Bill Targeting Massachusetts Water Authority Could Be Revised Following Public Hearings

Legislators in Massachusetts have decided to hold field hearings on a bill that would tighten oversight of the authority responsible for the $6.7 billion cleanup of Boston Harbor.

On Monday, the state's Joint Committee on State Administration said it would present the bill for public comments in several communities under the jurisdiction of the Massachusetts Water Resources Authority. Ratepayers would testify at the hearings, which could run into early next month.

Philip N. Shapiro, the authority's director of finance and development, said the committee's decision not to report the bill out for a full vote yet was a victory for the authority, which wants to retain its independence.

He added that he sees "a realization on the part of many key legislators that bondholders, the authority's ratepayers, and the federal court judge all had legitimate concerns about the impact of these proposals, and that these are issues that are not appropriate to tinker with."

The committee's chairman, state Rep. Emanuel G. Serra of East Boston, said the bill needs further study. He cited the opposition to the bill by U.S. District Judge A. David Mazzone, whose 1985 court order prompted the harbor cleanup.

"We in the legislature in no way are attemptinng to delay the implementation of the judge's order, or to delay the cleanup of Boston Harbor," Rep. Serra said. "We're looking for an equitable way in which this project can be built."

He said possible measures included seeking more aid from Washington. "The MWRA has not aggressively pursued the federal dollars that may be available for this project for openers."

Donald C. Jordan, director of research for the joint committee, said the purpose of the hearings would be "to allow the ratepayers an opportunity to vent their frustrations on the process by which the rates are established."

He added that committee members harbor a "hope that through that process, we will be able to delve into and glean new ideas that could possibly be part of the legislation. There may be people out there who have ideas that we have not determined."

As it stands, the legislation would remove the state's environmental affairs secretary from the authority's board of directors, replacing her with a representative of Walpole, a town in which the authority plans to deposit sludge from its sewage plant.

The chairman would be selected by the governor from the board's 11 members. In addition, the governments of Quincy and Winthrop would gain the power to select two board members. They currently must seek the governor's approval for their choices.

The bill also would give budget-cutting power to the Massachusetts Water Resources Advisory Board, which can now only recommend spending cuts, and it would force the authority to seek approval from the state's Department of Public Utilities for any rate increases.

The increases needed to back the $6.7 billion, 10-year capital plan would raise water and sewer bills by 262% through fiscal 1996.

Such features caused Judge Mazzone to condemn the bill in one of his period reports on the harbor project, dated Aug. 29.

"This pending legislation," the judge wrote, "seems aimed at stripping the MWRA of its independence and its ability to make the difficult, politically charged decisions that are necessary in this effort."

One of the bill's sponsors, Sen. Paul D. Harold, D-Quincy, yesterday reiterated his position that the legislation would not undermine the authority's standing.

"We're not affecting the independence of the authority, or the revenue stream," Sen. Harold said. "We're not trying to make it an agency of state government. It's going to stay within the current structure of the Massachusetts Water Resources Authority, which, in this case, is the advisory board."

Sen. Harold said he did not see the committee's move as a setback for the legislation, although he acknowledged that action on the bill is now not likely until sometime next year.

"This is far from being put off," Sen. Harold said. "This is further building the case. With 52 sponsors, this is the most heavily co-sponsored piece of legislation in recent memory. It's not just one or two disgruntled members."

At roughly the same time as field hearings on the oversight bill commence this month, the authority will probably be selling roughly $300 million of revenue debt. Paul DiNatale, press secretary for the authority, said that whatever the timing of the vote, it will not interfere with the authority's bond deal.

"And bond sale would be conducted totally independent of that [vote], as we seek to get the best deal for our ratepayers," Mr. DiNatale said.

Sen. Christopher M. Lane, a Republican whose district includes Walpole, was the other sponsor of the bill. Sen. Harold comes from Quincy, where on Dec. 16 the authority will inaugurate a plant that converts sludge into fertilizer.

In his compliance report last month, the 68th such report in the six-year history of the project, Judge Mazzone said local concerns must be silenced in favor of the greater good.

"The construction project under way as a result of the remedial order in this case is not a project that may be abandoned or delayed just because it is no longer acceptable to the 'political environment,' or because it costs too much in a temporarily stalled economy, or because it sites certain facilities in the backyards of voters who elect legislative representatives," the judge said.

Judge Mazzone's compliance reports can take the form of orders to the authority, "to compel compliance with a federal law that the commonwealth has flouted for years," as the judge put it.

"He has wide latitude," Mr. DiNatale said. The judge reminded legislators that so far he had "consistently refrained from taking any action that intrudes on the legislative process."

He did not indicate if he could take such action in the future. Sen. Harold, however, said the judge has no power over the legislature.

Nevertheless, Judge Mazzone warned that "the full remedial powers available to this court will be used to scrutinize closely any attempt that would derail the project."

"If it were to pass, it wouldn't automatically mean that the MWRA would go into receivership or anything like that," Mr. DiNatale said. "It would be one of those things where you have to take a look around."

While the bill has attracted a large measure of support from lawmakers eager to keep their constituents' water bills in check, some question exists as to whether the legislation would find support in the governor's office.

Republican Gov. William F. Weld supported Question 3, a voter referendum in 1990 that called for, among other things, restrictions on independent authorities. But two of his secretaries testifying at a hearing on the bill last week said the bill would be a mistake. These were Secretary Gloria Larson of the Executive Office of Consumer Affairs and Business Regulation, and Environmental Affairs Secretary Susan F. Tierney.

In his order, Judge Mazzone echoed the fears of the authority that any outside regulation would result in a downgrading of the authority's outstanding debt of about $835 million.

But it is unlikely that the law's passage would have any immediate impact on the authority's A-minus rating from Standard & Poor's Corp., according to Timothy Tattam, a senior vice president at the rating agency.

Public opposition to the steep rate increases necessary for the costly project to proceed figured into the A-minus rating, Mr. Tattan said last week.

"These are natural hurdles that you would expect them to have to jump over," he said of the authority. The real challenge is the cost, not the public opposition. "I think this other problem isn't going away, whether or not the legislation goes away."

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