Questions on Sewer Authority's Powers, Role Arise After Corruption Scandal

A day after several local sewerage authority employees were arrested on corruption and theft charges, questions are arising about what exactly the local entity does for Cinnaminson and who’s in charge.

The authority maintains and operates the township’s sewer systems and protects local waterways from pollution, according to New Jersey statute. It operates semi-independently from other township bodies.

State statute requires that five commissioners serve as board members of the authority. Township committee appoints these commissioners, who serve five-year terms, parameters also set by state law.

The authority operates similarly to township committee; the township administrator, a full-time employee, runs the day-to-day operations, however township committee members have the final word in personnel and budgeting. 

Likewise, the sewerage authority commissioners have oversight, while the superintendent, a full-time employee, handles the day-to-day operations. Commissioners are appointed volunteer members who receive a yearly stipend of less than $2,000 a year. The superintendent, currently suspended, earned $89,904 in 2011, according to state records.

It was two of the authority commissioners, said Brad Smith, solicitor for the Cinnaminson Sewerage Authority, who discovered the misspending issues that recently came to light.

“Information was learned by two commissioners about a potential problem,” Smith said, referring to a backhoe that had been declared too broken to repair. Authorities now say sewerage authority superintendent Paul Phillips conspired with another authority employee to deem the backhoe inoperable and take it out of commission. In reality, the backhoe was in working order and was transported to the Poconos home of one of the suspects.

Discovery of the backhoe's status occurred in September 2011. Smith said he personally called each commissioner, advising them of the problem. The board conducted an initial investigation and in November, Smith decided to take the matter to the prosecutor’s office.

“The reason we didn’t go further into [it] is because we didn’t want to interfere with a potential criminal investigation,” said Smith.

All five commissioners agreed with Smith’s decision to call county authorities, the solicitor said.

The five commissioners on the Cinnaminson Sewerage Authority are:

• Thomas N. Kollar — appointed in 2011, term expires in 2015
• Robert W. O’Connor — appointed in 2007, re-appointed in 2012 through 2017
• David B. Stahl — appointed in 2008, term expires in 2014
• Richard C. Strobel — appointed in 2008, term expires in 2013
• Carmen Saginario — appointed in 2010, term expires in 2015

Cinnaminson Sewerage Authority is funded through billing customers. The authority’s current budget, according to Smith, is $3,917,070.

Revenue the authority earned from ratepayers from Feb. 1, 2011 to Jan. 31 of this year totalled $3,305,864.21. User charges and delinquent interest comprise the revenue, according to Smith.

Those arrested Wednesday include Phillips, the sewerage authority superintendent and a nearly 30-year employee who serves as the plant operator, and the assistant superintendent, William Yannarella.

“We place trust in these people to perform their operations properly,” Smith said. “When you have the supervisor involved, it is very difficult to pick up wrongdoing, which in fact was covered up.”

Smith said the supervisors submitted phony vouchers. Authorities said Phillips frequently instructed employees to carry out the side work on company time. 

“They were in collusion,” Smith said. “You don’t have commissioners down on some loading dock inspecting what’s coming in and gong out. It just doesn’t work that way.”

Burlington County Prosecutor Robert Bernardi said at a press conference Wednesday that Phillips and Yannarella's alleged involvement made it harder to uncover wrongdoings. For example, authorities allege that Phillips used a Camden contracting firm to purchase seemingly legitimate items, such as pumps, for the authority. In reality, the money was used to buy home goods, which Phillips distributed to other employees implicated in the corruptions charges, authorities allege.

"Certainly this is a specific instance that should call to the attention of those that run authorities like this and governing bodies that they need close monitoring on what these authorities are doing. That’s not to suggest that Cinnaminson wasn’t doing that," Bernardi said. 

"But when you have people who are placed in a position of public trust, like the superintendent and assistant superintendent, it’s understandable that the authority might not detect this in the first instance."

Because of these charges, Smith said commissioners are already making changes regarding oversight.

Associate Regional Editor Lauren Burgoon contributed to this report.