Acting director in place at utilities authority
WMUA commissioners say executive director is focus of U.S. probe
BY KATHY BARATTA & TALI ISRAELI
Staff Writers

Kathy Leatherman, a longtime employee of the Western Monmouth Utilities Authority (WMUA), has been named acting director of the sewer utility.

Commissioners of the WMUA, which has its headquarters on Pension Road, Manalapan, confirmed last week that the FBI and the Internal Revenue Service are investigating Frank Abate, the authority's executive director.

Agents of the FBI and IRS converged on the WMUA's Manalapan headquarters and Abate's Marlboro home on July 25 and were later observed removing boxes, apparently filled with documents and records, from both locations.

The federal authorities would not say what was being sought.

The WMUA commissioners immediately announced that Abate was on a leave of absence and named Leatherman to head the utility.

The WMUA operates a wastewater sewage treatment plant, which provides sewage treatment service to 25,000 customers in Manalapan, Marlboro, English-town and part of Freehold Township.

The four commissioners, two each appointed by the governing bodies of Manalapan and Marlboro, said through spokesman Jeff Meyer that the authority itself was not the focus of the federal attention.

"The WMUA is not the focal point of today's search nor is the WMUA the target of the joint inquiry being conducted by the FBI and IRS. This inquiry is solely focused on the personal actions of Frank Abate, executive director for the WMUA. Effective immediately, the WMUA's Board of Commissioners has placed Mr. Abate on a temporary leave of absence, pending a formal meeting of the board," the commissioners said in a statement.

A special meeting of the WMUA board was called for Aug. 1.

Through Meyer, Abate said he had no comment on the developments of last week.

According to the statement, since August 2005, the WMUA has been cooperating fully with the FBI's probe of Abate, ensuring that the federal agency has all of the information it needs to complete its probe.

The statement said that the WMUA had retained a special counsel, Vincent Giblin, to represent the authority on this matter and that as recently as last week, the WMUA staff and commissioners were meeting with federal authorities to assist in their investigation of Abate.

The commissioners said, "Every document request has been fulfilled, every phone call has been returned and every meeting has been granted. We have been open and honest with the federal authorities and we will continue to do so. The commissioners take their responsibility to ratepayers seriously and they are deeply disheartened by this turn of events. The commissioners want ratepayers to know that today's events will have no impact on our ability to provide efficient and reliable sewer service to our customers."

On July 27, Meyer issued a press release announcing the interim appointment of Leatherman as acting director of the WMUA. Abate's employment status was expected to be discussed at the commissioners' special meeting on Aug. 1.

Prior to her appointment as interim director, Leatherman held the position of general manager of the WMUA facility.

The commissioners said, "Kathy's work experience and management background make her well suited to serve in the capacity as acting executive director. The commissioners have complete confidence in Kathy's ability to lead this authority."

According to Meyer, Leatherman is a 28-year WMUA employee. Meyer said Leatherman will work with the WMUA commissioners and senior management team, which includes the director of finance, plant superintendent, collections supervisor, maintenance supervisor and plant supervisor.

He said Leatherman will be responsible for managing the 55-member staff and overseeing the operation of the sewage plant that provides service to 25,000 residential customers. According to Meyer, the plant processes 5.5 million gallons of sewage each day. The facility is off Pension Road, behind the Englishtown Auction Sales.

The WMUA was in the news in 2005 when the authority raised its rates by 30 percent.

The commissioners and Abate were eventually called before the Marlboro Township Council in October to answer questions about the rate increase and the authority's finances.

Manalapan committeemen Andrew Lucas and Joseph Locricchio wanted to hold a similar hearing in Manalapan but were outvoted by the majority of the governing body at that time, William Scherer, Rebecca Aaronson and Drew Shapiro.

Lucas, Locricchio, Aaronson and Scherer attended the hearing that was held in Marlboro and participated in the questioning of the WMUA representatives.

During the October hearing, Marlboro's chief financial officer said that while he could not agree with every financial action that was taken by the WMUA commissioners, many of the ways money was spent came down to a philosophy of operating a utility.

Regarding the need for a rate increase, the WMUA commissioners attributed the authority's financial situation to a drop in the number of connection fees and to what they said was a significant increase in operating expenses, including employee benefits, chemicals, fuel and plant repairs.

Shapiro said he would not comment on any of the events that transpired at the WMUA last week. He said it would be inappropriate for him to do so.

Lucas said he toured the WMUA's new administrative building which cost $2 million to construct and has been the subject of public criticism. He said he was told that in a "post-9/11 world," the security of the WMUA's old building off Pension Road was insufficient for a facility which can on any day take in significant amounts of cash.

Lucas said he found no fault in the need for the construction of a new facility. As to other expenditures of the $7 million surplus, Lucas said he learned that instead of issuing bonds to pay for capital improvements at the treatment plant, the authority had instead relied on its surplus (i.e. savings) account.

Lucas said he found no fault fiscally insofar as the project spending was concerned, but said he thought more scrutiny should be brought to bear on the salary Abate receives, which exceeds $100,000 per year.

Locricchio said he and Lucas had been prepared to make another request for a hearing to be scheduled in September, but, said Locricchio, "With this latest development I guess we should wait and let law enforcement do its job."

Lucas said regardless of the developments of last week, he believes a public hearing should still be scheduled for the near future and continue to be held at least once annually. He said such a hearing would give residents a chance to meet the appointed WMUA commissioners and ask questions or acquire information that would make them better informed consumers.

Marlboro Mayor Robert Kleinberg said that since he became mayor in 2004, he has cooperated with federal authorities in their investigations of Abate.

He said he trusts that the recent raid of Abate's home and the WMUA headquarters will bring the federal authorities closer to bringing to justice anyone who may have "pilfered" from Marlboro taxpayers.

When asked what he thinks the FBI and the IRS agents were looking for last week, Kleinberg said he has no inside knowledge as to why the raids happened. However, he said he imagines that if the FBI raids someone's home and workplace, that person may have been involved in wrongdoing.