Tonight
this Mayor and Council are introducing the Ordinance
which will allow us to sell the Water Department to
Passaic Valley Water Commission.
I
have been asked a number of questions concerning this
sale and believe that they should be answered.
First
and most important question is "Why is the Water
Department being sold to the Passaic Valley Water Commission".
First and foremost we believe that the residents of
the Borough must be assured the best and highest quality
water delivery to their homes; and we believe this sale
insures it.
Passaic
Valley Water Commission's sole objective is the maintenance
of the pipes, service to it's customers and delivery
of water which meets and maintains both State and
Federal standards. On December 31st, when this
sale is completed Passaic Valley Water will have the
responsible to maintain and repair our pipes, our
meters and our gages and to insure the delivery of
water to all of their customers.
The
Borough of North Arlington is not in the business
of supplying water, we can not do as good a job
as Passaic Valley, experience has shown us this. We
have had ramped weeks some of which have lasted for
months if not years before they were discovered. It
appears repairs are sporadic and maintenance is almost
non existent. I firmly believe that this transfer
will insure to the people of North Arlington the best
quality service and water. Much improved over the
service and maintenance that this town can provide.
Secondly
"We believe in the long run the services and water supplied
by Passaic Valley to our residents will be less
costly to our residents". In our contract we have
spread out over three (3) years the rate increase which
Passaic Valley charges it's customers. This is to insure
that the people of North Arlington have a period of
time to absorb these rate increases. However, the residents
must understand that if North Arlington were to give
the services required in operating a Water Company to
our residents the rates would have been much, much higher
than what Passaic Valley charges it's customers.
In 2000,
the Kaiser Administration embarked upon a study
to determine both financially and internally what must
be done to maintain and improve our water department.
Their experts recommended substantial rate increase,
non of which were implemented.
Their
Engineer recommended major capital improvement to the
water system which would have cost the tax payers an
additional 4.5 million dollars. These repairs were not
done.
If
these recommendations had been implemented then the
state of the water department as it presently exists
would have been greatly changed. Without the
implementation, we are still faced with approximately
three (3) million dollars in capital improvements and
projected rate increase far exceeding those of the Passaic
Valley Water Company.
The
present report of our Engineer still indicates
million's of dollars necessary for capital improvements.
Passaic Valley Water Company will of necessity have
to make these improvements in order to maintain their
commitment to deliver quality water and services to
the community. This is money that will not be spent
by the tax payers.
Further
I am asked, "Why are we doing this now?". My political
opponents claim that this is being done now, because
it is a method in which we can defer any tax increase.
This is far from the truth. The capital improvements
which our Engineer tells us must to be made, will have
to be made this year in order to supply quality water
services. That means that the rate increase to our customers,
which we checked the water company may increase next
year tenfold. In addition, all of the taxpayers will
have to pay the interest and costs of floating additional
bonds to pay for the millions of dollars in capital
improvements. This should have been done four (4) years
ago.
Of
the 576 municipalities in this state, less than 10%
maintain their own water companies. It's an idea
that has lost it's meaning. To delay this sale is detrimental
to the pocketbook of every citizen of this town and
detrimental to their receiving quality water when they
turn on their faucet.
What
are we going to do with the money we receive? We
are receiving approximately $4.3 million dollars,
and the 1st thing we are going to do is payoff all
the bonds, notes and outstanding liabilities that
we have as a result of the Water Department. That
means there will be an immediate benefit to the community
as of January of 2005, and that the amount of interest
that we will be paying on our long term debt, will
be lessened substantially. Approximately one (1) million
dollars of this money is being used to off set the
2004 budget, in other words to reduce taxes to every
tax payer in this community. There is no better public
purpose then to keep our residents money in their
pockets, rather then paying it to the community. The
balance of the money will be placed in a reserve account
to be used by the community next year and in the following
years to come to benefit the tax payers. There is
no higher purpose that the Governing Body can have
then to operate a community at the least cost, to
it's individual tax payers.
The
next question I am asked often is "Are we selling
it to cheaply"? From the municipalities stand
point, we are getting more than a fair price. The
net asset value of the Water Company as set forth in
audit reports, prepared not by my auditors, but by auditors
of the prior administration appointed by Councilman
Whittles.
The
value of the Water Company is approximately $250, 000.00
dollars.
We
owe over $2 million on the Water Company as it exists
now . How anyone can say that over $4 million dollar
sales price, is selling this to cheaply must have
another agenda. Finally, it is no question in our
minds that the sale of this Water Company is beneficial
to each and every tax payer of this community. It
insures better quality service, better quality water,
all at lesser expense to the residents. It is probably
the best thing that has happened to this Borough in
the last ten years.
Mayor
Russ Pitman's comments on the sale of the borough's water
utility: 
