The family behind Damariscotta’s snowplowing contractor says a communication breakdown between the town and the company prompted them to pursue a contract in another town.
Brothers, Damariscotta residents and Hagar Enterprises Inc. Vice Presidents Justin and Seth Hagar said town officials are considering expanding the highway department in order to take over the work, but are not sharing their plans with the company.
The Hagars also said a municipal snowplowing operation would not be able to provide the same service for the same price.
Damariscotta Town Manager Matt Lutkus said the town has no immediate plans to take over snowplowing, although the Damariscotta and Newcastle boards of selectmen plan to meet for a workshop on the subject in July.
The towns share public works employees and equipment, and the two boards of selectmen had a brief conversation about expanding joint operations at their February meeting.
Hagar Enterprises recently secured a five-year winter roads contract in Nobleboro.
“We don’t want to work for Damariscotta anymore because of the current administration,” Justin Hagar said. “We want to work for the people of Damariscotta, we just don’t want to work for the administration.”
“It’s been the worst it’s ever been, on many levels,” Seth Hagar said.
The company’s existing two-year contracts with Damariscotta – one for downtown and one for all other town roads – expire at the end of next winter. Damariscotta has an option to extend the contracts for two more years.
Hagar Enterprises has a similar deal with Newcastle and hopes to continue to work for that town, where they describe their relationship with the administration and board of selectmen as open and stable.
According to Newcastle Town Administrator David Bolling, while Damariscotta and Newcastle have “generally discussed ways that we could expand on sharing services, the town of Newcastle has expressed no interest in doing our own snowplowing. It’s simply not a cost-effective option.”
“We value our relationship with Hagar and will continue to work with them to provide the best possible service to the citizens of Newcastle,” Bolling said in a May 1 email. “As town administrator, I very much appreciate the job that they do, working in hand with our public works staff, to keep our roads open during the worst of conditions.”
Winter roads contracts are important to Hagar Enterprises because they allow the company to retain full-time employees throughout the winter, when the construction season grinds to a halt.
“We have the quality of employee we have because they work 12 months a year,” Justin Hagar said.
The company has 14 full-time, year -round employees. The roster grows to as many as 30 full- and part-time employees during the winter.
The employees who work in Damariscotta have as much as 30 years of experience, and some drivers have been plowing the same routes for years, the brothers said.
The employees, especially the year-round employees, depend on the company for year-round income and health insurance.
“We plan years in advance, like any good company,” Justin Hagar said. The present situation in Damariscotta disrupts this process. “It’s made it very difficult for us to plan for the future,” he said.
“We have to go to communities that are giving long-term commitments,” he said. “That’s just the reality of it.”
The brothers enjoy working for Damariscotta residents and take pride in their role in the town. As Damariscotta residents, they have personal reasons for their commitment to high-quality service.
“When we plow our streets, I know my family is safe on them,” Seth Hagar said.
The company receives generally excellent feedback from the community. One Damariscotta resident, in the pages of The Lincoln County News, compared the efficiency of the company’s storm response to a military operation.
Another reader, in a letter to the editor, concluded Hagar is “either an extremely well-run company or they have an army of elves at the ready waiting to spring into action at the first snowflake.”
The company maintains a log of complaints and Seth Hagar responds to every complaint in person.
Lutkus, the town manager, said the town does not have an issue with the quality of Hagar Enterprises’ work. “My subjective assessment is that performance has been very good to excellent,” he said.
“We’re proud of the fact we can deliver that service and we want to continue to deliver it, but there has to be some communication and there has to be some planning,” Seth Hagar said.
Right now, there is neither communication nor planning in their relationship with Damariscotta, the brothers said.
Lutkus disagrees. “I think we have a good working relationship,” he said in an April 26 email. “From my standpoint, I believe that we have successfully worked through issues that have come up.”
Seth Hagar and Damariscotta Superintendent of Roads, Buildings and Grounds Steve Reynolds serve as the points of contact between the town and the company, Lutkus said.
“My understanding is that they communicate regularly,” he said. “They are aware that we have talked to the selectmen about the concept of an expanded public works department.”
The communication issues and the interest on the part of the administration in moving away from the private sector and expanding the municipal public works operation concerns the brothers, not only as businessmen, but as Damariscotta residents.
A municipal public works department can be very expensive to start from scratch, they said.
The Damariscotta Highway Department, which would assume responsibility for winter roads, currently has two year-round employees, a truck, a backhoe, a small excavator and a tractor. The employees and the equipment spend half their time in Damariscotta and the other half in Newcastle.
Seth Hagar estimated Damariscotta would need at least 10 employees, seven trucks and a bucket loader to clear and treat town roads.
The big trucks Hagar Enterprises uses to plow the major roads cost as much as $235,000 brand new, Seth Hagar said. The town could take advantage of municipal discounts and tax breaks, but would spend at least $180,000 for the same vehicle.
The town would likely have to borrow hundreds of thousands of dollars for the initial equipment purchase and would have to prepare to replace the trucks on a regular schedule, the brothers said.
“They can’t provide the same service we are doing at the same cost level because they don’t bear any expenses associated with the material,” Seth Hagar said.
The town would also bear all the unpredictable expenses of winter roads maintenance, including fuel, overtime, salt, sand and vehicle maintenance.
“We really are an insurance policy for the town,” Justin Hagar said. The company, unlike a municipal public works department, cannot go to the town halfway through a rough winter and ask for more money. “When we lock into these prices, we lock into these prices,” he said.
Lutkus said the town would have to “complete an analysis” to determine whether it can provide the same service at the same price.
“I believe that the long-run costs might be lower, but the initial investment may make this option cost-prohibitive,” Lutkus said.
The town will pay Hagar Enterprises $113,370.66 for the roads contract and $72,704.97 for the downtown contract this year. Next year, the amounts go up to $118,994.63 and $75,249.64, respectively. The amounts will stay the same through 2016 if the town picks up its option.
“Unless we receive direction otherwise, we will continue to contract out these services,” Lutkus said.
“The costs for extending the contract have some appeal because they essentially lock in the 2013-2014 pricing for two additional years,” Lutkus said. “Also, the way the contract is set up is advantageous to the town in that it provides us with a fixed cost for snow removal regardless of the kind of winter weather we have.”
The Hagars said they would not object to a transition from private to public snowplowing if the town planned for the change and communicated their plans to the company.
If the town were to lay out a 10-year plan to save money, purchase equipment and gradually assume responsibility for pieces of the contract – a neighborhood one year, a major road the next – the company would be able to plan for the transition.
Instead, all the information about Damariscotta’s plans has come to Hagar Enterprises secondhand, like a tip from a longtime vendor who said the town requested quotes for plow trucks from his company.
Lutkus said the town has not asked for quotes for snowplowing equipment.
The situation might not trouble the Hagars as much if Damariscotta was not their hometown. “We might see it very differently, because it would be as simple as a business transaction,” Justin Hagar said.
The company does not plan to pursue contracts in towns besides Nobleboro. The goal is not to grow into “a giant company,” although Hagar Enterprises can manage all three towns “without a problem,” Justin Hagar said.
The goal, instead, is to retain employees and pay the bills.
“We’re here to establish a certain amount of security for employees and make sure we’re here for the long run,” he said.
Note: This article has been updated to include comments from Newcastle Town Administrator David Bolling.