Last Thursday, Sharon Gregory submitted separate petitions to the Great Barrington town clerk seeking a special town meeting to consider the purchase and merger of the Great Barrington Fire District (GBFD) and Housatonic Water Works Company (HWW).
On Friday, I conducted a Zoom roundtable discussion with Gregory, GBFD Water Commissioner/Chair Walter F. “Buddy” Atwood III, Stockbridge Select Board member Patrick White (the intervenor in the rate case litigation), and The Berkshire Edge Managing Editor and reporter Shaw Israel Izikson. HWW Treasurer Jim Mercer did not respond to invitations to participate. The purpose of the meeting was to review the whereases, what-have-yous, and what-fors of the petitions to purchase and merge the water companies. Our conversation has been edited for length and clarity.
MOST
The ground rule today is that we are all starting from the same point, which is that something needs to be done regarding Housatonic Water Works. No need to debate that point. I’d like to discuss what Sharon has proposed here. One petition provides that the town approve the purchase of GBFD in an amount not to exceed $2 million, and the other petition provides that the town acquire HWW in an amount not to exceed $2.3 million. Everyone can ask everyone else questions.
Sharon, my first question. On December 19, the town engaged Eric Krathwohl, an attorney with considerable experience in public utility purchases, to negotiate the potential acquisition of HWW. Why not let those negotiations play out? Why proceed with the citizen’s petition for a special town meeting at this point?
GREGORY
Because we’ve been talking about it for years. I’d been studying it since 2018 when DPC Engineering Company came up with their study, which was presented at the Selectboard meeting. I downloaded it and studied it. You know, it’s been a long time, six years, and we’ve had a lot of studies. So that’s number one. Great Barrington Fire District does have the capability to manage HWW. HWW does not have the managerial capability, and it was clear to me that Buddy does such an excellent job of managing.
MOST
I want to focus my question, not going back to 2018 Sharon, on the fact that legal counsel was engaged by the town to proceed with the potential purchase of HWW. That process is in place. We all understand HWW is a long-standing issue, but the town has engaged counsel to negotiate directly with HWW, so why not let those negotiations proceed rather than convene a special town meeting now?
GREGORY
Because I just answered your question, and that is we don’t need to go through another three, six months of somebody engaging in that if the town is going to reject just buying HWW. It’s great that there are many people in Housatonic who want this done. So, you know, it’s a bit of an end-run, I agree, but that’s why I’m proposing it.
MOST
Buddy, does the Great Barrington Fire District have any objection to the citizen’s petition to purchase the Great Barrington Fire District for an amount not to exceed $2 million?
ATWOOD
Yes.
MOST
Would you like to expand on that?
ATWOOD
Well, I read the report that Sharon did. Only saw one thing that was right. There’s two water companies. I think the Selectboard is working hard at what they’re doing. The Mercers, if they were given a rate increase, could mostly improve the system to what the people in town want. As far as the operation of it, I don’t think it’s that difficult because the Mercers are running it with a part-time person and a couple guys that test the water. So, there’s no management there. They need repairs. They hire a local contractor to take care of it. I don’t see any problem with the operation or the management of HWW. They have a unique system of billing everybody. It’s on a cell phone. You can’t get simpler than that. I don’t see any problem with the Mercers running it. And I have confidence in the town’s Selectboard. Everybody voted for the ones who are there. That’s why we elect the Selectboard to help us run the town. If we all go out and do our own thing, it’s not going to go on. And then another part is right on top of this. If I lived in Housatonic and I realized that something was coming up and the bills were going to be huge, I’d be putting in a well. When you look at the 850 customers they have, of which about 750 are in Great Barrington, there’s a whole group of places out there to put wells in. I can just see that system getting smaller and smaller and smaller and making it harder and harder to update it.
MOST
Do you know what GBFD’s current outstanding debt is?
