Township moving forward with water, sewer system sale

West Milford and Suez Water working through due diligence before closing on $12.5 million deal

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West Milford is making significant progress in the sale of the West Milford Municipal Utilities system to the Suez Water New Jersey Inc.

The voters approved the sale in a 5,929 to 654 vote in November 2017. The sale price was $12.5 million. The sale covers an existing debt and fines owed to the state.

According to the Suez company, there are plans to invest $70 million into repairs and upgrades over the next 20 years.

“Until last week, there were no updates to provide as Suez was engaged in the due diligence process,” Mayor Bettina Bieri said Monday during a Township of West Milford Council meeting.

Due diligence, even in a sale of this magnitude, is very similar to the process every homeowner experiences when they are buying or selling a home, she said.

On March 7, Suez submitted their comments about the system to the township. Township Administrator Antoinette Battaglia and Township Attorney Fred Semrau have been in discussion with Suez about those comments.

The first meeting of the mayor and council since the conclusion of due diligence was scheduled for this month. This was the first opportunity the administrator and attorney had to apprise the governing body of the ongoing discussions.

In the meantime, and simultaneously, Suez filed its application with the Board of Public Utilities in the mandated process for the sale of any public utility. Suez and township officials have worked together to provide answers to the follow-up questions from the BPU and that application appears to be moving ahead.

“The New Jersey Department of Environmental Protection may have to approve this sale in accordance with the Watershed Moratorium Act,” Mayor Bieri said. “This was a step that neither Suez nor the township anticipated but both parties are working with the NJDEP to obtain that approval.”

The MUA was formed in 1964 after a series of individual systems were built for new home developments. Then, the developers left the projects without providing for system maintenance and future operating plans. The MUA currently supplies 1,700 homes with water and 1,500 homes with sewer service.

The township attorney has continued to work with the state environmental projection agency to address the $5 million-plus in fines currently outstanding to the MUA system that resulted in state fines from problems resulting from needed ongoing maintenance and upgrades.

These negotiations will continue until a satisfactory outcome is achieved, the mayor said.

“All of this is still placing the township on a course to hopefully close this transaction and bring it to a conclusion within the calendar year,” the mayor said. “This is a collaborative transaction on behalf of the Township’s West Milford professionals and staff members of the MUA and residents. We will continue to keep you apprised of this matter as it progresses. Understand that we recognize there are multiple state and federal agencies involved in this transaction who have been very helpful. However, that also means there are a number of requirements that must be discussed prior to the closing, some of which first require confidential discussions in order to protect the contract interest of the township. As the process allows for disclosure, we will provide updates of this nature.”

Questions should be directed to the township administrator.

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