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Commission votes in favor of DBO for new water treatment plant

June 17, 2013

WOONSOCKET  Opponents went down fighting as Mayor Leo T. Fontaine narrowly won the authorization he needs to privatize a proposed $50 million water treatment plant from the Budget Commission.
The long impasse over privatization finally broke on a 3-2 vote Friday as Fontaine and Commissioner Peder Schaefer lobbed verbal grenades at each other from opposite sides of the issue.
Shaefer said he’d been opposed to privatization from the outset, rattling off a half-dozen reasons why. He said he is concerned that the City Council and state lawmakers, whose cooperation the commission needs to right the city’s fiscal ship, are opposed to privatization. He said privatization “is not in vogue” anymore and would result in fewer bidders for the project. And he said it would exacerbate tensions with labor, another important partner for the city if the five-year solvency plan is going to be successful.
But it was Schaefer’s suggestion that privatization would impede the future sale of the water works that seemed to rile Fontaine most.
“This really ties the city’s hands for a 20-year or more period,” said Schaefer. We have an asset. I think the budget commission or a receiver or future councils or future mayors should have the opportunity to give it up if that’s the way to resolve the city’s financial problems.”
But Fontaine accused the deputy director of the Rhode Island League of Cities and Towns of putting the interests of other communities ahead of Woonsocket’s.
“I respect your opinion, but the fact of the matter is you work for the league of cities and towns and you represent all the other cities and towns,” said Fontaine. “You know what? I represent the city of Woonsocket. We’ve been screwed enough by the state and all the other cities and towns.”
The deadlock over privatization has been going on since at least 2009, when the City Council granted Fontaine permission to procure a new water treatment plant in a process known as design-build-operate, or DBO. That means one company would be granted a long-term contract – probably 20 years – to operate a plant that it has also designed and built.
In 2011, after an election cycle that changed the makeup of the council, the panel reversed itself amid increasing opposition to DBO. Much of the blowback has come from Council 94 of AFSCME, which represents some 30 workers at the plant who see privatization as a threat to jobs and benefits.
When the Budget Commission was seated in 2012, it put a hold on bidding the plant until the DBO controversy was settled. The panel voted to a hire an independent consultant to determine whether DBO would be cheaper than the traditional way of building a new plant, as the Fontaine administration has long argued.
The controversy seemed to have been put to rest on June 3, when a consulting team assembled by the Providence law firm Pannone Lopes Devereaux & West issued its report. Bruce Tobey, a former mayor of Gloucester, Mass. who led the consulting team, declared that DBO would be save the city about $28.4 million under a 20-year-contract. He said the plant would still cost about $51.6 million.
Tobey said some of the savings will come from reduced personnel costs, but much of the benefit would result from what he called “efficiencies of consolidated labor and planning.”
When DBO was finally put to a vote on Friday, Commissioner Dina Dutremble, a former business manager for the Woonsocket Education Department, sided with Fontaine and Ward, giving the elected officials the majority. Chairman William Sequino, in what may have been his last meeting, voted with Schaefer. The longtime Town Manager of East Greenwich, Sequino is expected to tender his resignation from the commission after he was hired recently for new job running the state Clean Water Finance Agency.
John Burns, a business agent for Council 94, reiterated his concerns before the meeting. He said he didn’t trust the “so-called independent report” issued by the consultants two weeks earlier.
“If DBO is 20 percent cheaper, why isn’t everybody doing it?” he said.
In the remarks he made before voting, Fontaine said he had nothing to do with choosing the consultants. In fact, Fontaine said the same consulting firm had previously been chosen to do a presentation at a convention of Schaefer’s employer – another reason the mayor gave for questioning Schaefer’s opposition.
“For you to sit there and say you don’t trust the report, I wonder why you had them at your own convention at that point,” Fontaine said.

DESPITE THE commission’s vote, it’s unlikely the controversy over DBO and the plant will be put to rest anytime soon. Many city residents are also against the plant, which they say will expose them to a new round of rate hikes on top of new taxes the commission is seeking as part of its five-year solvency plan. Some opponents carried signs to the commission meeting saying “Enough it enough.”
Taxpayers are tapped out, said Lisa Paradise, one of several residents who complained to the council.
“You want to hang us upside down and shake us?” she said. “My money tree is dead.”
In a non-binding move, the city council is expected to pass a resolution tonight opposing the DBO. Five of the council’s seven members are listed as co-sponsors, Vice President Dan Gendron, Roger J. Jalette Sr., Robert Moreau, Marc Dubois and Albert G. Brien. They question the assumptions used by the consulting team in projecting the savings, which they contend will be the result of lower-quality construction methods – an argument the consultants have already denounced as a myth.
The Fontaine administration says the city has no choice but to replace the antiquated Hamman Water Treatment Plant, and that DBO is the way to do it with the least pain for ratepayers. The state Department of Environmental Management has ordered the city to replace the facility to meet new health and antipollution codes by May 2016.
DEM says the city must build a replacement for the existing plant primarily to eliminate a practice of unloading a sludge-like material known as filter backwash into the Blackstone River. The backwash is mostly a concentrated form of raw reservoir water that is removed during the purification process, but DEM says it is harmful to the fish and other river creatures.
The vote allows Public Works Director Sheila McGauvran to issue what is known for a request for qualifications, or an RFQ, which is one step short of an actual invitation to bid for a DBO contract. A RFQ is an open call for potential bidders to submit detailed information about themselves and make a case for why they should be allowed to compete for a future contract to design, built and operate the plant.
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