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Water board in another dispute

Fight gets personal over conflict query

By Johanna Seltz
Globe Correspondent / February 5, 2012
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The Cohasset Water Department is making waves again - this time for questions about potential conflict of interest involving the chairman of the water commission and over concerns about plans to give a 20-year contract to a company to run the town-owned utility.

Water commissioners counter there is no conflict and they are only trying to do the best for the town - and wish Town Manager Michael Coughlin would stop sabotaging their efforts.

“This is a deliberate attempt to block what we are trying to do,’’ commission chairman Peter DeCaprio said in a telephone interview. “Why? Because he’s a megalomaniac idiot. He wants control over everything.’’

Asked to respond, Coughlin told the Globe he was “not trying to control things, as much as safeguarding the interests of the citizens of Cohasset.’’

The dispute has gotten personal, but at its heart is a disagreement - between the three water commissioners on one side, and the town manager and selectmen on the other - over who controls the water department.

A Special Town Meeting voted in 2010 to give the town manager joint oversight with the elected commissioners over the department. The action was in response to a $1.1 million deficit in the water budget, which an independent audit later attributed to an “overwhelmed’’ and bungling town finance department.

The water commissioners, however, say that they are in charge and hired a lawyer, at $200 an hour, to prove their point. The law firm of Blatman, Bobrowski & Mead concluded that an 1886 legislative act gave the water commissioners sole authority.

“We are a private corporation with all the rights that private corporations have, and have had since 1886,’’ DeCaprio said. “The Special Act of the Legislature trumps all.’’

Selectmen and Coughlin disagree, and say the water commissioners should have gotten permission before even hiring an attorney. Coughlin, who came on the job in August, said the matter is on the agenda for Tuesday’s Board of Selectmen meeting.

Also up for discussion is the water commission’s plan to issue a request for proposals later this month, in an attempt to find a company to run the water department for 20 years. The current five-year contract with American Water expires June 30.

The new arrangement would be different from the current one not only in its length, but also in the added responsibilities and risks assumed under the contract, DeCaprio said. Those new responsibilities include billing and collection but the town would retain the right to set water rates, he said.

Coughlin has raised questions over the timing of the contract proposal, which would need approval of Town Meeting in May. He’s also worried that if the proposal fails, there is no backup plan.

“We’re heading into a Town Meeting with a huge 20-year decision for the town to make,’’ Coughlin said. “I’m just concerned about the timeframe to debate such a significant change. We should take more time to study this.’’

Coughlin said he’s also concerned, for several reasons, that the water commissioners have spoken with Aquarion Water Co. about the proposal.

For starters, the town is part of a challenge against Aquarion’s proposed rate hike before the state Department of Public Utilities, he said. Aquarion provides water to North Cohasset, as well as Hingham and Hull.

Hingham and Hull are fighting the rate hike, too, and Hingham officials are so unhappy with Aquarion that they are looking into buying the local system.

Then there’s the question of possible conflict of interest, Coughlin said. Aquarion is owned, in part, by Macquarie Bank, which partnered with New York investors MD Sass to start DeCaprio’s Scituate investment management firm, Crow Point Partners.

DeCaprio dismisses any idea of a conflict in the connection, which he says is tenuous at best.

“The Macquarie entity that invested in my firm in 2006 had approximately $200 million in total assets, representing one tenth of 1 percent of Macquarie’s total assets,’’ DeCaprio said. “Macquarie’s investment in my company was less than $15 million, which is less than one one-thousandth of 1 percent of Macquarie’s total assets.’’

DeCaprio said there is no longer an affiliation between his firm and Macquarie or MD Sass. “We have been a private, employee-owned partnership since early 2011,’’ he said.

“These are false and baseless charges that are purely political,’’ he added. “I have no relationship with Aquarion except for being a customer, like everyone else in North Cohasset not on well water.’’

Coughlin doesn’t consider the matter closed, though.

“I feel that the only way that this issue can be laid to rest [is] if Mr. DeCaprio makes a full disclosure to the town attorney, which in turn is formally submitted to the state Ethics [Commission] for an opinion.’’

Former selectwoman Karen Quigley, who was on the board that appointed DeCaprio to a vacancy on the water commission, agreed that the Ethics Commission should decide whether there’s a conflict, or an appearance of conflict.

“Either Mr. DeCaprio will be exonerated and he’s due an apology, or he won’t be and then he owes the town an apology,’’ she said.

Coughlin said another issue that selectmen will address is whether the water commissioners acted improperly by talking to Aquarion officials before the request for proposals was released.

DeCaprio said the board spoke with about 20 utilities and municipal officials to get input on the best way to manage the water department. “All we’ve done is background research to try to get the best possible transaction for our ratepayers,’’ he said.

Water commissioner Leonora Jenkins said it was only natural for the board to talk to Aquarion, since it already provided water service in town and in neighboring communities. “You have to be realistic and not live in a vacuum,’’ she said.

Jenkins said she had no concerns about conflicts of interest. “In today’s business world, people are so interconnected. Peter is not the type of person who would give [anyone] undue consideration above anybody else,’’ she said.

“I’m very upset about a cloud that the water department was placed under,’’ she added. “We’ve been working diligently . . . so our ratepayers will be benefited and will have a good quality product.’’

Quigley said she thinks the town needs more time to sort out the issues.

“I don’t know if this is the best option,’’ she said of the plans for a 20-year contract. “The water commissioners are asking us yet again to trust blindly in their decision-making. That hasn’t worked out so well for us in the past.’’

Johanna Seltz can be reached at

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