NewburyportNews.com, Newburyport, MA

February 13, 2013

Selectmen probing expenses in lavish water dept. project

By Michelle Pelletier Marshall
Correspondent

---- — ROWLEY — Talk of a misappropriation of funds, violation of procurement laws and insufficient bid documentation have caused the Board of Selectmen to ask for town counsel review of the Water Department’s records relative to the new garage addition that was built at the department’s 401 Central St. location.

A recent review of the department’s invoices, initiated by the town accountant’s concern about several project expenses that were charged to the operating budget instead of being treated as a capital expense, has led to the discovery that the garage addition project was more than $45,000 over budget. Included in this amount is a reconfigured office area at the Central Street location that selectmen are calling “elaborate,” after touring the facility on Dec. 13.

Town residents originally approved $100,000 at the 2006 Town Meeting for the garage addition, which included a reconfiguration of the office area. In order to complete the project, the Water Department, under the direction of water board chairman Scott Martin, sought another $40,000 at the 2012 Town Meeting, which was approved.

“It is quite clear that the water board exceeded authorization from Town Meeting and not only built an addition but added two offices, a full kitchen, lounge area and a three-quarter bath,” said Bob Snow, chairman of the Board of Selectmen, claiming the area was nearly an in-law apartment and was concerning to the board and the town.

Selectmen are now holding back payment on over $16,000 worth of bills for that project, citing, according to the Town Administrator and procurement officer Deborah Eagan, the failure to prove compliance with the town’s bidding laws and procurement policies and possible misappropriation of funds. Eagan explained that the town can’t pay the bills until they determine if the services were procured legally.

Documentation appears to lead to the fact that they weren’t. In 2011, work was done on the addition, including roofing, foundation and siding work, without any documentation of a water board meeting approving the work and without proof of contracts or bids or reference to prevailing wage rate. All this must be evident on government work.

Additionally, the work done in 2012 to finish the office renovations, which include the purchase of office furniture, a stove, a high-end coffee maker and more, was paid from the expense budget rather than through the proper channel of seeking money through a Town Meeting vote for a capital expense.

Selectmen have called at least three joint meetings with the Water Department since the project came into question in November, and have ordered the department to work side-by-side with Eagan to organize its fiscal, procurement and operations management, but have yet to have full participation of the water board or answers from Martin or Water Department superintendent John Rezza.

According to Martin, who was at only the first joint meeting, the items in question for the office reconfiguration, except for the new office on the second floor, were included in the architect’s reconfiguration plan.

“This has all been blown out of proportion — this (the addition) is an asset to the town and I’m glad to see it finally completed after six years,” he said.

Martin explained that the “lounge” is actually a break room, which the department had had in the front of the building but with the addition was moved to the back of the building, and the extra bathroom is to allow one for male and one for female employees. He did say that the office on the second floor was an extra he was not aware of on the original plan and referred questions to Rezza, who could not be reached for comment as he is on a 30-day medical leave, expected back late this month.

Snow said it isn’t so much the items themselves that raise the most concern, though he did question repeatedly the need for a high-end coffee maker and full cooking range at a town office, but the arrogance of purchasing something outside town warrant.

“Here we have close to $50,000 of unappropriated money that came from an operating budget but was a capital expenditure,” he said. “I am appalled, and the citizens in town are concerned about what is going on.”

There also was great concern expressed that that no one on the water board had answered the question of who approved the purchases that put the project over budget and why the proper methods were not utilized in securing funding.

Water board members Tim Toomey and Roy Ricker said to selectmen at the Jan. 28 meeting that they were trying to do the right thing and move forward, “but you’ve asked us the same questions three times and we just don’t have the answers.”

According to the town administrator, the chairman of the water board is the only one who can sign vouchers and invoices that are over $1,000, and his signature has been on the invoices for the garage project invoices thus far. The superintendent of the Water Department can sign up to $1,000 and also has the responsibility to check the accuracy of the invoices for services rendered.

If these items were bought with ratepayers’ money, it has to benefit the ratepayers, and if not, it is a violation of inspector general rules,” said Bob Merry, vice chairman of selectmen, at the Jan. 28 joint meeting of the boards. “We need to get some answers and give the townspeople back their Water Department and run it the way it should be run.”

At that time, a unanimous vote by the selectmen ruled in favor of seeking guidance of the town attorney on the matter. “It is obvious that the Water Department did not follow the town procurement policy and the state purchase law … and there was no appropriation to pay these outstanding invoices and there appears to be a violation of the state purchasing laws,” he said. “We must move this to town counsel.”