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Downtown Freehold eyes future following changes

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By Matthew Sockol
Staff Writer

FREEHOLD – Two individuals responsible for the planning and execution of popular public events in Freehold Borough have resigned from their positions.

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The resignations came several days after the Borough Council adopted an ordinance at its May 16 meeting that mandates certain changes for the Freehold Center Management Corporation.

The Freehold Center Management Corporation, a nonprofit organization, was previously known as the Freehold Center Partnership and currently does business as Downtown Freehold.

The ordinance’s adoption on May 16 was followed by the resignations of two Downtown Freehold employees, Chief Executive Officer Richard Gatto and Marketing and Events Coordinator Christina Sapikowski, and two members of the organization’s Board of Directors, Chairman Larry Metz and First Vice Chair Bill Mehr.

The ordinance was adopted by the council following a two-hour public hearing at Borough Hall. Council members Sharon Shutzer, George Schnurr, Kevin Kane and Ron Griffiths voted yes on a motion to adopt the ordinance. Council President Jaye Sims voted no. Councilman Mike DiBenedetto abstained on the vote.

According to municipal officials, the ordinance will make three changes:

  • The Downtown Freehold Board of Trustees/Directors will include the mayor and a member of the Borough Council as voting members.
  • The elections for the Downtown Freehold Board of Directors will follow an established process and be administered by the borough clerk at Borough Hall.
  • An annual certified audit of Downtown Freehold will be conducted in accordance with generally accepted government auditing standards.

A letter of resignation from Gatto and Sapikowski addressed to Metz and the Board of Directors reads, “As you are aware, the last six months we, as well as members of this board, have been subject to innuendo, half-truths, lies and defamation of our character from members of the Land Use Committee. This culminated in (the May 16) council meeting where additional members of the council felt it warranted to confirm the ethically challenged actions of the Land Use Committee.”

The Land Use Committee is comprised of Schnurr, Kane and DiBenedetto. Prior to the council’s decision on the ordinance, the councilmen, along with Business Administrator Joseph Bellina and Borough Attorney Kerry Higgins, held meetings with Metz and Mehr beginning in December 2015 to address certain issues that were of concern to municipal officials.

“It is not possible to continue working in the environment that we have had to for the last six months,” Gatto and Sapikowski wrote. “Notwithstanding both the mental and physical toll this has been, the greater challenge we faced, and we believe members of the board faced, was to maintain our own ethical beliefs and conduct when confronted by elected officials who consistently displayed a lack of ethics and integrity.”

In his letter of resignation from the Board of Directors, Metz wrote, “I feel that over the last six months, since the Land Use Committee presented its proposed revision to (Downtown Freehold’s Special Improvement District) ordinance, I, along with other board members have made every attempt possible to negotiate a compromise alternative with their addendum. I regret that we were not able to do that. The organization has remained non-political for 25 years since its inception and (the May 16) council meeting has changed that.

“In addition to my feelings with regard to the council’s acceptance of that type of governance, with Rich Gatto’s and Tina Sapikowski’s resignations, I simply do not have the time nor energy to devote to running and being responsible for all that goes on in Downtown Freehold,” Metz wrote.

For years, Downtown Freehold has produced events in the borough’s downtown district. The cancellation of a slate of annual events, such as the Freehold Idol talent contest, summer concerts, fall concerts, holiday events and more, has been alleged as another outcome of the ordinance’s adoption.

Court Jester owner Mike Page has been named the interim chairman of the Downtown Freehold Board of Directors. On May 18, Page indicated that the ordinance would have an impact on the local events, but he said it was too early to determine what the exact impact would be.

During the council meeting, Mayor Nolan Higgins emphasized that the purpose of the ordinance was to make Downtown Freehold’s operations more transparent and improve its communications with the borough, not to shut down the organization and the events it produces.

“No one is opposed to what Downtown Freehold does,” Higgins said.

Prior to the May 16 meeting, Gatto said the potential cancellation of events would be caused by an anticipated loss of sponsorships and an increased cost of compliance with the proposed ordinance, specifically the annual audit of Downtown Freehold’s operations that will have to be conducted in compliance with government standards.

Speaking before the council, Downtown Freehold Executive Committee member Elias Abilheira said the ordinance would impact events due to the way it is presented and drive sponsors away.

Metz said the organization’s sponsors were dismayed by the proposed changes the council brought to the table.

When resident Judy Guy asked why sponsors would leave if the ordinance was adopted, Abilheira said sponsors might not like government involvement in a nonprofit organization, wish to step back to see the impact of the ordinance, or simply dislike what they are witnessing.

“The reality is that people will walk away if they don’t like something,” he said.

