MONROE — As a cost-saving measure as well as to improve water quality, the township has begun the process of becoming its own water provider.
During the Nov. 5 Township Council meeting, the governing body adopted a $5.5 million bond ordinance that will fund the purchase of water allocation rights to eliminate the need for an outside company to supply water for properties throughout Monroe.
“We will be the sole provider. We won’t need an additional supplemental water supplier as we do currently,” Business Administrator Wayne Hamilton said. “The interesting thing is it provides an immediate savings of $565,000 a year when the [New Jersey American Water] contract runs out.
“It really provides a lot of financial and operating benefits to the ratepayers.”
The township will purchase the water allocation rights currently held by Georgiabased SWM International, which will allow the township to drill and operate its own well to provide water for residents and businesses.
The township is currently under contract with Voorhees-based New Jersey American Water, and Hamilton said the township would let the contract expire in two years if plans go forward.
“It is really important to understand that this is a classic business decision, that we went into negotiations when we became aware that SWM had unused water allocation rights that would have otherwise expired,” he said. “It really is a very positive business decision for the township and the utilities department.
“We had some rigorous negotiations, but to the benefit of the ratepayers who pay into the utilities system.”
Approximately $4.5 million of the $5.5 million in bonds will be used to purchase the allocation rights, while the remaining funds will be used for water-quality testing for five possible well locations and applications to the New Jersey Department of Environmental Protection (DEP), according to Hamilton.
“It is a lot of technical engineering, digging of test wells as we determine which of the five [sites] we are going to be putting a well in,” he said.
“We’ve already met with DEP and showed them the five options. Basically, now we will continue to do some test wells and determine which is the most advantageous for us to pursue.”
Monroe currently spends $2,750 per million gallons of water in the agreement with New Jersey American Water.
However, once the new system is in place, the township will only spend $615 per million gallons of water, which includes financing the bond, Hamilton said.
“That is why it is such a win-win deal for us and our ratepayers, because we get to basically eliminate that costly contract and build our own production wells and have control over it,” he said.
According to Hamilton, New Jersey American is currently supplying 205 million gallons per year, while the township would be able to treat 750 million gallons per year under the new system .
Along with the financial benefits, Hamilton said water quality would improve.
“I wouldn’t say a lot [of complaints], but at the point of the interconnect and especially when it is high usage time in the summer, there are complaints about the temperature of the water, the taste of the water,” he said.
Hamilton said the contract is subject to DEP approval, which he expects to secure by the end of December.
He said the township entered into negotiations with SWM during the summer in the effort to purchase the rights.
“We crunched a lot of numbers, looked at the benefits and came to an agreement,” Hamilton said. “We are very happy because the water ratepayers in Monroe will definitely benefit as a result of this transaction.”