After a brief spat between city leaders at Tuesday’s Bay St Louis city council meeting, officials voted to rescind a recently approved contract to audit the city’s utility services.

At the July 10 city council meeting, the Bay St. Louis City Council voted unanimously to approve a city-wide utility audit. Councilmen accepted a contract, based on review, from Water Company of America, a company proposing to audit the city’s utility services, concentrating on water, sewer and solid waste, based on a percentage of any lost revenue.

“We only get paid if we produce,” said Water Company of America’s Regional Manager Mike Necaise.

At that meeting, Ward 6 Councilman Josh DeSalvo said he would like to explore other possibilities and options before voting on any one contract and that he had a meeting already set up with a company which recently audited Waveland’s utility services.

Ward 1 Councilman Doug Seal made a motion to move forward with entering into a one-year agreement with the company, stating the council had talked about the matter for years and he believed they should move forward and not put it off any longer. DeSalvo voted in favor of the motion at that time; however, at this week’s meeting, DeSalvo asked fellow council members to consider rescinding their motion and entering into an agreement with the other company he had previously mentioned.

Delta Water approached city leaders with a flat-rate contract instead of one based on a percentage.

Ward 3 Councilman Jeffrey Reed agreed with fellow councilmen to rescind the original contract with Water Company of America; however, he said he thought both companies should be able to come back and submit individual bids. His concern was that the council, in good faith, he said, gave the contract to someone but found a cheaper avenue after the first contract’s details had already gone public. Reed said Delta Water had very similar verbiage in its proposal and it was concerning. He stressed he was not accusing the company of "reading and copying" the other company's contract.

“The bottom line is -- in good faith -- we gave it to somebody and somebody went out and found someone cheaper who was doing something for a neighboring city, so we are going to rescind the one we gave it to and go with the one who was cheaper without giving the other company the opportunity to come back to the table,” Reed said. “To me, that seems unethical.”

DeSalvo, who solicited information from Delta Water, said,“Well, with all due respect Mr. Reed, I asked last meeting when we discussed this…. I said I set up a meeting for next week and asked could we hold off. It wasn’t like I was trying to backdoor anybody. I was transparent about it at the previous meeting. I said I got someone else who did Waveland’s. I got a meeting set up with them on Wednesday. They charge a flat fee instead of percentage base and I would like to have both proposals so we could really prepare everything and Mr. Seal said we’ve been talking about this since 2014 and I want to move forward and make a motion and go.

"I said I would like to make this meeting so we could get prices and look at everything, but we kind of got in a hurry at that meeting, so I didn’t do this after the fact. I had this set up before and asked for time to explore this option and give the residents of Bay St. Louis the best option available.”

Councilman-at-Large Gary Knoblock echoed Reed’s thoughts and said he did not agree with the process. He said he would like to see the contract be put out to bid and everyone get a fair shot.

City Attorney Heather Smith informed the council that there was no legal obligation to bid out the job because this was a request for services, which fell under different guidelines.

When Knoblock questioned DeSalvo on who initiated the meeting with Delta Water, things got a bit heated.

“I’m not going to get into this political argument with you Mr. Knoblock," DeSalvo said. "They met at my office.”

“Who was there?” Knoblock asked.

“Myself and them,” DeSalvo said.

“Was the council president notified?” Knoblock asked.

“I notified everybody that they were coming at the (previous) meeting,” DeSalvo said.

“I’m just saying that if you’re going to negotiate contracts, that’s a council procedure,” Knoblock said.

“I didn’t negotiate a contract," DeSalvo said. "We are negotiating a contract right now.”

Knoblock again said he agreed with Reed.

“If we are going to go out there and put something out there between $5 and $50,000, I think we need to open it up to everybody that wants to put a proposal in," Knoblock said. "I think it’s a great thing. It needs to be done. I just don’t agree with the procedure and the way it was handled.”

