Hingham Anchor Opinion by HDIC
HDIC Members Urge Voters To Support Aquarion Purchase
We urge Hingham voters to attend Town Meeting on April 22nd and to approve the Town’s proposed purchase of the water company from Aquarion. We believe the purchase will lead to lower annual water rate increases and more efficient recovery of our existing (and increasingly scarce) water resources. We are also confident that the risk profile of water company operations and town finances will not be adversely affected by the purchase.
Hingham’s water rates are among the highest in the state, reflecting the private ownership of its water operations. Residents bear the costs of running this water company, plus a 10.5% rate of return (profit) that Aquarion is allowed by the DPU. Not surprisingly, over 95% of Massachusetts towns (and all communities of Hingham’s size) either run their own water companies or have their water operations run by a public agency.
A town-owned and operated system would result in better, more transparent stewardship of our water infrastructure. Aquarion has under-invested in the town’s water mains. Its actual annual capital investment has been about a third of that deemed necessary in its own engineering studies. This has led to persistently excessive loss of water, which counts against the amount of water that the Town's residents and businesses can actually use. Lost water hovers around 16%, compared to the Commonwealth’s 10% standard loss rate. Some well-managed, town-operated systems report water loss levels as low as 6%. Additionally, Aquarion’s reactive “break and fix” mindset has created unnecessary maintenance costs for the Town’s roadways. Some 22% of rehabilitated roads have had to be subsequently reopened for emergency water repairs. These costs are avoidable, given more proactive care of the system.
The purchase would not raise the operational risk profile of water delivery, nor would it expose the Town to new financial risks. Operationally, the Town will hire a licensed, professional water operator who will manage the system, under oversight of a professional water superintendent who will report to the Board of Selectmen and to Hingham residents. There will be no changes to the permitting/regulatory processes that currently govern both development and access to water. The financial structure supporting the purchase would preserve Hingham’s top-tier credit rating and its financial flexibility to undertake new, necessary projects. The debt will be paid off solely from the payments of our water bills - not from new taxes. This financial structure was used previously in the Town's purchase of both the South Shore Country Club and the Hingham Municipal Light Plant.
The Town of Hingham has a long history of outstanding stewardship and it’s widely admired as a model of strong operational management and financial discipline. We are confident that Town ownership of our water company will lead to lower water rates, more efficient use of our scarce water resource and no increased risk to the Town. A two-thirds majority of Town Meeting attendees will be required for approval. Accordingly, we urge voters to attend Town Meeting on April 22nd and to vote in favor of Articles 10-13.
Hingham Development & Industrial Commission
Michael Kranzley, Brian Stack, Kevin O’Brien, Brett Rosequist, Nancy Wiley