ATWOOD
This year here it’s going to be zero, since we are making our last payment on our water tanks. We have right now a proposal to put an ultraviolet system in at the Green River pumping station and to build the pumping station to go from Great Barrington to HWW. You can’t do that right now because the different boards have HWW in limbo. They can’t borrow money to connect with us. There’s also another minor problem. There’s a state statute in 1905 that, as the GBFD, we cannot sell water to people in Housatonic. Now, there’ll be $5 million in debt voted on at our April meeting. There will be absolutely no increase and most likely a decrease because we have a method we’re working on, a borrowing that’s going to make sure that what we’re retiring is going to be the same with the new bill. So, as far as the customers in the GBFD, we don’t expect to see any change in the tax rate. Actually, we expect to see it go down a little.
MOST
The reason I asked about the debt, the debt exceeds or will shortly exceed the amount in Sharon’s petition seeking to purchase GBFD for $2 million.
ATWOOD
That’s very interesting. Do I get the money? Does the board get the money? Do our employees get the money? Or do we prorate that money among the amount of water that’s used by our customers?
GREGORY
I have no idea how we distribute the $2 million.
MOST
The amount that Sharon is seeking authorization for from the town is not to exceed $2 million, which is less than the debt that will be on GBFD’s books. Presumably, it would be a violation of the existing debt covenants to sell the entity for any amount less than the outstanding debt. So, I’d like you both to address how the town could purchase GBFD when the debt exceeds the amount that Sharon is seeking for the purchase.
GREGORY
Let me answer the question. The last statement that’s posted on GBFD had, I think, a value of about $5 million. And so, I didn’t have any information beyond that. I knew that the Prudential Committee took on or got an agreement to take on $5 million of debt for the projects that they presented. The thing is, they would be retiring some debt. I didn’t know that the net effect was going to be—I thought it would probably be less than $5 million. But I had no idea the timing, so I didn’t want it to say zero, so I said up to $2 million, and that’s how I got that, so that there was going to be some flexibility in the negotiation.
WHITE
Is this a private entity or a quasi-public entity? How is GBFD organized?
ATWOOD
We’re a municipality within the municipality. We would have to vote ourselves out of existence.
WHITE
So, basically, there’s no acquisition price.
ATWOOD
You have a good point. It’s very different than HWW.
WHITE
HWW is a private entity owned by private individuals.
ATWOOD
You would have to commit 1,750 customers to sell themselves to the Town of Great Barrington for a better deal.
GREGORY
I wouldn’t put it that way. Before you say that, could you explain, Buddy, the process for the sale?
ATWOOD
I believe we would have to vote ourselves out of existence in the town and give our assets to the Town of Great Barrington.
MOST
And if the town voted by a two-thirds vote to expend $2 million to acquire the GBFD, where do those dollars flow, as you understand it?
ATWOOD
I have no idea because we have to vote ourselves out of existence before the town can take us over.
MOST
If the town were to take over GBFD and assume its outstanding debt, would that debt be owed by the entirety of the town, or just the GBFD ratepayers?
ATWOOD
If they take over, everybody’s paying that debt, even if you have a well.
MOST
Do you have an idea of what percentage of Great Barrington homeowners use GBFD as opposed to a private well for water?
ATWOOD
Well, I’ll make a rough estimate. When I was on the Selectboard, there were roughly 3,300 units in the town of Great Barrington. At GBFD, we have basically 1,750; HWW has 850 customers, knock off a 100 for Stockbridge and West Stockbridge, and that comes out to about 800 people on wells.
MOST
That leads to a question for you, Sharon. I have been curious why the citizen’s petition wants to convene a special meeting in advance of the May Town Meeting given that we are relatively close to the May Town Meeting. It occurred to me that by insisting on a special town meeting before the May Town Meeting, the calculation was that it would be easier to achieve a two-thirds vote at a special town meeting where more Housatonic residents would be present than at a regular town meeting.
GREGORY
I’ve read probably 20 statutes, and there are about 100 of them, the state statutes between 1870 or so and 1920, and they all kind of mirror each other. They say that the town has the right to purchase the water company in a special town meeting and it would prevail by at least two-thirds majority. It’s a standard thing. There are fine people on the Prudential Committee, but if we were, as an example, a water company for Great Barrington, I’m wondering whether we could have saved $1 million not exploring and digging for a second source. I think we would have just hooked up the two water systems and figured out something that’s good for the entire town. So that’s just one example of how the town does not really have any governance or supervision over it.
