Credit: (Wilson Hui via Flickr/CC BY 2.0)Much of the attention around this week’s election was on the state and local offices up for grabs, but it also settled what was a months-long debate in one of New Jersey’s poorest communities over who controls its water and sewer systems.
Salem residents on Tuesday overwhelmingly voted in favor of selling off the city’s troubled, debt-ridden municipal drinking water and sewer systems to New Jersey American Water, the region’s dominant private water utility. The turnout was light but the choice was decisive, with 61% of the fewer than 1,000 votes in favor of the sale, and 39% opposed.
Now that voters have approved the sale, the Salem City Council is cleared to finalize the contract with New Jersey American Water.
Opponents of the sale argued that the system just needed a change of leadership to boost bill collection and pursue state and federal infrastructure grants.
“Water and sewer is all we do, and we are deeply committed to making the necessary improvements to these systems to help ensure clean, safe, reliable and affordable service for all residents,” said Mark McDonough, president of the company. “We look forward to getting started and working hard to deliver upon the commitments we made.”
New Jersey American Water is offering the city $18 million up front for the purchase. The state dictates that money be spent first on paying off the public utilities’ debts, then paying off other municipal debt. If there’s money left over, the city will be able to use those funds for its general operations.
The private utility said it also plans to make $50 million worth of capital improvements in the water and sewer systems over the next 10 years. One of the major problems New Jersey American Water will have to address is the water system’s elevated levels of PFNA, a toxic compound that is part of the larger “forever chemical” family.
Water and sewer rates for customers will remain the same for the first two years, according to the utility, then the rates will increase by 3% in each of the following three years. It’s unclear what rate changes New Jersey American Water may seek after that.
Second attempt
City leaders in Salem have been supportive of the sale, seeing it as a critical step to stabilizing the distressed community’s financial situation. Mayor Jody Veler said that, since the vote, multiple developers have reached out about possibly bringing new business to town.
“I’m feeling very good about it,” Veler said. “It shows a desire for progress in the city. Not just in the city, but to other people around the city.”
Salem officials had first tried in 2020 to sell the system through an emergency process laid out in state’s Water Infrastructure Protection Act. But opponents gathered enough petition signatures earlier this year to force a vote on whether to sell.
Their campaign centered on concerns about loss of local control, and they argued that the system just needed a change of leadership to boost bill collection and pursue state and federal infrastructure grants.
Voices heard
Janice Roots, a Salem resident who helped organize the opposition campaign, said after the vote that she was disappointed in the outcome, but pleased that a vote was held at all.
“I think that it was just paramount that we as taxpaying citizens were able to have our voices heard,” Roots said. “The WIPA legislation was designed to bypass us. So regardless of the outcome, it was imperative for us residents who live in this community be able to voice our opinions about a water system that belongs to us.”
New Jersey American Water expects the Salem sale to be finalized in 2024. The deal still has to undergo a rigorous review by the Office of the State Comptroller, and final approval will have to come from the state Board of Public Utilities.
