Submitted to the Mirror by Loraine Huchler, P.E., CMC®, FIMC, email@example.com. This comment was read into the record at the last Town Council Regular Meeting
I am an Eastern Shore resident and a licensed professional engineer specializing in water and wastewater. I’ve been following the Town’s progress evaluating the option to sell the Water & Wastewater assets and outsource the services. On September 3, 2020, the town adopted and posted the local Public-Private Education Facilities and Infrastructure Act of 2002 (PPEA guidelines). The Town accepted an unsolicited conceptual proposal from Aqua on October 9, 2020 and accepted a finalized conceptual proposal from Virginia American Water (VAW) shortly after receipt of clarifications on January 8, 2021.
There’s a requirement to post-conceptual proposals for public access. “Why aren’t these two conceptual proposals currently available to the public on the Town’s website as required by the PPEA guideline?” Section V.B.5.a. of the local PPEA guidelines reprinted below, requires that solicited and unsolicited proposals shall be posted to the Town’s website within 10 days of acceptance.
As of Thursday morning (2/18/21), I was not able to find these two proposals on the Town’s website. This requirement applies even if the proposals contain information labeled “confidential” that Town officials redact prior to posting the document.
Today’s agenda includes a request for the council to move from the Conceptual Phase Review to the next phase. Is it appropriate for the Town Council to approve advancing these conceptual proposals to the Detailed Phase when the Town Manager has failed to comply with the PPEA requirement to post the two accepted conceptual proposals to the Town’s website within 10 days of acceptance? Why would you violate the PPEA guideline and deny stakeholders their legal right to access these documents in a timely manner?
In tonight’s request for deliberation, the town manager has stated that “it would appear to be in the Town’s best interest to continue this investigation to determine if the sale of our utilities could be in the best interest of the Town.” ”What constitutes “best interest in the Town?”
Water and sewer rates and fees are a critical issue for stakeholders. The submissions in the Detailed Review Phase requires bidders to define rates and fees (Section D.1.iv.); however, there’s no requirement to disclose these fees and rates to the stakeholders.
Numerous studies have documented the high probability that the rates and fees will increase after privatization because corporate profits, dividends and income taxes can add 20 to 30 percent to the operation and maintenance costs – and these costs are passed on to the ratepayers., “How important is the issue of the projection of rates and fees in Town Council’s decision?”
On February 5, 2021, the Town of Cape Charles released a Request for Proposal (RFP) for PPEA Utility Consulting Services. There are seven (7) tasks: Background research, PPEA processes & procedures, asset appraisal, rate forecast & capital investment strategy, evaluation and contract monitoring metrics, meet with Cape Charles staff, and participate in town hall meetings & assist with PPEA agreement. This is a significant amount of work: “What is the budget for these consulting services? “How will the town pay for this work?” “Shouldn’t the appraisal of the assets and the financial analysis – defining the capital investments and forecasting the rates – be done first to understand what is a fair purchase price?” “If the town decides not to complete a deal with either bidder, does any of the expense for the consultant’s work have tangible value?” There’s no sense in spending money to conduct intensive due diligence if the Town determines part-way through the process that the deal is not “in the best interest of the town”
Finally, I’ll continue to ask the questions that I’ve asked for the past six weeks, “Why? Why does the town want to sell the water plant?” and “After paying off the current debt, how does the Town plan to spend the proceeds of the sale of these assets?” As ratepayers and stakeholders, we deserve transparent actions and timely answers to our questions.