To the Editor:
I feel very lucky to live in a place where so many people care about our community and the future of our water system. Having worked on this issue for many years, I respect and appreciate the effort by the Hopewell Borough Public Water Alliance (HBPWA) to explore alternatives to selling our water system. However, I do not believe that their “alternative delivery proposal” would be practical or financially viable, or that we can afford to “pause” the sale of our water system for a year.
The claim that a one year pause on the sale to New Jersey American Water (NJAW) “wouldn’t cost us anything” is not true. Delaying the sale for a year would cost the Borough at least $1.1MM in debt service payments that we wouldn’t have to pay if the system were sold, according to figures presented by Phoenix Advisors during the Borough’s September 11th public session. Our community would also pay at least $170,000 more for water over the next year under Borough ownership than we would as NJAW customers, based on current water usage and rates. Moreover, if the HBPWA can’t deliver a financially viable long-term alternative within a year, we would have to repeat the entire regulatory process required to sell the system under the Water Infrastructure Protection Act (WIPA), adding to our already substantial legal and professional costs. We would not get any of this money back.
Delaying the sale would also put us into infrastructure and regulatory “limbo” for a year. If we moved forward with any of our urgently needed infrastructure replacement projects, we might not recover the cost if we later decided to sell the system, because infrastructure we would install for our local needs (e.g., a new storage tank or water mains) might not meet NJAW’s larger system requirements. If we didn’t recoup the full project and financing costs from the sale, the difference would come from our community.
Further, it is doubtful that the NJDEP would “pause” enforcement of our outstanding Notice of Non-Compliance for PFOS at Well No. 4, or preserve our $2.34MM federal grant award for another year, to allow time for a citizens group with no official standing to explore alternatives. If the NJDEP required us to proceed with the design and construction of treatment systems at Well No. 4 using federal funding and we later sold our water system, we would have to repay the federal government the depreciated value of all capital assets financed by the grant. There is no guarantee that the Borough would recoup the cost of the treatment systems from the sale to NJAW, who may decide they do not need the wells, given that they would be expensive to treat and would add less than 0.2% to their existing local production capacity.
The proposed by the HBPWA also depends heavily on their assumption that some of the infrastructure projects outlined in the Borough’s 10-Year Capital Plan could be postponed and spread out over 15 years. That would be irresponsible. Our 10-Year Capital Plan was developed based a comprehensive engineering analysis of our water system, using the methodology required by the NJDEP Asset Management Policy Program and the New Jersey Water Quality Accountability Act. That analysis included assessments by the Borough Engineer and our licensed water system operator of the condition, functionality, and remaining life of our storage reservoir, water mains, fire hydrants, isolation valves, meters, etc. We know exactly what must be replaced and how soon. It is ironic that people who have accused the Borough of “neglecting” our water system in social media posts now suggest putting some of our infrastructure projects on hold, with no understanding of the risks or consequences.
Finally, the HBPWA’s claim that, under their plan, our water utility would be “debt free” within 30 years shows a lack of understanding of the life-cycle costs of our water system infrastructure. In addition to the estimated $10.8MM in capital spending outlined in our 10-Year Capital Plan, we estimate at least $6.2MM in additional capital spending will be required to replace other assets listed in the Borough’s Asset Management Plan that will reach the end of their remaining life in 30 to 50 years. These include over 2½ miles of water mains, 30 fire hydrants, and 11 isolation valves, along with water treatment systems, chlorinators, well pumps, and water meters. Our engineers have confirmed that the design life of the proposed new treatment systems for Wells No. 4 and 6 would be 30 years, after which they would have to be replaced, at an estimated cost of $1.3MM. So, although the initial construction costs would be paid for by a federal grant, the Borough would bear the cost of replacing these treatment systems every 30 years.
Our preliminary estimate of $6.2MM does not capture the full cost of capital improvements needed after 30 years because it omits projects for which we don’t currently have engineer’s estimates, such as the rehabilitation or repair of the well houses, replacement of electrical and control systems, maintenance of the proposed new water storage system, etc.
I urge you to consider this information and to make use of the resources available on the Hopewell Borough website, as you decide how to vote on November 4th.
Sincerely,
David Mackie
Hopewell Borough Council President
Chair of Water Supply Planning Committee
