Edison mayor proposes new public-private partnership with Suez North America to manage water and sewer systems

EDISON – When Mayor Thomas Lankey came into office in 2014, one of his first initiatives was to conduct a water, sewer infrastructure analysis of the township.

“The condition [of the infrastructure] was horrendous … nothing had been improved post 1950s and 1960s,” he said.

Fast forward five years, the focal point on infrastructure has reached a proposed $811.3 million new public-private partnership – long-term 40-year 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,” Lankey said, adding Suez has agreed to make unprecedented and sorely needed capital improvements to the township’s water and wastewater systems.

The mayor announced the new partnership during Edison’s 28th annual State of the Township Address, held on Feb. 21 at the Pines Manor.

Lankey said township officials discussed three options to either maintain, lease or sell the operation and maintenance of the water and sewer systems in the township.

“If we decided to sell, we would have lost too much control,” he said.

Lankey said significant benefits have been negotiated into the agreement for Edison to provide improved service to residential and business customers.

The proposed agreement provides necessary $496.5 million investments for infrastructure improvements; provides the township with a sizable “upfront payment” of $105 million, in which the township will use to retire its existing debt and utilize a small portion for the design, development and construction of the long discussed new municipal community center; rate protection; and keeping the senior freeze intact.

Lankey said rate increases will be capped as they relate to an agreed upon formula expected at an average of between 4 and 5 percent, which is below national average increases.

“This translates to a monthly increase of less than $4.50 per month for residential users of both utilities,” he said. “This long term approach provides stability and avoids rate spikes.”

In 1997, Edison had entered into a contract with New Jersey American Water to operate and manage its water system. In 2017, the township amended the contract, which ended that year, and extended it for two years so options could be considered, including the benefits of private operation of both the water and sewer systems.

Currently, Edison operates its own municipal sewer utility, serving the entire town. The township serves approximately 12,000 water customers and 26,000 sewer customers, both residential and commercial.

The goals and objectives of discussions included to continue public ownership of the systems; to address significant capital needs of the water and sewer systems; to secure an experienced entity to operate, maintain, improve and manage the systems; improved service to customer base; and to realize value from the systems for the benefit of the Edison taxpayers.

The proposed contract requires Suez to manage and operate the township’s water distribution system and sewer collection system including operations and management in accordance with a best management practices operations and technical standards manual; maintenance and operations annually of $4 million increasing with inflation over the 40 years of the contract; and billing and collection to customers of the township systems, both commercial and residential.

“This long-term lease will have Suez operating these systems and, more importantly, relieve the township of the financial burden of funding capital to these aging systems,” Lankey said. “Suez, a company with the technical experience and expertise that now serves 1.5 million people across New Jersey, will manage, maintain and make all necessary improvements to our water and sewer systems.”

Lankey said the partnership agreement is contingent upon a local public hearing and will require approvals from the Edison Township Council, the state Department of Community Affairs, the Department of Environmental Protection and the Board of Public Utilities.

Contact Kathy Chang at kchang@newspapermediagroup.com.