MOST
Patrick wants to respond to something you just said.
WHITE
First of all, there are a couple of points in that question. We’re all grappling with what sounds like a political discussion. You know, in the grand scheme of things, we’re all dealing with the same thing. For example, Stockbridge shares with West Stockbridge a wonderful water superintendent. He’s also five years away from retirement.
It’s also getting nearly impossible to staff these positions here. At the eastern part of the state, people in those positions are approaching $250,000 a year to run these jobs. For a long time, I have been considering shared services for the towns, which makes a ton of sense in many instances and may be a challenge that we have to deal with here.
Putting all the politics aside, my first obvious question is this: If you look at the rate structure of GBFD, which I understand is basically a surcharge on the tax bill added to a water bill that’s relatively low, and compare that to a private entity, has there been a discussion, first of all, for GBFD to acquire HWW? And if they did, what sort of guarantees could the town have that there was an equitable, consistent rate base across the entire combined district? A question is whether consolidation makes sense for economies of scale because we’re going to see tremendous pressure around staffing of these entities across the region over the next five to 10 years. We’re all seeing it: the lack of locals, the lack of training, people aren’t staying in the region. This is getting harder. I think about economies of scale and how we stop these things regionally. My question, Buddy, is would you consider acquiring HWW?
ATWOOD
We already had a vote. Answer was “no.” We don’t want to take on the debt because there isn’t an easy way to divide the debt up. They’re not part of the Fire District, which we can tax.
MOST
Sharon, my supposition is that you and your group want to proceed with a special town meeting in advance of the May Town Meeting because you believe that the Housatonic ratepayers could form a two-thirds majority at a special town meeting but may not be able to do so at a town meeting. That was the question I was asking before, but you said in response that you have read many statutes, which suggests it can be done at a special town meeting. I have also read the statutes, and they do not preclude a purchase at a regular town meeting.
GREGORY
It’s at a special town meeting, so I read it differently. And I understand that, because you know how our town meetings go on and on and on. By the time you get to the vote, an especially important vote, not so much even financially, but in terms of the health and welfare of its people, it needs to have a focus on it.
MOST
My other supposition is, Sharon, that by having the town undertake the purchase, rather than the ratepayers in Housatonic, the entire town will share the cost of the necessary improvements, a cost borne by all residents and taxpayers of Great Barrington, not just Housatonic ratepayers.
GREGORY
It’s hard to explain. You know, I have kind of alluded to it. First of all, with HWW, what you’re talking about is probably neglect and implicit liabilities. Well, you know, the GBFD has a lot of old pipes too, and this is maybe old data, but I have a 2018 DPC Engineering study that says GBFD has $55 million worth of pipes that needed to be replaced over 40 years.
ATWOOD
People stopped at our office and asked us a question. They went to the state and took records from the state. We’ve got 40 miles, and 22 miles have been put in since 1965.
GREGORY
Whatever the number is, they pegged it at $55 million for GBFD and half that for HWW. Whatever the number is, there’s a number that both companies carry because there’s a lot of pipes there. But let me go to the question you asked. How I would do it, and I’ve done a lot of cost allocations for my business analysis over 30 years, I would keep the two different rate payers in the different class, and the GBFD would continue the way they are, separating the use of water, the cost of the use of water, from capital expenditures, or on our tax bill. I would take that same model and use it for HWW, so their water usage would continue to be whatever the cost of pumping the water and distributing and so forth, but the capital expenditures, the filtration system, the new tanks, and so forth would be borrowed, would be financed by long-term borrowing. Now, you would have some economies of scale because, you know, GBFD has office space as an example. The superintendent can oversee both systems and maybe have an assistant superintendent for the HWW system. And some of the people would basically swing between the systems, and you can do cost accounting so that the two cost centers would be different.
