The city of Bayonne is planning to pay for improvements to an aqueduct that runs from North Arlington to Route 7 and into Bayonne, which the city relies on for its water supply. The city council unanimously voted to issue $11.7 million in municipal bonds at its last meeting on September 12 to cover the repairs, which the city’s chief financial officer, Terrence Malloy, said included fixing various leaks along the line. The cost incurred by the city would be spread out over 30 years, at $350,000 each year.
The goal of the repairs is to ensure that enough water is on hand for developers to use and to prevent further water rate increases for residents, according to Malloy. Suez is contractually obligated to allocate $2 million per year for infrastructure repairs. The city’s bonding out for the improvements makes Suez eligible to participate in the New Jersey Water Bank, a partnership between the NJ Department of Environmental Protection (NJDEP) and the NJ Environmental Infrastructure Trust, which provides low-cost financing for water infrastructure projects. How much of the infrastructure repair will take place in Bayonne is unclear.
“If it works out correctly, it shouldn’t impact the water rates,” said City Council President Sharon Ashe-Nadrowski.
“It’s not like the water system is in jeopardy tomorrow,” said Malloy. “The aqueduct is leaking, and the leaking is getting worse. If we don’t address that problem, then there will be some kind of catastrophic failure down the line.”
Construction sites need water
Bayonne residents are already on edge about rising water rates after they saw a 33 percent increase in their water rates from 2012, when Bayonne privatized its water utility, to 2017.
The contract between Suez and the city includes a guaranteed rate of return from water ratepayers.
“So, when the expenses exceed the revenue, that causes an automatic [rate] increase,” said Malloy.
Other than possible effects on water rates, the city’s primary concern is that leaks and potential damage could prevent enough water from getting to Bayonne’s real estate developers, who rely on the water supply for construction.
“Every project that comes in, you have to have an adequate water supply to support that project, or you can’t move forward with it,” said Malloy. “We have that supply now and to continue with the development, we’ll have to increase the water supply. It’s far cheaper to fix your leaks than to purchase the water.”
Rory Pasquariello can be reached at roryp@hudsonreporter.com.
