Findings

  • Executive Director Gordon Dahl’s contract — in place since 2008 — was never approved by the South Jersey Economic Development District’s board or the board’s executive committee. No resolutions exist authorizing the contract.
  • Between 2006 and 2011, Dahl’s salary increased from $79,000 to $112,000 - a 42 percent increase while the district was in the midst of financial struggles with the NextGen project. In that time, he never underwent a performance evaluation.
  • SJEDD’s Executive Committee is supposed to approve all salaries, according to the agency’s bylaws. No resolutions exist approving any of Dahl’s salary increases.
  • Dahl’s salary increases are noted in letters to Dahl from SJEDD board Chairman Leonard Desiderio. There also are no meeting minutes showing that the salary increases were ever discussed.

Executive Director Gordon Dahl’s salary has increased by more than 40 percent — with no identifiable documentation of proper approval — even as the South Jersey Economic Development District has fallen into hundreds of thousands of dollars of debt with the NextGen Aviation Research and Technology Park project.

SJEDD has no meeting minutes or resolutions confirming formal votes on the raises ever took place, district Chief Operations Officer Diana Schiavo said in response to an Open Public Records Act request filed by The Press of Atlantic City.

Letters to Dahl signed by SJEDD board Chairman Leonard Desiderio document the raise amounts. Some of the letters authorize retroactive salary increases dating back six months to a year from the date the letters were issued. Raises swelled Dahl’s salary from $79,000 in 2005 to $112,000 in 2011, in addition to vacation buybacks, which in one year amounted to more than $8,100.

Dahl has received a raise every year since at least 2006. SJEDD’s budget, including salaries, is funded through membership fees paid by counties, federal Economic Development Administration funding, grants and revenue received through administered projects.

Dahl in 2006 received a $10,700 increase, amounting to an almost 14 percent raise in a single year. And in a letter dated June 14, 2007, Dahl’s salary is listed as $900 higher than the raise approved for him the previous year. Board members could not account for the discrepancy.

SJEDD is the state’s lone economic development district. It was founded in 1979 to promote regional economic planning and acts as a conduit for bringing in U.S. Economic Development Administration funding to its member counties. Cape May, Cumberland and Salem counties are members; Atlantic County withdrew in January after discovering the district’s financial problems.

Since 1987 Dahl has led the SJEDD, which has been at the forefront of the planned NextGen project presiding over the infrastructure installation. The Federal Aviation Administration leased the park’s land to the district in 2008. Since the district has led the project, no buildings have been built, no tenants have been secured, and bonds that could have supported the park’s construction were lost due to missed deadlines.

Cumberland County Freeholder Bill Whelan, the SJEDD board’s vice chairman, said despite sending a letter on behalf of the freeholders he has never been informed of Dahl’s salary and said regular board members he has spoken with were unaware of Dahl’s salary. Dahl’s last raise was issued in January 2011, prior to Whelan’s tenure on the district’s Executive Committee.

“Are you kidding me?” Whelan said when told about the increase. “It is so hard to get an answer on anything in this district, even as a member of the Executive Committee. But I will tell you one thing: I am a banker, and I have a family. I will never embarrass my business or my family by the decisions I make. There will be changes coming.”

Dahl’s first contract — in 1988 — listed a salary of $36,500, which had the buying power of $70,243 today. His contracts have never required him to undergo performance evaluations.

Dahl did not respond to an email requesting comment, nor did he answer calls made to his cell phone. The voicemail on his cell phone was full and would no longer accept messages as of Friday afternoon. He was out of the office on sick leave last week, Schiavo said.

SJEDD’s Executive Committee includes one board member from each member county. The district’s bylaws say that group is responsible for approving salaries, the district’s operating budget and its annual report. Yet Schiavo said, to her knowledge, the Executive Committee does not keep meeting minutes. Desiderio, who is also a Cape May County freeholder and mayor of Sea Isle City, said he does not have any documentation of Executive Committee meetings. He insisted, however, that Dahl maintains those records.

“As the chairman, Gordon would come to me and say, ‘Do you think I could get a raise? I haven’t gotten a raise in a while,” Desiderio said. “I was not the lone ranger on this. Four counties agreed to this. This was not, ‘Gordon, I’ll take care of you.’ This was not my private business.”

Schiavo said she could not locate any resolutions authorizing Dahl’s latest contract dated Feb. 4, 2008. The contract, which is signed by Dahl and Desiderio, is automatically renewing and is not tied to any performance evaluations.

“Well, there have to be resolutions,” Desiderio said when asked about the lack of documentation. “I don’t know what to tell you. Obviously, no one had a problem with Gordon or asked any questions until recently.”

NextGen troubles

SJEDD’s problems were noticed earlier this year when Atlantic County severed ties with the district. The county questioned why SJEDD had not completed an audit in two years while in the midst of the NextGen project — the most expensive undertaking in the district’s 33-year history. SJEDD has spent $858,000 of its own funding on the project in addition to overseeing a $7 million publicly funded infrastructure installation.

The district also owes $495,000 to its contractors, one of which has sued for payment. Atlantic County officials have said they believe Dahl individually made many of the decisions on the project without the full consent of his board. Since then, the district’s three remaining counties — Cape May, Cumberland and Salem — have all passed resolutions calling for SJEDD’s board to vote on whether Dahl should remain as director.