MOST
I think we got off track. There are two defects with your petition, Sharon. I want to see if you can help me understand them. In your petition for the GBFD, you state it is in accordance with Massachusetts State Statute 1886, Chapter 311. That chapter relates solely to the Berkshire Heights Water Company which no longer exists. Does it make sense to proceed with a special town meeting on a petition under a state statute that we know isn’t applicable to the petition? Wouldn’t you want to save the town $6,000 [the cost of a special town meeting] by not proceeding with a vote on a petition that cannot, as a matter of law, proceed?
GREGORY
Well, you could look at it that way or you can look at the fact that there are several state statutes that promote the ability of a town to have a special town meeting and vote by two-thirds or more the acquisition of the water company.
MOST
As I understand it, you’ve already gathered more than 100 signatures for this particular petition that relates to a particular state statute that is inapplicable. So, are you going to revise it and get new signatures, or do you intend to proceed with the petition under the wrong statute?
My other question, Sharon, is regarding the other petition in which you’re seeking an amount not to exceed $2.3 million for the purchase of HWW. The appraisal came in at the $2.3 million number cited in your petition. Steve Bannon, quoted in an article in The Berkshire Eagle—sorry, Shaw—states that he believed that HWW shareholders would reject that amount. As Steve Bannon has been dealing with this for years and has some sense of the amount that the shareholders of HWW would take to sell. What is the benefit to proceeding to obtain an amount, not to exceed $2.3 million, when the chair of the Selectboard has already stated it’s insufficient?
GREGORY
The reason is that I want the people to let the Selectboard know whether or not they want to buy it at all. The fact that they’ve contracted somebody to negotiate it, if the people don’t even want to buy it for $2.3 million, then why are we spending a lot of money to have somebody negotiate to buy it when the people won’t buy it?
MOST
Then my next question is, are these two petitions advisory petitions in which you are trying to advise the Selectboard as to the beliefs of the town, or are these mandatory petitions which, if passed, the town would be obligated to proceed?
GREGORY
Well, the reason I put the amounts “not to exceed” were “yes” or “no” questions.
WHITE
I have a question for Buddy. Is there an argument for consolidation in some form? One concern is the amount of money it’s going to cost over time to upgrade these systems, we’re talking about tens of millions of dollars. And the second has to do with staffing and the ability to insure in the long term, in an environment where we have declining population, declining qualified individuals who work through these systems, how we’re going to do it.
ATWOOD
The staffing is interesting. It took us six months to find an employee, and we’ve sent them to school. We have two people who are going to retire within the next four years most likely. We have one person who will retire within three years, another guy within five years, and we have four employees, so we hired another employee to be trained so we can have a regular turnover. We’ve looked at that and, you know, we don’t need a lot of people to run our system. We need people with a license, and then we hire outside contractors to help us.
IZIKSON
Well, that actually leads me to a question for Buddy. If you have to run two water systems, would it put a drain on your operations to run both systems at the same time?
ATWOOD
That would cost us. We’d have to have more employees, and we’d have to do it. We don’t know their system, so we don’t know what the problems are.
IZIKSON
I have a direct question for you, Sharon. Back in October, DPC Engineering issued a report that if the town were going to buy HWW, it would have to invest $33 million. My question is, how do you think the town is going to get $33 million to pay for these repairs?
GREGORY
I think that was a very pointed way to instill a lot of fear into this possibility of buying the water companies. I said it in the October meeting. DPC cited $55 million was needed to replace the pipes in GBFD and half that amount, which is how they got to the $32 million, added to the filtration system and the pipes to join, as well as the water tanks. It’s kind of like, why would you buy this house here if you’ve got to put $2 million worth of improvements in it. Well, you know, most people do it staged over time, and the original report staged the replacement of pipes over a 40-year period. So why do you think you have to sink $32 million in on day one? That is a scare tactic.
IZIKSON
Buddy, does the Prudential Committee actually have $32 million to put into repairs for HWW?
