Have you heard about the water utility debate? This is what’s going on

Photo: Jeremy Moyer/For the AnchorPhoto: Jeremy Moyer/For the Anchor

KEYPORT — To keep the water running, the Borough Council will need to approve spending about $3 million to upgrade and repair the water plant, according to borough engineers. But there’s a small and vocal minority that wants to scrap the whole utility and sell it to a private company.

First you need to know that most of the water used by Keyport residents and businesses is purchased through Shorelands Water Company to the tune of about $3,650 per million gallons. Shorelands supplies water to borough customers through the fall, winter and spring. The borough’s wells only supply customers with water during the summer.

Even still, the water that is pumped from the wells during the summer cannot meet the demand from Keyport’s water customers. The upgrade will allow more water to be pumped from the aquifer during the summer.

EXPLAINER

The purchase from Shorelands cost $486,450 this year, according to figures provided by Stephen Gallo, the borough manager. If the upgrade is made in full, the 2018 purchase is expected to be about $235,000.

A chunk of that savings is going to eaten up by the debt payment on a 40-year USDA loan to the tune of about $114,048 each year. That leaves about $90,952 in savings of today’s dollars.

If the council decides not to go through with the full upgrade, there are repairs that need to be made because no major work has been done at the plant since the 1970s.  The cost of those repairs is estimated  at about $1.5 million. If the basics are completed it will not provide the borough with an additional water supply.

What the customer needs to know is how any of this work will ultimately mean for the water rate, and that’s something Gallo can’t answer. This is how he answered the question:

“The Shorelands savings is a moving target since water rates are likely to rise over time,” Gallo wrote in an email. “It’s diccicult (sic) to relate a decrease in the cost of our water purchase to the rate since there are many unallocated expenses that are bundled into the actual rate.”

That said, Gallo is making his plans based on a referendum held in 2003 on the very question of whether to sell the water utility. The vote was 1,401 against and 145 for selling — a 10 to 1 margin.

Gallo has said that vote indicates that the voters of Keyport want to keep the utility and invest in its continued operation. He said the borough has done that by installing improved water lines and mains throughout Keyport during the past decade. The upgrade at the plant is an extension of that existing policy.

Now, that small and vocal minority is really just two people: Michael Lane and Ed Burlew.

Lane is a gadfly with a fiscal conservative bent, but he also wields and encylopeadic knowledge of the borough’s codes and regulations. He writes an email newsletter in which he documents the council’s spending and how the planning board votes on major developments. (He’s used that research to force a hearing on the expansion of Brown’s Point Marina’s docks, but that’s another story).

Burlew is a long standing businessman, property owner and general contractor in the borough. One of his properties is the old Strand Theater, which he converted to a mini-mall. He owns Burlew’s Seafood and Steak at the back of that building. He has been in long-standing opposition to the Democratic majority sitting on the council.

Now, despite their repeated protests during the past few weeks, they have not been able to garner much other public support behind their call for a sale.

Lane wanted a representative from New Jersey American Water Company to speak to the council about the benefits of selling. Gallo rejected that idea because: “They aren’t going to buy it because they like us.” The implication is that private water companies want to increase their customer base, and purchasing the borough’s small water utility would not be done to benefit anyone in Keyport.

Gallo , however, did invite a lawyer familiar with the process of selling public water utilities to speak to the council. On Tuesday, Joseph Baumann, of McManimon, Scotland & Baumann in Little Falls, explained that the only way to sell the utility was to hold a referendum or convince the state Department of Environmental Protection that an emergency exists. If the DEP allows a sale without a referendum a petition signed by a small group can force another referendum to block the sale.

The number of signatures required is 15 percent of the total number of people who voted in the last election, and fewer than 1,000 of the more than 4,000 registered voters turned out this year. So, just a handful of people can force a referendum at this point.

From Lane and Burlew’s standpoint, the debate isn’t over. They still want the council to hear from representatives of private companies, and Gallo is still unconvinced.

Editor’s note: An earlier version of this story omitted a first reference to Stephen Gallo. The story has been subsequently updated.