Edison continuing due diligence phase in proposed public-private partnership with Suez


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EDISON – With many questions and concerns remaining about the proposed $811.3 million, 40-year, proposed public-private partnership with Suez North America, township officials are continuing their due diligence to digest some 758 pages plus a DVD of the proposal.

A meeting will be held at 6 p.m. on May 2 at Town Hall to continue to discuss a cost analysis of the pros and cons of leaving some of the aspects of operating and maintaining the water and sewer systems in the township or entering into the proposed public-private partnership with Suez, a Paramus-based water and wastewater company.

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Council President Alvaro Gomez said at a Township Council meeting on April 10 that once the council reaches a comfort level of the information and the public’s feedback, only then will officials move onto the next step.

Edison’s water and sewer infrastructure has not been upgraded in more than 60 years and needs to be replaced. That is what is known. What is not known is if the Suez proposal is the right fit for the township, officials have said.

Some members of the public have suggested a public referendum for the Suez proposal. Township Attorney William Northgrave said a referendum is not allowed in this type of scenario under Edison’s model of government, due to the Faulkner Act.

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. The hearing was held at Middlesex County College on March 28.

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.

Officials said New Jersey American Water wanted to buy the township’s water system, in which officials were not interested due to loss of control. Gomez said as officials continue to discuss pros and cons, a contract extension with New Jersey American Water will have be made in July in the interim.

The township has discussed options to either maintain, lease or sell the operation and maintenance of the water and sewer systems in the township.

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.

Township officials said the partnership is separate from water treatment, which will remain with New Jersey American Water.

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.

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