ATWOOD
We’d have to borrow it. Interesting thing is that a number of years ago, we put in 1,100 feet of pipe on Bridge Street in Great Barrington. We hired a private contractor and, with the guys in my district, we laid it down. We bought the pipe and put everything down for $80,000. Two years later, we had to put in 6,600 feet of pipe. To put in those 6,600 feet of pipe, because we were on a state highway, it cost us $2.5 million, of which 25 percent was to hire police. Now, what happens is that usually different numbers, and it depends on what your project is, where you’re going. If you’re in prevailing wage, $33 million is a joke. It’s going to be twice that. If you’re not in prevailing wage, and if you’re a private company, you can do a lot of this work at a lower price. And I believe that if the Mercers hadn’t been hamstrung with all these delays on getting a rate increase, a lot of that would have been done.
IZIKSON
Would operating and maintaining HWW take away from maintaining and operating your current system? Both systems are already up and running. You’re talking about maintenance. Would that take away from maintaining your current system, Buddy?
ATWOOD
I believe we have the right number of employees to handle our system. If we’re taking on increasing on our system by 50 percent, that’s not going to work. It’s a system we don’t know, and they have a different method of accessing water. It comes from a lake. Our water comes from a shallow well. They’re drawing it out of a lake.
GREGORY
I said this in the October meeting. There have been only two people running HWW, and they both get paid $118,000 a year. They use contractors. They spent $217,000 on contractors last year. It’s not like you have to pull somebody off the street and say, ‘Could you figure out the pond?’ They have specialists who they have dealt with for quite some time. It’s not necessarily all of GBFD’s people who are going to be responsible for this, for the ongoing maintenance, of course. And I think the shared expenses and the guarantee of quantity and quality of water is very important to the town of Great Barrington. I find no comfort that we have no secondary source of water.
ATWOOD
You have to pay them a decent rate, number one. And number two, the fire district, we’re paying basically more money that—when you look at all of our employees, and we’re still hiring outside contractors.
IZIKSON
Buddy, what would happen if the Prudential Committee were forced to take over HWW?
ATWOOD
It’ll be a very interesting town meeting.
WHITE
Well, aren’t they all? Can I ask one more question or one observation? In Stockbridge, we’ve spent five years coming up with a strategy to defend our ability to hire across all departments. I always look at Cape municipalities—I have a number of friends who live on the Cape, work on the Cape—and what they’ve gone through in the last 20 years, and it is sobering. Town managers, for example, on the Cape, are now running $250,000, because it’s so competitive for them. Our town manager started when we hired him two months after I got elected five years ago for $100,000. We’re paying $150,000, and I don’t care if we have to pay him $250,000, we’re keeping him, all right? Right now, you aren’t going to find someone to run HWW for what the Mercers are making.
IZIKSON
Buddy, has your water system ever had any manganese problems or any kind of water quality problems, and, if so, how has your water system dealt with it?
ATWOOD
That’s one of the reasons why we’re putting in our ultraviolet system. By going to an ultraviolet system, we can take care of that, and that is one of the reasons why we’re going there. Actually, it’s a system that sits alongside the Green River and, by osmosis, moves a couple hundred feet into our galleries, and is pumped into town. As far as the secondary source, the Mercer source, that’s up there to come to the town of Great Barrington—we have to put in a pump system to make it work. Their system is at 900 feet, ours is at 1,033, so we have to pump the water. We need 700 gallons a minute, 24/7. They only need about 300 gallons a minute, 24/7. They have the ability to do most likely 400 gallons a minute. So, when we tie together, we don’t have a secondary seller, all we have is an additional source. We’re still looking for another source to go on top of that so that we can get close to our 700 gallons a minute. They don’t produce enough water to take care of us. We can take care of them, but they can’t take care of us.
MOST
Sharon, based on Buddy’s numbers, about a quarter of Great Barrington residents have private wells, about a quarter are HWW ratepayers, and about half are GBFD ratepayers. Two questions: Why would your petitions be advantageous to those residents who have wells? And why are your petitions advantageous to rate payers of GBFD?
GREGORY
A lot of people on wells want to be on town water because it is tested and, and other things.
MOST
That’s not an answer to my question. I am asking why your petitions, for all of those residents who live outside of Housatonic, why are your two petitions advantageous to those people, the two thirds or three quarters of the town, why are your petitions advantageous to everyone who lives outside of Housatonic?