Mayor Mike Favre chimed in after a motion was put on the table to rescind the previously-accepted contract and the issue was up for discussion. Reed said he felt obligated to “do it the right way” and put the job up for bid.

“What did we do wrong?” Favre asked Reed.

“I’m not saying we did anything wrong,” Reed said.

“You insinuated that they (Delta Water) saw their (Water Co of America’s) proposal,” Favre said.

“I didn’t insinuate that,” Reed said.

“You did insinuate it," Favre said. "You said they saw that contract and used that contract to come up with their price,” Favre said.

“Mr. Mayor, you didn’t listen to everything I said," Reed said. "I said I heard her stand up there and I heard her say things word for word that was in that contract. I did not say they did (read or copy the contract) so don’t go back and say that I said it. I said she said some things that were word for word. I didn’t say she read their contract.”

“But you said you didn’t like the way it was done,” Favre snapped back.

“I don’t like the way it was done,” Reed repeated.

“I’m saying this was up and up. Nothing was done illegally,” Favre said.

“I’m not saying anything was done illegal," Reed said. "I’m just telling you my gut feeling because I’m into bidding and I’m into contracts and stuff. I’ve seen it done. I’m not saying it was done."

“Well, you're assuming it was done here,” Favre said, “and that’s not what was done.”

A representative for Delta Water who was present said the company’s contract is an exact copy of what is standard and typically used for securing services.

DeSalvo said he believed the entire situation was a "witch hunt" against him and his political career.

Council President Gene Hoffman said he didn’t agree to the bidding process since it was not needed and the city had already secured two offers from highly respectable companies. He said he’d rather see both businesses come back and pitch their service contracts before the council chose to vote on either contract.

A final motion was made to do just that after several motions had been withdrawn. The motion passed 4-3 with DeSalvo, Ward 4 Councilman Larry Smith and Ward 5 Councilman Buddy Zimmerman voting against the option. The three councilmen said they thought the new contract brought to the table would be the best option and would save the citizens the most money..

Both companies are expected to return to the council chambers in August. The council also advised against either altering their already previously submitted proposals.

In other action:

• The council voted to make State Street a one-way street all the way through.

• A representative from South Mississippi Planning and Development outlined the results from a previously-approved plan to evaluate the city’s roadways.

The plan, she said, is a tool to help officials spend road and bridge funds more efficiently and invest in the preservation of roadways. Overall, the city of Bay St. Louis has 144 miles of roadway, with the majority in asphalt and little in concrete and gravel. An estimated cost from the program's perspective of $8.5 million dollars is needed if the city wanted to touch up every inch of roadways and keep the streets in their current condition, she said.

One unique tool the company provided the city with is an alphabetical listing of all streets with detailed entries attached, ward maps, and video of each street close-up. Officials can take a virtual tour down each street and see what issues a motorist may be calling to complain about and quickly address the problem. The company said some funding was available through some systems and they would be willing to assist city leaders with gaining access to those, but the plan does not come with a ready "open check book." Officials plan to host a workshop to discuss the details.

• Some city leaders also voted for a new ordinance to authorize short-term rentals of dwellings in residential, commercial, and waterfront districts, against the city attorney's advice. According to the proposed ordinance, the city intends to regulate the use of residential property used as short-term rentals in order to protect the rights of citizens in residential neighborhoods. The city would consider a valuable and needed use for those desiring to rent their residential property in exchange for compensation, and such use will aid and promote tourism.

The council has conducted numerous public hearings on the proposed adoption of an ordinance which regulates short-term rentals. After due consideration, the mayor and some members of the city council said they found it in the best interest of the city to adopt the ordinance.

Heather Smith said she advised against formally adopting the ordinance until further research could be done to assure the city was not violating anyone's property rights and would then later file suit against the city for doing so. Seal motioned to adopt the ordinance against the city attorney's recommendation. DeSalvo and Hoffman voted not to go against legal advice; however, the motion carried enough votes to pass.

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