At its Nov. 10 meeting, Evesham Township Council tabled several ordinances and resolutions necessary to start the application process through which the township would seek state approval for the dissolution of the Evesham Township Municipal Utilities Authority.
The MUA operates separate from the municipality and performs water and wastewater operations for properties in town, with funding gained from ratepayers at said properties.
Council has recently been discussing potential cost savings it believes could be achieved through restructuring of MUA debt if the MUA was absorbed into a new water and wastewater department under the township, but the township determined more time was required before applying to the state for approval of the move.
For now, council tabled the ordinances and resolutions so an MUA audit required for the application could be completed, and so the township and its solicitor would have more time to explore the potential legal safeguards that could be put in place to protect the quality of the township’s water and wastewater services if the dissolution were to move forward.
Should dissolution eventually take place, Councilmember Steve Zeuli questioned if there was legislation council could adopt where current MUA operational funds and multi-year capital improvement plans could be secured for years in advance, so current and future councils would have more difficulty in deviating from such plans.
“For decades, the MUA has had low rates, a safe supply of drinking water and, financially, they’re rock solid,” Zeuli said.
Township Solicitor John Gillespie said he would need to do further research, but his initial reaction was Zeuli’s requests were feasible if contained within an ordinance council approved.
“You can establish protocols, you can establish some limitation upon yourselves,” Gillespie said.
However, Gillespie noted that such ordinances would be similar to any other ordinance passed by council, meaning they could be repealed, amended or modified under the standard process of council introducing such changes at one council meeting and council passing them at a second meeting after a public hearing.
In response to concerns he had heard from members of the public, Deputy Mayor Bob DiEnna also asked about the creation of an ordinance so any potential, future sale of the authority to a private company could only occur by way of a public referendum.
“I would want the folks to know that in performing our due diligence, we’re trying to leave no stone unturned,” DiEnna said.
Gillespie again said his initial reaction was such a requirement would be possible, and would actually impose a greater burden upon the council than in many respects what the MUA would currently have to undergo if it chose to sell water and wastewater services.
“The MUA doesn’t have to do those things,” Gillespie said. “You’re asking us if we can create these safeguards by way of the ordinance that currently don’t even exist over there.”
Mayor Randy Brown said he would be fully supportive of requiring a public referendum before any potential sale of the water and wastewater system.
“I think the public should make that decision down the line, not five council people,” Brown said.
At the meeting, Brown also gave a presentation on the state-mandated legal process the council would have to go through if it chose to dissolve the MUA, a process he said had been distorted in recent weeks by Internet postings.
Before the MUA could be dissolved and absorbed under the township, council would have to introduce an ordinance to dissolve the MUA and introduce an ordinance to refund the debt of the utility, as well as adopt a resolution approving a financial advisor’s plan and a resolution authorizing township staff to prepare an application to the Local Finance Board under the state Department of Community Affairs.
Such ordinances and resolutions were those tabled at the Nov. 10 meeting.
Brown noted that dissolution was a decision for council and the LFB, and he repeatedly pointed out that the MUA board of commissioners had no say in the matter.
A vote to dissolve the MUA failed to take place at the Nov. 4 MUA board of commissioners meeting when no board member would motion to take up the related resolutions on its agenda.
“If they (the Local Finance Board) say yes it will come back to us … if they say no, regardless of what we say as council, it’s dead, period, end of story,” Brown said. “The Local Finance Board is that third-party arbitrary entity who helps make that decision.”
Township manager Tom Czerniecki said only after approval from the LFB could the township schedule a public hearing on the adoption of the dissolution ordinances.
In past presentations, Czerniecki said ratepayers could potentially realize $4.3 million in savings over 10 years if MUA debt was reissued as municipal debt through MUA dissolution.
Other potential benefits of dissolution Czerniecki has noted in the past include the release of about $9 million in cash reserves the MUA is required to carry for its $31 million in debt service, overlapping operational savings and savings to come from more coordinated planning of capital improvements.
“The manager has stated many times that this is a name change only. There will be no loss of jobs, and I believe it’s an opportunity for departments to get together,” Brown said.
