Town Challenges Legality of High-Priced Contracts
By JAMES KINSELLA
Gazette Senior Writer
Tisbury town officials are challenging the legality of multi-year contracts negotiated with the two people who supervise the Tisbury Water Works and Oak Bluffs Water District systems.
The officials also have expressed concern about the $100,000 salaries and additional employment benefits for water superintendent Deacon Perrotta and water systems administrator Lois Norton.
Ray LaPorte, chairman of the Tisbury board of selectmen, said yesterday the contracts are not enforceable.
In particular, Tisbury town counsel Michele E. Randazzo has raised questions about the authority of water commissions to negotiate contracts in excess of one year, about the legality of funding the salaries without town meeting approval, and about the terms of employment, specifically whether such provisions violate the town's personnel bylaw.
The salaries make Mr. Perrotta and Ms. Norton - who are paid $50,000 by each of the water commissions in Oak Bluffs and Vineyard Haven - among the highest paid public employees on the Vineyard.
In Tisbury, for example, the police chief is paid $83,771 and the town administrator $75,774. The highest paid Dukes County employee is the manager of the Martha's Vineyard Airport, who is paid $88,686. The Dukes County sheriff makes $84,582. The county manager's annual salary is $75,381.
The starting pay on Mr. Perrotta's and Ms. Norton's previous contracts, which took effect six years ago, was $90,000 ($45,000 from each town).
The Tisbury board of selectmen and town water commissioners met in the Katharine Cornell Theatre yesterday to discuss the Perrotta and Norton contracts. Mr. LaPorte asked water commission chairman David Schwab to request the commission's attorney to examine the issues raised by the town.
Tisbury selectman Tristan Israel called the terms of the contracts exorbitant. He said he is concerned about the incongruity of the salaries when compared to other Tisbury town salaries, as well as the possible ramifications of the salaries rippling across the town.
Tisbury town administrator John Bugbee said the size of the current salaries belatedly came to the attention of Tisbury officials only after an Edgartown official called to ask about salary levels in the water department.
"I don't think anyone realized the size of the contracts," Mr. Bugbee said. The water commission manages its own finances, he said.
Mr. LaPorte said details of the salaries and the contracts would have been flagged in the town long ago, were it not for the operational independence of the water works from other parts of town government.
Mr. Israel acknowledged that the selectmen perhaps should have been more alert about the contract agreements. But he said the board would be remiss not to raise questions now.
Selectman Thomas Pachico said the salary compensation details have not been readily available, even though Mr. Schwab said the company has sent copies of past contracts to the personnel board.
"Nobody knows," Mr. Pachico said. "How would you know? It isn't in the town report."
William Cini, chairman of the personnel board, said the contracts do not come close to any other employment agreements for the town of Tisbury. Mr. LaPorte said the town personnel board should be involved in the resolution of the issues.
The current salaries are being paid under five-year contracts negotiated last April by the two commissions with the two employees. The contracts took effect July 1.
Also under the contracts, Mr. Perrotta and Ms. Norton each are being paid annually a total of $10,000 in deferred compensation ($5,000 from each town) and $3,000 for a Roth individual retirement account ($1,500 from each town).
Both individuals also pay 10 per cent of their health care premiums, in contrast to the 25 per cent paid by Tisbury and Oak Bluffs town employees.
Under their respective contracts, each individual is slated to receive annual pay increases of at least four per cent. Also, in case of termination for just cause, each employee would receive a lump-sum payment equal to one year's salary and benefits.
The Tisbury water system has had a tradition of independent operation. In the late 1980s, however, the board of selectmen secured a superior court judgment against the water commissioners that gave the selectmen, not the water commission, the sole authority to set the conditions of employment for water system employees.
Mr. Perrotta said the water system budgets total about $1.6 million for Tisbury and the same for Oak Bluffs. He said that he and Ms. Norton supervise six employees, plus contractors, in Tisbury, and five employees, plus contractors, in Oak Bluffs.
"We have two full-time jobs," Mr. Perrotta said.
Mr. Schwab said earlier this week he considers Mr. Perrotta and Ms. Norton well worth the money.
"We don't recognize it as part-time work," Mr. Schwab said. "Essentially, they're doing twice as much work."
Michael DeBettencourt, one of the water commissioners in Oak Bluffs, said he is very happy with the job performance of the two individuals.
"They do a great job in Oak Bluffs," Mr. DeBettencourt said.
As for the salaries that the water systems commissions negotiated with the two individuals, Mr. DeBettencourt said, "I think they're on a par with the other professionals on the Island. The cost of living is pretty high, obviously."
Mr. Schwab said the two employees do excellent work, and that they do it with less support staff than is common in other Massachusetts water systems. He said the two not only handle the day-to-day operations of the two systems, but also supervise capital projects for the systems.
"I hope to get them signed to another five-year contract after this," he said.
Their salaries, he said, are funded through fees paid by water system users rather than property taxes.
As for why Ms. Norton is paid at the same rate as the water superintendent, Mr. Schwab said she has shown an ability to step in for Mr. Perrotta when he is away. Mr. Schwab said she has the necessary licenses and experience to run the two systems herself.
Ms. Norton is working under a contract that gives her and the superintendent the joint administrative responsibility for running the two water systems.
When Mr. Perrotta was out for health issues for three weeks earlier this year, Mr. Schwab said, Ms. Norton stepped in. "Because of the system we had going on, we didn't miss a beat," Mr. Schwab said.
When both individuals are on the job, Mr. Schwab said, Ms. Norton usually handles the finances for the two water systems.
Oak Bluffs selectman Kerry Scott said she is comfortable with the salary level paid the individuals in Oak Bluffs so long as the town's water commission deems the salary appropriate.
But Ms. Scott said she is concerned about the disparity in the percentage of health premium payments, as well as the one-year severance agreements. She questions the fairness of such provisions when considered against what other Oak Bluffs employees receive, as well as their legality.
In the review solicited by Mr. Bugbee, Ms. Randazzo of Kopelman & Paige wrote: "In my opinion, there are several legal issues that could impact the validity of the contracts in question."
The legal issues include whether the water commission has the authority to hire and fire employees; the placing of the two employees outside the town personnel classification plan; the duration of their contracts beyond one year; the lack of specific salary authorization by town meeting; the health care premium contributions beyond those received by other Tisbury employees; and the payments into the deferred compensation and Roth IRA plans.
A number of the issues, Ms. Randazzo wrote, might be resolved only through litigation, while others could be addressed through local bylaws or by amending the 1905 state act that created the Tisbury water system.
In particular, Ms. Randazzo stated:
* That the legislature did not create a separate water district when it created the Tisbury water system. As such, she said, the Tisbury system is properly viewed as a department within the town. "Department heads typically do not have ultimate hiring and firing authority for department personnel," she wrote.
* That the employment terms were reached outside the town's classification plan, which Ms. Randazzo said would appear to violate the town's personnel bylaw.
* That the state department of revenue has held that municipal employment contracts, outside certain limited exceptions not covering these positions, are enforceable for only one year.
* That the salaries would be subject to annual funding and appropriation by town meeting.
* That state law requires that municipal employees, with limited exceptions not extending to these positions, receive the same percentage of health care premium coverage.
* That the annual deferred compensation and Roth IRA contributions beyond those offered to all municipal employees generally are provided only for certain positions, but not these.
"We have to answer to the town," Mr. LaPorte said at yesterday's meeting. "We have to do due diligence on the legal side. We have to do due diligence on the compensation side."