Last month, our community had a difficult discussion about allocating drastic increases to our water rates. I am proud of my colleagues on council, especially our water planning committee, for the way such a challenging topic was addressed, and thankful for the comments and feedback that we received from our residents and businesses.
Increasing water rates affects us all: it burdens our businesses, challenges the finances of our most vulnerable residents and adds to the increasing unaffordability of living in our area. Borough Council and I are committed to doing everything in our power to bring our rates back down.
This includes continued steps to cut our water losses, increase production, continually monitoring our water utility budget, revisiting rates as soon as possible, and inviting the entire community to the discussion on whether it is in our best interests to pursue the sale of the water system.
At our April council meeting, we accepted a report from the borough’s financial advisors that laid out the steps and the potential benefits to the community of a sale. One of those first steps is to determine whether there are emergent conditions present to allow the Borough to pursue use of New Jersey’s Water Infrastructure Protection Act’s (WIPA for short) negotiated sales process. Those conditions are outlined in the report the borough received from Phoenix Advisors and you can find on our website.
While there is likely another full year of discussion, fact gathering and public process ahead of us before our community will make this choice, council and I have committed to being as inclusive and involve as many stakeholders as possible as we consider the sale. We think community involvement is so important that earlier this month, we mailed a postcard to each of our water customers asking them to join us at a special town hall meeting on Monday, May 13 at 7 p.m.
At that meeting, we will publicly review the process and options from our professionals and determine whether the conditions exist to allow the borough to eventually negotiate a sale under WIPA. After that hearing, the NJDEP 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.
Through the process, the borough will 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 arriving at 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.
As a small water system, 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 costs associated with operating the system and charge those to our approximately 800 water meters and connections. When costs go up, the borough has no choice but to raise rates, like we did last month. 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 of Princeton and Montgomery, are also facing these increased costs, they have the scale and resources to handle them more efficiently. Even with the anticipated rate increases requested by these private operators, our experts forecast that the rates the borough will have to charge will continue to be significantly higher than rates charged in surrounding communities.
Following a sale, while the borough would not itself set the water rates, 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, and that in addition to lower rates, taxpayers could expect significant municipal property tax relief from paying down our debt with proceeds from the sale of the system.
I hope that you will join us in this important conversation on May 13, at each of our monthly council meetings or at my drop-in mayor’s hours at town hall. It is only by working together that we can find the solution that gives our community the quality of service, the reliability, and the fair rates it deserves from our water provider.
You have my commitment as mayor and the full commitment of our town that until we find that solution, no stone will be left unturned.
More information can be found at the special water system website we have set up.
Ryan Kennedy is the mayor of Hopewell Borough, which provided this content.
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