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Ruminations

At last month's Annual Town Meeting, Donato "Dan" Niro questioned why so little has appeared in the press about the town's desire to acquire the privately held Milford Water Company. The honest answer is, there has not been that much to report on – so far.

Some History: The idea of buying the company goes back to the aftermath of the August, 2009 incident in which a few drops of the 5,899,687 gallons of water in the Milford Water Company's entire system showed the presence of total coliform bacteria. That led to the company building a new treatment plant which, in turn, was followed by back-to-back rate hikes of 33 percent in 2011 and 50.8 percent in 2013.

Given the water use rates people were now paying and the amount of information about the utility gathered by the town and state Attorney General's office in fighting those rate increases, the idea arose in Town Hall – largely from Town Counsel Gerald Moody – that it might be possible for the town to buy the company by paying for it entirely out of the higher rate structure. So, from roughly 2013-2014 to late last year, the town paid several hundred thousand dollars to legal, financial and engineering consultants to explore that possibility.

When the town and the water company couldn't agree on a value for the company, a mediator was brought in. Paul Levy – former Executive Director of the Massachusetts Water Resources Authority, determined the utility is worth $63 million and last December the two sides announced an "agreement in principal" for the town to buy the water company.

What's been happening since then? A lot, actually. The town's legal, financial and engineering consultants have been continuing what is known in the mergers and acquisitions business as "due diligence." There probably isn't an aspect of the Milford Water Company – from the size and age of each pipe it has in the ground to the pensions it owes to its employees – which the town doesn't know about.

Those "in the know" include the consultants, Moody, the Board of Selectmen, Town Administrator Richard Villani, Finance Committee Chair Christopher Morin – and, to a lesser extent, the rest of the Finance Committee, Finance Director Zachary Taylor and Town Treasurer Christopher Pilla.

Each time they get together to discuss the status of the proposed purchase, more questions are raised. And, the selectmen have vowed they won't hold public meetings on the acquisition until all of those questions are answered to their satisfaction. They're even working on a "playbook" of questions and answers so that every player says the same thing when it is time to talk.

Mr. Niro, there hasn't been a week gone by since that "agreement in principal" was announced that I haven't hounded the list of folks I just mentioned to try to break out bits of information. I expect the "cone of silence" to be lifted soon and – rest assured – this newspaper will print every detail we can get our hands on to keep the public informed.

One thing all should know: When the town signed that "agreement in principal" it meant that its thesis had been proven. In other words, the town can pay for the acquisition through the current water use rate structure – including annual replacement of aging water mains, which the company's customers have been paying for all along through their water bills.

The Milford Water Company's decision to seek a rate increase of "at least 20 percent" – if granted by the state Department of Public Utilities – will just make it easier for the town to do the deal. Higher rates will mean more money to pay off the acquisition bonds, replace aging water mains, and make the company 100 percent answerable to elected town officials versus private ownership.




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