State grants Evesham power to move forward with next steps of possible MUA dissolution

Water

Evesham Township has passed another hurdle in its ongoing process to dissolve the Evesham Municipal Utilities Authority and absorb water and wastewater services as a department under the municipality.

At its April meeting, the New Jersey Local Finance Board approved Evesham’s application to dissolve the MUA after originally tabling the application in March to take more time to review the issue.

The Local Finance Board operates under the state Department of Community Affairs as the ruling body regarding the fiscal health of municipalities and whether dissolutions of utilities should be allowed within those municipalities.

Evesham township officials first started discussing the potential benefits of dissolving the MUA in October after a best practices inventory from the state asked the township if it had ever considered any cost savings or other benefits from dissolving utilities in town such as the MUA.

From the time the MUA was created in the 1950s until present day, the organization has operated as a public entity separate from the municipality. Rather than be funded by taxpayer dollars and governed by Evesham Council, the MUA collects revenues from ratepayers for performing water and wastewater services and is controlled by its own board of commissioners.

However, township council ultimately appoints those commissioners to the MUA board, and council does have the authority to take steps to dissolve the MUA at any time if granted approval from the state, which Evesham council now has.

As described by township manager Tom Czerniecki at multiple public meetings, there are still several steps council would need to complete before the dissolution process was finalized. Council first needs to adopt an official MUA dissolution ordinance, as well as adopt an ordinance creating a new water and wastewater department in the municipality. Council would also need to adopt an ordinance refinancing MUA debt as municipal debt.

Although council already introduced ordinances to dissolve the MUA and refinance its debt at its Feb. 9 meeting, the votes fell along a 3–2 margin. Mayor Randy Brown, Deputy Mayor Ken D’Andrea and Councilman Bob DiEnna voted yes to those ordinances, but Councilwoman Debbie Hackman and Councilman Steve Zeuli voted no.

Only a simple majority of three votes is required for the final adoption of the ordinance to dissolve the MUA, but a supermajority of at least four votes would be required for the final adoption of the ordinance refinancing the MUA’s debt.

If Brown and members of council vote as they did when introducing the ordinances, the ordinance to refinance the MUA’s debt would fall one vote short of passing, and the township could not move forward with the MUA dissolution.

At this time, there is no set date for the public hearing and final vote on the MUA dissolution and debt refinancing.

Over the past several months, Czerniecki has outlined many potential benefits he and township officials believe would follow from the dissolution of the MUA.

Czerniecki has repeatedly said about $4.3 million in savings would occur if the township were to reissue MUA debt as municipal debt, and about $9 million of ratepayer funds the MUA is required to hold in reserve as a public entity would be freed up as well.

Czerniecki has also said no MUA or municipal employee is expected to lose their job if the township were to dissolve the MUA, and he believed the township would be able to increase the number of water and wastewater projects to carried out over the next decade.

To ease fears about any potential, future sale of the township’s water system to a private company, Brown and other council members have also said they are supportive of codifying that a public referendum would need to take place before any such sale.