EDISON – Edison’s water and sewer infrastructure has not been upgraded in 60 to 70 years and needs to be replaced.
That is what is known. What is not known is if the proposed $811.3 million new public-private partnership with Suez North America, a Paramus-based water and wastewater company, is the right fit for the township.
In the first of several public hearings, Mayor Thomas Lankey, along with Joseph P. Baumann Jr. and Fran McManimon, attorneys from McManimon, Scotland and Baumann LLC, Roseland, Dennis Enright, founding member and principal of NW Financial Group, Hoboken, Peter Kocsik, senior vice president of Mott MacDonald Group, Iselin, and Kevin Chandler, of Suez, presented the public with information about the partnership and why they believe they have negotiated a “robust” plan best for the township at a hearing held at Middlesex County College on March 28.
The stakeholders of the partnership heard some three house testimony from the public.
In 1997, Edison entered into a contract with New Jersey American Water to operate and manage its water system. In 2017, the township amended the contract, which ended that year, and extended it for two years so options could be considered, including the benefits of private operation of both the water and sewer systems.
“New Jersey American Water wanted to buy our water system and we were not interested, so that was not an option,” Baumann said.
The township discussed three options to either maintain, lease or sell the operation and maintenance of the water and sewer systems in the township.
“If we decided to sell, we would have lost too much control,” Lankey had said.
Currently, Edison operates its own municipal sewer utility, serving the entire town. The township serves approximately 12,000 water customers and 26,000 sewer customers, both residential and commercial.
Lankey said the proposed long-term 40-year lease agreement with Suez North America will not only allow Edison to retain ownership of the water and sewer systems, but also provide significant financial benefits for the community.
The proposed agreement provides the necessary $496.5 million investments for infrastructure improvements; provides the township with a sizable “upfront payment” of $105 million, which the township will use to retire its existing debt and utilize a small portion for the design, development and construction of the long discussed new municipal community center; rate protection; and keeping the senior freeze intact.
Lankey said rate increases will be capped as they relate to an agreed upon formula expected at an average of 4 to 5 percent, which is below national average increases.
Baumann said the plan would provide rate stabilization with the goal of avoiding drastic rate increases. He said for seven years the rate increases would be capped at 4.9 percent for residential customers.
For the average ratepayer, a 4.9 percent increase would amount to $3.30 a month for water and $1.90 for sewer wastewater.
The proposed contract requires Suez to manage and operate the township’s water distribution system and sewer collection system including operations and management in accordance with a best management practices operations and technical standards manual; maintenance and operations annually of $4 million increasing with inflation over the 40 years of the contract; and billing and collection to customers of the township systems, both commercial and residential.
“This long-term lease will have Suez operating these systems and, more importantly, relieve the township of the financial burden of funding capital to these aging systems,” Lankey said. “Suez, a company with the technical experience and expertise that now serves 1.5 million people across New Jersey, will manage, maintain and make all necessary improvements to our water and sewer systems.”
Township officials said the partnership is separate from water treatment, which will remain with New Jersey American Water.
Baumann said as part of the partnership Suez will have 27 staff members, 19 of whom will be located in Edison on a full-time basis. A four-person advisory committee – two from the township, one from Suez and one venture capitalist – will provide oversight of the standards provided in the partnership including conducting audits, inspections and reports.
Ahead of the public hearing, Junior Romero, central New Jersey organizer of Food and Water Watch, presented concerns of risks of rate increases, hidden surcharges, broken promises and lack of control at two meetings held in the township.
Romero, at the meetings he held, provided examples of case studies his organization conducted in Bayonne and Middletown, Pennsylvania. Both municipalities entered long-term agreements with Suez and saw surcharges and rate increases.
Many residents including Romero raised the same concerns at the public hearing.
Baumann said during negotiations, Suez was questioned on the instances in Bayonne and other municipalities. He said the plan includes the necessary checks and balances, which could lead to default if Suez was found insolvent.
After the hearing, Council Vice President Leonard Sendelsky said in a statement he is keeping an open mind about the agreement.
“I want to be sure that our water and sewer rates remain stable, and that Edison protects the water-sewer rate freeze for all senior citizens 65 or older,” he said. “I am listening carefully to what residents are saying. Only then will I be able to make a truly informed decision.”
He said fewer than 120 people showed up to hear factual details about Edison’s proposed lease agreement for our water and sewer systems.
“Most of the negative remarks I heard were politically biased,” he said. “This agreement should not be a political football. This is strictly about the repairing, upgrading and maintaining Edison’s water and sewer infrastructure.”
To provide property owners with accurate details about Edison’s proposed long-term, water-sewer partnership agreement with Suez North America, the township is hosting three more opportunities for its residents.
Edison’s professional staff and representatives from Suez will also be available for one-on-one discussions with individual property owners who seek more information or have questions about the proposed agreement.
Information sessions were scheduled for noon to 2 p.m. on April 3 at the Edison Senior Citizen Center, 2963 Woodbridge Ave., Edison; for 4-7 p.m. on April 3 at the Edison Municipal Complex, the Edison Room, 100 Municipal Blvd., Edison; and for 4-7 p.m. on April 4 at the Minnie Veal Recreation Center, 1070 Grove Ave., Edison.
The partnership agreement is contingent upon a local public hearing and will require approvals from the Edison Township Council, the state Department of Community Affairs, the Department of Environmental Protection and the Board of Public Utilities.