To the editor:
People are taking a second look at what rights Great Barrington residents have over their water. It has become abundantly clear that the town has no legal governance over water companies: neither the Great Barrington Fire District (GBFD) nor Housatonic Water Works (HWW).
At the October 28 Selectboard meeting, the final report on acquiring HWW was presented after six years of study. It was underwhelming. Many frustrated attendees concluded that the town needs to have a consolidated Great Barrington-wide water company.
Unbeknownst to many, two state statutes of 1886 (Ch. 311) and 1897 (Ch.229) spell out a process for doing so. The statutes require a vote at a Special Town Meeting called for that purpose and a two-third’s majority vote of attendees. (If it is not called by the Selectboard, registered voters can obtain 100 signatures to petition for a meeting.)
The 1886 statute addresses the GBFD. If there is no agreement on price, a State Supreme Court judge would negotiate and set a price. In the case of HWW, it is more complicated, but doable. Our forefathers understood the need for towns to own their critical resource, water.
To proceed, GBFD should be acquired first, perhaps by merger. The Town of Great Barrington already provides many services to GBFD, even though it has no governance over them. We bill and collect capital improvement taxes from property owners. Unlike HWW, there is a very able, voluntary Prudential Board that oversees GBFD’s operations and finances. In contrast, HWW is opaque. The two owners would not even disclose their working hours to the Massachusetts Department of Environmental Protection when queried. They claimed “executive privilege.”
Interestingly, the 2018 DPC Engineering study commissioned by the Selectboard clearly spelled out the cost advantages of combining both water companies. These included economies of scale, staff coverage, long-term municipal borrowing rates, and purchasing advantages for pipes in bulk. The study described the antiquated infrastructure of both systems and cost of replacement pipes: GBFD was then estimated at $54 million and HWW at $22 million. Only HWW’s costs have been mentioned since then, perhaps to imply they were the only ones with a problem. Not so.
A consolidation of our two small water companies was not even addressed in DPC Engineering’s October report. Only the purchase of HWW was covered, as if GBFD did not exist. The October report was essentially the same as it was three years ago except for the price tag.
One other factor has surfaced and was not addressed. The Commonwealth now requires each water company to have a second source. After costly explorations, GBFD failed to find any, so they financed a new connection to HWW as a last resort. After all, HWW’s Long Pond water is the largest water source in Great Barrington. This was part of GBFD’s nearly $5 million capital request last year. Since their GBFD meeting quorum is just 15 people, it passed easily. Most tax bills for water increased several hundred dollars without notice to its “Fire District” customers.
In parallel fashion, HWW received approval for higher rates from the Massachusetts Department of Public Utilities, some of which was to finance their part of the connecting pipes. However, the companies have not addressed how we use this dual resource. How do we pay for each other’s water when needed? On the fly? At what rate? How do we monitor the uniform quality of the water if each source is managed by different companies? And the town is not a player? Absurd!
Regarding a consolidation, some claim that GBFD users would be “paying double.” It is a deflection. Each set of water users can be billed only for their system. GBFD is the model. They bill capital expenditures to property owners and bill water consumption to users, whether they are renters or property owners. Not difficult. Housatonic water users can be billed using the same methodology. The difference is that capital expenditures (as enumerated by the DPU) will reflect long-term municipal borrowing terms and rates, substantially lower. These would be billed to property owners. Water rates would be without capital costs, billed to users. Financial systems can easily separate each user class. (I have designed several.)
Finally, people may be concerned about Great Barrington’s debt capacity with oncoming capital projects. Like Hingham, Mass., which bought back their water rights, Massachusetts General Laws allow municipal-owned water companies to exclude debt from their town’s borrowing capacity. That is because they are nonprofit companies and “zero-out” their costs through their user billings.
It is high time our town took on the serious responsibility of meeting all its townspeople’s needs in a sensible, cost-efficient way.
Summarized below is a successful case study:
The Town of Hingham, Mass., reacquired their water rights from Aquarion/Eversource using their 1879 Statute, Chapter 139. According to the town’s website, “The Statute allowed the Town to purchase the property and rights of the water company ‘at any time’ if approved by a 2/3rd’s affirmative vote at Town Meeting.” The process of acquisition began in 2012 and was completed in 2019. The intervening time was filled with analyses like Great Barrington’s process over the past six years. In 2020, Hingham took over the system and operated it using a subcontractor.
What happened: The effort was spurred by Aquarion/Eversource (a private utility, owned by the largest electric utility in Connecticut) raising near-term rates much higher and proposing elevating rates over a longer future period. With outrage, users pointed to advantages of taking over their watershed which was highly stressed because Aquarion was not interested in investing to protect Hingham’s water supply. Aquarion indicated it could not make necessary improvements because the investment did not provide enough profit in return. In a town meeting to discuss a water pipe that had broken six times during a year, Aquarion quoted the same reasons based on their profit formula.
Hingham proponents felt they could operate their system at lower costs since no profits would be draining the enterprise, and they would have greater control over decisions and repairs.
Hingham was also interested in expanding its distribution, including the ability to extend the water system to new development areas. They would also have more control in coordinating road construction and underground utility work; avoid legal fees and DPU hearings; and manage their own financing. Hingham’s system also provides water to homes in North Cohasset and Norwell, totaling 20,000 outlets.
One major town financial benefit was that borrowings for the acquisition would have no bearing on the town’s other capital needs. Water company debt does not count towards the town’s debt limit, as specified by Massachusetts law. The debt would be paid entirely by water rate payments (water customers), separate from real estate taxes.
In the same report, the town noted that 96 percent of all water companies in Massachusetts get water from municipalities which own and operate their systems.
In the end, the defining question the Hingham Study Committee had to answer was “What is the best interest of the Town?”
The Town Meeting vote was decisive: 80 percent (1,482 vs. 382) voted for the acquisition. The Select Board became the water commissioners to establish an enterprise fund to keep water funds separate from the general funds.
Sharon Gregory
Great Barrington
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