Water Company Defends Pacts

Commission Chairman Speaks About Contracts and Practices in an
Interview with Gazette Before Closed-Door Session

By MAX HART

Tisbury selectmen and water commissioners met behind closed doors on
Tuesday night to try to resolve a dispute over personnel contracts and
operating practices that has created a deep rift between the two town
departments.

It was the first meeting between selectmen and water commissioners
since tensions erupted earlier this year over the contracts of water
superintendant Deacon Perrotta and his administrator Lois Norton.
Selectmen want to recall the contracts, and an opinion from a town
attorney last month found that the historically independent practices of
the water department are outside the letter of the law.

At stake, among other things, is some $1.5 million in surplus cash
that the water department has in a separate account. Selectmen say the
money belongs in the town's general treasury.

On Tuesday afternoon before the exceutive session, water commission
chairman David Schwab said he stands firmly behind the contracts for Mr.
Perotta and Ms. Norton, and he defended the department's
practices, which he said have helped keep the town's water system
running smoothly for decades.

"We've been perceived as this rogue, out of control town
department, but we really haven't been doing anything different
than we have for the last 50 or 60 years," Mr. Schwab said in an
interview with the Gazette. "I mean, the selectmen have questions
about how we have our own checking account, and how we hire and fire our
own superintendant, but you know, there is no way that any of that could
have happened without them knowing. We could never have gotten our own
savings account, our own checking account without the blessing of the
selectmen, the town accountant and the treasurer. So whether that
started in 1908, or sometime during the thirties, forties or fifties,
we've done everything possible to stay on course."

Mr. Schwab spoke candidly about the contracts, the circumstances
around how they were drafted and the legality of the water department
practices. He said there has been no cloak of secrecy.

"We've tried to keep people informed of what's
going on," Mr. Schwab said. "We send out a newsletter every
year that lets people know where they get their water from, how we pump
it. The perception to me when I read the papers is that we are working
in back rooms, that we don't let anyone attend our
meetings," he said.

The standoff between the water commission and the selectmen begins
with the challenge to the five-year contracts awarded to Mr. Perrotta
and Ms. Norton last year. Selectmen first learned of the contracts in
February and immediately asked town counsel to look into their legality.
In a March opinion, town counsel Michele Randazzo of the Boston law firm
Kopelman and Paige found the contracts were unenforceable under state
law. One month later, selectman Tristan Israel tried unsuccessfully to
amend the salaries in the budget on the town meeting floor.

Since then, selectmen have challenged other water department
practices, including the use of separate legal counsel, a separate
financial auditor and the retention of over $1.5 million in surplus
money. Ms. Randazzo believes the practices violate the enabling
legislation that created the water department in 1905.

Under a unique agreement, Tisbury and Oak Bluffs share the duties of
Mr. Perrotta and Ms. Norton, and both contribute equally to their
compensation. By contract, the two employees split their time between
the two towns.

The selectmen's protest over the contracts sparked a firestorm
when the details were revealed in early March. In addition to individual
salaries of $110,000 (split by Oak Bluffs and Tisbury), Mr. Perrotta and
Ms. Norton receive six weeks of vacation, and pay only 10 per cent of
health insurance costs.

Other town employees receive three weeks' vacation and pay 25
per cent of their health insurance. The highest paid town employee last
year was Tisbury school principal Maureen Deloach, who made just over
$101,000.

"Yes, they are very generous contracts," Mr. Schwab said
this week. "We're paying Lois $50,000, we're paying
Deacon $50,000. We're paying 45 per cent of his health insurance,
we're paying 45 per cent of Lois's health insurance. In the
end, I think running two separate towns is a lot more stressful than
just running one town. It's twice the work."

He said the contracts were not done without research.

"We did a cross section of some other towns and one was
Nantucket," Mr. Schwab said. "Selectmen refuse to use
Nantucket as a basis because they say everything is out of whack. I look
at Nantucket and I see Martha's Vineyard - I see the high
cost of living, I see $4 for a gallon of gas. The superintendant over
there makes $104,000 and they give him a house. He has a similar
benefits package and he has a larger support staff. These two here do a
lot more than, say, a superintendant in Boston."

