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Hingham selectmen approve purchase of Aquarion water infrastructure

Posted by Jessica Bartlett  June 28, 2013 02:36 PM

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Hingham officials voted Thursday night to move forward with the acquisition of the town’s water system from Aquarion Water Co.

The vote goes along with a similar one taken by the town's Water Acquisition Study Committee on Tuesday. The committee has spent over a year analyzing the pros and cons of the town's purchasing and operating the system, and concluded this week that town ownership would save ratepayers money.

“We’ve come out with savings construction in the $1 million to $1.5 million a year range, that through the remaining life of the water treatment lease, would produce savings of $70 [million] to $90 million cumulatively,” said John Asher, a member of the Water Study Committee and former member of the Advisory Board.

Though the derived cost for the system or the process to get that cost have not been disclosed, selectmen agreed with the committee on Thursday, saying they would try to negotiate a purchase price with the private company.

Selectman Chairman Bruce Rabuffo said he has already gone to the company with a number, and is waiting for a counteroffer.

“Discussions have been very businesslike,” Rabuffo said.

While negotiations are ongoing, the town has not ruled out the possibility of litigation. Selectmen haven’t said what might trigger litigation, but have prepared legal strategies if Aquarion won’t cooperate in selling.

Aquarion officials have agreed that the town has a right to purchase the water assets, but have stood by the $184 million price tag for the system announced in 2012.

Recent decisions to move forward with a sale, without a public discussion of price, has been disheartening, said John P. Walsh, vice president of Massachusetts and New Hampshire operations for Aquarion.

“It’s disappointing,” he said. “Like the residents we heard from last night, we’re also frustrated that the committee is not sharing information for us to evaluate. As I mentioned, this is in stark contrast to how we’ve handled this.”

Walsh said the company has provided the town with a wealth of information on the system and the valuation of the company.

Rabuffo disputed that assertion, saying Aquarion was still withholding key pieces of information on what it paid for the system.

Furthermore, Rabuffo said that while information hasn’t been shared publicly, that Walsh and other top Aquarion executives do have the cost model the town is using.
The timeline for next steps is still unclear, but regardless of where the issue ends up, Town Meeting would have to approve any purchase officials intend.

The move would put Hingham, Hull, and Cohasset’s water under Hingham’s control.

According to Hingham Town Administrator Ted Alexiades, all three towns would pay for the purchase and operation of the system through their rates. The operation of the system would most likely be run through an inter-municipal agreement between all the towns, Alexiades said.

“We’ve kept the town managers up to date on our work, and we’ve met with them to talk about how we would structure this from a government standpoint,” Alexiades said. “They have given us strong statements that they are anxious and willing to work with us, and they do…feel it would be financially beneficial to their communities.”

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