Businesses lodge concerns over Oxford water takeover plan
Oxford’s proposed acquisition of the town’s privately owned water system could save local businesses money.
But it could also present risks.
The town’s residents will vote May 7 on a proposal to set aside $9.3 million to acquire the water system from Connecticut-based Aquarion Water Co., five years after a similar measure, for $6.7 million, barely mustered the two-thirds majority.
But since that vote, a court ruling — and legal fees associated with the five-year legal battle — boosted the purchase price $2.6 million, forcing another vote.
A town takeover would reduce business water rates by 5 to 10 percent and residential rates by 15 percent, according to Sean Divoll, public works director.
“It was a good deal in 2009, and despite the higher costs, it is still a good deal today,” Divoll said.
But if the town were to make significant improvements to the century-old water system, homeowners would save just 8 percent, while businesses would just about break even, Divoll said
Attendees at an April 16 forum questioned how the town would get the money to buy the system and obtain the needed equipment and professional expertise while delivering lower rates.
“(Town manager) Joe (Zeneski) thinks he can go to the people and ask for $9.3 million like it’s nothing,” said Larry Crowley, owner of the L.S. Crowley Construction Co. and president of the Oxford Business Association.
Crowley emphasized this was his personal view and that the business association doesn’t take a position on policy issues. He said the membership is pretty split on this issue.
Zeneski didn’t return a phone call seeking comment.
Over time, Divoll said the acquisition will save ratepayers money since, unlike a private company, Oxford isn’t looking to turn a profit. The town will also address substandard infrastructure Aquarion has allegedly let fester, such as undersized water mains.
“When it comes to public water supply, it should not be operated by a for-profit company,” he said.
John Walsh, Aquarion’s vice president of operations, said Oxford’s water rates have increased by an average of just 3.4 percent annually since Aquarion acquired the town’s system from another private provider in 2002. The average annual rate increase in Massachusetts since 2002 has been 5.2 percent, he said.
Since Aquarion serves more than 700,000 people in 55 towns across Connecticut, Massachusetts and New Hampshire, Walsh said it’s able to procure chemicals and energy used to treat and transport the water at a discount. The company also employs more than 300, many of whom have decades of experience running water systems.
“We have a staff a town couldn’t or wouldn’t retain,” he said.
Several Central Massachusetts communities have taken over private systems, according to the state’s Department of Public Utilities, including Groton in 1979, Grafton in 1988 and Ashland and Southbridge in 1990.
With Aquarion, industrial properties in Oxford pay $2.99 per 1,000 gallons of water used, while commercial properties pay $2.81 per 1,000 for the first 3,000 gallons used each month and $3.52 for every 1,000 gallons thereafter. Customers with 5/8-inch meters (2,833 of the town’s 2,906 meters) pay a quarterly service charge of $46.83, while those with 1-inch meters (53 meters) pay $114.27 per quarter. The larger meter allows for the consumption of more water, which costs more to service, Divoll said.
The town’s cheaper scenario would establish commercial and industrial usage rates at $2.99 per 1,000 gallons, with quarterly service charges falling to $39 for 5/8-inch meters and $97.50 for 1-inch meters. Under the more expensive scenario, business usage rates would actually decline to $2.88 per 1,000, but quarterly service charges would climb to $52 for 5/8-inch meters and $130 for 1-inch meters.
That’s if everything goes according to plan. Many residents and businesspeople have questioned the likelihood of that, pointing to acquisition-related legal costs that the town estimated at $60,000 in 2009 but actually ended up running more than $800,000.
Dan Prouty, owner of Millyard Industrial Properties, said, “These (town) numbers just don’t add up.”
The town’s plan to take over the water system July 1 — seven weeks after the vote — has also raised eyebrows both from a financial and manpower perspective.
Prouty would prefer to see the town invest in sewer infrastructure, which he said would make it easier for commercial or industrial development.
“If you want strong economic growth,” he said, “you need sewer more than water.” n
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