Mr. Schwab, who owns his own electrical contracting business and was
first elected to the water commission more than 20 years ago, also
maintained that despite the high salaries, the agreement with Oak Bluffs
actually saves Vineyard Haven money - up to $100,000 over five
years by his estimation.

Criticism has been perhaps the loudest over Ms. Norton's
salary. But Mr. Schwab said she is far more than an assistant.

"We treat them as equals and they treat each other as
equals," he said. "With Deacon, we gained huge experience
with his time in Boston and you can't duplicate that kind of
experience. Lois is perfectly capable of running the water works by
herself. She worked her way up the ranks, she's been here for
almost 20 years, she's got her licenses, she know's
what's going on. When you get that kind of experience, you
don't want to let it go. We found out from the previous
experience, that it is too much work for one person, and when Steve
Kenney left, it was hard to get everyone back up to speed. That's
where we got the idea for co-superintendents."

Selectmen have also questioned the circumstances around the drafting
of the contracts, and in June they issued a public records request for
all minutes related to the negotiations. The minutes revealed no
specifics.

But Mr. Schwab explained the details of the contract talks in the
spring of 2005, which he said were held in his work office off of
Airport Road.

"We met with Lois and Deacon, went over what they wanted, what
we wanted, and what we were looking for," he said. "It was
me, Kevin [Oak Bluffs water commissioner Kevin Johnson] and the two of
them. It wasn't an open meeting, it wasn't a closed meeting,
it was just us coming together with the terms. We brought back a
complete contract, everybody read it, everybody discussed it and all six
commissioners signed it. No commissioner had any reservations about it.
We were a united front."

Mr. Schwab said the two contracts were drawn up by Mr. Perrotta and
Ms. Norton themselves.

"They put them together and we looked them over, sent them
away to our counsel to look at them, and he didn't see any
problems with them," he said. "It went back and forth, but
we felt that they had earned it, we felt the amount of work that they
accomplished in the previous contract, they had done a fantastic job.
Was it generous? By some standards, town standards, I guess it
is."

He added: "I think there is a certain jealousy for what we do
here, in terms of the contracts. But they are perfectly legal."

He also disputed the opinion of Ms. Randazzo that the water
department is operating unlawfully.

"One of the errors in that letter is that we never report to
the finance committee," he said. "Now, as long as I have
been a commissioner, we have always gone to the finance committee,
we've gone over our projected budget, gone over any kind of rate
increases. And there has never really ever been any discussion on our
budget because we've always kept it down."

He continued: "They talk about the enabling legislation,
there's also a clause in there that says if we don't bring
in enough money to fund the operation that the town has to give us the
money and they have to raise that money by appropriation. So if
we're fiscally irresponsible, it's no big deal to us, we
just have to go to the town and say ‘We need money.' But
that has never happened."

As for the $1.5 million surplus, which the enabling legislation
states must either be used to reduce water rates or be returned to the
town treasurer, Mr. Schwab said surplus money has always gone toward
projects, which keeps the water department from having to borrow money.

"We've gotten a little bit more of a surplus in the last
few years because of a state mandate which essentially says that the
more water you use the more expensive it is, similar to electricity
regulations," he said. "That's why this so-called
surplus has become more of a factor."

Would the commissioners consider returning the money to the town?

"No, we'd use it to lower the rate," he said.
"It doesn't make sense to give it back to the town.
That's water rate payers money and it should be used to benefit
them."

Mr. Schwab said changing the 1905 legislation may be one solution.

"We have talked about it," he said. "It is
probably something we'll have to look at in the near future just
to get rid of these gray areas. But I don't know if the town wants
that."

Amending the contracts is another matter.

"Honestly, I don't know. I can't speak for the
other commissioners," Mr. Schwab said. "We're willing
to discuss it. There's got to be a middle ground there somewhere.
We have to get together with Oak Bluffs, because they are a partner in
this. And people keep missing that," he said, concluding:

"I have no problem sitting down and discussing it, and getting
it out in the open. I would like to work with the selectmen on some kind
of resolution, but I would like to leave the current contract in place
for the balance of it. I think we owe it to them and to show our
support. You have to support your people, no matter what and regardless
of how everything was, we have to support them until the end of the
contract.

"Our job was to hire the right people and let them do their
job, and we stand by that."