Evesham’s elected officials often refer to residents as the township’s customers, but that phrase would ring truer than ever should council decide to move forward with a proposal to dissolve The Evesham Municipal Utilities Authority and have the municipality assume water and sewer duties.
At the Oct. 6 meeting of the Evesham Township Council, township manager Tom Czerniecki said a question on a recent best practices inventory from the state resulted in township officials analyzing the potential benefits from it assuming responsibilities for water and sewer services.
As it stands, the MUA is a public entity separate from the municipality, funded solely from revenues derived by performing water and wastewater operations for properties throughout the township.
According to Czerniecki, the MUA handles sewer operations for 97 percent of Evesham properties and water operations for 96 percent.
The organization has 55 employees, $171 million in capital assets and an annual budget of $17.2 million.
With his preliminary analysis, Czerniecki said through the municipal government absorbing the MUA, ratepayers could potentially realize a savings of $4.3 million over 10 years through reissuing the MUA’s debt as municipal debt.
Additionally, Czerniecki said utility authorities are required to carry cash reserves for their debt, with the MUA holding $9 million of ratepayer funds in restricted reserves for its $31 million in debt service.
Czerniecki said there would not be a requirement to carry reserves for sewer and water debt issued under the municipal government, as municipal general obligation bonds aren’t required to carry such reserves.
As for the $9 million, township solicitor John Gillespie said there’s no fixed rule regarding what would happen to the funds if the municipal government absorbed the MUA.
“We would have to submit a plan for the use of that money to the local finance board, and they would to have to approve it,” Gillespie said.
Czerniecki also said overlapping operating, auditing, advertising, education and training and risk management savings could lead to annual savings of at least $300,000 without eliminating existing employees.
Czerniecki made a point to note that nothing he was proposing was to be taken that the MUA has not done well managing the township’s water and sewer, but instead the issues were simply functions of having two separate entities.
“As much as we try to collaborate, just the structures don’t make it practical in terms of budget planning and things like that,” Czerniecki said.
Having the two entities under the same management would also make it easier to plan for capital improvements, according to Czerniecki.
“To do a water main project, included is asphalt repairs — there may be a road that we could move up on our priority list if we have enough lead time to plan it,” Czerniecki said.
Czerniecki also noted another potential $100,000 in added value benefits from focusing on managing everything as one entity in the areas of facility maintenance, human resources administration and customer service.
Czerniecki said he and other members of township staff also had experience in other towns where the municipal government handled water and sewer operations.
Should council wish to move further, Czerniecki said it would need to introduce an ordinance to dissolve and refinance all the bonds at MUA, as well as pass a resolution authorizing township staff to prepare an application for the local finance board under the state Department of Community Affairs.
The MUA would also need to pass a resolution certifying debt, assets and liabilities, and township council would also need to approve the application prepared by township staff, along with all related studies and draft legislation.
The local finance board would then potentially approve the package, and only then could the township fully approve the original dissolution ordinance.
Mayor Randy Brown said the Evesham MUA has served the township well with outstanding leadership, and said he did not believe that would change if the municipal government absorbed the entity.
“If there’s millions of dollars that are sitting there that don’t need to be sitting there because you can bond differently as a municipality and you move over, so be it,” Brown said. “I’m a proponent of this, I studied this, I’ve advocated for this.”
During the meeting’s public comment portion, several members of the public criticized the meeting’s agenda for not specifically mentioning the presentation on the potential Evesham MUA dissolution, but Brown argued that many more public discussions and public hearings would take place at future meetings.
Councilmember Ken D’Andrea said he wanted to ensure that absorbing the Evesham MUA didn’t follow the situation of when a previous council had the township take ownership of the Indian Spring Golf Course, and then used golf course money to plug holes in the township’s budget.
“It’s always good to take a look, but there needs to be a lot of controls,” D’Andrea said. “We don’t want to have the same situation happen.”
