HILLSBOROUGH: No hike needed for fire protection rates

Faulty notice has town protesting

By Eileen Oldfield, Staff Writer
   American Water Co. representatives said bureaucratic jargon is to blame for Hillsborough township officials thinking public fire protection rates would increase 8.1 percent in Hillsborough — though the rates will not increase in town.
   The confusion came after a public notice on the company’s request to increase rates in various towns, with the notice suggesting an 8.1 percent increase for customers in the SA-2 service area that includes Hillsborough. Since the public notice documents must be structured in a certain way, the notice neglected to show which towns would see an increase, which would see a decrease, and which would have the rates remain the same.
   ”The documents are not easy to read,” Pete Eschbach, American Water Co.’s director of community and external affairs, said. “They are not straight forward. … It was confusion over what is admittedly a bureaucratic document. In Hillsborough, it is actually (a) zero (percent increase).”
   ”That breakdown by town was not in the public notice,” he added.
   In response, Hillsborough Mayor Frank DelCore sent a letter to the New Jersey Board of Public Utilities Aug. 23, protesting the rate increase. American Water Co. called the township on Aug. 27 to explain the mistake, and offered to send the township documents explaining the rates. The township has not received the documents yet, Township Clerk Kevin Davis said.
   Had the increase proposed in the public notice affected Hillsborough, the township would see $70,000 added to the $850,000 it pays for fire protection services, according to Mayor DelCore’s Aug. 23 letter to the New Jersey Board of Public Utilities (BPU). In the letter, Mayor DelCore called the increase “unjustifiable economically and seriously out of line with state policy”, and noted the strain it would cause given the 2 percent limit on municipal property taxes instituted earlier this year.
   ”A $70,000 cost increase equals over 22 percent of the available cap allowance under the new law,” Mayor DelCore said in the letter. “Any increase in spending above 2 percent will require a reduction elsewhere in the township’s budget to offset the cost difference. The offset could mean a reduction in police personnel, assistance to senior citizens, or to maintain the roadways during winter weather, to name just a few examples.”
   He added, “Any increase in water rates for fire protection is totally unjustifiable given that the township has been advised by the Division of Local Government Services that inflation last year was negative 1 percent.”
   According to the New Jersey Division of Local Government Services Local Finance Notice 2009-26, released in November 2009, the Implicit Price Deflator for State and Local Governments, calculated by the U.S. Department of Commerce, Bureau of Economic Analysis for calendar year 2010 is -1 percent.
   Fire protection services involve having water available at public fire hydrants, not the volume of water used when fighting a fire, Mr. Eschbach said. American Water can only charge towns for the hydrant system — which includes pipes that go to the fire hydrants and other machinery — after it is built and in use, he added.
   The changes to the public fire protection services rate is part of the company’s attempt to create a standard rate for the service, Mr. Eschbach said. Currently, each town pays a different amount for the service, so towns pay different amounts for water to be available at fire hydrants.
   Changes to the rates must be noticed publicly and accepted by the state BPU.