November 17, 2010
OCG and RISC call for a full financial audit of the Bristol County Water Supply System
Operation Clean Government (OCG) and the Rhode Island Statewide Coalition (RISC) have been closely following issues concerning the Bristol County Water Authority (BCWA). Our research of relevant documents has found that the water authorities responsible for protecting, maintaining and establishing an adequate and safe water supply for Bristol County residents have left Rhode Islanders with an incomplete water supply system and a fragmented financial records system. That makes it extremely difficult for ratepayers, taxpayers, or legislators to have any reasonable idea of how much money has been spent and how much money will be spent on Bristol County water supply capital projects that should have all been completed years ago. Read more….
In the 1994 timeframe, the General Assembly created a careful statutory framework to guarantee a safe supply of drinking water to Bristol County residents. The General Assembly authorized the construction of the East Bay Pipeline to connect the Bristol County water supply system to the Scituate Reservoir, and also directed the State to upgrade the current Bristol County water supply system.
Despite a careful examination of all available public records pertaining to the financing of the Bristol County Water Supply system OCG and RISC have been unable to determine how much money has been spent for these capital projects. We have found that different documents show different totals, from a variety of funding sources. There are no accountings with any straightforward report of expenditures. Appropriate authorities have been asked to provide us with an accounting of all the funds that were used to establish the Bristol County Water Supply system pursuant to law, to date no such accounting has been provided. However, based upon the most reliable public records currently available, that the following issues of immediate concern need to be addressed:
1. What Accounting measures have been used to date and are currently in place to properly monitor project spending by the WRB and BCWA such that they follow accepted industry “best practices”. As examples:
- Based on records of BCWA Board minutes dated February 15, 2006, the minutes report that most of $1 million of state funds earmarked for the Shad Pipeline project are reported as having been directed to non-Shad projects such as improvements to BCWA’s new headquarters building.
- We have been unable to obtain documentation that shows the “full and final” costs for the Cross Bay Pipeline and East Providence Interconnect completed in 1998. This project was paid in part with proceeds from state bond funds being Chapter 332 and Chapter 419 bonds. Following a comprehensive review of numerous project documents, we have been unable to reconcile how the funds were actually spent. We have been unable to account for as much as $3.2 million of costs and did request assistance from Mr. Thomas Mullaney, RI Budget Officer. We did receive a reply on November 3rd from Mr. Mullaney that he would attempt to reconcile the $3.2 million, but as of today, November 15, we have not yet received an answer.
- The numerous engineering studies completed since the 1989 Camp Dresser study appear to lack the specific objective of describing a final BCWA infrastructure upgrade as required per the original statutory requirements of RI General Laws Section 46-15.5-6. Even the most recent study being the May 2010 Camp Dresser “Final” report holds in Section 2, page 7, that planning on the Shad Factory Pipeline is “currently in the final design stages”. We've been unable to find any specific comprehensive report that outlines the final BCWA infrastructure design/cost?
2. Planning appears incomplete as to the cost / benefit of providing backup sources in the East Bay for disaster recovery of the Scituate Reservoir supply. As examples:
- To our knowledge, opportunities to utilize the new Swansea desalination plant as a backup source have not been evaluated.
- No studies were found that evaluated the cost benefit of obtaining water from the Massachusetts reservoirs. Specifically, the quality of the Massachusetts reservoirs has regularly been reported as being of poor quality. During construction of the Cross Bay Pipeline, BCWA’s Executive Director described in the September 3, 1997 Providence Journal that the water had “algae and other problems that need a lot more chemical treatment.” Therefore, we would appreciate a detailed explanation as to what basis is being used to develop the comprehensive plan? How will periods of shortage be handled? Will the Mass Reservoirs be used as a normal supply to the residents of the East Bay? What are the criteria for using Mass Reservoir water?
- We found no study that examined the long term operational cost based on labor rates to process Massachusetts reservoir water. OCG has examined various water authority labor costs between the years 2007 and 2009 which show BCWA’s labor costs may be significantly higher in measures such as: annual labor costs for total compensation, base wages of similarly skilled employees, overtime costs, and the cost of benefits. For example, in the comparative years of 2007-2009, base salaries were found to be 20% higher in BCWA than for similarly skilled employees in other water authorities. Pension costs were higher by as much as 200% when compared to other similar water authorities who are enrolled in the Municipal Employee Retirement System (MERS). We believe the WRB should consider overall long term operational costs in a value equation.
- Shad pipeline costs do not appear to be based on a comprehensive end-to-end plan with specific detailed cost analysis. The estimated $8,000,000 cost by the WRB did not appear to be based on reliable quantitative data including such costs such as dredging or road paving benefit packages to Rehoboth Massachusetts.
Margaret Kane, President of OCG, states: “Transparency and open government is defeated and citizens lose confidence in their government when financial records are so opaque that taxpayers cannot see where their money is being spent. Following a presentation of this information by Gary Morse at a meeting of the Water Resource Board Monday afternoon, it is clear that there are unresolved planning issues that must be addressed, and an audit is needed now.”
James T. Beale, Jr., President of RISC, announces: “Two important voices for reform in Rhode Island, OCG and RISC, have joined forces and are together calling for a full audit of the Rhode Island Water Resources Board and the Bristol County Water Authority, and a halt to all further capital expenditures by the Bristol County Water Authority related to its existing facilities until all relevant planning issues are addressed and there is a full audit of past and current spending on the Bristol County Water supply system to ensure that the 1994 legislative mandates are being followed in accordance with the intent of the General Assembly.”
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