Council Moves To Raise Water Rates, Impose New Fee

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An ordinance amendment that calls for a 15 percent increase in water rates was introduced on first reading at the March 14 Township Council meeting.

The hike would be the first such increase in about a decade, and caps a conversation started at least six years ago.

Township water customers pay a minimum charge of 10,000 gallons of water per quarter. Should the amendment be passed, the minimum quarterly charge for residential water customers would increase from $56.60 to $65.10, a $34 yearly increase.

Mayor Phil Kramer said the median residential charge – meaning half are higher and half are lower – would increase by about $100 a year.

The increase is necessary, Kramer said, because the township is paying more for water from its suppliers than it charges. In fact, he said, the rate has increased 19 percent from the last time water rates to township customers were increased.

“That is not sustainable,” he said.

Two of the township’s water suppliers – New Brunswick and New Jersey American Water – are each raising their rates by 3.5 percent, Kramer said.

Kramer said the head of the township’s water utility suggested a 25 percent rate increase, but the Council’s Financial Oversight Committee did not agree with that.

“The financial oversight committee met and thought that was too much of a jump all at once,” Kramer said. “Our recommendation to the full Council is that rather than increase the cost of water by 25 percent, we’d be increasing it by 15 percent.”

The Financial Oversight Committee was also advised to impose what’s called a Distribution System Investment Charge, which would go to maintaining the water system’s infrastructure, Kramer said.

The DSIC charge is calculated on the amount of water a customer actually uses, rather than having a minimum charge attached to it, said Township Manager Robert Vornlocker.

The proposed amendment sets the DSIC fee at $1 per 1,000 gallons of water used.

Kramer said the hope is that the increased water rates and the addition of the DSIC charge will be enough to absorb the water supplier increases.

“Our hope is that we won’t have to increase it again, but I can’t guarantee that,” Kramer said.

This is not the first time the Council has talked about adding a DSIC charge. In December 2018, the Council tabled a proposed ordinance that would tie water rate hikes to customers to water rate hikes charged by suppliers, and establish the DSIC charge.

The ordinance was pulled then at Vornlocker’s request. The Township Manager said that he might have been able to devise a better way to deal with water supplier rate hikes. The idea lay dormant until the March 14 meeting.

Kramer said the Council knew that water rates were going to have to increase for about the past two years, but that members “didn’t have it in our hearts” to raise rates during the Covid pandemic.

There’s never a good time to raise rates, Kramer said, “but we have to keep our utility solvent.”

“Eventually we want to get to the position where the price of water is automatically linked to the price we pay,” Kramer said, harkening back to the abandoned 2018 ordinance.

A public hearing on the ordinance amendment is set for the Council’s March 28 meeting.

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