Hopewell Borough to discuss sale of borough’s water utility system

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A meeting next week will kick off a series of discussions that Hopewell Borough officials will have with residents about exploring a potential sale of the borough’s water utility system.

The first meeting is scheduled for 7 p.m., May 13 in person at Borough Hall and also online through ZOOM. The link to view the meeting online can be found on the borough’s website – www.hopewellboro-nj.us.

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“We want to make it clear that we think this is important and that getting everyone’s input and eyes on this process is very important to everyone here at the borough,” Mayor Ryan Kennedy said.

During the meeting, officials and professionals will be talking about the first steps of the process for a potential sale of the water system.

“…which is determining whether certain emergent conditions will allow us to enter the Water Infrastructure Protection Act (WIPA) program that is one of the paths for a potential sale of the water system,” Kennedy added.

The WIPA authorizes certain owners of water or wastewater systems to enter into a long-term lease contract or sell their water or wastewater assets to a private or public entity.

To qualify for the WIPA process, a municipality such as Hopewell Borough must qualify for one of five emergent conditions, according to the New Jersey Department of Enviornmental Protection (NJDEP).

Borough officials have been told by consultants and professionals that the process could take about a year or more to get to the point when the governing body could make a decision or determination on a potential sale of the system.

The scheduled meeting and other planned future meetings come as the borough tries to control water costs.

In April, the council approved increases to water and sewer rates to cover the 2023 water department budget, which was over budget due to leaks and other costs such as the systemwide water detection system.

At the same meeting, the council accepted a report from consulting firm Phoenix Advisors about options for the future of the borough water system.

“As a result of the offline wells and bulk water purchase from New Jersey American Water (NJAW), the borough is facing a significant amount of additional operating expenses or capital needs in the short-term, in addition to the general need to maintain the system infrastructure,” the report stated.

“Despite the proposed rate increases, the borough will still face various financial, technical, regulatory and operational challenges.”

Phoenix Advisors in their March report explained that a sale of the system will result in the borough losing the ability to control rate-setting, but also noted the borough’s rate structure is higher than the rates of public utilities such NJAW.

Based on preliminary estimates Phoenix Advisors added that a sale of the water system should be a budget positive.

The process that is being kicked off next week allows for further discussions with residents and businesses as officials consider their options to control costs.

Kennedy explained that officials have met with the NJDEP; representatives from the Board of Public Utilities, a state agency that oversees regulated utilities; representatives from the New Jersey Infrastructure Bank, Gov. Phil Murphy’s office, and state legislators representing the 15th District.

Along with the series of meetings, a recurring item will appear each month on the Borough Council agenda for updates and any questions that the public may have.

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