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    • The sale of Gloucester Township’s wastewater utility is up for vote in the City Council
    Tennessee

    The sale of Gloucester Township’s wastewater utility is up for vote in the City Council

    Eira Gwyneth Posted on

    GLOUCESTER TOWNSHIP, NJ — Local officials will decide Thursday whether to move forward with a controversial sale that would privatize Gloucester Township’s sewer services.

    During a special meeting, the council is scheduled to hold a final vote on whether to sell control of the township’s wastewater service to New Jersey American Water for $143 million. If the ordinance passes, township residents will vote on whether to approve the transaction in the November general election.

    The Gloucester Township Municipal Utilities Authority (GTMUA) currently manages the township’s wastewater services. A sale to New Jersey American Water would mean the dissolution of the public utility.

    Several residents have sharply criticized the municipality’s efforts to sell its sewer system. Officials have debated the issue publicly throughout the year. Critics have argued in favor of the GTMUA, speculated that the sale will lead to higher sewer bills, and claimed the mayor has a conflict of interest.

    Mayor David Mayer is director of government affairs for New Jersey American Water. Mayer has not participated in any discussions about the transaction and cannot do so, local officials say.

    Council members were positive about the prospect of selling the rights to the township’s sewer system, saying it would allow the township to pay off its $65 million in debt and bring on board a company with access to capital, allowing for faster repairs and improvements.

    There will be a public hearing at Thursday’s meeting on the ordinance to preliminarily approve the sale. All council members present passed the measure on first reading at the July 8 meeting – James Nash was absent due to vacation.

    The only other item on the agenda for Thursday’s meeting is a resolution that would require the council to discuss certain matters that are excluded from public discussion in private. The resolution will only be voted on if necessary, the agenda says.

    If the ordinance is passed, township residents will vote on a ballot question on Nov. 5 to decide whether to approve the sale. The questions in the ordinance are as follows:

    SUGGESTION
    “Should the Town of Gloucester, Camden County, New Jersey, be authorized to sell its sewer system to the New Jersey-American Water Company, Inc., for the sum of one hundred and forty-three million dollars ($143,000,000)?”

    (Options to vote yes or no)

    Explanation
    If a majority of eligible voters in the Township vote “yes,” the Township of Gloucester will enter into a purchase agreement with New Jersey-American Water Company, Inc. for the sewer system serving residents and property owners in the Township. The purchase agreement will provide that New Jersey-American Water Company, Inc. will provide and maintain all sewer collection and conveyance services to the existing customers of the Township system and will make significant capital improvements to that system under the terms of the purchase agreement approved by the Township. Service fees for the customers of the Township system shall be subject to approval from time to time by the New Jersey Board of Public Utilities.

    If the council approves the ordinance on Thursday, the township will submit the ballot question to the Camden County Clerk the next day, Council President Orlando Mercado said. The township will then hold public meetings on the referendum in the coming months.

    “The statement was prepared by legal counsel and reviewed and approved by council members,” Mercado said of the voting question at the July 8 council meeting. “The mayor has no influence on any matters related to the potential sale.”

    If the referendum passes, the township and New Jersey American Water will go ahead with the sale. The process typically takes about six months and is expected to be completed by the end of June 2025, Mercado said.

    However, if the referendum fails, the sale will not take place “unless the city council decides to initiate a new procurement process in the future,” Mercado said.

    If the acquisition goes through, New Jersey American Water would spend $90 million on the township’s wastewater system over 10 years, according to its published plan. The company, which is the state’s largest water utility, is owned by American Water – the largest publicly traded wastewater utility in the country.

    Residents of the community currently pay quarterly bills of $46 per unit – or per single-family home. New Jersey American Water would collect the bills monthly, but rates would remain the same for the first two years of ownership.

    The company expects to increase costs by 9 percent over the next three years (5 percent in the third year and 2 percent in the fourth and fifth years) before raising rates approximately every two to three years. New Jersey American Water would need approval from the state utility to raise rates.

    New Jersey American Water believes the water service would save Gloucester Township residents money, but some residents have expressed doubts.

    “How long would it take this company to recoup its $143 million if prices stayed the same?” asked Ray Polidoro, an Erial resident, at the July 8 meeting. “Most investors want to make a profit.”

    The special council meeting begins at 6 p.m. Thursday at the community center (1261 Chews Landing Road, Laurel Springs). See agenda.

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    Eira Gwyneth
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