Del Haven Water Project Moves Forward

DEL HAVEN – The Middle Township Committee May 20 meeting marked an achievement in a project the municipality has worked on for several years. The township has selected an option to bring potable water to Del Haven and adjacent areas.
Saltwater intrusion has compromised wells across Del Haven, denying many residents direct access to fresh water.
Mayor Timothy Donohue said the township considered many options, always with two goals in mind:
Provide homeowners the lowest cost over time.
Be feasible without taxpayers taking on debt, a completely ratepayer-based project.
A presentation outlined the three options, along with the pros and cons of each.
The first option was to ask New Jersey-American Water to extend water mains from Whitesboro to Del Haven.
New Jersey-American Water is the township’s major supplier of water, has the expertise to design and manage such a project, and is regulated by the Board of Public Utilities (BPU).
The most significant problem was that the project required the township to cover part of the costs involved in bringing water from existing mains to Del Haven.
The municipality would have had to issue new debt, violating one of the two tenets established as guidelines.
The next option involved having the township set up its own water distribution system and structure to manage it.
Water then could be purchased from New Jersey-American Water or another source. Lower cost loans would be available to the municipality for construction.
The difficulty was once again the township would have to take on new debt even if that debt was to be covered by ratepayers.
Another difficulty was the lack of expertise in many engineering and management skills involved in creating and operating a water distribution system.
The third option, and the one selected, was establishing a link with Lower Township Municipal Utilities Authority (LTMUA).
The proximity of the LTMUA lines to Del Haven lowered construction estimates, the entity has the demonstrated expertise and the proposed project would not include any general debt for Middle Township taxpayers. The township also believes that this solution offers the lowest cost to ratepayers over time.
There were some countervailing factors considered given that the water system would largely be out of Middle Township’s control, the LTMUA is not regulated by the BPU, the system would be owned by LTMUA and, perhaps most importantly for many residents, financing of the project requires a mandatory connection fee.
The ordinance establishing the arrangement with LTMUA would be in place for 40 years, with two, 20-year renewals.
Fees to residents would have two components separate from the connection fee. One component is debt service to cover the financing required to build the system.
With just under 1,000 homes in Del Haven and some adjacent areas, the debt service fee was estimated at $99.41 per quarter. The rate component, actual water use, was estimated at $54.02. The two combined would have ratepayers looking at a quarterly bill of $153.43.
The mandatory connection fee for each home is $1,600 which can be paid in full or spread over five years with no interest.
If spread out, the quarterly payment would be $80 for a five-year period.
A homeowner who elects to spread out the connection fee would face an estimated quarterly payment of $233.43 when the system begins operation.
An ordinance would be necessary to establish the mandatory connection fee.
LTMUA estimates are that state approvals, design, and financing would all mean that construction of the system would not begin before spring of 2020.
The estimate includes a one-year construction period with the system operational in the spring of 2021.
Committee member Michael Clark reminded the public that bringing water distribution to the Del Haven area would significantly improve fire protection, establishing hydrants at regular intervals in the community.
To contact Vince Conti, email vconti@cmcherald.com.