Mayor Michael Sullivan
City Hall
Holyoke, MA
March 10, 2005

Dear Mayor Sullivan:

Holyoke Citizens for Open Government (HCOG) urges you to listen Holyoke’s citizens. We ask you to reconsider the decision you announced in the March 9th Republican newspaper to ignore the plea of citizens for a public cost-comparison for the city’s Combined Sewer Overflow/Waste Water Treatment Plant (CSO-WWTP) problem.

On February 7th at Holyoke High School, about 500 citizens responded to the postcards sent out by the DPW to discuss the impending rate hike to fund the CSO/Waste Water Treatment Plant. Nearly all who spoke felt that before deciding on funding the Aquarion company service contract, the City should obtain a credible cost estimate for a city-run project to see if it would be cheaper.

This is not a personal attack on you, as you suggested to the newspaper reporter, but genuine citizen concern for the future of the city. Nor were these 500 grass roots citizens from the “left wing” as critics of the Aquarion contract have been labeled in the local press; the issue of public-private partnerships versus publicly run public utilities is a wide-ranging debate on the national level that cuts across party lines, with both Republicans and Democrats on both sides of the argument.

None of the cost estimates compare an optimized municipal operation versus a privatization option. The City does not have an apples-to-apple comparison.

As we have now learned, there is a reason. The economic advisors hired by the City were only directed to examine status quo costs developed by Tighe & Bond, according to the contract you signed. And the team of four consultants were directed to solicit, evaluate and award a 20 year design-build-operate contract. There was not a separate consulting team set up which was told to develop a competing municipally-run project. The absence of an even-handed analysis leaves the question of what is best for ratepayers completely unanswered.

On behalf of the citizens of Holyoke who spoke at that forum and those we have spoken with in the following weeks, we request that you reconsider your decision announced in the March 9th Republican article and sign City Council orders referred to you by the city council:  #34 and 35 and  #1) Independent Cost and engineering analysis of a municipal run operation: This order, which was adopted 14-1, calls for the City Council to oversee an independent engineering consultant to evaluate the design and costs of an optimized city-run WWTP/CSO project.
This can be used by ratepayers and the city council to make an informed judgment on the most economic and effective alternative. We presume you share that objective.What this Order provides is an apples-to-apples comparison for the costs of a municipally run project that will meet EPA/DEP requirements. The studies by HDR are not independent, are not even handed, and do not provide an apples-to-apples comparison. 

Since the economic analyses were completed, there have been developments which  indicate the magnitude of the CSO problem may be smaller than was projected.  Employees cleaned one interceptor at South Street that had diverted flows into the river, instead of the WWTP. The net result is that CSO volumes are lessened, and when CSOs do occur, the overflow  doesn’t last as long. The question this development raises is whether capital costs could be reduced to some extent, and still achieve compliance with EPA and DPE requirements.

The public was told that a bid for a publicly run operation would be developed with part of the $2.5 million in bonding approved in October 2002, as part of the process of evaluating how best to proceed with the CSO issue.

Despite all the debate in Holyoke regarding how to address the CSO issue, there is still no public bid on the table for consideration.  DPW Superintendent Bill Fuqua has stated publicly that the City could do the required work.

At last week’s city council meeting letters from the consultants were read to the council and it appeared that every one of the consultants was asked to help the city only with a public-private partnership (aka privatization). One of the consultants identified himself as the “quarterback of privatization.” It is time for you to adopt the order presented to you on behalf of the ratepayers and citizens of Holyoke to authorize a public bid.

There are resources and information available to assist communities with
evaluating public vs. private proposals.  The (national) Association of Metropolitan Water Agencies (AMWA)  and the Association of Metropolitan Sewerage Agencies (AMSA)),  professional organizations of sewer and water commission directors, have produced publications laying out clear formulas for comparing costs in a  way which assures a "level playing field".  Their joint publication, "Public vs. Private Comparing the Costs," is designed for governing bodies of public utilities that may be contemplating a potential switch from public operations to a private service contract.  By applying the framework, public decision makers can assure themselves and their constituents that they are delivering the highest quality service at the lowest possible price. They further state that the difference in costs should be at least 10% to warrant a change from
public to private operation. We are providing you a copy of this material along with this letter.

Holyoke needs a credible proposal for a municipally run system on the table to compare with the Aquarion service contract, using a legitimate cost comparison framework as suggested by  these agencies.  There are huge ramifications for Holyoke over the next 20 plus years in this decision. Regrettably, it appears the entire process was stacked in favor of one outcome. The first step towards restoring credibility is to approve the Order for an optimization study for a publicly-run operation and request the necessary appropriations from the DPW for the City Council to retain the consultants to carry out this independent assessment.

It is clear from the overwhelming turnout at the February 7 public forum that there is a clear mandate from the citizens of Holyoke to ascertain whether a city run operation is more cost effective.  We urge you to listen to the voices of the public and at least do what you can to give the public another option. The February 7 hearing forum also showed that when a real effort is made to involve the citizens and ratepayers of Holyoke, they will get involved.

We are disappointed that you chose not to record and broadcast the February 7 hearing on the government channel. The public needed to hear the debate on this subject.

However, there is a recording of a February 16 forum on the CSO/WWTP issue, that we have sent to you. We respectfully request that you air those tapes from this February 16 public forum on Comcast Channel 15 so that the public has a more informed view of this issue. This tape includes a discussion, which we hope you watched, of what happened in Lee, Massachusetts when they hired consultants to evaluate privatization vs municipal operations. Some of the same consultants hired by Holyoke overstated the costs of Lee’s municipal operations, which raises some doubt about the value of their cost estimates produced for Holyoke.

The City Council approved an order requesting that this February 16 forum be broadcast. We urge you sign this order forthwith, and direct Comcast to broadcast this tape several times.

Lastly, we ask you to adopt Order #34 asking the DPW Commissioners to check with DPW employees to see what can be done at the WWTP plant now to improve conditions and the handling of the sludge with funds that are presently available to further reduce the amount needed to raise the sewer rates. Since the discussion about the Aquarion contract, there have already been improvements that indicate the magnitude of the CSO problem may be smaller than was projected.  Employees cleaned one interceptor at South Street, overflows were lessened, and now, when it does overflow , it doesn't last as long.

What else can be done to increase cost saving measures? Can we get ideas from Chicopee where they seem to have a handle on their CSO problem and are running it themselves?

We have worked  hard in an effort to open up this process, and participate with you and the city council in these decisions.  Let our city be a model of democratic decision making in Western Massachusetts.

Holyoke Citizens for Open Government
cc: Attached is a list of selected HCOG active members

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