Great Barrington — At their meeting on Monday, December 2, the Selectboard tabled a decision on hiring special counsel for the potential acquisition of Housatonic Water Works (HWW).
In October, town consultants DPC Engineering LLC, of Longmeadow and Harwich Port, Mass., presented their report on the potential cost of purchasing and operating the long-troubled water utility. According to DPC Engineering, the value of HWW’s infrastructure is $2.3 million. If the town were to acquire the company’s infrastructure, however, it would have to invest at least $33 million in repairs. Factoring in the infrastructure costs and the fair market value cost, DPC Engineering estimated that HWW has a negative net value of $31.3 million.
As Town Manager Mark Pruhenski reminded attendees at the December 2 Selectboard meeting, any decision for the town to purchase the utility would be made by residents at a future town meeting.
Pruhenski said that the board asked him to find special counsel to assist the town with negotiating a purchase price for HWW’s water system at a Selectboard priority planning session back in September.
At the December 2 Selectboard meeting, Pruhenski recommended that the board approve the hiring of attorney Eric Krathwohl, a partner at Boston law firm Rich May PC, to be the special counsel in negotiations between the town and HWW.
As per a biography he sent to the town, which was part of the informational packet for the December 2 Selectboard meeting, Krathwohl has previously worked on corporate and finance work for water, energy, and telecommunication companies.
“You have had some number of dealings with the water company over time, and I guess you are approaching the concept of the town purchasing the water company,” Krathwohl told the board. “There’s certainly negotiations that go into that, and there is some input on the value. I have some experience with that, although I am not a valuation expert.”
Krathwohl said he had previously worked with Town Counsel David Doneski but did not state for which cases. However, Pruhenski said that Doneski highly recommended Krathwohl to work as special counsel for the town in HWW price negotiations.
Vice Chair Leigh Davis asked Krathwohl if he had any previous dealings with HWW. “I did mention to both David and Mark that I had received a call a number of years ago—two years maybe more, maybe a little less—from [Housatonic Water Works Treasurer] James Mercer,” Krathwohl said. “I heard his description of the situation of HWW and basically being not able to really support operations the way they needed to be, including the idea of potentially trying to sell the water company down the road. He talked to me, and nothing went beyond that.”
“Was he looking to hire you at that time?” Davis asked Krathwohl.
“I guess, considering the need for counsel,” Krathwohl said. “He was looking to see who might be out there. I can’t remember to what extent we discussed the sale of the water company. Whether he was seeking any information from me, I can’t remember. I guess that he might have been looking for counsel at that point, but he never called me back.”
While Selectboard Chair Steve Bannon made a motion for the town to hire Krathwohl, the rest of the Selectboard instead continued the discussion. Selectboard member Eric Gabriel asked Krathwohl if he had any further interactions with Mercer or anyone else from HWW beyond the phone call.
“We were never engaged [in anything further],” Krathwohl said. “The conversation certainly wasn’t substantive in terms of providing legal advice or acting as counsel. I do not recall more than a single conversation. He was inquiring about Rich May and myself. I would be surprised if I had not sent him a follow-up email. But there were no real conversations that I recall other than that one and no communications on an ongoing basis.”
Krathwohl continued to insist that neither he nor his law firm ever took HWW on as a client.
From the audience, resident Michelle Loubert, who is also a customer of HWW, said that she is uncomfortable with the town hiring Krathwohl because he had a conversation with Mercer. “I don’t care how long ago it was, I just think we’re stepping into some conflict here,” Loubert said. “I’m not an attorney, but it’s leaving a bad taste in my mouth already, and I haven’t even drank any Housatonic water. If you’ve ever been through a divorce, and I have, if your spouse contacts an attorney, and you contact your attorney, the attorney can’t really represent you because there’s been a conversation there.”
“I am [also] a little bit uncomfortable,” Davis said. “I think that perhaps a bit more information should be gathered before we take this step because this is a huge step.”
However, Bannon said that he is comfortable with the town hiring Krathwohl. “We didn’t take on [Town Counsel Doneski for negotiations with HWW] because it’s not his specialty, and we want someone who specializes in acquisitions. I’m not uncomfortable, but this is a board decision.”
Gabriel suggested that the board table any decision on hiring Krathwohl as special counsel until other options had been explored.
Pruhenski told the Selectboard that he only looked at hiring Krathwohl and no other special counsel options because Krathwohl was highly recommended by Town Counsel Doneski.
“I just want to make sure that we do a thorough search before we take on this endeavor that we know will be a lot of work,” Gabriel said. “I want to feel confident that not only myself, but the customers of HWW know that we really did some thought behind this, and maybe interviewed a couple of folks.”
The Selectboard eventually tabled its decision.
A potential fee for Krathwohl’s services was not part of the discussion at the meeting.
