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."