05.08.12
Hull Town Manager at Hingham Meeting
Phil Lemnios, Hull Town Manager, was the guest speaker at a meeting of the Hingham Water Supply committee. We thought his insights on his exposure to several methods of water operations was noteworthy. Lemnios said he could see an inter-municipal water agreement as best benefiting all involved towns.
APRIL 12, 2012 A posted meeting of the Hingham Water Supply Committee (Committee) was held on Thursday, April 12, 2012 in the East hearing room, 210 Central St., Hingham, MA.
MEMBERS PRESENT Sam Mullen, Chairman
Kirk Shilts, Secretary
Tom Burbank, Member
James Connelly, Member
Maureen Doran, Member
Roger Sullivan, Member
OFFICIALS PRESENT Harry Hibbard, V.P. Massachusetts Operations, Aquarion Water Co. (Aquarion)
Clinton Sanko, Aquarion Water Co.
Joe Cronin, Aquarion Water Co.
Philip Lemnios, Hull Town Manager
AGENDA Mr. Mullen reviewed the posted agenda with the Committee.
Thereafter, the agenda was established as posted.
HULL TOWN MANAGER:
PHILIP LEMNIOS Mr. Lemnios discussed his municipal experience with the towns of Attleboro, Natick and Hull that included first-hand knowledge working, with a municipal; a quasi-public regional; and a privately run water supply system.
Mr. Lemnios said Hull has their municipal electric and sewer utilities under private contractual operations and views the purchase of Aquarion as an additional opportunity to save Hull money. He said municipal utilities typically operate on lower margins than private utilities. He believed Aquarion is not efficient at cost management.
Mr. Lemnios said the residents of Hull are frustrated with Aquarion’s service and rising costs. He recognized the responsibility for Hull to input toward the purchase of Aquarion, if Hingham residents eventually decide to move forward on any future acquisition. He believed the taxpayers of Hull have an appetite to allocate money for this endeavor.
Mr. Lemnios envisioned how Hull would be a minority partner within a tri-town municipal water district involving Hull, Cohasset and Hingham. He gave the analogy of the new regional dispatch center as an example and model for intermunicipal cooperation and resultant cost savings. He said each town’s cost toward operating the dispatch center is proportional to the call volume frequency from each town.
Mr. Lemnios said municipal utility rates are typically lower than private utilities because a municipality has no investor profit, component retained earnings are usually maximized at 1-2% and private utilities often short capitol investments. He added that municipal utility rate changes also go through a public oversight format.
Mr. Lemnios discussed the Hull desalinization study from about six years ago. He said the study was driven by the town’s dissatisfaction with Aquarion and the potential cost benefits from having their own water supply mechanism. He said the study primarily dealt with the unique permitting and engineering aspects of desalinization in addition to studying Hull’s existing water infrastructure. The cost of the study was $265,000. He said the town did not follow through with the project because of the significant permitting difficulties tied to the complexities and novelty of the desalinization process.
Mr. Lemnios described the advantages of privatizing employee municipal operations as Hull has done, which generally ensures adequate staffing. He also said customer service through a town-owned utility has advantages over a private company, because an aggrieved resident has the ability to appear before the utility’s governance board and ability to ask and receive abatements. Mr. Lemnios agreed that the state DPU process for private utilities also protects customer rights through an extensive oversight mechanism.
Mr. Lemnios believed the absent frequency of towns selling their utilities to private owners suggests that total privatization is not cost efficient or desirable. The example of the Town of Grafton water system was nevertheless mentioned as one such example.
CATHERINE SALISBURY: Ms. Salisbury discussed her chairmanship of the WSC twenty-seven-years ago when the Town last conducted a study of the Hingham Water Co. She said the 1984 study was performed by the engineering firm Whitman & Howard and cost the town $50,000. She added the Town did not have the position of Town Administrator back then and that town governance was less integrated than it is now.
Ms. Salisbury said the Water Co. was locally owned at the time of the 1984 study. She reported the tremendous cooperation the Water Co. provided toward completing the town study.
Ms. Salisbury said the principle focus of the WSC in 1984 was in regards to adequacy and water quality including the issue of trihalomethanes in our drinking water. She mentioned the WSC establishing two groundwater protection zones, the Hingham Groundwater Overlay District and the Accord Pond Protection Overlay District. She noted the state Water Management Act, including the mandates & protections it contains, did not come into being until later (1987).
Ms. Salisbury reported how the WSC actively participated in rate cases before the state DPU as an advocate for the Town. She found it interesting that the fire hydrant fee the water co. assessed the Town seemed to surprisingly match the taxes paid by the Water Co. to the Town.
Ms. Salisbury said the price (acquisition) component of the 1984 study was not the focus of the 1984 study although it was determined to be $6.1 million. The study’s principal finding was a recommendation the Water Co., or the Town, build a water treatment plant to address known water quality problems. The cost for building a treatment plant was estimated at $10 million. She mentioned that the completed plant cost significantly more than originally estimated.
