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Water Company Responds to Buy-out Suggestion

The Milford Water Company's response to a discussion at the Board of Selectmen's September 9 meeting that the town should consider buying the privately held utility is, "Milford Water Company is not considering a sale at this time."

At their recent meeting, selectmen said they would support Town Counsel Gerald's recommendation that now – in the wake of the state Department of Public Utilities (DPU) granting the Milford Water Company a 54 percent rate hike – is a good time to hire consultants to evaluate what it would take to buy the utility. "Each of you has talked about it in the past," he told board members.

The timing is right because consultants' data about the water company's finances is readily available from the just-concluded rate increase hearings, Moody explained. "This is as fresh as you can get." He estimated it would cost about $100,000 to carry out the evaluation, with funding to be sought at the October 21 Special Town Meeting.

"Now is as good a time as any to look at that," Chairman William Buckley said. "I also think we're responding to our constituents," who are looking for someone to be accountable if there are problems with the water supply, he said. "I think there are enough reasons why we should have a serious understanding [of the process] at this time," commented Selectman Dino DeBartolomeis. "The best argument you made is timing," Selectman Brian Murray said.

Moody said making the utility a town department would follow a trend that began in the early 1900s, when municipalities bought out the privately owned utilities that served them. There are only a few private water companies left in the state, he said.

The acquisition would eliminate certain costs that a private company has to pay, such as income taxes and property taxes, Moody explained. The town could pay for the acquisition by using the funds generated through water rates – which Moody described as "several million dollars per year" – to borrow the money needed, he said.

Water Company Manager David Condrey issued a formal statement outlining the utility's response: "Milford Water Company is not considering a sale at this time. However, the Company would be glad to meet with Milford officials to discuss the issue at the appropriate time. Perhaps more importantly, the Company is focused in the near term on addressing the issues identified by the DPU in its recent decision, including the company's procurement practices. We understand the Department's concerns and are committed to the transparency that will give all parties, including our customers and the Town, confidence in our processes and our work. It is also important to note, however, that while the Department raised questions related to our procurement processes, it also found that the services provided were commensurate with the scope of the individual projects and were provided at a reasonable price."




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