Mayor Carolyn Kirk has asked the federal government to allow adjusted schedules for a series of mandated water and sewer projects so costly at an estimated $100 million, she argued, that paying for them all at once would put a crushing burden on ratepayers.
"By our calculations," Kirk wrote to Robert Varney, regional administrator of the federal Environmental Protection Agency, last Friday, "the combined water and sewer rates far exceed the 2 percent of median income that is the rule of thumb for EPA affordability."
Michael Hale, selected by Kirk yesterday to be acting director of Public Works and Utilities, said the average family of four in Gloucester is paying about $1,200 a year in water and sewer bills. Two percent of the median income of $57,227 for a family of four would be $1,144.54.
In her State of the City report, based on the current scheduling of the mandated work on the water and sewer systems, the mayor said the rates could more than double over the next five years.
Kirk also appealed to Varney for relief, noting that "many projects are stacking up at one time." She described them as a "tidal wave of consent work ... as the aging infrastructure from our old city reaches its useful life span."
Her letter reviewed the package of mandated improvements, including the seven-year, $40 million combined sewer overflow project that began two years ago, and the likely requirement that the city join the rest of the nation in putting its waste water through biological or secondary treatment. The city's wastewater plant is one of the nation's few remaining primary treatment plants.
She has estimated the city faces roughly $150 million in utility spending to meet federal and state standards for drinking and waste water and to end discharges of sewage into the harbor.
"Already," Kirk wrote, "Gloucester pays the highest combined water and sewer rates in the entire nation."
She also wrote that technical staff from EPA and the state Department of Environmental Protection have agreed with the city that Gloucester should be allowed to offer an adjusted implementation schedule to achieve the ends more efficiently while easing the city's burden.
"EPA and DEP (staff) have indicated that they could support the new scope and schedule for the work" so long as the city presents a satisfactory plan for converting the sewage treatment plant to secondary treatment and justifies reorganizing the combined sewer overflow project.
Varney's office had no immediate response to Kirk's letter.
But City Council President Bruce Tobey, who has participated in the meetings with federal and state environmental enforcers, said the mayor repeatedly made the point that while the city was busy doing mandated environmental improvements "we still haven't paved the streets."
"They've agreed in principle to our findings," Tobey said.
"We have a better plan to get us where we want to go," he said.
But Kirk also told Varney the city's case would be incomplete while financial records were uncertain.
In announcing the decision to appoint Hale to be acting public works director, the mayor also said she had given former Director Joseph Parisi "a special project" to assist a team of auditors working on a contract with the city to decipher records of environmental capital projects.
"Due to the project load, cuts in staffing and a difficult software conversion," she wrote to Varney, "the city has fallen behind in its record-keeping. The city hasn't closed the books on the 2007 fiscal year, and does not have a firm grasp on the status of the loan authorizations and expenses associated with the various capital projects."
Kirk made a detailed presentation of the mess in her State of the City report last month.
Soon after taking office in January, Kirk announced that she would not reappoint Parisi and Linda Lowe, the city's longtime legal counsel. Parisi agreed to a nine-day appointment.
In shifting him out of the director's position, the mayor gave Parisi a 30-day appointment to be dedicated to deciphering the books on capital environmental projects.
Kirk announced in her State of the City report that her administration is investigating "questionable expenses being funded through the (water and sewer) enterprise accounts and then ultimately being put on the water and sewer rates."
As utilities director, Parisi managed both enterprise accounts and proposed rates.
In the six years of his watch, Parisi repeatedly stood for realistic rates and set-asides in utility stabilization accounts, only to look on as the council subsidized lowered rates with the set-asides.
The borrowing for utilities is managed by the treasurer and reviewed and checked by the auditor.
Parisi described the past system as "cumbersome and confusing" and probably not reflecting "best practices."
Kirk said the uncertainty of the city's financial position compromises the clarity of its case to Varney for flexibility in scheduling the mandated work.
"Potholes are an annoyance," she said in an interview, "but what can bankrupt the city are the capital projects."
In a memo to the council explaining the shift in personnel at the top of the Department of Public Works and utilities systems, Kirk praised Hale and city engineer Richard Clarke for "instrumental" help in the negotiations with the federal and state environmental enforcers.
But she said the arrangements are "interim," with further changes in the works.
With the interim appointments, four of the 10 senior management positions in the Department of Public Works and utilities systems are either vacant or held on interim bases.
Richard Gaines can be reached at rgaines@gloucestertimes.com.
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