Ms. Salisbury said the town’s signature financial discussion during the mid 1980′s centered on whether to purchase the South Shore Country Club property. The WSC did not advance or suggest the Town consider purchasing the Water Co. and the 1985 Town Meeting never addressed the topic.
Ms. Salisbury offered her personal thoughts on whether the town should currently purchase the Water Co. (Aquarion). She said she did not believe the cost of water was a significant expense or factor to consider. She was unsure if the Town possessed the ability to efficiently run the treatment plant. She highlighted the good relationship the WSC has had, and continues to have, with the Water Co. (Aquarion). Should a purchase eventually occur, she thought water should be sold in bulk to Hull as opposed to Hingham serving individual Hull customers.
AQUARION UPDATE: Mr. Hibbard reported the, April 10th forum at the Hingham Middle School was informative albeit not well attended. He said information presented at the meeting is available online at www.hinghamwaterfacts.com.
Mr. Hibbard said Aquarion is most concerned by the wording of the Selectmen’s feasibility study Article authorizing litigation. He said there is a big difference between simply obtaining documents and obtaining a “price”.
Mr. Hibbard discussed how water systems originated and evolved from what were initially fire suppression protection systems rather than drinking water supplies.
Mr. Hibbard said Aquarion interprets the “not to exceed 10%” interest clause within the Water Co. 1879 charter to mean actually 10%. He mentioned a 1938 court decision that rejected an attempt to change the 10% interest figure down to 5%.
Mr. Hibbard discussed the recently released 2011 rate case ruling by the state DPU. He said the DPU cited Aquarion’s need to improve communications between the company and its customers. He believed this stemmed from an allegation that Aquarion had not properly maintained its infrastructure which 3-years ago resulted in a Rockland St. water main break and also the “combative” nature of Aquarion’s customer dissatisfaction.
COMMITTEE MEMBER COMMENT:
PAUL CAPPERS Mr. Burbank reviewed a prepared statement from Mr. Cappers regarding his investigation comparing water rates between Aquarion and the Town of Braintree. An opinion was expressed on how difficult it can be to make such comparisons due to the apples-to-oranges nature of different systems with completely different capitol needs.
SCHEDULE The next quarterly meeting of the Committee is tentatively scheduled for Wednesday, June, 27, 2012 at 7:30pm.
ADJOURNMENT The April 12, 2012 meeting of the Hingham Water Supply Committee meeting adjourned at 9:20PM.
Respectfully submitted,
Kirk Shilts, D.C.
Secretary
Hingham Water Supply Committee
Mike Coughlin Said:
May 8, 2012 at 1:36 PM
Let me predict the Dicaprio response– Phil is yet another government hack that knows nothing about anything. I– Peter Dicaprio know better– ignore the fact that all of the communities that Phil has served had a DPW director and municipal employees to oversee water and sewer-BTW I Peter Dicaprio also know that those jobs are also hacks–so Cohasset should never follow suit– so I – Peter Dicaprio will trash Mark Brennan and Tom Gruber so more to prove my point.
Callahan Said:
May 8, 2012 at 2:39 PM
Cohasset should not be left holding the bag or following along here. This may be another way of making the deal I have long advocated for with Hull – water for sewers.
Tanna K Said:
May 8, 2012 at 4:25 PM
Comment from the Tinytown Unleashed Water Expert:
Great post!
Cohasset should get an engineer’s evaluation of its water sources along with a forecast of future Cohasset needs that is not static (i.e. includes a demand model for a more aggressive build out of commercial development on 3A) and consider becoming a quasi-regional supplier. If the engineers find a large enough surplus to support this business model then supply agreements could be explored with neighboring towns (Scituate should not be forgotten). If favorable supply deals can be struck with Cohasset’s neighbors the Town should be better able to service its water and sewer related debt and maintain its systems more adequately than in the past.
By the way, what ever happened to the 40% unaccounted water number that the forensic auditors reported last year? Has that figure come down to a reasonable margin (10-12%)?
Another question from the Machiavelli deconstruction back-bencher element in our shop: If earlier reports that Aquarion was angling to get control of Cohasset’s surplus water source were true – was their real motive to get leverage to prevent a Hingham water ‘municipalization’ and possibly get leverage to form its own 3-town service area by locking up the practical alternative to the Hull desalinization proposal?
Inquiring minds want to know.
peter decaprio Said:
May 8, 2012 at 6:03 PM
Dearest Michael:
If I could understand your gibberish, I would respond. Since your post was incoherent, I’m not sure what should be said. Not sure how relevant it is that Lemnios has served in towns that like to have bloated infrastructure costs, but it might be good if he could show the true total costs from the in-house operations he references. Lifetime expense per employee, capital expenditures per mile, etc.
