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Officials cool to utility privatization

September 17, 1998|By JULIE E. GREENE

Some Hagerstown and Washington County officials who attended a Wednesday presentation on privatizing water and sewer utilities said afterward they don't think privatization is necessary.

The talk by American Anglian Vice President Howard J. Woods Jr. was sponsored by the Hagerstown-Washington County Chamber of Commerce. It was not the first time county officials have talked to a private utility operator, said County Commissioner President Gregory I. Snook.

Privatization has been one of the options discussed as a means of cutting the county's $54 million water and sewer debt.

Talks with U.S. Filter have led to improved efficiency, Snook said.

Woods told business and civic leaders that private firms can save communities millions of dollars by reducing staff through attrition, trimming costs through large volume purchases and refinancing debt.

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Woods cited several examples, including a 10-year agreement his firm signed with the city of Buffalo to operate its water utility.

The firm would guarantee the city would save $4.6 million a year and would agree to fixed rates, Woods said. It would not lay off any workers for five years, he said.

Later Woods said that if his firm took over the utility, it would face an operating loss in the first few years because staff would not be reduced.

Snook said private utilities aren't eligible for state and federal funds.

Washington County Director of Public Works Gary Rohrer said Woods made an impressive marketing presentation, but didn't share all the horror stories of privatization.

Rohrer said the Washington County Water and Sewer Department no longer has a bloated administrative staff. "We don't have people standing around, leaning on shovels."

Purchasing in volume would not save the county a lot of money because it doesn't buy pipe by the thousands of feet, he said.

Hagerstown City Councilman William M. Breichner said the county's water and sewer department director, Greg Murray, has done an excellent job cutting costs. Government can find ways to cut costs the same way private firms can, he said.

Murray has done a tremendous job, cutting 15 percent of operating costs this fiscal year, Rohrer said.

That translates into savings of $475,000 for the department and $50,000 for the pretreatment fund, Murray said.

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