HOWELL – A resident has questioned the Township Council’s adoption of a bond ordinance that will see Howell taxpayers fund the installation of infrastructure the municipality will not own.
During a meeting on Feb. 19, the Township Council unanimously adopted an ordinance appropriating $3.5 million. Officials said $3.225 million in bonds or notes will be issued and Howell will make a down payment of $175,000.
The total cost to finance the project in the Freewood Acres section of Howell is $4.9 million. The New Jersey American Water Company will pay the balance of $1.4 million, according to the ordinance.
The purpose of the project is to bring public water service to homes in Freewood Acres, which is on both sides of Route 9 in the vicinity of Georgia Tavern Road. The homes are presently served by wells.
At the same the township is installing water lines, a project is underway to install public sewer lines in Freewood Acres. The homes there are currently served by septic systems.
Resident Tina Smilek discussed the bond ordinance that will fund the water infrastructure with Chief Financial Officer Louis Palazzo. The CFO said the general obligation bonds would be funded by taxpayers.
“So we are paying for the infrastructure and the water company is making the money off it?” Smilek asked. “The council is OK with that? That we are paying for something that somebody else is making money off of?”
“OK? No, we are never OK. No, we are never OK with paying more money. No, we are not OK with it,” Deputy Mayor Evelyn O’Donnell said.
Mayor Theresa Berger said Smilek was asking good questions, but said she was not sure if she could answer all the questions.
“How could you vote on this (ordinance) if you cannot answer these questions?” Smilek said.
There were two representatives from the water company in attendance, engineering manager Elliott Schwartz and engineering project manager Kevin Rodier.
Schwartz said he was not in attendance to answer questions. He said he was in attendance to support the ordinance and to provide the council and residents with a handout from the water company.
Palazzo said he researched various ways of financing the project, but said because New Jersey American holds the master water permit, any financing had to go through the company.
“With the (Freewood Acres) sewer project going on and the roads being opened now, and having the ability to do this, the only viable option was to go and get a market rate,” he said during a discussion regarding financing.
Smilek said she is in favor of the Freewood Acres water project, but has a problem with who is paying for it and who is profiting from it.
“We are paying for the (water company’s) infrastructure, we are going to get an increase in water rates and we are all going to pick up the expense for it is basically how it works,” she said.
Palazzo said officials are permitted through the bond law to make a capital contribution in order to complete the project.
“Yes, the township is not going to own the water line at the end of the day,” Palazzo said. “It is an improvement for the area.”
The CFO said this method of financing the water project was the last resort for Howell.
“With the the sewer project commencing, and not wanting to reopen the roads to put the water lines in, and wanting to do it in one continuous package, time became of the essence,” Palazzo said.
“We tried very hard to secure some alternative kind of funding because New Jersey American is going to be the owner of the water line (and) it presented many challenges in trying to come up with a viable solution,” he said.
Smilek said she was disappointed in the deal, but knew there was nothing Howell officials could do about it.
Berger said residents of Freewood Acres would benefit from the new infrastructure.