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HB Council contemplates selling the water system

by Aaron Twitchell

All eyes and ears were on the water department at April’s Hopewell Borough Council meeting due not only to significant rate increases but also to the possibility of the sale of the Borough’s water infrastructure to a private company. Other agenda items, including an overview of the laws and plans surrounding Areas of Need of Rehabilitation and several ordinances, received comparably little attention as attendees were eager to understand the rationale behind the up to rate increase, which seems all but inevitable.

Borough Planner Joanne Slagle provided a comprehensive presentation on the processes behind Affordable Housing and the designation by Council of certain pieces of land as Areas in Need of Rehabilitation. In summary, for a plot of land to receive the designation, which allows certain provisions to encourage good use of the land, the process is relatively simple:

  • Governing Body designates an Area in Need of Rehabilitation
  • That Governing Body submits a resolution to the Planning Board for review
  • Planning Board has 45 days to submit its recommendation
  • Preparation of a Rehabilitation Plan and program
  • No special notice is required other than standard notice for public meetings

Municipalities have struggled to fill commercial space, Slagle said, and Areas in Need of Rehabilitation designations provide “another tool in the toolbox” for towns to create business opportunities. Such designations are more business- and town-friendly than, say, redevelopment processes.

The Hopewell School Baptist Meetinghouse trustees presented a letter, read by its president. The group provided updates on the Meetinghouse’s preservation and restoration, as well as having received conditional historic status by the State. It expects to receive full status in the coming months before being evaluated at the national level. If approved, it would be one of just two such sites in Hopewell Borough. Other updates include the retention of an architecture firm to make recommendations, particularly on accessibility issues such as handicap parking. Finally, the trustees request that in its review of Borough parking ordinances, the Borough remain mindful of the Meetinghouse’s parking needs, which may differ from other businesses in the area.

The bulk of the remainder of the meeting was characterized by a slide presentation presided over by Council member David Mackie. The slides contained information on water usage and rates over periods of time, meant to illustrate both how the Borough got to the point at which rates must be raised and the effect such raises will have on consumers. The raises are significant. Suppose an average household pays $170 per quarter for water in the Borough. Under the proposed changes, that household would pay $248 per quarter, an increase of $78, or 46%. A household that pays $498 per quarter would see their rates balloon to $755, a more than 50% increase.

The Borough serves approximately 750 water users. Of that number, just over 300 use between 10,000 and 20,000 gallons per quarter. Those users would see an increase between 46 and 50 percent, respectively. The greatest users, those who use 150,000 gallons or more per quarter, will see their rates increase by nearly $1,500 per quarter for an annual cost of over $16,000. On the other end of the spectrum, no user will see their rates increase by less than 22%.

Public commenters were predictably concerned. Business owners expressed dismay at the proportional rate increases that could see their water bills go up more than 50% per quarter. Nathaniel Davidson, proprietor of Hopewell Laundress, was politely incredulous that his business will be expected to pay more than $16,000 per year for water, something they depend on and, importantly, cannot change without severely impacting their business. And Davidson’s concerns are not just about his bottom line. According to him, many of Hopewell’s poorer residents depend on the Laundress for their laundry needs, and he is mindful of the impact the rate increase will have downstream. The father of five gave emotional testimony on the impact the higher rates will have, and while Council was sympathetic, few alternatives were offered.

The Borough has no choice but to raise rates in this manner. The reason, according to Mayor Ryan Kennedy, is that in the last year, the Borough purchased more water than it used and was subsequently charged for, producing a deficit. The over-purchase was due, in part, to undetected leaks but there were other factors. As a result, the water system must regain financial ground this year or risk insolvency. As the owner and operator of its own water system, the Borough is tightly regulated by the New Jersey Department of Environmental Protection. Part of those regulations govern finances, and they do not allow for the carryover of these discrepancies. Were the rates not raised, the system would lose its ability, among other things, to borrow money and manage its finances.

Kennedy and other Council members assured folks the rate increases would only last as long as absolutely necessary. As soon as possible, rates would begin to return to amounts residents have been used to.

The discussion on water rates overshadowed an arguably bigger issue, at least in terms of long-term impact on the way the Borough does business, that was introduced at the meeting. As part of its self-reckoning, Council and has begun the process of exploring whether or not it makes sense to sell off the water system to a private firm. Again, according to Kennedy, every municipality must adhere to the same requirements in the maintenance and operation of the water utility. These include things like repairs and water safety for which the Borough must pay. As a smaller town, the cost is proportionally greater than for larger cities which translates to higher rates per user. Selling the system would transfer those costs to the water company, in addition to savings realized on the open market.

The resolution to increase the water rates was passed.

Residents are encouraged to attend a special Town Hall on May 13 to discuss the issue of selling the water system to a private buyer. If the Borough resolves to enter into such a process, it could take a year or longer before coming to a conclusion.

The next regular meeting of the Borough Council is scheduled for May 2 at 7pm.

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MercerMe is the only hyperlocal, independent, online news outlet serving Hopewell Valley in Mercer County, New Jersey.

Contact us: [email protected] 

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