private contract status of concession contract(s
18 Apr 2012
Cohasset’s May 12th, Annual Town Meeting will be asked to vote on a water concession contract. We asked our Water RFP Expert to discussion the legal ramifications of the same.
Tinytown Unleashed: Here’s a question for you, Water Expert.
Legally, what rights does a concessionaire have that the town doesn’t’ know about.
The RFP looks pretty safe, but Corporate Accountability says the concessionaire calls the shots, that the state will treat our water contract as a private (not municipal) contract, and that investors have rights.
Re water system governance and
private contract status of concession contract(s):
Tinytown Gazette Water Expert: The proposals will tell more than the RFP, but the language of the RFP certainly invites a backdoor takeover, either though explicit contract terms or through after-the-fact interpretation of contract terms by reference to recitals in the RFP.
Basically, if you want to confuse the public in setting the terms of a utility contract or other contract with a municipality, use several mirrors, not just one. For instance, the interest rate swaps that got so many states and municipalities into deep financial hot water a few years ago and led to congressional hearings, law suits and criminal complaints against some of our country’s largest banks were, in reality, piles of interlocking contracts, agreements, memoranda and exhibits that Sherlock Holmes would have been challenged to diagram, with the help of his magnifying glass.
Even with a computer and many hours to read and take notes, we (Water Expert’s company) were hard pressed to provide a defrauded municipality that contacted us on one such deal with a truly definitive summary of the rights and obligations of the parties. Municipal utility privatizations/PPPs/concessions usually involve fewer documents, but the ping-pong reference games that can be built into these deals are capable of being just as complex.
Of particular concern: inclusion of poorly-understood law by reference can make for essential deal points that can only be brought into clear definition through litigation. Not a great way to start a 10-year arrangement for services.
So public scrutiny and legal/financial due diligence will be a critical to understanding what is being proposed and what is being entered into where the proposed concession arrangement is concerned. On a related point, with qualified management contract provisions of the Internal Revenue Code in mind on this special day (April 17) we hope that the Town’s bond counsel will look beyond “97-13″ requirements, which seem to have been taken into account in drafting the RFP, and further into any proposed provisions, whose interpretation by a manager in an operating environment could, depending on the action(s) taken, trigger taxability for a substantial amount of the Town’s outstanding tax-exempt debt. That would not be pretty.
Implications for the setting of water rates would, of course, be of the greatest concern for Town residents. Unfortunately, there is no substitute for doing one’s homework.
Tinytown Unleashed: I think you’re saying we should not get ourselves into a concession contract. That there are no safeguards.
Apr 20, 2012 @ 11:49:36
You’re assuming we will have something to vote on. We might not.
I’m still trying to figure out how to “hotwire” this to Aquarion.
For the third time, November 18th, 2002 special town meeting. Article 14.
Annual Town Meeting, March 28th, 1998. Article 7.
Apr 20, 2012 @ 08:27:15
You might want to rethink your digs towards Governor Patrick. Please remember that Chairman of the BOS Ted Carr was formerly a top appointee of Governor Patrick and a democrat. Finally– will the Town Meeting be allowed to vote on the contract/contractor– a simple yes or no will do
Apr 20, 2012 @ 08:05:44
Mike:
I don’t have any Macquarie contacts anymore (it’s one R, by the way). Haven’t since 2009. Can you confirm through your FBI contacts how your IG investigation is going?
I could care less what Aquarion is doing. At your next Democrat Hack Politician Convention, when you are sitting next to Governor Patrick, you should ask him to annex Connecticut, thereby beating Aquarion to the punch – time to turn the tables on Aquarion. Let them become the hunted for once. It’s time to stop them once and for all. I mean, a company that owns two piddly little water systems is striking fear into everyone and causing you to apparently go insane (or at least head further down the path. . .)
Do you even know what a bond covenant is? Have you ever read ours? If you did, you would understand once and for all that our water assets will never change hands. See strawberry reference above. . .
