TU Water Expert Says Vote No On Article 32

We tuned into the May 17 Cohasset Board of Selectmen meeting to hear what would be said concerning the Town’s water services RFP and the proposals received in response. A few of Water Chairman DiCaprio’s statements regarding the proposals and the existing management contract with American Water were revealing:

1. Concession -The Chairman cited two reasons for the respondents’ lack of interest in a concession – b. the small size of the Town and its water system and b. the political environment.

2. 5- year management contract – interest in a 5-year contract was strong, but the respondents want to include escalators for inflation, which he does not see as attractive. Authority to negotiate a 5-year contract would require approval by Town meeting.

3. 2- year management contract – The water commission could renew its present 2-year contract with American Water without further approval from Town Meeting and could substitute another contractor for American Water, as it deemed appropriate.

Comments:

1. The original information we received concerning the proposal for a concession involved an up-front payment from a concessionaire, who, in turn, would basically gain control of a substantial amount of surplus Cohasset water that could be sold to customers in neighboring towns, turning Cohasset water into a regional resource. We are not convinced that size was the problem for prospective concessionaires.

However, Chairman DiCaprio’s comment concerning the political environment rang true. The types of concession contract that we have seen inked elsewhere would have been difficult to execute in public and in sunlight. (Atlanta fired its consulting engineers for saying too much in public meetings about the full cost of the concession that water commissioners wanted to grant to United Water.) The alertness and scrutiny of community leaders and residents of Cohasset that have  come since the forensic auditors delivered their report on Town water operations last year have made a world of difference.

Basically, for water companies, concessions are deals that allow them to make a lot more money than plain vanilla management contracts and they know that too much public scrutiny will spoil the fun. It was becoming apparent to water pros that there wasn’t going to be a lot of room for creative margin enhancement in Cohasset.

2. If Chairman DiCaprio finds the 5-year proposals that he has received unattractive, then there is no reason for Town meeting to authorize the water commission to negotiate a contract of that term.

In addition to being of little practical use if the proposals are unattractive, permission to negotiate such a contract without coming back to Town Meeting could open Pandora’s box by granting rights to a contractor that are similar to the rights of a concessionaire.

As we stated in a prior correspondence, the rules that govern the operation of a contract and the rights and obligations of the parties are not contained in its title, but in its contents. A document titled “Management Contract” can be a concession and a document titled “Concession” can be a management contact, depending on what is sandwiched between the recitals on page 1 and the blue ink at the bottom of the signature page.

Without a rational for a new contract the Town Meeting’s vote on the article should be “no.”

3. If the water commission really does have clear authority to extend the current contract for another 2 years, then that document should be published on the Town’s website for residents to review. At least it is a known quantity (one hopes). I am not familiar with Cohasset’s bylaws, but if it is permissible to bring an article  to Town meeting in the short time remaining until the next meeting and vote, community leaders should consider introducing an article that restricts any amendments to the current contract to a 2-year extension of the current term.

We have not seen a copy of he current contract, but if it allows amendment of other provisions, in addition to an extension of the term, then the lid to Pandora’s box could unexpectedly spring open when Town residents thought it was nailed shut.

Conclusion: Although it sounds like the concession concept and the risks that such an arrangement would entail are off the table for a while, the motives and economic factors that drove the push for a privatization of Cohasset Water will remain.

The favorable price proposals that the Town has received for water management services demonstrate that sunlight and alert Town residents can help the Board of Selectmen and the Water Commissioners to drive the cost of water down to more reasonable levels for ratepayers.

Continued diligence promises to deliver continued success. Inattention, however, will invite more of the disappointment that the Town has experienced with its water system in the past. Cohasset residents who want to avoid such an outcome should attend Town meeting and should take Chairman DiCaprio’s negative assessment of the 5-year proposals to heart and vote “no” on the article.

© Copyright 2012 Tanna K, All rights Reserved. Written For: Tinytown Unleashed
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