder (from a group of only one applicant), was comprised of all of the heavily self-invested insiders that should NOT have been involved, and NO ONE else: Birdsall Services Group, Inc.(the initial engineering consultants), DeCotiis, FitzPatrick & Cole, LLP (highly-paid UCIA counsel and bond counsel on the deal), and NW Financial Group, LLC (an affiliate of the bond Underwriters), each of whom earned very large fees going in and prior to anything at all being built. They also shared no risk themselves, except perhaps the risk that the project bond financing might not go through to generate a pot of money for their payment. Maybe that’s why for the several months prior to the May 4, 2011 closing of the deal, with the SREC market already falling further and further and headed below the prices they each knew were needed to sustain the longer term economics of the project, they kept their mouths shut, still pushed the deal forward despite the souring outlook, and collected big time at closing.