A meeting of the Board of Directors of the Massachusetts Water Resources Authority was held on April 18, 2001 at the Authority Headquarters in Charlestown. Present: Norman Jacques, Advisory Board Representative; Chairman Robert Durand, Lucile Hicks and Donald Mitchell, Gubernatorial Representatives; Antonia Pollak, Vincent Mannering and Robert Spinney, City of Boston Representatives; Joseph MacRitchie, City of Quincy Representative. Absent: John Carroll and Andrew Pappastergion, Advisory Board Representative; Marie Turner, Town of Winthrop Representative.

AGENDA

Report of the Chair

No report.

Report of the Executive Director

Barbara Gottschalk, MWRA Interim Executive Director, reported to the Board that the Massachusetts House of Representatives released its version of the FY02 state budget, which includes a recommendation to fully fund the Commonwealth Sewer Rate Relief Fund (CSRRF). Specifically, the House allocates $66.5 million for this statewide program and includes the following language:

The House's recommendation is good news for MWRA ratepayers as debt service assistance is annually drawn from the CSRRF. The House is expected to start debating its budget on April 30, 2001. Provided that the Senate matches the House recommendation, funding of the CSRRF will not be subject to negotiation between the conference committee members of both houses.

Ms. Gottschalk also reminded the Board that the Boston Harbor Project Symposium is scheduled for May 16, 2001, at the Kennedy Library at South Boston. The Symposium will feature a number of speakers who were involved in the Project as well as a transfer of legal papers from Judge A. David Mazzone to the President of the University of Massachusetts, William Bulger.

Additionally, Ms. Gottschalk informed the Board that the Association of Metropolitan Water Agencies recently honored MWRA with an award for competitiveness. MWRA is one of twenty such agencies to receive the award this year.

APPROVALS

Appointment of Proxy for Fore River Railroad Corporation

The Board voted to appoint Barbara Gottschalk, with the power of substitution, to vote as proxy at the next annual meeting and any special meetings of the stockholders of the Fore River Railroad Corporation. In addition, the proxy is directed to elect the following Board members:

Executive Director (ex-officio) Maggie Debbie Richard G. Mills

Kenneth Wissman Michael Hornbrook Joseph P. MacRitchie

Elizabeth Murray Norman P. Jacques Nancy Kurtz

Appointment of Maintenance Manager

The Board voted to approve the Executive Director's recommendation to appoint David Shea to the position of Maintenance Manager, Deer Island, at an annual salary of $88,940, to be effective on the date designated by the Executive Director. Mr. Jacques asked staff why this position was not filled from within. Staff responded that many internal applicants were considered; however, Mr. Shea's qualifications exceeded expectations. Mr. Jacques asked that with all of the training programs the Authority offers, combined with Mr. Shea's lack of MWRA experience, aren't internal applicants being denied a promotional opportunity? Staff responded that MWRA is trying to balance the rate of internal and external hires. Mr. Jacques clarified that his overall point is that the Board approves an enormous amount of money on training, regardless of Mr. Shea's qualifications. It seems a natural progression for an internal candidate to progress to the Maintenance Manager position.

Joseph Favaloro, Executive Director of the MWRA Advisory Board, informed the Board that one of the Advisory Board's recommendations to the Authority's Current Expense Budget is to put a hold on external hiring. The recommendation is based on the pending results of the MWRA Competitiveness Study and the ongoing consolidation of operations in Chelsea. The Advisory Board believes that staff should have to overcome many firewalls before making external hires.

Non-Union Compensation Program

The Board voted to take the following actions in the FY01 Non-Union Compensation Program: (1) approve a revised non-union salary structure for Grades 13 to 17 for FY01; (2) authorize and direct the Executive Director to implement "pay for performance" compensation adjustments for non-union managers for FY01 and FY02 where the range adjustments for individuals shall fall between 1% and 5.5%, with the average adjustment and resulting cost not-to-exceed 3.5% of the payroll; and (3) direct that MWRA continue to review its non-union salary structure by internal and external market review for the purpose of providing market-based recommendations to the Board for the revision of salary ranges in FY02.

Mr. Spinney asked staff how it justifies raises for non-union employees when contract negotiations for union employees are still pending. Staff responded that in recent weeks negotiations have improved.

Affirmative Action Plan: January 1, 2001 - December 31, 2001

The Board voted to approve the Massachusetts Water Resources Authority's Affirmative Action Plan, effective for a one-year period from January 1, 2001 through December 31, 2001.