The language we will include for a vote, if there is even a need for one, will be to ask town meeting if the water company is authorized to paint a picture of your smiling face on the Scituate Hill tank so that no one in town will ever forget you, much as we all would like to try.
November 18th, 2002 special town meeting. Article 14.
Annual Town Meeting, March 28th, 1998. Article 7.
Apr 19, 2012 @ 22:21:42
PETER– Tom Walsh of the Massachusetts Water Infrastructure Finance Commission thinks otherwise. If you have an issue with Tom– contact Governor Duval Patrick — through Chairman Ted Carr. Peter– through you Macquarrie contacts could you confirm rumors that Aquarion is interested in purchasing United Water assets in Massachusetts after their recent purchase of United Water assets in neighboring Connecticut. Finally can you confirm whether voters at Town Meeting will vote on the actual contract/contractor rather that the mere authorization required by MGL 30B?
Apr 19, 2012 @ 19:12:46
Try this one instead (search under Google. G-O-O-G-L-E)
Mayor’s Guide to Water and Wastewater Partnership Service Agreements: Terms and Conditions
In case you’ve forgotten, a decision is required prior to June 30th, so something will be chosen and we will indeed forge ahead. Exactly what proposal am I pushing? I fought to get one (of three) possibilities included in the queue to be available for consideration. That’s it. Any proposals come in yet about which I am unaware? How do you know what will be decided? Have you seen the bids?
Do you usually make decisions on things before all the facts are in? – Never mind, of course you do. We all saw it every day. I think the opposite approach is better: get all the facts first and then make an objective evaluation.
Apr 19, 2012 @ 14:38:10
Peter,
Since you take issue with public and consumer protections groups, how about the Massachusetts Water Infrastructure Finance Commission chaired by Senator Jamie Eldridge (D Acton) Tom Walsh, appointed by Governor Patrick, headed the commission’s Working Group on Privatization. He discovered many shortcomings in the arrangements like the one you are pushing for Cohasset. Funny, Tom was a former employee of Veolia and he has a opinion that Cohasset should here before approving any agreement. He is in a process of producing a guide for municipalities so they do not make mistakes. Cohasset should wait for that municipal guide and for the findings from the upcoming Financial Management Review by the Department of Revenue on governance of Water and Sewer before forging ahead at Town Meeting.
Apr 19, 2012 @ 12:07:33
Peter, you brought this on yourself by the way you talk about the concession contract. It is obvious you were never going to entertain anyting but a concession contract and at first you wanted it for 20yrs.
All you have to do is be upfront about all the issues, instead of making snide remarks and being arrogant. You tak about customers and its all math. Whatever happened to talking about the residents of Cohasset, whom you represent in this contract, and the best interests of those residents? Of course a company bidding on this contract is looking to make as much profit as possible. Shouldn’t Cohasset be looking at the same issue? These kinds of contracts can be ripe for embezzlement to take place.
Get rid of the paranoia and do the job you volunteered to do. Public officials are fair game. You never answered the two questions I intially asked you. Those two questions are very relevant to water issues. when you dodge questions people lose faith in what you are doing.
Apr 19, 2012 @ 09:29:32
Helping? Really? The Who’s Who of the CPUSA and we’re helped by them? Thank god. I was really worried that we incompetent boobs in the water commission that have never done anything of merit ever in our lives would be left with the decision. Thank god a former town manager, partly responsible for a disastrous real estate development in Southbridge, is on the case. I’m sure everyone is relieved.
Let me get this straight: You deliberately distort the facts surrounding our contract proposals and you organized a campaign to slander me, and I’m unbecoming? You need a new mirror. Better yet, some shame.
Apr 19, 2012 @ 08:52:37
Peter– I am going to leave the way you communicate on this blog to others and your opinions you express about me alone except to say its unbecoming of a public official.
