Edison, NJ – Edison may soon enter into a 40 year agreement with Suez North America to operate and manage Edison's water system and the town’s sewer system. This was according to Mayor Thomas Lankey who unveiled the proposal during his State of Township address on Thursday.
“We now plan to enter a long-term lease agreement with Suez North America, a Paramus-based water and wastewater company. This agreement will allow Edison to retain ownership of these systems, but also provide significant financial benefits for our community,” said Mr. Lankey.
According to the Administration, Suez will manage, maintain and make all necessary improvements to the Township’s water and sewer systems.
Mayor Lankey outlined the principle terms of the agreement during his speech on Thursday. According to Mr. Lankey, Suez has agreed to:
1. Capital improvements by Suez to Edison’s water and wastewater systems.
2. Provide the Township with a sizable “upfront payment” ($100 million) that the Township will use to retire its existing debt and utilize a small portion for the design, development and construction of a new municipal Community Center.
3. Provide improved service to the Township’s residential and business customers.
4. Rate protection and keeping the senior freeze intact
According to Mr. Lankey, the total value of the transaction over 40 years, inclusive of investments to infrastructure, will be $811,344,330.
Critics on social media have already raised issues with the proposal, citing Suez related issues around the State.
Suez has not always had a smooth relationship with other municipalities, a fact Edison Township attorney William Northgrave knows first-hand.
In August 2018, Mr. Northgrave’s firm, on behalf of the City of Hoboken, sought injunctive relief against Suez. In that suit, Mr. Northgrave’s firm, on behalf of Hoboken, alleged that Suez’s “ongoing efforts to repair and/or prevent future [water main] breaks have been woefully inadequate and have threatened the city’s water supply and the general public.” The complaint was signed by Mr. Northgrave.
At his State of the City address in January of this year, Hoboken Mayor Ravi Bhalla, referring to Suez, said, “unfortunately, the large increase in water main breaks in recent years has been due to the current water contract that has tied Hoboken's hands for years, that provides zero proactive investments in new water mains.”
Hoboken is presently re-negotiating its deal with the company.
Apart from infrastructure improvements, rate increases are also a concern.
Earlier this year, it was announced that Bayonne’s water rate had increased by more than 9 percent, the second highest increase the city has had since it signed a contract with Suez and a private equity firm in 2012. According to media reports, “Bayonne’s rate has ballooned by more than 50 percent since the deal was brokered — based on the city’s $1.04 per 100 gallons rate in 2012 and compared to its current $1.57 rate.”
Also in January, Suez said that water samples from multiple homes and buildings in Bergen and Hudson counties served by its water treatment plant in Haworth showed high levels of lead. According to the company, 108 samples were collected at residences served by Suez Hackensack between July 16, 2018 and December 12, 2018, and 15 of the results exceeded the Lead Action Level of 15 ppb. The company stated that “the likely source of lead in the drinking water is from the service lines, pipes that extend from the water mains to the homes and businesses, and from lead fixtures in customer homes.” NJDEP said that the state issued Suez a notice of noncompliance on Jan. 7 requiring the company to evaluate the performance of its corrosion control treatment at the Haworth plant.
At a January 29, 2019 Borough Council meeting in the Borough of Oradell, located in Bergen County, the governing body passed a resolution calling on the New Jersey Department of Environmental Protection “to hold Suez North America accountable and demand that they commit to an aggressive replacement plan for all lead service lines they own.” A similar resolution was passed by the Township of Teaneck.
According to Edison Township, a March 28 public hearing has been scheduled on the proposed lease agreement.