Hingham Journal Letter
To the editor: Why I voted in support of purchasing the Water Company
Hingham has a long-standing tradition of controlling our destiny. We own our electric utility. We run an ambulance service. We own the Lincoln School Apartments. Our AAA bond rating is a validation that our town is well run.
The water company has always been privately owned. Hingham has always had the right to purchase it. In response to a number of concerns, the 2012 annual town meeting authorized the initiation of a water company purchase feasibility study.
For the past seven years, the town has conducted a feasibility study, while leaving the door open for our concerns to be addressed by past and present owners of the water company. They have not been addressed to our satisfaction and we have learned several things:
Private ownership of a water system is unusual in Massachusetts. 96 percent, or 337 Massachusetts communities, are served by public water systems. Many of these water systems service multiple communities.
We pay a lot for our water. In 2012, our water rates were the fifth highest in the state. In 2017, they were 23 percent above the Massachusetts average. The most recent rate case will result in a 21 percent increase over the next four years.
Over 55 percent of the money we pay in water bills leaves our water system. Our water bills pay for things including shareholder returns, corporate overhead, legal and public relations expenses for rate cases, and state and federal taxes. These are costs that a municipally owned water system would not incur.
Not enough money is being invested in water mains. A 2014 report commissioned by Aquarion recommended replacing 1 percent of water mains each year. Aquarion has replaced less than 1/3 of 1 percent each year.
Unaccounted for water has ranged from 16 percent to 24 percent, well above the Massachusetts standard of 10 percent. According to the World Bank, “The reduction of unaccounted for water is a crucial step to improve the financial health of water utilities and to save scarce water resources”.
Ratepayer savings under town ownership will be significant. According to an independent analysis, town ownership would result in at least $48 million in savings in the first 30 years. Beginning in year 31, when the purchase debt is retired, annual savings increase to $7.4 million. These savings translate to either smaller future rate increases or more money to invest in the water system.
Purchasing the water company does not impact the town’s operating budget or personal property taxes. If the town were to acquire the water company, it would operate independently, similar to Hingham Light. Revenues collected from the sale of water would pay for all the costs of running the company, including the debt service associated with its purchase.
Purchasing the water company does not affect the timing or ability to move forward with capital projects such as Foster School. If the town were to acquire the water company, the debt taken on to purchase the water company would not count against the town’s borrowing limit, line of credit, because it is secured by water revenues.
As I stated on Jan. 31, while the financial benefits of town ownership are compelling, the ability to control decisions related to the management of our water supply and water delivery system are even more important.
The Board of Selectmen will be holding public information meetings prior to town meeting. The first meeting will take place from 1 to 3 p.m. March 9 in Sanborn Auditorium, located in Hingham Town Hall, 10 Central St. We look forward to seeing you there.
Mary Power serves on the Hingham Board of Selectmen.