PUBLIC INFORMATION: POSSIBLE SALE OF OUR WATER SYSTEM
Community Discussion about the Future of our Water System
At the April 4, 2024 Council meeting, Hopewell Borough accepted a report from Phoenix Advisors, a consulting firm retained by the Borough to evaluate the options for the future of our drinking water system. A copy of that report can be downloaded below. This web page will be updated regularly as the Borough reviews its options to combat rising water rates. Below you can find information from the public Town Hall meeting held on May 13 as well as frequently asked questions about the process. On Tuesday July 30, 2024 at 7PM (in person at Borough Hall and via zoom) the water supply committee held a public Q&A session and provide an update on where we are in the process. A video recording of that meeting can be found on the Borough’s YouTube page and the slides presented downloaded below:
Additionally, the Borough has engaged its engineers to develop an assets management plan for the water system. The Borough’s 2024 Water System Asset Management Plan is available for review upon request at Borough Hall.
May 13 Town Hall meeting
Borough Council held a special Town Hall public meeting on Monday May 13, 2024 at to review the next steps towards considering a sale of the water system. A copy of the notice of the special meeting can be found below, along with a resolution of Borough Council outlining the public steps under New Jersey’s Water Infrastructure Protection Act (“WIPA”). A PDF copy of the slide presentation from the May 13 meeting can be found below, video from the meeting can be viewed on the Borough’s YouTube Chanel.
NJDEP Approval of Emergent Conditions
Following the May 13, 2024 Town Hall meeting, the New Jersey Department of Environmental Projection (NJDEP) approved the Borough of Hopewell’s Emergent Conditions Certification under the Water Infrastructure Protection Act (WIPA). This approval allows the Borough to utilize the WIPA process to enable a sale of the Borough’s water system to a capable private or public entity. The notice of this decision (published on June 21, 2024) starts the period where a petition to require a public referendum may be filed by the public. Information on the requirements for such a petition and a copy of the notice can be found below, along with a copy of the DEP’s approval letter:
Frequently Asked Questions
WIPA is short for New Jersey’s Water Infrastructure Protection Act, a statute that provides a public process for a municipality to consider and ultimately sell a water system. More information on the WIPA process can be found at the NJ Department of Environmental Protection’s website here. After extensive consultation with the Borough’s team of professionals and consultants, the WIPA process was chosen as the fastest path, with the highest likelihood of getting the best price for the sale of the water system that most benefits the Borough’s ratepayers and residents.
The process for the Borough to potentially sell the water system will take approximately a year, if not longer, under WIPA and involves numerous public meetings, advertisements and the review/approval of several state agencies in order to complete. Through the process, the Borough would maintain the ability to decide on the course that makes the most sense for its residents and ratepayers right up until the very end, giving our community the most flexibility in coming to the right decision. A decision to start the process does not require the Borough to sell: that would not occur until the final steps after terms have been negotiated with a buyer and contract approved.
On May 13, Borough Council will hold a hearing at a special town hall meeting on whether certain emergent conditions exist that would allow use of WIPA’s negotiated sales process. Those conditions are outlined in the report the Borough received from Phoenix Advisors. After that hearing, the NJ DEP has 30 days to approve or deny the Borough’s determination, after which Hopewell Borough could advertise for interested buyers and potential terms for the sale, by issuing a request for qualifications and then negotiating terms of a sale.
As a small water system, the Borough Council currently sets water rates each year by ordinance. While this might appear to give the town control over pricing, as a regulated utility we are required to account for all of the costs of operating the system and charge those to our approximately 800 water customers. When costs go up, the Borough has no choice but to raise rates. Our experts have created a capital plan for our system that forecasts costs steadily increasing in the future, which will ultimately continue to result in higher water rates. While larger water systems, like the type that serve neighboring towns like Princeton and Montgomery, are also facing these increased costs, they have the scale and resources to handle them more efficiently. Even with anticipated rate increases requested by these private operators, our experts forecast that the rates the Borough will have to charge will ultimately be significantly higher than rates charged in surrounding communities. Following a sale, while the Borough would not itself set the water rates, but what our customers pay would be on par with other communities and any increases would be subject to approval by the New Jersey Board of Public Utilities.
Based on the information from the Borough’s experts, we expect that rates would be considerably lower in the future if the system is sold.
Currently our water system is run by Borough employees, with a level of service responsiveness that we are very proud of. However, staffing limitations and the scale and complexity of many of the improvements necessitated by new regulations require extensive reliance on private contractors, at considerable expense. Following a sale, Borough water customers would be served by a large staff from a regulated public utility who would have considerably more resources available than our small water department, and would answer to the Board of Public Utilities.
The report from Phoenix Advisors estimates a value of our water system of between $3.9 and $6.45 million. If the system were to be sold, WIPA requires that the funds received be used to pay off debt, which ultimately would result in considerable savings to Borough taxpayers. That debt relief would be in addition to savings Borough water customers might expect from lower water rates.
The New Jersey Department of Environmental Projection (NJDEP) has approved the Borough of Hopewell’s Emergent Conditions Certification under the Water Infrastructure Protection Act (WIPA). This approval allows the Borough to utilize the WIPA process to enable a sale of the Borough’s water system to a capable private or public entity. The notice of this decision (published on June 21, 2024) starts the period where a petition to require a public referendum may be filed by the public. Information on the requirements for such a petition and a copy of the notice can be found below:
At the May 13 Borough Council meeting, resolution 2024-69 certifying the emergent conditions under WIPA. A copy of the resolution, and the supporting certifications can be found below:
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