Letter: Four Things You Should Know About the BCWA

Letter to the Editor from John M. Jannitto, Chairman of the BCWA

Here are four things you should know about the BCWA:

  1. There is a very small group of individuals, headed up by the likes of publicity seeking Jeff and Janice Black, Gary Morse, and Marina Peterson that are obsessed with bringing down the BCWA. They claim to have the public interest in mind, but do not let them mislead you. They comment on meetings they do not attend. They spread falsehoods online and in newspapers, without accountability. They allege without basis, mismanagement of funds, yet an expensive independent accounting report concludes that no mismanagement of funds and no mismanagement of assets were found. Their participation has not only misled the public, but cost you, the ratepayers, significant dollars to hire additional engineers, spend unbudgeted legal funds to dispel unfound legal arguments, and engage pension experts to defend well made choices by this board.
  2. The most important task before the BCWA is to determine a redundant source of water in the event that the pipeline underneath the Narragansett Bay fails. Despite recent turmoil, the Board has directed the preparation of a strategic plan, a matrix of options to pursue a redundant source including benefits and drawbacks of each option. This requires the cooperation of our state legislators and all three towns. We need to defend our right to a redundant source. We need to develop a redundant source and we collectively need to hold the state to their promise to pay for it.
  3. The recent hoopla regarding BCWA defense of over one year of complaints by the Blacks to the Attorney General’s office involves fourteen written complaints alleging over 42 violations. Early on in the process, the Authority self corrected. But that did not stop the Blacks from bringing in video cameras to every meeting, tape recording conversations, and intimidating our staff “demanding” that Black claims be met. Please read the AG opinion that is posted on the Authority website.  The AG found, again and again in its decision that the Blacks’ numerous and repeated claims were unfounded. Yes, there were a few violations acknowledged and corrected. By the time the decision was rendered, the Blacks have received over 4000 pages of documents. Really, what is their agenda? There was no fine assessed against BCWA. In the words of the AG, “We conclude that the evidence does not establish a willful or knowing violation”.
  4. We respect the right of individuals to participate, and invite responsible citizens to meetings to judge for themselves the performance of the board. There are important decisions that need to be made by the Authority, and we welcome you to be part of the solution. Hard work does not always grab headlines, nor does the continuous supply of adequate and safe drinking water. That is our mission, however, and we pledge to the ratepayers to do it well.

John M. Jannitto, Chairman of the

marina peterson October 21, 2011 at 06:39 PM
The allegations in the first paragraph are so egregious that they don't deserve a response. For the Chairman of the Board of a Public Entity to come out and chastise ratepayers/residents who rightly question management decisions and who are only concerned about the quality and cost of their water.... is unconscionable! Just follow the money. Who benefited from the $65,000 cost of the ridiculous decision to fight the AG's office? As stated in the letter, early on the Authority self corrected. Chances are that if they had admitted to their "unknowing" violation at the beginning, there would have been no legal fees and the result would probably have been the same, i.e. “We conclude that the evidence does not establish a willful or knowing violation”. But it was only ratepayer money... so who cares?
Gary Morse October 21, 2011 at 07:23 PM
Mr. Jannitto, I will address your points on the mismanagement of funds: 1) Over $1 million was spent on upgrades to a failing Water Treatment Plant (WTP) that in the end may be taken out of service. The Bristol County Water Supply Act made clear such expenditures on the WTP could only be made AFTER the installation of the Shad Pipeline which currently remains "on paper" only. 2) BCWA has made claims about having to keep the old Shad Pipeline and WTP operational since 2000 at a cost of $ millions to the rate payers when in fact BCWA did take the Nayatt Well field out of operation without any approval by the RI Water Resources Board. 3) BCWA claims they have investigated the use of the Pawtucket Supply as a backup source, yet continue to spend hundreds of thousands pursuing the Shad Pipleine in the absence of all approvals from Rehoboth and the RIWRB. 4) Contrary to your opinion that B&E Consulting did do a financial audit, they did not. Before the bid went out, Sandra Mack notified the Tri Town Council that BCWA would not participate in the audit if it included a requirement for a full financial audit. Operation Clean Government later requested the RIWRB itself do a legal audit of the Act which was voted in by the RIWRB in March of 2011. To date, that audit has not been completed. Of concern was how $3.2 Million was transferred to BCWA for work on the WTP in advance of completion of the Shad Pipeline. My next post will continue due to posting limitations.