As for the TTU Water Amateur, I guess he/she was absent when Melanson Heath corrected their erroneous report on water loss rates. And yes it has come down to a reasonable level. I would suggest the TTU Water Amateur read our bond covenants, which make it virtually impossible for the water assets to change hands while our debt remains outstanding. I don’t know how many times this needs to be said, but you guys never seem to get the message. Hmmm. I detect an agenda at work. . . I guess you don’t believe First Southwest either.
Anyhoo, how exactly was Aquarion supposed to force town meeting to agree to a sale and assume the crushing tax burden and get town counsel to look the other way? Oh, never mind. I forgot. It’s the TTU. Let’s just make one inflammatory, ignorant and ridiculous statement after the next because it’s TTU and who cares about facts?
Tanna K Said:
May 9, 2012 at 12:01 AM
PETER ALMIGHTY
You are a point man for the water industry and it is very dangerous for us to have you sitting on our water commission.
There is so much evidence out there to discourage people from negotiating with water corporations that I am amazed that our town officials are even considering it.
What is on the offering plate is a decision to cut a deal for water management with a private company. There is no benefit for the public in the deal – any deal – the simple summary is, a private company manages our supply for a profit, the costs of which are placed on the backs of the customers (residents). As brightly as the picture is painted by Aquarion – or whoever submits the contract for services – it remains a sell out of the community’s right to water.
It would be best for Cohasset to invest in our own water supply and to maintain local control over it. Investments in water will only grow as the supplies decrease in volume and quality – that is a determination made by the World Bank. Water is a solid investment for any venture capitalist, so why not us?
Mike Coughlin Said:
May 9, 2012 at 7:19 AM
This past January when Hingham Town Administrator Ted Alexedes brought up the idea of appropriating money to study buying Aquarion you responded along the lines that if Hingham wants to waste its money– you also had some choice words as to his competency. Now you do the same to Hull Town Manager’s Phil Lemenios comments and the relevancy of his experience. I guess you would argue that experience doesn’t matter and that is why Cohasset should trust an interim Town Manager with no experience to counter balance the water commission and watch out for citizens as chief procurement officer.
Even though you continue to trash Mark Brennan and Tom Gruber as well as any government official or auditor that states the obvious– that professional oversight over water and sewer in Cohasset is necessary— its a losing game– Saturday will tell.
BTW- You Steve Gaumer and Meninboats have some egg on your face– last nights manslaughter arrest demonstrates that while Cohasset is a small town it is not immune to serious crime and your other hair brain proposal to darken the station displays the same arrogance that you are demonstrating with respect to water and the citizens petition.
peter decaprio Said:
May 9, 2012 at 10:16 AM
Tanna:
If it’s so dangerous to have me on the commission, why did Karen lobby me so hard in 2010 to step up and volunteer when John McNabb resigned? Why did she then publicly support me during the appointment phase? Have I gotten dangerous in just two short years? If so, shouldn’t I get some kind of an award? Isn’t that an accomplishment? Certainly better than getting fired by four towns in 12 years.
When the contract was up for bid in 2007 and it was awarded to an evil, “private” company, did I miss the mass protest and uprising that ensued? I mean I lived here back then, and I just don’t remember seeing any resistance. When sewer did the same two years ago, and awarded their contract to an evil, for-profit enterprise, how quickly did the fire department put out the fires that burned throughout town?
You’re on to something. We need to revisit every contract we award. Every paving contract, every construction contract, every tide gate project. We cannot trust the private sector ever. We need to start staffing up. . .
Tanna K Said:
May 9, 2012 at 10:50 AM
PETER ALMIGHTY:
She did like you.
Until you decided to steal the water.
It’s about the concession, Peter.
It has nothing to do with any operations group that isn’t a concessionaire.
You know that, I know that, you know that I know that. But maybe we can confuse the issues for others.
You’re like those nagging little subscription cards in magazines…like maybe if they insert one on every other page the person reading the periodical will instead of ripping out the card and throwing it in the trash can, say “OH, here it is. Just what I was looking for!”
I’m not looking for what you’re selling, Peter.
It’s a perfect setup for you: – basically a lot of people who aren’t clued into concession, who will be choosing a concessionaire. There can’t be any time to deliberate, for fear the rest of the Town will learn what the concessionaire really gets out of this. Bids come in on the 15th, a Tuesday. Town Meeting votes on the 21st. Not time enough to deliberate and share the results of those deliberations with the public or the TU Water Expert.
You’re amazingly tenacious – but then you’ve got a whole lot to win.
peter decaprio Said:
May 10, 2012 at 9:08 AM
I don’t know Mike, this kind of sums it up pretty well though. If it walks like a hack, talks like a hack. . .
http://www.wind-watch.org/news/2012/01/21/delahunt-champion-of-wind-project-now-may-profit-from-it/