That vote will take place Monday at Cumberland County Community College. Meanwhile, the organization’s continued existence is uncertain, since the counties have agreed that if it does not prove financially sustainable by mid-June, SJEDD should be dissolved.

Atlantic County Freeholder Frank Formica was Atlantic County’s representative to the Executive Committee and served as the full board’s secretary. While Formica never saw any minutes taken during Executive Committee meetings, he was responsible for taking the minutes at the full board’s quarterly meetings.

He became concerned about the district’s record keeping in 2011 when he saw that minutes he had taken at full board meetings were later altered. In one case, when a board member said the board was not given adequate time to review issues prior to votes, the testimony was later removed from the minutes. He did not know who had made the change.

“At a very minimum, you cannot take the public trust and public funds and manage them in such a nonprofessional, insufficient manner,” Formica said. “The whole organization was completely mismanaged. No taxpayer money should be entrusted to an organization that is that grossly incompetent.”

The point at which the district financially overextended itself in the NextGen project remains unclear, because timely audits were not taken. Problems were evident, however, at least by early 2011. The Atlantic County Improvement Authority, which acted as a project manager for the park’s infrastructure installation, did not receive payment on a December 2010 invoice until March 2011. Meanwhile, in January 2011, Dahl received a $7,100 raise. Schiavo also received a $6,500 raise and her title was changed from senior operations officer to chief operations officer.

In recent years, Dahl’s total income from the district has exceeded his base salary because he has also received payouts for unused vacation days. According to a letter written by Judith Arnold, SJEDD’s former attorney and project manager, Dahl was issued a check for $8,166.66 for unused vacation in 2009. Whelan said the Executive Committee approved another vacation buyout for Dahl in 2011, but he did not remember the exact amount.

The Press has filed an OPRA request for the money Dahl earned in vacation buybacks between 2006 and 2011. When Schiavo was asked for the amounts last week she said an OPRA request would be necessary because Dahl keeps that information locked in a safe in his office, and only he has the combination.

Letters about raises

Desiderio, when first questioned about the raises that he has signed off on each year, said all raises were approved by votes of the Executive Committee. He later said the full board also voted on the increases. Still later, Desiderio said none of that was correct. Instead, he said, he remembered sending letters to the Executive Committee members with the proposed raises, but that votes never took place.

“I’d say ... if you have any questions or concerns, please respond. If not, I’ll take that as a yes for the salary increase,” he said. “If Gordon got raises, Gordon got approved by four counties. Obviously, they must have agreed because no one questioned Gordon’s salary until now, since the Atlantic City Press has been doing these articles.”

Desiderio’s recollection of the raise amounts was also unclear. He said he thought the raises approved accounted for only cost-of-living increases. He said he did not remember approving a $10,700 raise in 2006.

When asked to comment on Dahl’s raises and questioned about the lack of documentation to support them, Atlantic County Surrogate Jim Curcio an Executive Committee member of two years, said he would not want to comment at length without reviewing all meeting agendas, minutes, payroll records and contracts himself.

“In the two years I served on that board, I do not remember ever voting on any matter that was not presented by way of resolution,” he wrote in an email.

Arnold, the former SJEDD attorney, said she saw the letters detailing the raise amounts; she says they were written by Dahl at the district’s office on High Street in Millville. The letters were then brought to Desiderio to sign. Arnold, who left the district in 2009, has previously written to the U.S. Attorney’s Office and the state attorney general questioning the district’s accounting practices.

Asked if Dahl wrote the letters, Desiderio said no. He then requested that the letters be read to him and concluded they sound like something Desiderio would have written.

It’s unclear if the five other Executive Committee members who served between 2006 and 2011 were always aware of the raises, despite the district’s apparent lack of record keeping. Of the three current Executive Committee board members, only Desiderio has been on the committee when a salary increase was issued.

Whelan, a current executive committee member, said he has seen some decisions discussed in email exchanges, but does not believe there are minutes or resolutions.

“I will tell you it has been very uncomfortable to be one of three people making a decision for an entire board,” Whelan said. “I have requested numerous times that we have full board meetings to avoid Executive Committee decisions.”

In addition to approving budgets and salaries, the Executive Committee can make decisions in between quarterly board meetings subject to the full board’s approval. However, nothing prevents the district from calling a full board meeting at any time.

Two former committee members who spoke to The Press — former Atlantic County Freeholders Director Joe Silipena and Cumberland County Surrogate Douglas Rainear — said they could recall some raises being issued but could not remember specifics of any process.

“I can’t really remember what happened. It’s been a while back now,” said Rainear, who was an Executive Committee member though 2008. “I’m no longer a part of that board.”

Asked why the raises were awarded, Silipena, who recalled at least one raise, said Dahl deserved the increase because he was running the district entirely on his own. Desiderio said the raises were the result of satisfactory job performance.

“When the district was doing well, all the counties were benefiting from the funds. When he was getting the raises, NextGen was not a problem. The project was fine. We were a pretty good little group and no one asked any questions,” he said.

Contact Jennifer Bogdan

609-272-7239