Water Company Defends Pacts

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


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."