As for Town Meeting, While the law only requires that the Water Commission seek authorization for contracts longer than three years, many communities still place an article on a specific contract on the warrant. I hope the Board of Selectmen does this so the people have a real voice.
As to my role, I will continue to bring up issues concerning the proposed concession contract and the company that is eventually chosen. You might be interested to learn that Adam Macon of Corporate Accountability International, Gail Darrell of the Community Environmental Legal Defense Fund and Roz Frontiera of Gloucester’s “Who Decides” have a very different view than you on privatization. These groups are assisting dedicated citizens in this town. These groups stopped United Water in Gloucester and now they are helping Cohasset.
Apr 19, 2012 @ 08:12:23
Peter DeCaprio -you take my breath away.
You truly do.
Still waiting for Ted Carr to chime in on this.
Apr 19, 2012 @ 00:20:45
Tom:
I beg to differ. Your side has been complaining from the start about everything we have done. You’ve complained about civility from the outset of this process, but have exhibited none throughout. The proprietor of this blog, no doubt with your consent, has participated in a smear campaign against me personally, has sent threatening emails, has willfully lied and distorted facts throughout, and has shown nothing but contempt for people that have done nothing but work diligently as volunteers for the best possible outcome for fellow residents that we seldom meet or barely know. Your ally and former town manager, working closely with you throughout your persistent disinformation campaign, has impugned my motives publicly and practiced slander for no reason other than his personal aggrandizement. And you claim we are arrogant and condescending? I don’t give a damn what you think. We were completely honest on Our Town about what Coughlin did throughout this process. Nothing we said on TV was anything but factual, accurate, and to the point. He’s a venal, despicable person, a practiced liar, that has gotten everything he deserved.
It is your arrogance that enables you to continually distort facts, and ignore the truth. Just admit that all of you have an agenda here, and none of you have been the least bit honest at any point. Go back and read your defenses of Coughlin. Instead of hanging your head in shame as you ignore inconvenient fact after inconvenient fact, you continue to act like you are the noble ones. You live in an echo chamber and you all deserve each other. Karen’s performance in front of the Advisory Committee was a pathetic sham. She completely distorted facts, twisted things I have said, and deliberately mislead the Committee, which from what I could tell could see through her every move. There’s real arrogance for you – acting like anyone cares about what any of you say. Your motivations and agenda are as transparent as they are phony. How can you present a citizen’s petition to change governance at water and sewer when none of you, including our (thankfully) former town manager, have ever sat in a commissioner’s chair, attended any of our meetings, ever helped us prepare a budget, or ever looked at or analyzed any of our operations? You ever sit down with any of our employees? Ever talk with one of our project managers about process improvements? Know anything at all about the factors that impact water quality? Yet you proclaim to know what’s best? Arrogance indeed.
In this entire debate, there are only two people properly situated to evaluate the water company’s operations and neither of them are named Callahan, Quigley, or Kasperowicz. Keep putting your faith in hired municipal employees – that has worked so well for us in the past. We’ll never be able to pay enough to attract top tier talent – so you might as well get used to able and capable volunteers lending a hand. You don’t like that? Then change the Town Meeting form of government. In the meantime, grab a rifle and stand a post. I love the arrogance of the elites that always know best. Your superiority complex knows no bounds.
Your water RFP expert is either mailing it in, making it up, or just inept, based on what he writes. He’s so far off base on what he’s focused on it’s not even worth answering anymore. No one knows what kind of responses we will get – my fear is that your boy Coughlin did serious damage and we’ll get none. You should all take a bow at that point for screwing our customers. Go Team Cohasset! Vote for Quigley! You don’t trust us to negotiate a contract? Too F’n bad. Who are you to judge? At some point, one of you could exhibit a shred of decency and just say thank you for picking up the bag of sh*t that was dumped in our lap. Anyone hear from the commissioners that just cut and ran? Me neither. That’s okay, I’ll keep working 35 hours a week for people I don’t know to produce I product I can’t even use.
