Township cuts sale price for water and sewer system

West Milford drops price to account for 'issues' discovered during pre-sale investigation


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BY ANN GENADER

The sale of the township-owned water and sewer service assets to a private company is moving ahead but with a reduced price tag.

The Township of West Milford is selling the West Milford Municipal Utilities Authority to Suez Water New Jersey for $11,300,000, a reduction of $1,200,000 from the original figure of $12,500,000.

When the municipality entered an agreement with Suez on Sept. 6, 2017, it was required in terms of the document that Suez engage in due diligence within a specified period of time. A resolution passed by the township council recently approved lowering the sale price. It said the change was made as a result of issues and situations discovered during the due diligence period. Details of the issues were not disclosed.

The mayor and council by an earlier resolution on May 3, 2017 authorized a "Request for Proposals" for purchase of the MUA assets. The Suez proposal was deemed acceptable following a review by Township Attorney Fred Semrau, and determination by a subcommittee established by Mayor Bettina Bieri and the township council that the proposal was the highest responsible bid.

The sale of the MUA is important not only to ensure future adequate service to the customers now serviced by the utilities system but also to the remaining majority of township residents with private wells and septic systems.

All taxpayers may have been required to help pay the existing MUA debt and any fines still owed to the New Jersey Department of Environmental Protection — a total of $8 million — if the MUA was not sold. Suez is picking up those costs as part of the sale.

Township Attorney Fred Semrau has continued to work with the state to address the more than $5 million in outstanding state fines after the MUA needed maintenance and upgrades.

Suez plans to invest $70 million into system repairs and upgrades over the next 20 years.

Voters approved the sale in November 2017 in an overwhelming 5,929 to 654 vote of approval.

Mayor Bettina Bieri said earlier this month that the New Jersey Department of Environmental Protection may have to approve the sale in accordance with the Watershed Moratorium Act. She said neither Suez or the township anticipated the step but both parties are working with the state to obtain that approval.

The MUA was formed in 1964 after developers built and sold homes and left town without providing for water and sewer system maintenance and future plans for operation of the systems.

The MUA currently supplies 1,700 homes with water and 1,500 with sewer service.



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