Wednesday, June 29, 2011

Reader finds: Corruption at SESD?

I receive emails from time to time, and I share them with you. I received the below last week. Do I know that it's true? Absolutely not. I make no such claim. I hope it's not true, because if it is, it stinks. I thought about whether or not to print this. The truth is, I researched SESD and it is extremely difficult to find any information about them. They have no website, and no budget is published online.

From: REDACTEDDate: Subject: South Essex Sewage District Compensation 'Fraud'To: "" <>

Hi KeepitKlassy:
I love your blog.  I tweet under the handle "Redacted".

I'd like to relay this story to you- I heard it from a well-placed family member.  I hope I can describe this accurately enough to make sense, but numbers and policies and unions aren't really my thing.  Here goes anyway:

SESD executives are basically using union negotiation as a way to reward themselves and special grandfathered employees with cadillac health plans and insane compensation and benefits post-retirement.  Here's how I understand it to work:

Way back when, the unions negotiated a very sweet healthcare deal that some employees still have, as well as management.
- the 'special' healthcare plans are 90/10 (employee pays 10%)
- everyone else is 75/25
- some 'special' employees are grandfathered into a really amazing deal that literally costs them $28/week for the entire family  (it won't surprise you to know that the executive director, for example, is one such special employee)

But here's where it gets good:
- everybody gets the same deduction taken out of their check for healthcare
- the special employees, however, get a kickback in the form of "additional compensation" added to their check so that they only have to pay that 10%, not the full 25% like everyone else.
- That additional compensation has some fairly vast implications for the municipalities that are paying into the plant for sewage treatment; for example, they have to pay worker's comp on those dollars
- Further, that additional comp costs us more money by figuring itself into overtime:  Since that sum is rolled into an hourly formula, some employees' time and a half is really double time;
- Also, when someone retires, they get a pension.  That pension is over-inflated because the 'additional compensation' is figured into their overall salary
- the executive director and the executive director before him all benefit from this very scheme.  They have a clear conflict of interest, though, because they're the ones negotiating with the union and approving the plan.  And once they approve the plan they go ahead and reward themselves with the very plans they just "negotiated"
- at the most recent negotiation the executive director is quoted as saying "if healthcare comes up the meeting is over".
- all other employees have to choose from two cadillac (and very expensive) HMO and Master Medical Insurance Plans.
it's so "let them eat cake!"  And it's costing the municipalities that pay into water treatment millions over the years.  Someone should have Mayor Driscoll and other mayors look into this.


According to the Lynn Item, South Essex Sewerage District Director Arthur Knight earns $112,250 and his top engineer makes $97,444. Whether or not that includes "additional compensation" or not, if such a thing exists, is unclear.

Why should Salem residents care about this? Well, according to the proposed fiscal year 2012 Salem Budget, the city of Salem will send SESD $6,140,898 for our share of the FY 2012 operating budget of SESD. That cost is passed on to you in your sewer bill, and for city buildings, in your property taxes. Salem City Engineer David Knowlton represents the city on the SESD Board of Directors.

Peabody expects to pay $8,982,776 in FY 2012. Beverly has budgeted $5,726,042. So that's 20 million dollars a year, without factoring in the other communities that use them, which include Marblehead, Danvers, and Middleton.

Quincy city councilor Brian McNamee (no, not that one) is the Treasurer at SESD. Why do I think that as a Quincy resident, and city councilor down there, he's not putting in as much time as he should up here? Have you ever tried to commute to Quincy from Salem? It would be rich if the allegations above are true, as McNamee just voted against the city budget for Quincy because a proposed reorganization in the DPW wouldn't yield any savings. (Also note, this article gives a real life example of why it was important for the "Pinto Jobs for Councilors Bill" to fail.)

That's about all one can learn about SESD without really doing a lot of heavy digging. It was digging to find this much. It's enough to know that this is really big business. It's a little shocking that they don't even appear to have a web site.

These allegations at least smell bad, and don't seem ethical, if true. Depending on how it's been handled they may well be illegal. The mayors of the communities that use SESD should ask some tough questions about expenses, especially since each community got a much bigger bill for 2012. They should also ask for a little more openness and info sharing for the citizens who foot the bill.


Later this week, the other email I received last week, which paints everyone's favorite warlock (and I don't mean Charlie Sheen) in not the best light.


  1. Years ago, I used to enter government meeting notices into our on-air systems at SATV. I remember SESD's notices very well. They would always be once a month at 8:00.

    8:00 AM. On a weekday. I know there are "legit" ways to circumvent transparency, and the morning meeting is one of the oldest of them...

  2. Still once a month, but now at 2PM on Wednesdays. Equally impossible for most to attend.

  3. Readers might find it interesting to know that there have been copies of this posted all over the SESD complex. There is definitely fire, based on some of the correspondence I've received since.


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