Here’s something else for you to chew on: I could care less what kind of contract is ultimately in place, as long as it is best for our customers. Our last contract did real harm. The next one won’t, no matter what shape it takes. It’s about math as much as anything else. Of course, if you knew anything at all about the production of water you’d know that. I doubt very much, given the conditions in the credit markets, that we will get anything like what we’ve proposed. That’s okay by me. This is a bird hunt – we are out to flush prey and see what pops up. We will make decisions as needed in the best interest of our customers. We will keep an open mind about our options and we will use the dynamic that will result from this process to craft the best solution possible, whether it is what we wanted exactly or a hybrid – we will get what we get and we will act and respond accordingly. If you’re not happy with the potential outcome, or that it is us that will make the decision, then lobby hard for your citizens petition. Either way, I could care less what any of you think. You have not earned any consideration.
I’ve come to despise the water company and everything associated with it because of people like you. Your fundamental dishonesty has made public service a dreary chore. What should have been a collaborative and relatively easy process was made the opposite by venal people with an agenda. You have done harm to the town, to the process of governance, and you’ll never admit it. Arrogance in all its glory.
Apr 18, 2012 @ 21:55:34
I cannot identify the water expert, only that he is a real water expert. His very large international company deals with concessions, public and private. It would be nice if he could just join the party here and blog on with all of us, but it would have to get permission from his company president to do so and the answer would be no. I’ve already asked. He’s a Cohasset resident, so he’s very close to all of this.
Apr 18, 2012 @ 21:36:10
Okay, not that you all have been waiting with baited breath, but I am going to finally weigh in on the concession contract here rather than as a separate post. I was at the March forum, have read the RFP, maybe not with a fine tooth comb so excuse if a question comes from me just missing something, and I was backstage at the TV show taping.
Let me first comment on the tone of things. Peter, with all due respect, you do yourself and the Commission a disservice by constant arrogance and condescension that was displayed at the Forum, on the TV comments about Mr. Coughlin, and above – although I love a good movie quote and The Caine Mutiny, and chuckled at the above. I would recommend changing the tone at Town Meeting, just as some advice from one sarcastic sonofabitch. As for opponents, I have come to learn from 35+ years of living here that New Englanders are naturally reticent and skeptical, especially to anything new. As one who advocated thinking outside the box more often when on the BOS, the frustration with some attitudes is understandable, but most of it is in good faith. I think Mike is right to bring up the issues that have existed with concession contracts elsewhere, even if in a minority overall in the country. As a lawyer, I know that a contract of this nature and length is bound to have problems and there is nothing wrong with stepping back, looking at others’ problems and hopefully learning from them. Back to your Caine reference, there are also those who will be unreasonably skeptical or paranoid, or who simply oppose anything cooked up in town government. One has to accept that element of Massachusetts municipal life. While I share the skepticism of anything that comes out of your department owing to history that pre-dates you for the most part, I have tried to give this a fair look and all benefits of the doubt.
Tanna, one thing on your side, have you identified this “water expert”? If not, I’m not fond of the anonimity, and think it is time he or she step forward.
On the merits, bottom line, I am prepared to support at least looking at this through the process that has been outlined. I think Chris and Peter were very articulate at the taping and the forum in explaining the objective, and I do not oppose the concession in concept. I don’t know if I share the rosy predictions of immediate rate relief given the known capital expenditures coming down the pike that were identified, but predictability of cost and ultimate rate reduction are certainly worthy to pursue. I would agree that a repeat of the present contract, with only one bidder, is not advisable (especially since I hold this contractor as responsible along with past Commissions for the faulty rate and usage projections that led to recent problems, as well as operational faults).
