Voters give MUA sale huge thumbs-up

Suez Water New Jersey to buy Municipal Utilities Authority for $12.5 million


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  • A treatment plant in Awosting that is owned and operated by the township's Muncipal Utilities Authority. photo by don webb



BY ERIKA NORTON

West Milford residents voted overwhelmingly to approve the sale of the township’s Municipal Utilities Authority to Suez Water New Jersey Inc. on Election Day Tuesday.

According to unofficial results provided by the Passaic County Clerk’s Office, the vote was (89.7 percent (6,191votes) for the sale and 10.3 percent (711 votes) against the sale.

Earlier this year, Suez agreed to buy the MUA’s 15 water and sewer systems for $12.5 million, if approved by voters in a referendum. The MUA’s aging system in need of major repairs and upgrades, compounded by the MUA’s multimillion dollar debt, led to the MUA commissioners and the township council’s decision to sell to a private company earlier this year.

The sale will cover all of the MUA’s existing debt and any fines owed to the New Jersey Department of Environmental Protection — a total of about $8 million. Both the tax burden from the MUA’s debt and the tax burden from paying for needed infrastructure upgrades will no longer fall onto the backs of all West Milford residents.

The remaining funds from the sale will go directly towards paying down the township’s municipal debt of $30 million.

Suez has also said they plan to invest $70 million into system repairs and upgrades over the next 20 years.

ReactionWest Milford Township Mayor Bettina Bieri was an early supporter of the plan, advocating for a sale of the MUA since 2011.

“I am incredibly grateful and relieved,” Bieri said Wednesday. “The residents clearly heard our message and overwhelmingly supported the sale of the MUA, with a 90 percent approval rate.

“Voter approval was our last major hurdle in order to effectuate the sale, which was truly the township's only solution to a problem that existed since the MUA's inception 53 years ago,” she continued. “The voters sent a clear message that they wanted to be part of that solution and to achieve the many community-wide benefits resulting from the sale. The outcome will be a win-win for all residents and will avoid a tremendous financial and environmental catastrophe.”

RatesThe MUA provides water services to approximately 1,700 homes and sewer services to about 1,500 homes within the township. As far rates for these customers, Suez has agreed to a plan to keep rates frozen for the first three years after the sale.

In year two, MUA customers who receive combined water and wastewater bills will see their rates decrease by 1 percent, according to Suez. Following the three-year freeze, Suez will consider then whether to adjust rates.

“Historically, we have filed for approximately a 5 or 6 percent rate increase every other year,” Gallo said last month. “Compared to the historical increases of the MUA and also the anticipated increases to cover the needed infrastructure investment, the 5 or 6 percent is a fraction of what customers would and could be paying should they stay with the MUA.”

MUA customers will become part of the larger Suez Water New Jersey rate base, which provides water service to approximately 850,000 customers throughout New Jersey.

For West Milford residents who are already Suez customers, which includes 535 residents of the senior village Bald Eagle Commons, their rates will not be impacted by the sale, Bieri. The sale will also have no impact on West Milford residents with septic systems and well water.

UpgradesAs far as the infrastructure upgrades, Suez has said that if and when the sale is approved, they will immediately begin a comprehensive system-wide due diligence evaluation of the MUA’s existing eight potable water and seven wastewater systems. Afterward, the findings will be analyzed and an upgrade and/or replacement plan will be put in place.

This will begin the design and permitting process, which will be followed by the construction phase.

Financially, Suez has committed to investing $30 million in upgrades and repairs to ensure that all of the current MUA facilities and systems are operated to meet or exceed all state and federal regulations, according to Billie Gallo, director of communications for Suez Water New Jersey. Then over the next 15 years, Suez will invest an additional $40 million, totalling $70 million over the next 20 years.

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