The Town of Babylon has approved a contract with a financial advisory company to replace Doug Jacob, a municipal financial adviser who resigned from that role with the town pending an investigation by the U.S. Securities and Exchange Commission.
The Town Board voted 5-0 at its Sept. 27 meeting to approve the contract with Great Neck-based Capital Markets Advisors LLC to assist with Babylon’s $17.8 million bond issue for 2017. Babylon comptroller Victoria Marotta said the town will pay the company about $18,000 for the work.
Jacob temporarily stepped down from his advisory position after the SEC on June 30 asked the town to preserve records on his work, citing an ongoing civil investigation, Babylon Town Supervisor Rich Schaffer said.
An SEC spokeswoman declined to comment on the status or subject of the investigation. The commission has not updated the town about the probe, Babylon spokesman Kevin Bonner said.
Schaffer told Newsday previously that at issue is likely Jacob’s multiple roles in the town.
Jacob is also a town subcontractor, providing dozens of nonunion employees to work in several town departments through his company, Red Hill Professional Services Inc.
The town subcontracts Red Hill through Herbert L. Greene, a solid waste consultant. In 2016, Greene billed the town $1.53 million, Bonner said.
Schaffer said the arrangement saves the town money, as the Red Hill employees are not offered benefits by the town, such as health care or pensions.
“They provide important services that we wouldn’t be able to provide,” he said of the contract employees.
Bonner said the town could not provide a list of Red Hill employees as it does not have that information.
Red Hill is “handled like any other outside contractor, where we may be aware of the services they provide and the qualifications of their employees, but do not personally track or maintain an employee roster,” he said.
Jacob also declined to give Newsday a list of Red Hill employees working for Babylon, citing privacy agreements.
Jacob previously served as the town comptroller. In 1998, he was convicted of eight misdemeanor counts of second-degree offering a false instrument for filing and sentenced to probation, Newsday has reported.