Guy asked why Downtown Freehold’s personnel would resign if the ordinance was adopted. In response, Mehr cited a lack of negotiation between the borough and Downtown Freehold over the changes.

“If we can’t negotiate on friendly terms, I’m leaving,” Mehr said.

A source of objection to the ordinance was the government standard audit.

Previous annual audits of Downtown Freehold were conducted by an independent certified public accountant. The 2015 audit was conducted by Steven Sewald & Company, which deemed the financial position of Downtown Freehold to be in accordance with accounting principles generally accepted in the United States.

“A government audit is not required by the state statute and would be onerous and costly,” Gatto said prior to the meeting.

Abilheira voiced his criticism of the government standard audit before the council, also stating it would be costly and unnecessary, as well as unable to prevent fraud. He estimated the cost of the audit would be $10,000 to $15,000, five times more than the organization’s previous audits.

Property owner Barry Fisher said he supports the more stringent audit. He said he did not believe that type of audit would harm Downtown Freehold and he said it was necessary for full transparency of the organization. He also touched on the issue of the organization’s election.

“There has been no transparency with the elections,” Fisher said. “I gave my word as a board member when the organization was founded that there would be transparency and that has not happened. Why is there an issue about doing a full audit? You (mayor and council) have a fiduciary responsibility to the taxpayers.”

Fisher’s mention of taxpayers refers to the fact that the Special Improvement District is supported by a levy on property owners in the designated downtown area.

Businessman Carl Steinberg also asked the council to adopt the ordinance and said, “The town will survive. Anybody who threatens to leave (Downtown Freehold) is wrong. I give credit to Councilman Schnurr for bringing this to a head.”

Mike Federici, the owner of Federici’s restaurant, said the entire situation “is disappointing to the businesses and residents. All events will be canceled this year. We have worked too hard not to come to an agreement. Our organization is what it is today because of Rich (Gatto’s) hard work. I am asking you to vote no on the ordinance. The only loser is Freehold.”

Jeff Friedman spoke in support of Downtown Freehold and the events it produces.

Downtown Freehold “is not perfect. Can things be improved? Absolutely. Please vote no on the ordinance for the sake of the downtown,” Friedman said.

Jean Holtz urged the council not to adopt the ordinance and said the issues that have been raised should be handled through negotiations, not by an ordinance.

“Legislation is not how you resolve personality conflicts and I believe that is what this (situation) is,” Holtz said.

Following the public hearing, council members addressed the issue.

Council members said their auditor has indicated that a government standards audit could be conducted for about $2,500. They said they would consider contributing to the cost of the Downtown Freehold audit going forward.

Shutzer said she would vote to adopt the ordinance because she did not believe the changes being made were unreasonable.

“i love Downtown Freehold and the members of Downtown Freehold, but I have never been as upset about anything as I am over this issue. It is not the issue, it is the way the issue has been handled. I think I have been drawn into a situation, a nasty little fight that is clouded by ego and personality on both sides.

“I perceived the letter from Downtown Freehold (in which employees and board members said they would quit and sponsors would pull their support if the ordinance was adopted) and I resented it. The way to work something out is not to threaten. It is time to bring it to a head and let’s go on for the benefit of the town,” Shutzer said.

Schnurr said some council members had been discussing issues associated with Downtown Freehold since the summer of 2014. He said the discussions picked up steam in 2015. The end result was the introduction of the ordinance.

Griffiths spoke favorably about Downtown Freehold and said he does not expect the ordinance to be a detriment to the organization. He said while he does not expect to find evidence of misappropriations or malfeasance, the government standards audit is necessary.

“I do not believe we are doing our job as elected officials if we do not require an audit,” he said.

Sims voted no without comment. When asked about his vote after the meeting, the council president said he did not wish to comment further.

DiBenedetto, who is the council liaison to Downtown Freehold, abstained from the vote on the ordinance, but said the governing body “had to create this ordinance because of a lack of communication. The mayor and I have been at meetings and we have been lashed out at and threatened. My responsibility is to the taxpayers and businesses. I agree the audit must be done, transparency must be here.”

DiBenedetto said he believed the borough’s representatives and Downtown Freehold’s representatives needed more time to reach an agreement, but the motion to adopt the ordinance was made and a majority of the council members voted to adopt it that evening.

Later in the meeting, the council members voted unanimously to adopt Downtown Freehold’s 2016-17 budget, which totals $382,000. No announcement has been made about public events that may be held in the borough during the remainder of 2016.

News Transcript Managing Editor Mark Rosman contributed to this article. He may be reached via email at gmntnews@gmnews.com

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