UPDATE: Stop the Sale lawn signs are in!!!! And, Volunteers are needed between now and Election Day.
Call or write Charlie Kratovil: 732.993.9697 cell, or ckratovil@gmail.com for both.
Over the last week, a number of very well-written and well-informed Comments to some of my posts have been written by William Pyle. He describes himself thus: “A while ago I worked for a municipally owned water utilty and I continue to maintain contact with some experienced water professionals. We have been concerned about the efforts to mislead the voters by the unsupported statements regarding the anticipated revenue and expenses and the condition of the expenses to maintain the assets that would be sold. We understand that this is more of a political campaign rather than an economic or engineering study that will lead the voters to the correct decision. However, we hope that having accurate information, in at least some places, will help the voters make the right choice.”
Since his comments do contain a tremendous amount of relevant and pointed information, I am going to pull some of the Comments up top here, for your viewing pleasure. This first one, from two days ago, on the incredible profits NJAW stands to make from their water sale to our current suburban customers. Emphasis and paragraph breaks are mine. Thanks, William!
The BPU order authorizing the sale of the assets allows NJAW to bring the rates used in the Townships up to the rates that exist in the NJAW service area that includes Lawrence Township, Princeton Township and Princeton Borough. NJAW will be allowed to do this over the next three rate increase requests that if files. It could certainly do this within the next five years since it begins preparing its next rate case as soon as the present one is finalized.
Keep in mind that the rates that will exist in five years will be greater than the rates that exist today. Applying the rates that exist in Lawrence Township reveals that NJAW will receive about $28 million from Township customers. This includes revenue from water sales of about 4 billion gallons ($18.5 million), fixed service charges ($5.4 million), private fire protection charges ($1 million), public fire protection charges ($2 million), miscellaneous revenue ($.5 million). Remembering that NJAW will only pay the City $9.6 million plus $2.2 million or $11.8 million, that will leave NJAW $16.2 million to maintain the pipes and other facilities.
The City says that it costs $4 million to do that. NJAW could do it for that and probably less. That only leaves about $12.2 million for NJAW to pay debt, pay dividends to stockholders, pay taxes and do whatever it does with what is left over. If half of the $80 million is financed with debt, the annual payment would be about $3.4 million (6% for twenty years). Stockholder dividends at today’s rate would be about $1.68 million (4.22%). Combined that is about $5 million.
That leaves about $7.2 million. Not a bad return on an $80 million dollar investment that costs you only $5 million a year (debt and dividends).
Wow. According to this unofficial, but professionally informed analysis, NJAWC stands to make over $7 Million annually in profit on the water they will buy wholesale from Trenton for around $12 Million per year. And that’s even after stockholder dividends.
NJAWC should re-name their committee. Rather than “TrentonYES,” they should call themselves “Sweet Deal for Us? Hell, YES!!”