In a 64-page report that included a withering hour-by-hour account of irregularities at the Edgartown wastewater department, retired Judge John Paul Sullivan recommended that the wastewater commission fire facilities manager Joe Alosso.
Judge Sullivan was appointed by selectmen on December 19, 2011, as an independent counsel to investigate the matter. He delivered his report at a special joint meeting of Edgartown selectmen and wastewater commissioners on Tuesday at Edgartown town hall.
Mr. Sullivan said the loss to taxpayers that could be determined was almost $90,000 but the real figure was much more than that.
On the advice of labor counsel Jack Collins, who participated in Tuesday ‘s meeting by speaker phone, wastewater commissioners Tim Connelly and Cliff Karako voted immediately to place Mr. Alosso on paid administrative leave until they can review the report in more detail. On the advice of Mr. Collins, commissioner Jim Carter did not vote. The commissioners plan to meet on February 7 to consider further action.
Immediately after presentation of the report, Edgartown police accompanied Mr. Alosso to the wastewater plant where he retrieved his personal items from his office. Mr. Collins advised town officials to ensure that no town property or records were taken.
Mr. Alosso declined comment following the joint meeting.
In questioning by police as part of their criminal investigation, Mr. Alosso implicated a sitting Edgartown selectman who he said received free pump-out service. He declined to name the selectman during the police interview, according to the police report.
Judge Sullivan said Mr. Donaroma was the unnamed subject of the allegation. In a footnote to his report, he concluded that Mr. Donaroma had done nothing wrong.
“The pump-out was for selectman Donaroma, but it was not a pump-out of a septic system,” Judge Sullivan wrote. “The Donaroma property… is tied into the Edgartown sewer system. There was a sewage backup on the Donaroma property on July 4, 2009. Ms. Donaroma called the department. Personnel from the department arrived at the scene to correct the problem and a hauler was called to pump out the facility. Under existing department procedures then in place, such pump-outs are included in the annual sewer fee and there is no additional charge.”
In that police interview, Mr. Alosso also said wastewater commissioner James Carter received free pump-out service. Because of that allegation, labor counsel advised Mr. Carter not to vote or participate in any matters related to the investigation.
Irregularities in the Edgartown wastewater department first came to light in January of 2010, when the town’s independent auditor reported material deficiencies in accounting practices and refused to certify the audit until measures were taken to correct the problems.
The atmosphere was tense inside the selectmen’s meeting room Tuesday morning. Judge Sullivan noted that it was the same room where more than two decades ago, he presided over his last session of the Dukes County Superior Court. Court was convened in the town hall meeting room that day because the courthouse was unavailable.
Judge Sullivan sat at the center of the selectmen’s meeting desk, beside selectmen Art Smadbeck and Margaret Serpa and town counsel Ron Rappaport.
Facing them were Mr. Alosso and wastewater commissioners Carter, Connelly, and Karako.
Edgartown police chief Tony Bettencourt and Det. Sgt. Chris Dolby, who participated in the police investigation, sat in the back of the room, their presence underscoring the serious nature of the allegations.
Selectman Michael Donaroma was on vacation and did not attend.
For more than an hour, Judge Sullivan detailed his findings in measured, serious tones. He assembled his report after interviews with plant employees and town officials. He reviewed the police investigation and the criminal complaint pending in Edgartown District Court, as well as minutes of every wastewater commission meeting since 2002.
Judge Sullivan used strong, forceful language in detailing his conclusions.
He prefaced several sections of his report by calling attention to fine points of law, and highlighting actions that defied common sense. Several times he stopped to repeat his conclusions for emphasis.
Selectmen and wastewater commissioners, who each had a copy of the thick report, followed along in silence, their expressions clearly reflecting the gravity of the situation. No one responded to Judge Sullivan’s invitation to ask questions about his report.
No honor in the system
Near the end of his presentation, Judge Sullivan read verbatim from the section of his report that summarized his conclusions and recommendations.
