In addition to a U.S. Presidential election, a crowded field of candidates for the local Board of Education, and other momentous races, South Orange Village residents are faced with a ballot referendum in this election on whether of not to allow the Village Council to move ahead with the sale of its water utility to New Jersey American Water.
The referendum reads:
“Shall South Orange Village, in the County of Essex, New Jersey, be authorized to sell its water distribution and transmission system (commonly known as the “system”) to New Jersey American Water Company, Inc. for the sum of $19,700,000?”
_____ Yes _____ No
Village officials have convened a task force on the topic, held three town hall meetings, and have posted relevant documents on the Village website: https://www.southorange.org/1009/Water-System-Potential-Sale-2024
Proponents of the sale — including current Mayor Sheena Collum and former Village President Doug Newman — say that the sale is the best option for the township to make costly infrastructure upgrades, retire debt on recent improvements, and manage rate increases while maintaining water quality going forward.
Per the Village website: “Purchase and Investment totaling $69.7 million dollars: NJAW will buy the water system for $19.7 million and invest an additional $50 million in infrastructure upgrades over the next 10 years – important infrastructure improvements resulting in a modernized and upgraded water system.”
New Jersey American Water has been supplying water to South Orange since 2017, after Village leaders found that the East Orange Water Commission was supplying water with unacceptable levels of a contaminant and an EOWC official was ultimately found guilty of falsifying reports. In recent years, the Village has added to its debt service by taking on infrastructure improvements on the aging system with former Councilmember Howard Levison leading the effort as water administrator.
Read letters from Collum and Newman, who served as chair of the Water Utility Task Force, supporting the referendum and the sale of the water utility here:
- LETTER: Collum Urges South Orange to Vote ‘Yes’ on Water Utility Referendum, Sheena Collum
- LETTER: Voting YES on Water Utility Referendum Is Right Choice for South Orange’s Future, Doug Newman
Proponents argue against selling the township’s water infrastructure to a publicly traded company, saying NJAW is “buying the right to charge us fees and make profits off us literally forever.”
Read letters opposing the sale here:
- LETTER: Vote NO on South Orange Water System Privatization, Joe Rospars
- LETTER: Vote No on South Orange Water Privatization Plan, Bernice Napach
Rospars wrote in part: “The deal promises to cap rate increase for five years, and then in years six to fifteen gradually increase rates to those paid by everyone else in the state who’s privatized their infrastructure. From year fifteen to year infinity all bets are off and fees will rise to feed profits (and more acquisitions). The mayor and the company say, ‘hey, it’s regulated by the state how much we can charge.’ Yes, the governor appoints a Board of Public Utilities that has in the past been a revolving door of former political staffers and old college friends of governors. Here’s how that goes: just last month the board approved an almost $80 million increase in the fees American Water can charge its New Jersey customers.”
Collum has countered that, without the sale, “our rates will need to increase by roughly 74% in the next five years, excluding any service charges the Council will need to consider for meters and customer-side lead line replacement.”
Collum writes, “This comes down to whether South Orange wants to tackle our challenges ahead with the existing rate base of approximately 4,600 water customers or with NJAW, which has a rate base of 668,000 water customers, including owning and operating the water systems for Maplewood, Millburn, West Orange, and Irvington.”
New Jersey American Water has shared that other former and current South Orange Village officials support the referendum.
Assemblywoman Garnet Hall has endorsed the water system referendum in South Orange, stating, “By voting yes on the South Orange water system referendum, residents have the opportunity to secure a safe, reliable water supply and remove lead pipes from the water system. In addition, the sale would green light $50 million in upgrades to the water system that is over 100 years old in parts and pay off all utility debt. A yes vote will strengthen the South Orange community and secure its water system for the future.”
Other community leaders supporting the referendum include Councilmembers Olivia Lewis-Chang, Summer Jones, Bobby Brown and Jen Greenberg, and Water Utility Task Force members Steve Schnall, and Cliff Pomerantz.
According to NJAW, the councilmembers jointly stated, “We’ve thoroughly examined our options, and it’s clear that this is the best path forward for our community. Approving the referendum will help us avoid steep rate increases while ensuring that our aging infrastructure, some of which is over 100 years old, gets the necessary updates and repairs it desperately needs. This is truly a win-win situation, especially considering that all lead and galvanized steel service lines will be replaced at no direct cost to residents. Moreover, the $19.7 million purchase price will allow us to pay off all water utility debt and reduce municipal debt, while New Jersey American Water commits to investing $50 million by 2035 to modernize our water system. This investment not only safeguards our community’s health and safety but also promotes long-term stability and transparency in our water rates.”
UPDATE: On November 4, NJAW also shared testimonials from the New Jersey NAACP, Maplewood Township, and the Great Swamp Watershed Association (GSWA), commending the work of NJAW. “The NAACP is a long-time partner of New Jersey American Water, and we applaud the work they do to build safer communities,” said Richard T. Smith, NAACP New Jersey State Conference President.
Back in July, Councilmembers Karen Hilton and Bill Haskins voted against placing the referendum on the ballot. “Ultimately, I’m not opposed to taking it to the voters,” Hilton said before the vote. “I just think our work isn’t done. We got these two bids, and I would like us to reject them both and keep working on this.”
Erika Malinoski and Ben Vitale made a deep dive on the referendum for the SOMA Action Voter Guide. The guide does not endorse voting “yes” or “no” but lays out various pros and cons.
Read their reporting here: https://www.somaaction.org/voter-guide#water
Read more Village Green reporting on the Water Utility referendum here:
- ‘Kicking the Tires’ on South Orange’s Water Utility Sale Referendum
- Water Utility Town Hall: Newstead Water Sphere, Accountability & Regionalizing Infrastructure