April PCR Amendments - FY01

The Board voted to approve the amendments to the Position Control Register. Amendments with a financial impact are as follows:

The annualized budget impact of these amendments will range from $330,723 to $569,565. The actual impact will depend upon the salary levels of employees that fill the vacant positions. Staff states in its summary that it will ensure that any cost increases associated with the PCR amendments will not result in spending over the approved FY01 Wages and Salaries budget.

CONTRACT AWARDS

Availability Analysis Study Services: D.J. Miller & Associates, Inc., Contract A419

The Board voted to approve the recommendation of the Consultant Selection Panel to select D.J. Miller & Associates, Inc. to conduct an Availability Analysis Study and to authorize the Executive Director, on behalf of the Authority, to execute Contract A419 with D.J. Miller & Associates, Inc. in an amount not to exceed $149,731 (of which $86,316 is to be reimbursed by the Commonwealth and the Water Pollution Abatement Trust), for a contract term of 250 calendar days from the Notice to Proceed. The Analysis Study must be conducted every three years in order to qualify for continual receipt of federal grants.

DITP Environmental Compliance Assistance: TRC Environmental Corporation, Inc., Contract S349

The Board voted to approve the recommendation of the Consultant Selection Panel to select TRC Environmental Corporation, Inc. to provide environmental compliance assistance services for the Deer Island Wastewater Treatment Plant and to authorize the Executive Director, on behalf of the Authority, to execute Contract S349 with TRC Environmental Corporation, Inc., in an amount not to exceed $253,576, for a term extending from the date of the Notice to Proceed through December 31, 2003.

CONTRACT AMENDMENTS/CHANGE ORDERS

MWRA Chelsea Facility: Griffin Way, LLC, Change Order 1

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Change Order 1 to increase the amount of the Work Letter Agreement, Exhibit C, to the lease between MWRA and Griffin Way, LLC, in an amount not to exceed $837,000. The Board further voted to authorize the Executive Director to approve additional change orders as may be needed to the Work Letter Agreement in amounts not to exceed the aggregate of $250,000. One purpose of this change order is to provide voice and data cabling ($610,000), which will be installed by the lowest bidder, Sullivan McLaughlin of Boston. The other purpose is to provide electrical, architectural and security system design changes ($227,000) requested by staff, which will be performed by the Prime Contractor. Change Order 1 will be funded through the MWRA capital budget, rather than the Developer's financing.

Norumbega Reservoir Covered Storage Design/Build Project: Norumbega Constructors - J.F. White/Slattery Skanska, Inc., JV, Contract 6213, Change Order 3

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Change Order 3 to increase the amount of Contract 6213 with Norumbega Constructors - J.F. White Contracting/Slattery Skanska, Inc., Norumbega Reservoir Covered Storage Facility, in an amount not to exceed $300,000. The Board further voted to authorize the Executive Director to approve additional change orders as may be needed to Contract 6213 in amounts not to exceed the aggregate of $250,000 and 180 calendar days. Change Order 3 increases the cumulative change order total to $399,943.17, added to the original contract amount of $89,400,000, for a revised contract total of $89,799,943.17. The FY01-03 CIP includes a budget of $89,495,000 for Contract 6213, resulting in a $304,943.17 deficit. Staff's summary does not contemplate how this deficit will be addressed.

Air Quality Consultant: TRC Environmental Corporation, Contract S271, Amendment 3

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Amendment 3 to extend the time for completion of Contract S271 with TRC Environmental Corp., Air Quality Consultant, by three months to June 30, 2001. Amendment 3 has no financial impact.

Boston Harbor Project - Final Site Completion: Barletta Heavy Division, Inc., Contract 6201, Change Order 14

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Change Order 14 to increase the amount of Contract 6201 with Barletta Heavy Division, Inc., BHP Final Site Completion, in an amount not to exceed $1.6 million and extending the time for completion by eighty-one days to September 27, 2004. This change order also includes the deletion of Milestone 7 and the addition of Milestones 7A and 7B.

Change Order 14 increases the cumulative change order total to $2,595,968.48, added to the original contract amount of $31,741,234, for a revised contract total of $34,337,202.48. Mr. Mannering referred staff to its summary, which indicates that Contract 6201 has required a total of $2.6 million in change orders since July of 1999, and asked if this is considered average. Staff explained that excavation, which often reveals unanticipated site conditions, has largely contributed to increasing the cost of Contract 6201.