Dan Shedd October 21, 2011 at 07:28 PM
As both a business and individual ratepayer I find the Chairman's comments troubling. He lists 4 things that ratepayers need to know and ignores the number one thing ratepayer want to know: are we getting the best possible water at the lowest possible cost? He would rather attack all of you who have taken an unselfish interest in examining the basis for the decision making at the BCWA. He alleges that you have hidden motives but he doesn't share what those motives might be. Ratepayers are very interested in these motivations; especially if it is other than identifying why our water is (1) so expensive and (2) often of suspect quality. Mr. Morse for one has spent a career in the pension business, he is an expert in the actuarial machinations of these complex plans, has zero potential personal gain (beyond a lower water bill and better quality water which we all seek) and the "people behind him" are the recognized lobbies for clean government in Rhode Island!!! His #2 point is partially correct but posses more questions than it answers. Where are the state bond funds oringally allocated to do the work? And costs today are some multiple more expensive then when the original mandate was legislated! His point #3 ignores the elephant in the room: the AG demand for transparent process and the remedies required for same! Finally #4: hard work has yielded ratepayers: above market costs for labor, pensions and water. Maybe it is time for some fresh thinking and leadership.
Gary Morse October 21, 2011 at 07:59 PM
Continued from above: 5) BCWA's loaded labor rate (salary and benefits) exceeds that of every other water authority in the state. The Board has had the misguided opinion that they themselves could become "workerbee directors" and do a better job at negotiating than a professional. That has cost rate payers $ millions over time. You have felt that as long as nobody was watching, you could beg forgivness later if anyone ever discovered what was really going on at rate payer expense (which is essentially what your submitted LTE is all about). 7) BCWA has routinely charged a premium for providing local water when more cost effective water could be obtained via the Scituate Reservoir. You have never told residents what the difference is between the cost of local water vs Scituate water. 8) You charged one local resident in Barrington on Lamson Road more than $20,000 to extend a water pipe under a public road so that they could hookup to BCWA water. But in Bristol, you are currently digging up Hope Street to replace residential connections and spreading the $400,000+ cost to all rate payers. 9) The above costs for the Hope Street Project (as I am told) may not have involved a full public bidding process. Your LTE is for the most part damage control following a long string of bad press. Rhetoric is a powerful tool when you choose not to reply with specifics and details.
John Tattrie October 21, 2011 at 10:54 PM
To All, I think this forum was established to inform people of the on-goings of important items that affect our communities. With that Mr. Jannitto was entitled to his (response) as I call it. While you may find his statements hard to swallow, it is in fact a response on his behalf after a long dialog with only certain people being heard. I personally dont agree with John on several levels with regard to the Water Authority but I most certainly respect his response. (It's his side of the story). Rather than clouding the argument with the same information over and over, all should look forward to the upcoming vacancy of Mr. Delise and try to find common ground with the Water Board so these items get rectified. His comments may upset some but I look at it as a response, you have his attention! So with that being said, attend the next meetings and see whats being corrected, we all know the problems and have monitored the issues. I would hope to see in the near future a Patch Article telling the public about some of the concerns being settled. There are many unanswered questions and Mr. Jannitto is not personally responsible for each and every item, but he is most certainly a component so I wouldn't call this an attack. An attack would have come in a much different form. It is an opinion.
marina peterson October 21, 2011 at 11:35 PM
When you say "response on his behalf", does that mean that someone else wrote it? Where did this dialog take place and why were only certain people heard? He specifically mentions me and makes incendiary charges against me that have no grounds whatsoever. When he says they "comment on meetings they do not attend", or "spreads falsehoods on line and in newspapers, without credibility", that is an attack. Not once does he say, "in my opinion". I would like to know specifics. Which falsehoods were spread? There are many people who have spent hours and hours pouring over documents, attending meetings, doing research, and asking important questions, only to have their character defamed by the chairman of the BCWA. I repeat, not once does he say, "in my opinion". By headlining the letter with John M. Jannitto, Chairman of the BCWA he sets the groundwork that he is speaking for the BCWA. I would sum up by saying that if Mr. Jannitto meant it to be only his personal opinion he probably should clarify that with a response to that effect.
