ALLENDALE – The borough is asking residents in the upcoming election to consider selling its water system to Suez Water for $18 million to improve its aging system.
The increasing complexity of operating the water system, increasing environmental regulations and aging water infrastructure were cited as the reasons behind the move to sell their system to Suez, said Councilwoman Liz Homan, chair of the borough's Water and Sewer Committee.
The idea was hatched more than two years ago, after officials become aware of these issues, said Homan. She said Suez has the expertise and staff to manage and improve the system.
"Allendale no longer has the expertise or resources to run our system given the ever-evolving safety and compliance issues," she said.
Elsewhere: Suez Water proposes two massive holding tanks behind homes. Montvale residents push back
The biggest capital improvement that Suez would install is a PFAS (per- and poly-fluoroalkyl substances) treatment facility, estimated to cost $7 million, in the water system to ensure that Allendale meets and surpasses state Department of Environmental Protection regulations, said Homan. The company will also help the borough comply with lead and copper regulations.
Suez would also provide computer upgrades for monitoring, security, and safety improvements; well pump replacements, advanced metering infrastructure, water main replacements and storage tank painting, Homan said. Overall, the capital improvements are estimated to cost $24 million, which would be paid for by Suez.
Currently, Allendale does not have a water department and has had a contract with Suez since 2013 to operate and maintain the Allendale Water System, said Homan. Since 2001, Allendale purchased 50% of water needs from Suez. The remainder of the water comes from the borough's five wells.
If the $18 million sale is approved by voters, Suez would provide and maintain all water services to existing customers of the borough’s water system and "will make substantial capital improvements." The estimated date for the transaction to close would be around May or June 2022.
"Suez and Allendale would continue to work together to ensure there is a smooth transition for all activities as this is in the best interest of both parties," said Homan. "Suez has operated and maintained our water system since 2013, which is expected to make the transition a smooth one."
Although it would need final approval from the New Jersey Board of Public Utilities, the service rates to customers would see zero rate increases in 2022, 2024, 2025, 2027, 2029 and 2030. There would be a 0.5% increase in 2023 and a 5% increase in 2026, 2028 and 2031.
If residents vote down the sale, the borough will retain the water system and will immediately begin a process to increase water rates to the extent required to address the need for additional treatment technology and maintenance activities, according to the ballot question.
The council would prepare plans to install a temporary treatment facility at the New Street Water Treatment Plant to address PFAS contamination while plans for permanent treatment are finalized and approved by the state, said Homan.
Upfront costs for a temporary treatment plant would be over $500,000, while the cost of temporary treatment for three of the borough's five wells is estimated to cost the borough $1 million over two to three years, said Homan. The cost for treating a well that is closed after PFAS contamination is unknown.
Building a permanent treatment facility without selling to Suez has been estimated to cost $7 million when treating four of the five Allendale wells, said Homan.
If the sale to Suez is voted down, the borough will increase water rates by 30% in January and have a minimum of 26% rate increases each year for the next five years, said Homan.
Polls open on Oct. 23 through Oct. 31, then on Nov. 2.
Stephanie Noda is a local reporter for NorthJersey.com. For unlimited access to the most important news from your local community, please subscribe or activate your digital account today.