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In a few days, on Nov. 4, Hopewell Borough residents will vote on a Water System Referendum. Their choice is stark: sell its water system to New Jersey American Water, a private company (“Yes”) or continue to maintain it independently as a public service, as it has for more than a century (“No”).
For months—the issue has been long debated—I’d been on the fence about how to vote. But now I’ve decided, or rather, I plan to employ a safe tactic.
Because now I see that the borough risks very little given a “no” vote, whereas it risks major negative possibilities were the referendum to pass.
I’m going to vote “no” to gain time, to pause, to hedge on the high-stakes possibility that selling our water is a mistake. (It’s an irreversible decision.) I’m going to pause to see if an alternative can work.
And an alternative is very much on the table (details below).
Background: On Oct. 5, I went to a community meeting organized by the Hopewell Borough Public Water Alliance, a volunteer group of borough residents that had studied the issue. I was surprised by the turnout. I had to stand the entire time because the pews (it was held at First Calvary Baptist Church on East Broad Street) were so crowded. My unofficial count had around 120 people.
The meeting’s theme was “Save Our Water.” Two of HBPWA’s core members, David Waldman and Ton Mesters, spoke first and showed slides. Then they introduced two guest speakers: Jeff Tittel, a former NJ Sierra Club director, and Peggy Gallos, a former New Jersey Board of Public Utilities employee and the current executive director of the Association of Environmental Authorities.
They shared their extensive experience working with and observing the NJ Board of Public Utilities and the Water Infrastructure Protection Act, and described what has happened to other municipalities that have sold their water systems to New Jersey American Water—and the buyers’ remorse they suffer from doing so.
In explaining New Jersey American’s plan, Waldman and Mesters highlighted two eye-openers:
1. Vagueness in the proposed contract. For example, there are missing exhibits in the “DRAFT Agreement,” including no mention of how the proposed $7 million capital expenditures would be used.
2. Questions about some of New Jersey American’s assumptions. Just one example: The borough report’s cost projections state that New Jersey American Water’s rates would increase 5%. But HBPWA drilled into New Jersey American Water’s latest annual and semi-annual reports and found the following: Based on NJAW’s outstanding debt, the company would have to increase its customers’ rates at least 6.85% to avoid a breach of their debt obligations.
In short, we’re not getting the full story.
After sharing their analysis of New Jersey American Water’s (questionable) financial projections, HBPWA laid out an alternative plan. I’ll describe that in a moment.
To conclude the meeting, the floor was opened to questions and comments from the audience—residents, including members of the Hopewell Borough Town Council (Mayor Ryan Kennedy; Council President and Water Committee Chair David Mackie; and Councilwoman Krista Weaver). As you may know, the sale has been endorsed by the water committee and the mayor.
During the Q&A, one resident—who’d been leaning toward “yes”—said that he boiled the whole complex issue down to one word: pause. In other words, why not vote “no” and give it a year to see if the HBPWA’s plan can work?
“Pause,” for me, is the operative word.
Another resident, a lawyer, pointed to critical flaws in the draft contract with NJ American Water that the borough council has posted on its website. He, too, was still on the fence, but he feared that, because of the contract’s lack of specificity—he quoted several paragraphs—given a “yes” vote, NJ American could do whatever it wanted given a go-ahead, and NJ American might not be required to use approved funds to fix the Borough’s water problems. As is, the contract, this lawyer said, lacks specific requirements for the ~$7 million allocation. It could be used for anything, even for building roofs over the wells, and not for remediation.
Jeff Tittel, the environmentalist who had spoken earlier, had alerted the audience to the no-return danger of selling our water in perpetuity. And Peggy Gallos described the documented evidence of big utilities (NJ American’s parent company, American Water, is the largest regulated water and wastewater utility in the United States, with a $27 billion capitalization) to export a township’s or borough’s plentiful aquifers to other municipalities that have less, for profit. I, personally, have not seen the evidence to corroborate these assessments, though that’s what they said and it wouldn’t surprise me.
Here’s an outline of HBPWA’s plan, as I understand it. Admittedly, it’s “broad brush,” requiring rigorous follow-through. But it’s viable, I believe, and warrants a fighting chance.
Namely: Use the $2.34 million federal EPA grant administered by the NJ Department of Environmental Protection (already allegedly approved) to decontaminate wells 4 and 6. This would remediate the PFAS and arsenic at those wells, enabling the borough to buy time to address maintenance of the entire system. It would also save approximately $270,000 a year, which the borough currently pays to New Jersey American for supplemental water. Reclamation of wells 4 and 6 would eliminate that expense.
Most important, with both wells operating, the borough would become self reliant with regard to its water supply, even allowing a significant margin for emergency situations. The $2.34 million grant implementation would allow the borough to cancel its 20-year short-supply contract with New Jersey American Water.
Water bills will increase, they said, but not as rapidly or as much as they would from NJ American. And we’d avoid surcharges that a big corporation can levy on consumers to recoup funds spent in other municipalities. At this meeting, there was a lot of discussion about how big utilities defray expenses by charging end users—in other words, us.
In addition, given a “no” vote, HBPWA’s plan will establish two entities devoted to the care of our water.
1. A five-member MUA—Municipal Utility Authority—to serve as a custodian of the remediation effort. The MUA would oversee operations, maintenance, and financial matters. If I understand it correctly, its members (presumably professionals with experience in the utilities field) would be appointed by the borough council.
and
2. The Philanthropic Alternative System Delivery Trust, a 501(c)(3) initiative, not unlike the “greenbelt initiative” proposed and funded by Hopewell Borough in the late 1990s/early 2000s to preserve the ring of lands (our “green belt”) around the Borough. This approach was later augmented by raising funds to purchase the St. Michael’s Orphanage property adjacent to the Borough. Those visionary grassroots efforts have prevented rampant development near and around Hopewell Borough.
The Philanthropic Alternative System Delivery Trust would serve two basic purposes:
1. It would subsidize qualified small businesses and residents in need of assistance to pay their water bills, and
2. It would disburse funds on a regular basis to the MUA to retire outstanding Borough debt. It would also fund the repair, maintenance, and improvement of the Borough’s water infrastructure in accordance with “best practices.”
To date, no philanthropists have been lined up. That’ll require a focused, organized outreach effort to big donors and resident donors. I should also mention that, at the end of the Q&A, a representative from The Atlantic Foundation—a J. Seward Johnson, Sr. family foundation—offered a $150,000 matching donation were the Nov. 4 referendum to be defeated.
In summary: The “pause” concept—vote “no” now—makes good sense. Many of my neighbors have wondered why New Jersey American is so intent on buying our water. We’ve gotten cold calls from their representatives, fliers hanging on our doors urging us to vote “yes,” and one-sided endorsement letters in the mail. It’s enough to make one suspicious.
One of the things I like best about living in Hopewell is its independent character. My neighbors want to keep Hopewell Borough free of chain stores, free of four-story development projects, and free from multibillion dollar corporations.
Hopewellians are generally disposed to anti-corporate, self-rule, grassroots principles. For me, sustaining this town’s character is essential to our quality of life.
So let’s give it a year. Vote “no” now. If the money we owe to service our debt ends up crushing us, sending property taxes and/or water rates sky high, then we’ll sell next year. We might even get a better deal.
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