BY DANIELLE MEDINA
Correspondent
The Brick Township Municipal Utilities Authority (BTMUA) took the next step in its acquisition of Parkway Water Co. by entering into a contract to purchase the Marlboro-based company.
Following a tour of Parkway Water Co.’s assets, with members of the Township Council and the BTMUA commissioners present, the authority voted 5-0 on Jan. 8 to pass a resolution that would give them 60 days either to set a closing date for the sale or pull the plug on the $3.8 million deal.
During that time, the authority’s lawyers and insurance broker will continue to conduct title searches and investigate any legal claims that may be outstanding against Parkway Water, which serves residents in the southern section of Howell, known as Ramtown.
The sale of Parkway Water is expected to be completed by April, after the Township Council, which established the authority, gives its approval.
Chairman Daniel F. Newman Sr. said that the purchase of Parkway Water will be a cash deal, with the BTMUA using the $2.3 million it received from Point Pleasant Beach. In October, that municipality paid off its debt to the authority for a pipeline it constructed to connect them to the BTMUA’s water source.
The remaining $1.5 million will come out of the authority’s surplus, so there will be no debt service on the purchase, leaving the authority with approximately $13 million in surplus.
Newman explained that Parkway Water generated about $550,000 in revenues annually. But because the authority expects to cut down on operating expenses, it hopes to increase revenues to between $550,000 and $750,000 annually.
“We expect it to pay itself off in seven years,” Newman said.
In addition to Parkway Water’s 1,853 customers in Howell, the BTMUA will also acquire the company’s assets, including its water towers, water treatment plants, various deep and shallow wells and pipes, as well as its groundwater diversion rights from the state Department of Environmental Protection.
Although the authority will not be using Parkway Water’s wells and treatment plants because of their contamination by radium-226 and radium-228, BTMUA Executive Director Kevin Donald said that Parkway Water’s infrastructure will still be considered an asset to the authority.
“We don’t know what will happen in the future,” he said. “The water business is a 100-year business.”
In February, the BTMUA issued a non-binding letter of intent to purchase Parkway Water and since then has been testing the company’s water system for contamination. In the meantime, the authority began providing approximately 200,000 gallons of water per day to 500 customers in the lower section of Ramtown after Parkway Water’s last uncontaminated well, the Englishtown aquifer, ran out of water in August.
Residents in the upper section of Ramtown continue to be supplied with water from New Jersey American Water Co., because the authority does not have the hydraulic system in place to push its water through the pipes to the customers in the higher elevation of the town.
The authority expects to have a booster station and some extended pipelines in place to supply those residents with water by October, thereby increasing Howell’s consumption to 500,000 gallons per day.
By expanding into Howell, the BTMUA is continuing its goal of becoming a regional water purveyor. The authority currently supplies Point Pleasant Beach and Point Pleasant Borough with water at a bulk rate, in addition to its 29,000 residential homes in Brick.
“This purchase opens up a lot of opportunities,” said Mayor Joseph Scarpelli, who attended the tour and meeting on Saturday. “We have the water with our reservoir, and we’re ready to distribute it.”
In addition to the 1 billion-gallon reservoir, the authority is also looking at improving the capacity of its water treatment plant from 16 million to 22 million gallons per day.
“The people of Brick invested in a reservoir,” vice chairman Andrew Nittoso said. “Unless [new] customers are brought online, then we have built a $34 million lake.”