INFORMATION REPORTS

QualServe Update

At its March 21, 2001 meeting, the Board was updated on the QualServe Self-Assessment Survey, the first part of a QualServe process at MWRA. During the week of March 18, 2001, a five-person team from leading public and private water and wastewater utilities in the US and Canada conducted an MWRA Peer Review. The team met with eighty-six members of the MWRA staff, toured MWRA facilities and reviewed extensive MWRA documentation. The team then presented the Authority with a Peer Review report, which highlights the team's assessment of MWRA's strengths and recommendations for improvement.

Highlighted strengths include MWRA's excellent source water quality and protection, ability to meet court-ordered requirements, strong relationships with member-communities, skilled and committed workforce, and efforts to promote competitiveness. Suggested areas of improvement include labor-management collaboration, maintenance management (the report encourages MWRA to continue implementing the MAXIMO system) and reliability-centered maintenance. Overall, the report identifies 164 strengths and eighty opportunities for improvement within twenty-six business practice categories.

Ms. Gottschalk explained to the Board that the QualServe process is a companion piece to MWRA's Competitiveness Study, which is currently underway by Black & Veatch. The distinction is that QualServe measures MWRA against similar utilities around the US and Canada from the perspective of industry peers. Ms. Hicks reminded staff that MWRA conducted a management study several years ago and that each study requires a great deal of staff time. Staff responded that it believes the level of study efforts have been appropriate thus far. Mr. Mannering referenced staff's summary, which mentions that MWRA should consider a study to standardize engineering practices. Mr. Mannering reminded staff that the Board has made this recommendation in the past. Staff responded that an engineering study to standardize best business practices is currently underway. Staff added that there are differences of opinion between the QualServe team's recommendations and MWRA staff. Staff attributes these variances to the team representatives not fully understanding MWRA.

Update on Competitiveness Study

The Consultant conducting the Competitiveness Study is Black & Veatch, which is currently collecting data from comparable water and wastewater utilities around the country. This information will provide the basis for comparison against nineteen staffing categories. It will also be supplemented with questionnaires and telephone interviews. Staff expects collection of the data at MWRA will take an additional two to three weeks to complete. The project schedule then allots an additional three to four weeks for Black & Veatch to analyze the information and present draft preliminary conclusions. Black & Veatch is targeting late May/early June of this year as the completion date for the draft staffing report and the end of June for the final report.

An amendment for $53,600 is currently being processed under delegated authority, which will bring the total contract value to $402,170. The increased cost is associated with Black & Veatch designating additional staff to work on the study. The FY01 CEB includes $300,000 for this study, of which $281,000 is expected to be spent by the end of this fiscal year. The remaining $121,000 ($402,170 - $281,000) balance will be added to the FY02 budget because no additional funds were included in the proposed budget for the study.

Internal Audit Management Advisory Review of Affirmative Action and Compliance Unit (AACU)

AACU has made a number of suggestions for MWRA to better recruit candidates. Although on-campus recruiting does occur, staff has not been tracking its progress in this effort. AACU has asked staff recruiters to document irregularities and update job descriptions. Mr. Mitchell stated that he is grateful to staff for the job it is doing and asked if the new tracking system will be part of Human Resources (HR). Staff responded that this has not been addressed as of yet. However, HR staff has been tracking MWRA's recruiting efforts since January 2001 and will be providing its findings to AACU.

Mr. Mitchell asked why there was such a previous lack of communication between HR and AACU. Staff responded that it was more of a question of there being room to improve communications rather than a lack thereof; going forward HR and AACU staff will meet once every month. Mr. MacRitchie asked whether there is less consultation with the Law Division since many departments have attorneys working within them, which may cause employees to seek advice from within. Staff responded that with the exception of two TRAC employees that track enforcement, no other attorneys work as such unless they work in the Law Division.

Update on Framingham Extension Sewer Corrosion and Odor Control

Staff updated the Board on the ongoing odor and corrosion problems from the Framingham Extension Sewer, Framingham Extension Relief Sewer and downstream interceptors. Staff recently held a workshop for officials from Natick, Ashland and Framingham regarding the financial penalties these communities may incur for exceeding sulfide limits. Staff has tried to assure the Towns that penalties are implemented to promote good faith efforts on their part. Staff is also trying to speak with every impacted industry and is continuing to meet with Town officials.

Mr. Spinney asked whether Framingham's numerous pump stations are contributing to the problem and whether the Town has any plans for consolidation. Staff responded that although the Town has hired a consultant on this matter, consolidation is a long-term, expensive option. Staff added that the short-term responses are a chemical addition program and downstream monitoring. The long-term solution is to reline Framingham's pipes.