GREGORY
Well, I believe that the consolidated water system would allow more economical decisions to be made and enable us to expand, for business-development purposes, to expand the water system, including to those people who might be on wells. New developments, as an example, decisions can be made much more efficiently and quickly with the right system.
MOST
Buddy, can you respond to that question? Do you understand why these petitions would be advantageous to everyone who lives outside of Housatonic?
ATWOOD
You can join the Great Barrington Fire District. We have an open meeting every year, about a month before our annual meeting, for everybody to petition to join the district. If you’re not joining the district, like Simon’s Rock, you have to set up a private water company. And we have two or three places where we sell private water to separate companies. They have their own company, so we sell them.
MOST
We’ve been going for over an hour. I would like to let everybody have a chance to give their final thoughts on the questions that have been addressed today. Buddy, we will do this alphabetically. You go first.
ATWOOD
Thank you. As always, it’s an advantage to have a last name that starts with “A.” Actually, it’s been very interesting what we’re talking about. I’m looking forward to seeing the article in The Edge.
GREGORY
I really believe in having a consolidated town water company where we can control the quantity, quality, and investment in our water and expansion of it. The statutes allow Great Barrington to build for the water company and so forth. This makes it very confusing as to who’s responsible for what. The last meeting where we were financing $5 million of expenditures surprised a lot of people. I don’t know how many times Steve Bannon says the water companies are not under us. There’s a lot of confusion, and even though Buddy says there is an open forum at his meetings, I’ve been to six meetings, and there have only been one or two people who have attended. So, having one company with the town having oversight seems to be a natural way we should be managing efficiently.
MOST
Have you submitted the petitions yet?
GREGORY
Yes, I did yesterday.
IZIKSON
How many signatures?
GREGORY
About 115.
PATRICK
I have two quick threads. One is, think about the long-term challenges that are minimized, following costs, and figure out in a competitive environment how you’re going staff it. This is a five-, 10-, 20-year plan. Those are the two top-line issues that any water company is going to have.
My second comment has to do with community. You know, when we debate this full impact on various users in a community, let’s remember water is a human right. This discussion is going on because there’s a perception in the community that the water has been substandard for a long time. The community is going to need to figure out whether it’s one community or two communities. If it’s one community, we are going to have to figure out an equitable way to take care of each other. That is my bottom line.
On the one hand, my strong suggestion to everyone listening is to say get the politics and the acrimony out of this decision-making process. And I know that this is going to go on for a long time, and people are angry. I’ve seen the pictures in the paper, but man, making good decisions is going to have to be made through a lens that is, on the one hand, based on aspirations like community, but on the other hand, the realities of what the next five, 10, 20 years are going to work like.
MOST
Thank you everybody.
***
Following the discussion, Gregory emailed a note stating that she believed misinformation had exchanged. Gregory’s note and documentation in support are available here.
Editor’s Note: Following the roundtable discussion, the town determined that Gregory’s two petitions had 105 qualified signatures but required 200 qualified signatures to call a special town meeting. When contacted, Gregory said she is still advocating for the petitions and, if permissible, will seek to obtain the necessary additional signatures.
Survey Monkey Question
Here is a link to the following Survey Monkey poll:
- “Do you favor proceeding with a special town meeting to consider the citizen’s petitions to purchase GBFD and HWW?”
- “If you favor proceeding with a special town meeting to consider the petitions, are you in favor of (1) purchasing HWW for an amount not to exceed $2.3 million, (2) purchasing GBFD for an amount not to exceed $2 million, and (3) merging the two water companies?”
- Do you believe the shareholders of HWW will agree to sell HWW for an amount not to exceed $2.3 million?
Survey Monkey Results
Here is the result of the following recent survey question: “Would you prefer towns move faster or slower in the implementation of the Commonwealth’s clean-energy and housing goals?”
As of publication, 87.5 percent of respondents said “faster.”
Days Great Barrington has wrongfully withheld Community Access Fees: 324