Voters in Hopewell Borough last week approved a referendum to sell the municipal water system to New Jersey American Water, with over 58% voting in favor.
The vote certainly didn’t make the headlines on election night or anytime thereafter, but the long-term implications for the town — and the statewide trend it appears to represent — are significant.
The referendum comes amid mounting concern over New Jersey’s water infrastructure. According to the EPA, the state’s drinking water and wastewater systems will require more than $24 billion in investment over the next two decades.
A recent Fairleigh Dickinson University poll found that 77% of New Jersey voters — across party lines — are deeply concerned about damage from extreme weather events.
The decision makes Hopewell the ninth municipality since 2014 to transfer ownership of its water or wastewater system to the private utility by voting “yes” on a ballot referendum.
Mark McDonough, president of New Jersey American Water, said the impact on communities is great. He cited research from the Value of Water Campaign showing that every $1 invested in water infrastructure yields up to $6 in economic returns.
“Many towns are too small to sustain modern infrastructure or meet increasing regulatory, resiliency and workforce demands while keeping rates stable the same way we can,” he said. “Every day, we’re helping local leaders address the litany of challenges through long-term planning and investment while achieving economies of scale.”
McDonough said the town — and its residents — can save money.
“A big benefit that many local leaders are surprised to learn about is our customer assistance programs to help those struggling with their bills,” he said.
“And typically, when communities sell their system, they are able to reduce or eliminate municipal debt and prioritize their focus and resources on other local initiatives knowing that their water and wastewater systems are safe, clean, reliable and affordable.”
In Hopewell Borough, New Jersey American Water will pay $6.4 million and invest approximately $7 million in infrastructure upgrades over the first five years of ownership. Borough officials say the proceeds will be used to pay down municipal debt, stabilize property taxes, and free up resources for core services such as public safety, parks and road maintenance.
Hopewell joins a diverse roster of towns that have opted to sell their systems to New Jersey American Water, ranging from conservative Long Hill to progressive South Orange. The company now provides water and/or wastewater service to more than 190 communities across New Jersey, representing roughly 33% of the state.
McDonough pledged swift action.
“We will be working with the Borough to begin integration efforts and will be ready to get to work the day we transfer ownership,” he said. “We look forward to fulfilling our promises and providing safe, affordable and reliable service to all of Hopewell Borough.”
McDonough emphasized that municipalities are increasingly turning to New Jersey American Water to address aging infrastructure, regulatory pressures and workforce challenges.
“Municipalities are increasingly turning to New Jersey American Water as a trusted partner to solve growing water infrastructure challenges that impact every community — rural, suburban and urban,” he said.
NJ American Water is a subsidiary of American Water, which recently announced a massive merger with Essential Utilities, creating a $40 billion company.
The merged American Water company will retain its name and be run by American Water CEO John Griffith, who told BINJE of American Water’s expansion plans earlier this year.
Both Griffith and McDonough were named to the BINGE’s Best: Power Players list earlier this week.