Regional Infiltration/Inflow (I/I) Task Force Report

The I/I Task Force is a broad based coalition consisting of representatives from each MWRA sewer community, federal and state regulatory agencies, the MWRA Advisory Board, watershed associations, the Wastewater Advisory Committee, businesses, EPA, DEP and MWRA. The Task Force was organized to develop a working group of sewer communities within the region, avoid prescriptive enforcement measures that regulators were seeking to implement, and encourage communities to respond in writing, which is a valuable tool for staff to use in bringing votes before the Board. The Task Force recently completed its report, which is an outline for regional I/I reduction, based on specific goals and implementation strategies. The report is intended to provide guidance for local communities, MWRA, DEP and other regional stakeholders. Task Force representatives thanked Jay Fink of Newton for organizing and running the meetings.

Update on Boston Low Service, Phase III: Stray Current Protection

On January 10, 2001, the Board approved the installation of passive electric stray current protection to MWRA's water mains in the vicinity of MBTA's Green Line in Brookline. The long-term solution to stray current on MWRA's Boston Low Service transmission mains is for the MBTA to upgrade its system to eliminate the source of stray current. Staff explained to the Board that MWRA is under time constraints to complete the installation, as Boston and Brookline have project plans for the same area. Staff wanted to protect MWRA's pipes before the communities began their projects. MWRA's approach is cheaper than actually replacing the pipes. Additionally, staff's approach is less destructive than digging up underground pipes along the Green Line. Staff cautioned that, due to time constraints, some of the pipes that were originally slated for protection will not be touched. Staff also expects to request an additional $200,000 from the Board in the near future. Ms. Hicks asked whether the MBTA is doing anything to correct the stray current problem. Staff responded that a more aggressive MBTA staff member than was originally assigned has taken over as the liaison to MWRA and staff expects improved progress and cooperation.

MetroWest Water Supply Tunnel Update

The raisebore of Shaft NE remains to be excavated before completing excavation of the MetroWest Water Supply Tunnel. The Norumbega Covered Storage Facility is nearly ready for tank foundation work. Additionally, all major contracts of the Walnut Hill Water Treatment Plant are now underway. As a result, future versions of staff's reports will focus on the status of the overall Integrated Water Improvement Program. Staff gave the Board a schedule with highlights of the project's progress and agreed to Mr. MacRitchie's request for future staff summaries to include similar schedules on a quarterly basis.

Reorganization of Administrative Functions in Operations Division

The reorganization of administrative functions will focus on administrative and financial staff at the Navy Yard and at the new Chelsea Maintenance Facility. Staff plans to consolidate the Coordination and Control Unit, Finance Planning and Analysis Unit and the Employee Relations Unit. With such a consolidation, there will be ten positions eliminated and two reassignments. Mr. Mannering asked why the Employee Relations Unit is not within Human Resources. Staff responded that Step 2 grievances must remain separate from Human Resources. Mr. Mannering suggested that separating Employee Relations into more than one division creates the potential for varying standards. Staff should consider consolidating Employee Relations into one unit to ensure one standard across the board. Why report to a field manager rather than a central manager of Human Resources? Staff responded that the quality of results is the same under either arrangement. Mr. Mitchell added that the perception of fairness could be compromised when Employee Relations staff reports to a division manager rather than centrally reporting to Human Resources.

OTHER MATTERS

MDC Watershed Division Sewerage Plan for Central Massachusetts

Joseph Favaloro, Executive Director of the MWRA Advisory Board, informed the Board that it is critical for the Central Massachusetts Sewerage Project to be expedited in order to avoid building a filtration plant. Currently the MDC Watershed Division (Division) is running a $4.5 million deficit and contract bids have been received. Mr. Favaloro explained that contracts cannot be awarded because the Division has no funds with which to do so. "It seems that ignorance is bliss, but if the [Project issues are] not addressed then the construction season is lost for the year, which will cause the consent decree [between MWRA and EPA] to appear violated," stated Mr. Favaloro.

Ms. Gottschalk responded that the Executive Office of Environmental Affairs (EOEA) and Administration & Finance (A&F) are working together to find a funding solution. "That is why the staff summary for today was pulled - it did not include a solution but simply presented the problem [to the Board]," stated Ms. Gottschalk. Mark Smith of EOEA added that A&F agrees that this project is critical and cannot be overlooked. "We pay a lot of money to the Watershed Division. Do we get more bang for our buck by sewering communities that surround land that we pay the Division to acquire?" asked Mr. Mannering. Ms. Gottschalk responded that "[w]e are not paying for all the sewering. Communities are paying some and the Commonwealth is paying the most. An update will be given to the Board on May 9, which will hopefully include a solution as well."