Feb. 29, 2020 by Carol Britton Meyer
The transition of the water system serving Hingham, Hull, and part of Cohasset from Aquarion Water Company to Town of Hingham ownership continues. While a specific transition date is still to be determined, the Hingham Board of Selectmen (in their capacity as Water Commissioners) voted to keep water rates the same as they are now for the first year of operation.
Those are a couple of the many details shared by Selectman Mary Power on Thursday as she provided a first look at the proposed Fiscal 2021 Enterprise Fund budget (under which the water system will be self-supporting) for the operation of the Weir River Water System -- which at this time shows a $2.3 million surplus. By law these funds must remain within the water system. The Fiscal 2021 operating budget will be roughly $8.3 million.
This surplus is despite the fact that some of the earlier figures presented at Town Meeting 2019 regarding certain aspects of the budget are now higher due in part to an expanded scope of service for the water system operator.
For instance, the Town’s RFP increased the threshold for preventive maintenance costs borne by the water system operator from $2,500 to $10,000. In addition, the water system operator will be responsible for inspecting every fire hydrant annually under town ownership (previously one-third of hydrants were inspected each year). The water system operator will also be responsible for purchasing and installing 10 hydrants across the system – twice the number as under Aquarion ownership.
Debt service payments -- projected to be lower than originally estimated due to current interest rates -- offset the higher operator costs. “Hingham’s AAA bond rating means that we are getting the lowest possible rates for a municipality,” said Power.
The Weir River Water System will pay a PILOT (payments in lieu of taxes) to all three towns, which will be equal to the amount of property taxes Aquarion pays to Hingham, Hull, and Cohasset. That figure will be about $841,000 for fiscal 2021.
The board adopted the preliminary budget in accordance with the requirements for the creation of an enterprise fund and also voted in support of the water rates not changing for the first year. Chairman Karen Johnson was unable to attend.
Town Meeting
More details will be available within the next couple of weeks, when the final water system budget will be heard and voted on by the selectmen and advisory committee for consideration at the April 27 Town Meeting.
"Three million dollars is budgeted for capital projects in the first year," with plans for accelerated improvements, Power said. "More money will be spent on these kinds of projects than in the past."
While there are still many details to be worked out, some are definite, according to Power. "About the same amount of revenue will be collected under town ownership, but the costs will be lower," she said. "The [shareholder] profit requirement no longer exists, so all the remaining money [beyond covering all costs, including salaries] will stay in the system."
The selectmen recently hired a new operator, Suez Water Environmental Services (SUEZ) -- subject to the execution of a contract -- which is part of the process of transitioning to full ownership following Town Meeting's decision to purchase from Aquarion the portion of the system that serves the three towns.
A water superintendent will also be hired within a salary range of $109,000 to $137,000, along with a part-time support staff member, a GIS (Georgraphic Information System) coordinator, and seasonal inspectors who will support water main replacement projects. SUEZ -- in accordance with the water operator Request for Proposals issued by the town that placed a high priority on considering current water system employees for positions within the new system -- will interview all current Aquarion employees.
The water superintendent will be involved with rate-setting and will work with town officials "24/7," Power said.
SUEZ will be responsible for all billing activities. Customers can expect them to "look a little different" and to receive a final bill from Aquarion and one from the Weir River Water System once the town takes over ownership, according to Power. “Prior to the transition, ratepayers will receive information about the format of a new bill, along with contact information for the new billing provider. There will not be any double charges," she said. Whether the billing will be monthly or quarterly, as is now the case, has not yet been determined.
A cost of service study will be undertaken several months after the town starts operating the system. "This will inform future rate decisions," Power said. A capital study will also be performed to identify and prioritize capital needs of the water system in all three towns.
Hingham Town Meeting will consider three water system-associated warrant articles. These relate to:
* adding another Hull representative to the citizen advisory board for the new water system, for a total of two. Hingham will have three representatives on the board and Cohasset one.
* spending $2.7 million in the first year under town ownership on system improvements -- out of an awareness of the aging water system and infrastructure -- with no taxpayer impact. The town will borrow the money, with all associated costs paid for through the enterprise fund.
* Hingham implementing a Massachusetts General Law allowing municipalities to initiate a lien for unpaid water bills in all three towns that will be added to customers' tax bills in an effort to ensure the money will ultimately be collected. Cohasset previously adopted this provision. "Hull Town Meeting will be taking it up as well (each town has to adopt this provision)," Power said.
Hingham Town Meeting has the final say on all three articles.