Village moves forward with contract to switch to NJAW

SOUTH ORANGE, NJ — The village held a public hearing March 21 regarding the 10-year operations and maintenance contract it will be entering into with New Jersey American Water, which will be providing South Orange’s water instead of the East Orange Water Commission beginning Jan. 1, 2017.

The village made the decision to switch from the EOWC to NJAW after a series of issues with the current water provider. Not only has South Orange’s water quality been called into question several times, but EOWC officials were indicted for falsifying test results.

The village is going with NJAW, the largest water provider in the state; according to village attorney Steven Rother the company met the village’s criteria better than any other proposer. According to the March 21 presentation, the selection criteria included a history of managing systems of at least 7,000 metered services; a history of regulatory compliance; a demonstrated understanding of the village’s system; experience; reputation; financial strength; price, and responsiveness of the Request For Proposal.

Finding a water provider that could provide quality water while staying on the right side of the law was highly important to the village, especially in light of the issues with the EOWC.

“We are painfully aware of the importance of having a good operator to run your system given the recent experience,” village Administrator Barry Lewis Jr. said.

Village officials stressed that the village will retain ownership of its water system, with NJAW only maintaining and operating it. According to Rother, NJAW will take care of day-to-day maintenance issues and any capital improvement projects will be paid for based on a specific schedule of costs, which will be part of the final contract. Lewis added that the proposed contract with NJAW is similar to the current contract with the EOWC as the village is not reconstituting a water department and will not be hiring personnel to oversee water operations.

“In that fashion, we are not paying for some anticipated costs that may not incur,” Rother said, adding that after three years, the village has the option to sell the water system.

Pricewise, Rother explained that there will be two phases to the contract. Phase I will include a one-time fee of $345,099, necessary to ensure a seamless transition on New Year’s Day 2017 and to make sure that everything is ready for the conversion from the EOWC to NJAW. Rother said the necessary pumping system and interconnections needed to switch water providers was covered in a separate contract, and NJAW and the village are already working on that.

Phase II pays $62,158 per month to NJAW to operate, control and maintain the system; provide daily inspections and maintenance of above-ground assets; perform leak detection on 20 percent of the village’s mains annually; test and inspect all hydrants with one-third to be flushed annually and at least 120 to be painted each year; inspect and exercise 20 percent of all valves annually; inspect and exercise the generators monthly; and perform meter readings and billing services.

“Every five years, every main will get (inspected),” Lewis said. “That is something that has been sorely lacking with East Orange Water. Quite frankly, it didn’t really cost us; it cost East Orange. But we know from the data they provided that there is an enormous amount of water lost somewhere, so we hope that through this program we’ll be able to tighten that up.”

Lewis added that, with every valve being inspected and exercised within every five years, the village will again see an improvement from East Orange Water, which, according to Lewis, gravely neglected the valves, leaving them unable to locate broken valves. Lewis said he looks forward to the “collaborative” relationship that he believes the village and NJAW will enjoy.

“We are very confident that, literally at midnight on Dec. 31 this year, everything will switch over and nobody’s going to know,” Lewis said. “The water will still flow; it will be softer. It’s going to be a real seamless transition.”

The next step is for a report to be prepared by the village based on last week’s hearing. The report will include a transcript of the hearing, as well as transcripts of previous hearings and meetings with NJAW; included will also be resident feedback pertaining to operations and maintenance only.

The report will then be submitted to the New Jersey Department of Environmental Protection for review; the NJDEP will subsequently submit it to the Local Finance Board and the Board of Public Utilities. All three entities must approve the report before the village Board of Trustees can do so. The BOT is expecting to vote on first reading at its April 11 meeting.

Once the report is complete, it will be posted on the village website.

“In short, we’re convinced that this was in the best interest for the village,” Lewis said. “We found the right partner and we look forward to a long-term, very mutually successful relationship with New Jersey American Water and Jersey American Water through the water supply contract.”