After months of discussion across multiple meetings, Evesham Township Council has taken its first votes toward dissolving the Evesham Municipal Utilities Authority and reorganizing the entity as a department under the municipality.
At its Feb. 9 meeting, council approved the introduction of an ordinance to dissolve the MUA, the introduction of an ordinance permitting the township to refinance MUA debt as municipal debt, a resolution to submit an application for dissolution to the state and a resolution approving the findings of a financial advisory report related to the dissolution.
However, the two ordinances officially dissolving the MUA and refinancing its debt will only move forward for a public hearing and final vote by council if first approved by the Local Finance Board under the state Department of Community Affairs.
Evesham Township manager Tom Czerniecki said that application could be heard by the LFB as early as its March 9 meeting. If the LFB approves Evesham’s application, the public hearing and final vote on the dissolution and refinancing ordinances could be set for council’s March 22 meeting.
The MUA-related ordinances and resolutions passed at the Feb. 9 meeting fell along a 3–2 vote margin, with Mayor Randy Brown, Deputy Mayor Ken D’Andrea and Councilman Bob DiEnna voting yes each time, and Councilwoman Debbie Hackman and Councilman Steve Zeuli voting no.
The votes came after Czerniecki once again presented a financial case for the township to assume water and wastewater duties, noting he believed the township could save nearly $11 million over 10 years by dissolving the MUA.
With an $18 million annual operating budget, 55 employees and about 16,000 water and wastewater customers, the MUA operates as a public entity separate from the municipality and gains funding only from its ratepayers.
Czerniecki said $4.3 million in savings would come from reissuing MUA debt as municipal debt, in addition to savings from overlapping operating expenses, consolidations of open personnel positions and freeing up $9 million in ratepayer funds held in restricted reserves, which is required of the MUA as a public entity.
Czerniecki also said if the township were to take over water and wastewater operations, it would codify current MUA policies of setting aside $1.5 million for emergencies, $2 million for pay as you go capital projects and $3 million for cashflow purposes.
He also noted that no employees would lose their job as a result of the dissolution, and if the township maintained a steady level of debt over the next 10 years, the township could increase the number of projects it was able to carry out.
After the presentation, Brown described the vote for dissolution as one of the easiest decisions ever placed before him as a township official. While he praised the work of the MUA, he said the savings that could be realized from dissolving the MUA was what was best for the community.
“We’d increase of the amount of capital, we’d increase the amount of workload, and we’d increase the amount that we can spend as we move forward,” Brown said.
D’Andrea said he was voting in favor of dissolution after examining areas such as MUA debt, MUA surplus, operational efficiencies that could come from dissolution, MUA personnel and more. D’Andrea said he had researched other townships across the state that had dissolved their MUAs, and he ultimately agreed with the information Czerniecki had presented throughout the process.
He also noted that his voting yes was only the first step of a process, and the state would now be able to review Evesham’s plan and come back with positive or negative feedback.
“Given all of that, I will be voting yes to allow that next step to occur in this process,” D’Andrea said.
DiEnna also praised the work of the MUA, but said the township didn’t just “wake up one day” and decide to dissolve the MUA without doing the necessary research. He noted the exercise of looking into whether the township should dissolve its MUA was a process encouraged and ultimately approved by the state.
“You can’t pick up a newspaper, you can’t watch television, you can’t be a student of the times and not know that there is an outcry for the reduction in the size and cost of government, and that’s what this is.” DiEnna said.
Zeuli said he was voting no because the MUA was a good entity that had done all that was asked of it, and he didn’t want give the MUA what he believed was effectively a vote of no confidence before the township has actually finished a takeover plan and had it approved.
“The process I think kind of lends itself to giving a good authority, a good entity, a lame duck status, and I don’t like it,” Zeuli said.
Hackman also praised the work of the MUA, and justified her votes against dissolution by saying she was worried the township’s credit rating would be negatively affected by assuming the MUA’s debt.
“We have as a township probably some of the lowest rates in our area for our MUA and that doesn’t happen by accident,” Hackman said. “Our MUA does a great job, so I asked myself why we would want to take on all the debt of the MUA and add it to ours.”
Brown questioned Hackman’s reasoning, as it went against that of a financial advisor present at the meeting who said bringing debt wouldn’t affect the township’s credit rating as long as the utility maintains a self-liquidating status, which was part of the municipality’s takeover plan.
Should the LFB approve the MUA dissolution, a four councilmember super majority will still be required to move the dissolution of the MUA forward, as four out of five of council’s votes are required to assume the MUA’s debt.
