The Monroe Township Council is working toward dissolving the Municipal Utilities Authority, a move that would do away with the MUA’s Board of Commissioners and hand the council the reins of the water and sewer utility.
Three ordinances introduced by the council this month will facilitate the takeover if they are adopted Jan. 5. One would dissolve the MUA, another would allow for the creation of a new water and sewer utility under the auspices of the township, and the third would have the township take on the debt of the MUA.
“Here is a classic case where we can do something and make it more accountable to the people,” township Business Administrator Wayne Hamilton said. “The operation is not going to change one iota.”
According to Hamilton and other officials in favor of the move, the elimination of the MUA as a governing body and the shifting of responsibility into the hands of the council would provide for greater accountability and transparency for residents. Shifting control over to elected officials, as opposed to appointed MUA commissioners, would help to ensure greater oversight as well, according to a study done by Hamilton, Chief Financial Officer George Lang and Council President Gerald Tamburro, who is also an MUA commissioner.
Aside from accountability and transparency, officials cited financial reasons for the takeover. Tamburro said it is in line with what state legislators have wanted, in terms of doing away with levels of bureaucracy in order to create savings for taxpayers.
Hamilton pointed out that there are 1,900 governing bodies throughout the state, and 215 MUAs. In addition, he said the MUA has an annual budget of $12 million, a number that is managed by five individuals.
“There are some small towns that don’t have [municipal] budgets of $12 million,” Hamilton said.
Tamburro explained plans to achieve savings by eliminating the MUA as its own entity.
“Going forward, we feel that there are positions in both the township and the MUA, administratively, that could be filled by one or the other,” Tamburro said.
For example, the township is in need of an additional person to conduct purchasing, and the MUA has a staff member who could fulfill that need, he said. In addition, the MUA has an IT head that the township could use on its staff. On the other hand, the township has a human resources department, as well as a financial department, both of which would strengthen the MUA, Tamburro said.
But according to MUA Board Chairman Alan Binaghi, savings could be gleaned through shared services without having to dissolve the MUA. Aside from the benefit of an autonomous authority focused solely on serving its customers, the MUA enjoys budgeting that is not tied in with other department budgets in the township, something that could potentially change its ability to operate in the same way if changed, Binaghi said.
According to the study, the savings achieved by removing duplicate professionals would be substantial. A report by accountant Andrew Hodulik showed about $88,000 in savings derived immediately in operational budgeting, but officials projected overall savings of anywhere from $200,000 to $500,000.
Tamburro said $200,000 would be the minimum expected savings amount for the first year after the move takes place.
The additional savings would come from the consolidation of professionals from the two entities, according to the report. It would also come from eliminating the need for separate advertising for the MUA, as well as doing away with board member stipends. Hamilton said each commissioner is paid approximately $2,000 per year.
According to Mayor Richard Pucci, the change would be a boon for residents.
“We’re anticipating there is going to be a two-year rate freeze, and that’s guaranteed,” Pucci said.
After a feasibility study that is slated to last about three or four months, officials will have determined whether a rate reduction is in the cards for utility customers, Pucci said.
Binaghi offered another perspective.
The elimination of the MUA board would represent less than 1 percent of the authority’s annual operating expenses, he said. In addition, while doing away with some professional positions for the MUA would bring about savings, the positions will likely have to be filled by township professionals, as the services will still be needed for the utility to operate, Binaghi said.
“To more fully achieve the higher level of savings stated publicly by township administration, one would expect other opportunities to consolidate overlapping services that achieve more meaningful cost savings will be explored,” Binaghi said, adding, “While the township must assume all debt and contractual obligations of the MUA, it will also receive benefit from a favorable cash position that is twice that of the MUA’s existing debt obligation.”
As of a January audit, the MUA had about $43 million in surplus funds, according to Hamilton. Approximately $20 million of that amount is spoken for in debt. Hamilton said the remainder of the surplus is spoken for as well. Over the next few years, the MUA has capital improvements scheduled that are “well in excess” of the $23 million, he said.
Late last month, MUA board Secretary George O’Carroll told a daily newspaper he saw the move to dissolve the authority as suspect, and had heard the council would look to sell the utility to the New Jersey American Water Company.
Both Pucci and Hamilton vehemently denied the claim.
“That is totally erroneous,” Hamilton said.
According to Hamilton, Monroe Township has one of the lowest water and sewer rates in the county, which would make it difficult to sell the utility to a private entity.
“That’s like the circulatory system of the body of the township,” he added.
Pucci said the township’s takeover of the MUA would basically guarantee that it would not be sold off to a private owner. He said O’Carroll’s comments were unfounded, because officials never discussed that as a possibility.
While O’Carroll did not confirm or deny his past statements regarding the issue, he told the Sentinel it would be pointless to state his opinions on the issue. O’Carroll served for 18 years on the board, and was its only Republican for a number of years, he said.
“For me to comment any further would be to create adversarial relationships, and I have no interest in creating adversarial relationships,” O’Carroll said. “I understand, and have no problem with the fact that my opinion means nothing. This is a policy decision that was made, it’s a political decision that was made, and whether I agree with it or not is irrelevant. It’s a done deal.”
Binaghi was more willing to state his opinion. He said that for nearly 20 years the MUA has been run successfully, and stressed the importance of keeping employees and customers at the forefront of concerns during the process.
“For the residents of Monroe who depend on water and sewer services, short- and longterm transition plans need to ensure that residents benefit not only from the initial attractiveness of the MTMUA, but that those benefits are sustained long term,” Binaghi said.
Mike Rogers, executive director of the MUA, said Pucci made it clear that no authority employees would lose their jobs as a result of the move.
“We’re here to serve the customers,” Rogers said. One of the necessary steps before the council can adopt the ordinances is to secure approval from the state Local Finance Board. Officials received unanimous approval from the board on Dec. 10.
The council is set to vote on the ordinances Jan. 5, after a public hearing.