John Tattrie October 22, 2011 at 01:14 PM
Marina, I have know idea who wrote it, I would assume Mr. Jannitto is a well edjucated man and probably wrote it himself. Yes he did specifically mention you, I was not surprised to read that line. After the months of dialog from yourself and others, quite frankly I expected it. You Marina have placed your self in a position that at times generates a (What I Call) expected response from people. I in the past have been demonished by individuals while I sat on the planning board, but I expected it. It comes with the territory of questioning authority. My suggestion would be to read into his letter and have a understanding of the Boards feeling and then work off of that, otherwise you well never get the results your looking for in a timely fashion. This nonsense will go on for another year before you are able to get the Board to address the problems that exist. If you where offended by his letter, then perhaps you gave him the results he was looking for. While his position and the position of the other Board members is to serve the publics best interest, at some point they tend to "Bite Back" as I say. Thus being the expected response. As far as his spreading falsehoods, I do not attend meetings, perhaps that question would be better served at one of their meetings. But if you sit back like I do, and watch the on-goings, his letter was exactaly what I expected to read. I dont necessarily agree with it, but it was his response, take it as constructive critisism. It hurts less.
Gary Morse October 22, 2011 at 01:41 PM
John, Your points are well taken, but there is a more likely outcome brewing here. Based on the history of this BCWA Board, this is advance damage control for what is about to happen (i.e. a politically based appointment of a new Executive Director, a politically based appointment of a new CFO, continued legal "rainmaking" at rate payers expense). When we see an end to this nonsense, then I'll say we have achieved a well run water authority that serves residents and not local insiders. I'm not holding any hope as long as the current Board remains. It will be politics as usual.
Gary Morse October 22, 2011 at 02:16 PM
John, I was once told that the moment you enter the "arena", you have to accept what is thrown at you as the price of being there. I understand that. But you have to consider where we are in the process. We are about to have a Board vote on a new CFO, and THEN a vote on a new Executive Director (in that order as I am told). That is largely a politically motivated decision. The order should be reversed and the choice of a new CFO should be decided by management, NOT THE BOARD!!!! We now know that BCWA was a mess (according to B&E Consulting given their report and their testimony before the councils). It was a mess because we had a Board and a Chairman of the Board who were clueless for the past 10 years. And now we are supposed to have faith in their future decisions? That was the point of my earlier posts. Mr. Jannitto was in charge of the Board and now states that they are being delayed in their search because they didn't have a proper job description for the Executive Director. I'm assuming you have the business background to understand the significance of that last point. That alone should be grounds for removal of the Chairman.
BOB I October 22, 2011 at 03:02 PM
BOB I October 22, 2011 at 03:08 PM
marina peterson October 22, 2011 at 04:43 PM
Good advice John. Certainly I am not shocked at his anger at being challenged; it was expected. But his libelous statements that falsehoods were spread without accountability was unacceptable. I have said many times in various letters that I would like to see specific instances of falsehoods rather than vague accusations. None ever appear. This letter was "damage control", pure and simple. When Mr. Jannitto states that no mismanagement of funds and no mismanagement of assets was found, he neglects to disclose that the BCWA would not have participated in the audit if it included a requirement for a full financial audit. I hope that they are prepared to back-up their accusations with facts, if necessary. As to the constructive criticism, what part of it do you consider constructive?
Gary Morse October 22, 2011 at 06:13 PM
Responding to Chairman Jannitto's comment -"and engage pension experts to defend well made choices by this board." In mid year 2010, the BCWA Board, non of whom are financial professionals, took action to increase the pension plans assumed rate of return from 6% to 8%. This vote was done without the written advice of their own pension investment advisor. The below is from the Office of the Treasurer's document "Truth In Numbers", page 6, regarding the state of RI's position on the investment rate of return in their pension plan. "On July 1, 2012, the investment assumption will be 7.5 percent. While this is a more realistic rate of return, the actuaries have warned that the state only has a 42.5 percent chance of achieving this target." A higher investment assumption can lead to future liabilities for rate payers. http://www.treasury.ri.gov/documents/SPRI/TIN-WEB-06-1-11.pdf
DownTown October 22, 2011 at 08:43 PM
Assuming Mr Jannitto reads these responses I have a few questions. Who paid for the very costly pipe upgrades on Ferry Rd for the RWU water tower - the entire ratepayer base or RWU? Why would the BCWA accept a 'gift' of that water tower when that will make all ratepayers responsible for maintenance on the water tower, pumps etc. Could the residents off Metacom Ave that have poor water pressure buy tanks for better pressure and then 'gift' the tank and pumps to the BCWA making them responsible for the equipment maintenance forever?
