By BRYAN ROURKE, Journal Staff Writer
NEWPORT, RI, Oct. 27, 2000 (The Providence Journal)—A proposal to privatize the city's sewer system went down the drain Wednesday night. The City Council voted 4 to 3 against entering into a contract with a private company that would have managed and operated the Newport Water Pollution Control System.
The project involved four years of study and $2 million in engineering and consulting fees. And it ended with a divided and heated council.
This council has just made a giant, giant mistake, said Councilman Dennis McCoy. It has just thrown $2 million away.
The majority of the council wasn't convinced that Earth Tech, a California company, the lowest of six bidders on the plan, would serve the best interest of the city.
Earth Tech representatives said that over the proposed 20-year contract, it would save Newport $24 million, which some questioned.
There's no guaranteed savings here, said Councilman Richard E. O'Neill. It's possible savings.
Earth Tech was to receive $2.9 million a year to operate the city's sewer system; and each year it would receive an additional 80 percent of an assumed 3 percent inflation figure, which some didn't want to assume. Frank Landry, a Newport resident and city employee, cited the double-digit inflation of the late '70s and called signing a 20-year contract financial suicide.
Ultimately what killed the contract was Earth Tech's inability to come to terms with Newport's employees union, AFSCME, over how health benefits were to be paid.
I don't have any faith in what has been said in terms of taking care of the employees, O'Neill said.
In the contract, the employees of the sewer system were to receive equal or better benefits and pay than they do now.
It was Tyco Industries (Earth Tech's parent company) that didn't negotiate in good faith, said Allen Lama, president of the Local 911, Newport Public Employees. They wouldn't let Earth Tech negotiate.
Council members voting for privatization were McCoy, who pointed out the city already privatized its garbage pickup and that the nation's top consultants recommended the city do the same with sewer; Mayor Richard Sardella, who called the contract very strong; and Councilman Joseph Pratt, who said we are better off under this contract.
Council members voting against privatization were O'Neill, James W. Baccari, John J. Trifero and Jeanne-Marie Napolitano, who sort of summarized the opposition: We pay for the electricity. We pay for the capital costs. We pay for the vehicles. What are we paying for [with Earth Tech]?
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