Although not a willing seller, Aquarion Water Co. officials told Hingham residents that if the town wanted to purchase its water infrastructure, it would cost well over $100 million.
The discussion of price was among the many Aquarion employees had with the town during a public meeting at Hingham Middle School on Tuesday, where the privately owned company attempted to talk approximately 40 residents and town officials out of a $500,000 study that will look into the possibility of purchasing the town’s water infrastructure.
Harry Hibbard, Aquarion's vice president of operations for Massachusetts, started the discussion by saying that it was “an issue of priorities” for the town.
“Is this the best way for Hingham to spend its money? Does Hingham want to be in the business of being a regional water supplier? The last thing the town needs is to put a big…well-run company out of business…in the end this will lead to higher rates, higher taxes, or both. And frankly nobody wants that,” Hibbard said.
Hibbard went on to say that, under the town’s own formula for the price, specified in the town’s charter, the system, treatment plant, pumps, pipes, and valves could be prohibitively costly, as the town must pay the cost of the infrastructure plus up to 10 percent annual interest.
Under those guidelines, the $35 million water-treatment plant built in 1996, would today cost $87.5 million, Hibbard said.
The company is in the process of finding out what the total number may be - a figure that officials expect to have within the next two months.
However, add to the cost of the infrastructure any possible litigation with the company, and the price could easily grow by millions.
“There are alternatives to going down this road…but once you begin spending $500,000…there are 500,000 reasons why you won't go back,” Hibbard said.
Hibbard suggested the town look at previous studies, pointing to one done in 2009 by the Hingham Municipal Lighting Plant. Although not every aspect of that study was correct, it concluded that the town couldn’t increase efficiency by purchasing the assets.
Hibbard and others, including National Eminent Domain Counsel Joe Connor, also suggested the town begin discussions with the company through the Water Supply Committee, or through Aquarion’s Customer Advisory Committee.
“Let’s find another solution other than spending half a million dollars that will divide the community, will be expensive, and will take a very long time,” Hibbard said.
After the presentation, some in the audience were wary of moving forward with the study.
“The other towns would be getting a free ride, as it would be impossible to recoup the expenses from the other communities,” resident Bernard Manning said about the need for Hingham to purchase the entire system, shared with Cohasset and Hull, but being unable to tax either community.
Peter Stathopoulos, a Hingham resident who lives in a part of town that uses Weymouth water, was also unhappy about the idea that the town would spend reserve money on something that didn’t impact him.
“I pay a 25 percent surcharge on my water [from Weymouth] – now Hingham wants to tax me?” he said.
Despite the protestations of the company, and the potential high price, Town Administrator Ted Alexiades said that a feasibility study was still necessary.
“Even if they gave us a number, be would still need…to validate that number,” he said. “This is just a part of the process.”
Furthermore, Alexiades feels the expected cost for the treatment plant is high, especially in looking at the company’s previous purchases of numerous water systems in the last decade.
“Yet we heard tonight that the treatment plant alone is $100 million, [so] we have a lot of work to do,” Alexiades said.
The cooperation of the company to work with and talk with the town also comes at a curious time, said Selectman Bruce Rabuffo, who attended Tuesday’s meeting, especially since customer service has improved since the town brought this article to light and the company has become more cooperative.
“We should not have to bring warrant articles to get appropriate service,” Rabuffo wrote in an e-mail. “Furthermore, they have raised water rates over 30 percent since 2008 when inflation and other costs exist mostly in a down economy.”
The town will hear from both sides during the April 23 Town Meeting, where a final vote will be taken on Article 19, which would provide $500,000 for the feasibility study.