Mrs. B October 23, 2011 at 04:19 AM
Bravo Mr. Donahue. Good point.
DownTown October 23, 2011 at 06:42 PM
Thanks. I know residents off part of Metacom Ave have bought such equipment and when it breaks down they pay for repairs or replacement. They have been told that they were warned about water pressure problems prior to buying homes there. Even the fire hydrants there do not meet standards. I told a state fire marshal that the BCWA doesn't think it's responsible for hydrant pressures to which he laughed and said 'Well if they aren't who is?' Certainly RWU was also told that having hundreds of toilets and showers for thousands of students at the far end of Bristol would cause water pressure problems also but Federal grants paid for their tower (our hard earned money) and now the BCWA will pick up the maintenance costs forever - again our hard earned money. If the BCWA can pick up the maintenance costs for 1 customer's water tank and pumps then they can do it for all customers with water pressure problems. In fact I believe the courts would agree on that point.
brian m October 24, 2011 at 09:12 PM
again we have wrong info from the special interest groups. Just post the truth or don't post at all. It's easy to make up numbers.
Gary Morse October 24, 2011 at 09:30 PM
Brian Which numbers are wrong??
DownTown October 24, 2011 at 11:12 PM
Refute them publicly instead of just saying they are wrong.
brian m October 25, 2011 at 04:56 AM
#5 above sounds like a b&e report-crap--- a cfo has been on board for approx two weeks..if anyone understands what bcwa is responsible for it is the maint of water main and service to customers property line.. If no main goes by someone's property the owner is responsible for the cost of installing the main. as far as ferry rd. Bristol RWU did pay a portion of the cost BCWA official's could tell you exactly.also I believe that an acturary explained the pension issue.,
brian m October 25, 2011 at 04:59 AM
also the cfo is hired by the executive director. The executive director is hired by the board.
brian m October 25, 2011 at 05:15 AM
as far as a financial audit goes it is done every year and no problems were found.. Its in the yearly report.
DownTown October 25, 2011 at 09:07 PM
A portion could be $1 and I'm betting that project was hundreds of thousands. Now RWU has skipped out from under maintenance costs as they come up whereas customers with poor water pressure are told they are responsible for maintaining their own pumps and tanks etc. They should be able to 'gift' that equipment to the BCWA and 'gift' the maintenance costs also just as RWU did.
Gary Morse October 26, 2011 at 12:58 AM
Thanks Brian for the "new CFO" info. I had always thought that hiring a new CFO would have, should have, been the job of the new Executive Director, not the Board. Things never change at BCWA. I'm assuming that you are referring to # 5 above being the loaded labor rates. I have the spreadsheets of 2007-2009 W2 and base salary data for the comparable water authorities if you want to look at them. The info was provided by the authorities themselves. As far as the actuary explaining things on the pension plan, I was told his numbers were run at an 8% investment rate of return which is NOT the rate of return being used to actually make the payments from the pension trust fund. Generally, those numbers should not have more than a 1/2% difference since it understates the pension liability. As far as your point "If no main goes by someone's property, the owner is responsible for the cost of installing the main." This does not reconcile why BCWA is borrowing $500K to pay for replacement of residential service connections from the water main on Hope Street which is also the responsibility of the resident.
Gary Morse October 26, 2011 at 01:04 AM
Brian, We are not talking about the general operating budget of BCWA being audited which I agree is audited annually. What we are talking about are the expenses under the Bristol County Water Supply Act. Those are not covered by the BCWA auditor and have never been audited since 1993. This has been confirmed by the RI Water Resources Board.


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