The RFP is fine as far as it goes. It seems comprehensive, detailed and thorough. However, as the “water expert” points out, the real issue will be with the actual contract negotiated, which is a completely different animal. The RFP can lead to a lot of “what if” questions that the contract hopefully will address. While, again, I found Chris and Peter’s command of the subject to be impressive and giving of some comfort, I do have concerns about the negotiation and vetting of the ultimate contract. I do not advocate further town meeting approval, but hope for extensive review by town counsel’s office and circulation for at least one round of comments to a wide range of people with talent in town government, lawyers and non-lawyers. If left to the 3 Commissioners and the interim TM alone, I will not have the warm fuzzies, no disrespect intended.
As a lawyer, I know that all you can do in a contract is anticipate as many possible future scenarios and address them as best you can. This is made more difficult by a 10 year duration. The concession, as conceived and explained, will be the best solution, even over in house, if it works flawlessly. But we know there will be differences – of interpretation and execution, over relative responsibilities, over the incentive plan (and has the max that could be awarded over the 10 years figured into the WC’s budgeting?), over what happens if we reduce rates and thus revenue, what happens if this becomes uneconomic for the contractor in year X, etc., etc. I could think of many more potential conflicts just from the parameters of the RFP. Obviously, the contract can be enforced, and as a lawyer and very much in contrast to non-lawyer commentators, I have faith in the final document that our attorneys will draft, and in the system, to give us the appropriate remedies. I am not scared by the what ifs if properly anticipated and addressed, nor do I fear any litigation process that may result. (I do fear the cost if we are going to battle with a poorly constructed contract, however.) But one of my longstanding philosophies is while a public-private partnership is OK, the public entity has to remain top dog in the relationship when a public resource is being managed. The biggest issue under such a contract will be oversight by the Town, to insure any breaches by the contractor are nipped in the bud, any problems with performance addressed immediately, and that the contractor not have any opportunity to take unwarranted advantage thru benign neglect. I think that has occurred with other outside contractors around town in the past and is a natural reaction – we don’t have to worry, we have “experts” to take care of it. While confident in the personal capabilities of most of the current Commission, history tells us (and elections insure) that we will not always have a competent Commission, nor competence in Town Hall. I think we will need a utility supervisor for water & sewer to professionalize management and oversight, and a fully engaged and capable town manager. The contract should be subject to yearly audit by the new auditors and a yearly legal review.
So, I support this thus far. Obviously, much turns first on how many bids we get and what they propose. But the resulting contract is the key, and we must not screw that up in the midst of petty squabbles over personalities or turf.
Apr 18, 2012 @ 21:32:29
Watched Our Town tonight (Wednesday night) and was surprised to learn from you and Chris Seebeck that annual town meeting would only vote on the ‘concept’ of letting commissioners enter into a concession agreement and would never get to vote on the contract itself. This was filmed a week and a half ago.
Since then selectmen have been talking about a date for continuing town meeting in order that town meeting would participate.
I’ve also sent an e-mail to Mike Milanoksi and Ted Carr – please advise.
Apr 18, 2012 @ 17:14:01
so, we should rely on that person’s view to make a decision? Seems somehow flawed to me.
Apr 18, 2012 @ 16:30:34
Some people are born crazy either a mental or genetic problem, there are many things that could bring it out in them, getting hurt by someone, drugs, growing older, serving on a town board. Then there are the people who are not born crazy but through their life experiences turn them into what we would consider crazy. Being hurt many times by someone, being hurt by many different people, being raised by wolves. Some people just snap because of stress. And sometimes people do drugs and screw up their brain. It all depends on the person; one person can go through something and come out stronger, another could experience the exact same thing and come out crazy. It is difficult to know what happened here.
Apr 18, 2012 @ 15:31:01
Ahh, but the strawberries that’s… that’s where I had them. They laughed at me and made jokes but I proved beyond the shadow of a doubt and with… geometric logic… that a duplicate key to the wardroom icebox DID exist, and I’d have produced that key if they hadn’t of pulled the Caine out of action. I, I, I know now they were only trying to protect some fellow officers…