“Alosso’s use of an honor system whereby the independent haulers who delivered septage to Edgartown’s septage receiving facility were billed solely for the gallons that they themselves had written in the manual logs showed extremely poor judgment,” Judge Sullivan wrote in his report delivered Tuesday. “His decision never to cross-check the figures the independent haulers had written in the manual logs with the figures from the electronic meter demonstrates poorer judgment still.
“But to use such an honor system when he knew that all the independent haulers were aware that their bills were based solely on the manual logs was to act in reckless disregard for the interests of Edgartown taxpayers.”
Judge Sullivan minced few words in outlining the cost of the billing irregularities to Edgartown taxpayers, and the department’s failure to comply with laws requiring retention of records.
“A proper audit could not be conducted and, in this case, there were insufficient records to conduct an effective criminal investigation,” Judge Sullivan wrote. “We will never know how many gallons went unrecorded and therefore unbilled between 2002 and 2010. We know, based on the limited records available to the auditors who conducted the forensic audit, that there was a loss of almost $90,000 for the [18-month] period of the audit. We have no way of determining how many tens or hundreds of thousands of dollars went unbilled between 2002 and 2010.”
Before and after
Judge Sullivan also criticized the actions of Mr. Alosso after auditors uncovered the deficiencies in the billing and record keeping system.
“He realized, as the audit was being conducted during the fall of 2010, that his billing method, which he knew to be deficient, would become public,” Judge Sullivan wrote.
He noted that Mr. Alosso, who composed the commission meeting agendas and set the dates of meetings, did not include any mention that the department was under scrutiny by auditors until five months after the audit began.
Judge Sullivan used the phrase “cover up” to describe Mr. Alosso’s haste in securing new meters from EleMech, an equipment manufacturer. He also detailed an apparent violation of state bidding laws, and several communications that focused on steps the department took to correct the problems.
“His plan appeared to be: to respond quickly to the auditors report of deficiencies by putting in place a procedure that he knew should have been in place as early as 2002,” Judge Sullivan wrote. “The problem with this humble pie approach is that his prompt attempt to obtain an early contract with EleMech and putting in place immediate security measures is further evidence that he always knew that depending solely on manual logs for billing and failing to cross-check the input of those logs with the original EleMech readings, did not meet even minimal standards of billing. His failure to meet those standards and his failure to properly maintain records has cost the Edgartown taxpayers perhaps many hundreds of thousands of dollars. Unfortunately, because he did not retain the required records, we will never know for certain what the actual figure is.”
Mr. Alosso was not the only target of Judge Sullivan’s criticism.
“The commissioners were also insufficiently attentive to their responsibilities,” Judge Sullivan wrote. “The board remained largely passive throughout the tenure of all the commissioners who held office between 2001 and 2011 and allowed the facilities manager to control the agenda of the meetings and to set the date of meetings.
“As a result of this passivity, the commissioners only knew what the facilities manager wanted them to know. It was their statutory responsibility to learn what was transpiring and not simply accept what the manager told them.”
In his recommendations, Judge Sullivan stopped short of suggesting any sanctions against the commissioners.
“They are elected officials, and voters can decide their fate,” he said.
But he did suggest the town consider rescinding the provisions of state law adopted by Edgartown voters in 1967, giving management control of the wastewater department to the wastewater commission. If voters rescind those provisions, selectmen would be responsible for management of the department, Judge Sullivan said.
“If the selectmen were to appoint commissioners, they would be able to appoint individuals with specific backgrounds in business, accounting, finance, and engineering to assist and oversee the manager of the department,” Judge Sullivan wrote.
In December of 2011, following an 11-month investigation led by State Police attached to the Cape and Islands district attorney’s office, the Edgartown District Court issued a criminal complaint against septic hauler Jason Araujo. The complaint charged him with a scheme to falsely procure government services.
The police report and criminal complaint were harshly critical of the department. In the criminal complaint, the court said gross mismanagement of records and protocols in the department made it fruitless to pursue further prosecution of waste haulers or plant employees, because wastewater department records were so inadequate that investigators could not document crimes.
Police recommended the investigation be closed. No other charges are expected.