Selectmen Launch Water Company Probe

By MAX HART

The discovery of a $1.5 million surplus in the Tisbury water
department budget has prompted the town selectmen to launch an internal
investigation, as they try to shed light on an array of questions about
management and financial practices within the department.

On Tuesday this week, town administrator John Bugbee submitted a
written request to the water department under the Massachusetts Public
Records Law for six years worth of financial audits, meeting minutes and
other documentation relating to contracts and recent salary increases
for the water department superintendent and administrator.

The request was hand-delivered and addressed to David Schwab, who is
chairman of the Tisbury water commission.

The selectmen's questions now go beyond the initial concerns
about supervisor contracts to more basic operating issues, including the
department's $1.5 million in cash and its use of an independent
financial auditor.

"This is about a town department that has been able to work in
a vacuum for a long time and has lost sight of accountability to the
town and the public," selectmen and board chairman Tristan Israel
said this week. "This is nothing personal and the selectmen have
no interest in running the water department. It is about a lack of
oversight and accountability and we are just trying to find out
what's going on."

Yesterday Mr. Schwab said the water commissioners will cooperate
fully with the public records request, but acknowledged that the
board's action surprised him.

"We'll give them whatever they want, but they
don't have to do this," he said. "We already provide
them with our audits every year and we have nothing to hide. I
don't know what the axe to grind is here."

The records request comes at a time of renewed tensions between
selectmen and water commissioners. Two months ago selectmen expressed
outrage over the salaries and benefits package the commissioners awarded
to water department superintendent Deacon Perrotta and administrator
Lois Norton. Mr. Perrotta and Ms. Norton, who oversee both the Vineyard
Haven and Oak Bluffs water systems, make over $100,000 - $50,000
from each town - under five-year contracts. Their salaries make
them among the highest paid public employees on the Vineyard.

Selectmen said the length of the contracts and the benefits packages
for Mr. Perrotta and Ms. Norton are out of line with other Tisbury
employees. At the annual town meeting in April, selectmen tried to
reduce the salaries by amending the water department budget on town
meeting floor, but were unsuccessful.

The Tisbury water department has traditionally operated
independently even though it is a town department. Water commissioners
manage department finances with very little oversight from town hall,
and the water department budget has frequently been exempted from review
by the finance and advisory committee. Selectmen and water commissioners
seldom meet.

Issues over control of the water department date back almost two
decades. In the late 1980s, selectmen and water commissioners squared
off in court over who had exclusive authority concerning wages, hours
and other terms of employment for water department employees. A superior
court judge declared that the selectmen - not the water commission
- hold that authority.

This week Mr. Bugbee said he believes the current contracts of Mr.
Perrotta and Ms. Norton violate the authority vested in the selectmen by
the court, and he has referred the matter to town counsel. He added that
new concerns have emerged in recent weeks over the legality of other
water company practices, which he has referred to the state Department
of Revenue. Among other things the selectmen want to know:

* Why the water department is carrying a $1.5 million cash
surplus. According to Mr. Bugbee, the 1905 legislation that created the
water department states that all surplus over $1,000 must either be put
toward reducing the water rate or deposited into the town general
treasury. A copy of last year's water department audit showed that
the department had $1.57 million in cash. Selectmen have requested
information about how the money is spent.

* Why the water department uses an independent financial
auditor. Mr. Bugbee said the water department has resisted using the
services of the town auditor, adding unnecessary cost to the water
department budget. He said town counsel Michele E. Randazzo will explore
whether this is allowed under state law.

* The circumstances under which the contract negotiations
between Mr. Perrotta, Ms. Norton and the water commissioners took place.

"The more we look at these contracts, the more questions we
have about how they came to be, how they are funded, and where we go
from here to ensure we are operating within the law," Mr. Bugbee
said. "The selectmen have an obligation to the voters and to the
public to make sure all town contracts are within the letter of the law.
We would be remiss if we didn't investigate it."

But Mr. Schwab said the water department has a long history of
running efficiently and he defended its operation.

"When you're an elected official, you don't always
have to try and reinvent the wheel," the longtime water
commissioner said. "The water department has always had its own
auditor, that's just the way it has been done. We have a cash
surplus because we are constantly making repairs to the system and
spending on new construction. If we ran a deficit, that would be one
thing, but we have always been able to run off our revenues. The
department pays for itself."

Mr. Israel said the inquiry boils down to simple questions of
oversight and accountability.

"They are not under the microscope that the other departments
are, they are used to working unimpeded, and at this point I would like
to see the water department superintendant and administrator come under
the purview of the personnel board. I am hopeful the water department
will reassess what they have done and start working more closely with
the town," he said.

Mr. Bugbee agreed. "This is not a crusade against the water
department," he said. "It is simply an attempt at ensuring
that each department is following the letter of the law. We are not
submitting formal requests because we don't feel they would
cooperate otherwise; we are just trying to ensure that we don't
even have to go down that road."