Share |

Under Fire For Steep Legal Bills, NBHA Boosts Law Firm’s Contract 150%

Firm Charged NBHA $201,844 Since 2015, Exceeding Budget For Four Straight Years
NBHA Board
The NBHA Board of Commissioners voted to more than double the size of their contract with Manfredi & Pellechio. Charlie Kratovil

NEW BRUNSWICK, NJ—On February 28, the city's embattled Housing Authority Board voted unanimously to approve an additional $60,000 for the same law firm that has billed them more than $201,844 since 2015.

The vote came six days after this newspaper reported that Manfredi & Pellechio charged the New Brunswick Housing Authority (NBHA) more than five times their legal budget last year.

The board's decision represented a 150% increase in the size of the firm's contract, and came after a closed-door "Executive Session" meeting with one of the firm's lawyers to discuss unspecified "priveleged" matters.

It also came shortly after several low-income tenants from the NBHA's largest housing development spoke up to the board, bringing forth complaints of dilapidated and moldy housing, schemes where they are repeatedly overcharged, and shenanigans involving the agency's housing waiting lists.

Manfredi & Pellechio attorney Alberto Camacho was on hand that night, instead of the NBHA's usual legal representative: the firm's namesake, Joseph Manfredi.

Manfredi, a Colts Neck resident, and his firm represent nine different public housing authorities across New Jersey, as we have reported previously.

Manfredi was hired by the Hoboken Housing Authority (HHA) to sue its former Executive Director, but that lawsuit backfired spectacularly.

The ousted official, Carmelo Garcia, filed a counter-suit just one week later, and the HHA's Board of Commissioners ultimately decided to settle that litigation for $700,000 in December.

Before the February 28 NBHA meeting commenced, Camacho was overheard saying that Manfredi had "a conflict" and could not attend.

The NBHA's public meetings have been more volatile ever since investigators with the US Department of Housing and Urban Development (HUD) released a scathing audit report in September 2017, noting that Manfredi & Pellechio and eight other contractors had been hired without preparing a required independent cost estimate, in violation of federal rules.

After one meeting in November, NBHA Commissioner Yirgu Wolde threatened to knock out this reporter after we asked him how much had been spent on legal fees.

After probable cause was found to charge Wolde following a criminal complaint was filed by this reporter, Wolde hired one of the county's top defense attorneys, Joe Benedict.  It's unclear if the NBHA will be paying to defend Wolde on the charge of criminal harassment.

Officials at the Housing Authority declined to comment when asked directly if taxpayers would be paying for Wolde's criminal defense.

When the NBHA Board returned from their 30-minute secret session, with only a fraction of the crowd still in attendance, they voted 5-0 to approve a "change order" to expand Manfredi & Pellechio's contract.

NBHA Executive Director John Clarke cited "additional unforeseen services required" of the Hoboken-based law firm that has represented the NBHA since 2007.

Asked what the additional funds were for, Camacho told New Brunswick Today, "It's within the resolution," referring to the legislation adopted by the board after the closed-door discussion.

However, on March 5, Executive Director Clarke provided this reporter with a copy of the resolution, which actually lacks the specifics of what work the Manfredi firm will be doing to earn the extra pay.

"Upon review of a memorandum prepared by the Executive Director recommending approval of a change order, the Board of Commissioners has determined that the requested services are both unforeseen and outside the original scope of services," reads the vague resolution.

The document also praises Manfredi & Pellechio, saying that the firm has "admirably performed all of its duties."

The vote came in stark contrast to the statements made by NBHA Chairman Dale Caldwell in response to the concerns raised by New Brunswick Today about the out-of-control spending on lawyers.

"I think that something needs to be done about this," said this reporter during the public comment section of the meeting.  "There needs to be more oversight."

"You don't know how to read the budget," responded Caldwell, who chairs three public boards: the NBHA Board, the city's Board of Education, and the NJ Educational Services Commission Board.

"You don't really understand the complexities of HUD, of the State of New Jersey—I used to be Deputy Commissioner of Department Community Affairs, so I actually understand how it works.  You obviously don't," said Caldwell, before advising this reporter to "send a letter" to the Housing Authority.

Caldwell also blamed this reporter for the legal bills, claiming that requests for public documents under the Open Public Records Act (OPRA) were responsible for some of the costs.

"Your OPRA requests cause lawyer fees and you are actually the source of a lot of the legal fees, and so that you know," said Caldwell. "And so it's kind of—It's weird that you're sitting here asking these questions."

Notably, none of our OPRA requests have led to litigation in this fiscal year, which began on July 1.

It's impossible to know what portion of the legal bills may have resulted from such requests, or what work was done to earn the funds, because the NBHA refuses to disclose the "description" portion of the bills, which are heavily redacted.

In the first half of this fiscal year—which ends on June 30—the NBHA had already spent $21,877.13 paying five different bills submitted by Manfredi's firm, according to the heavily-redacted documents obtained by NBToday.

Then on January 9, the NBHA received a $20,590 bill from the Manfredi firm, bringing their total for this fiscal year to $42,467, more than twice what was budgeted for legal expenses: just $18,000.

The bills also came despite a contractual cap limiting their maximum pay to $40,000 during their one-year contract, which lasts from May 1, 2017 to April 30, 2018.

The $40,000 cap was broken down as "not to exceed $10,000" for "general legal services" and "not to exceed $30,000" for "additional legal service relating to the review of Development Agreements and Contracts (and HUD related documents), contracting and awards relating to CFP and any additional assigned legal work."

Despite the fact that it violated the "not to exceed" limits contained in the contract, the NBHA paid the $20,590 bill on January 19, according to the records provided in response to our OPRA request.

That payment, which brought the total spending on the Manfredi firm's current contract to $59,831, came five days prior to the NBHA Board's formal approval, and 40 days before the change order was approved to expand the firm's contract.

After the adoption of "resolution #10" on February 28, the law firm's contract is now capped at $100,000, more than five times what was budgeted for legal expenses by the authority.

The NBHA also has another team of lawyers, this one from the powerful Wilentz firm, which handles "redevelopment" work and has billed more than $86,679 since 2015.

However, those bills are supposed to be paid by the "designated redevelopers" approved by the authority to embark on construction projects, though it's unclear if the NBHA fronts the money for the developers.

It's not the first year that the NBHA has vastly overspent its legal budget or exceeded the "not to exceed" amount in a legal contract, but it is the first time the authority's board has voted on a "change order" to properly account for their overspending on Manfredi & Pellechio.

During the prior fiscal year, despite an identical $18,000 budget and a similar contract capped at $40,000, Manfredi & Pellechio billed the NBHA $98,006.

During the 2015-2016 fiscal year, Manfredi & Pellechio also exceeded the authority's annual legal budget of $20,000, billing $44,531.

According to public records, the NBHA Board did not approve any change orders to expand the size of Manfredi & Pellechio's contract in those years.