Audubon Considers Sewer Service Privatization


Searching for added revenues to repair aging roadways or manage debt, the borough will soon take bids on the ownership and upkeep of its sewer infrastructure.

By Matt Skoufalos

"Pipes." Credit: Barta IV:

“Pipes.” Credit: Barta IV:

Water service in the borough of Audubon has been provided privately for so many years that even Public Works Supervisor David Taraschi can’t remember a time in his 36 years on the job when it wasn’t.

Sewerage is handled by the town itself, however, and as just one aspect of a local infrastructure that is showing its age, questions of the cost associated with maintaining the system have led local leaders to consider the benefits of just selling it off altogether.

Taraschi said that Audubon serves about 3,000 properties, the “vast majority” of which have their own sewer connections. Sewer rents for a single-family home are $120 annually, which he characterized as “very reasonable” in comparison with rates paid in neighboring communities.

But if the system is sold, taxpayers are almost guaranteed to see those costs increase, as any buyer recoups its investment. Increases are regulated by the New Jersey Board of Public Utilities, however, and Taraschi said that the borough “certainly would want to talk about some kind of two- or three-year hold” on prices.

“The question we want to take a look at is what’s the value and what are the pros and cons for the residents of Audubon [of a sale],” Taraschi said. “If it’s something that’s going to benefit the taxpayer, and we can utilize those funds to improve some other infrastructure, we take a look at it.”

Currently, property owners in Audubon are responsible for more than 50 percent of the sewer lines, terms that Taraschi suggested could be negotiated more favorably for residents in a sale.

“We maintain the mains in the middle of the street,” he said. “We don’t do anything from the basement to the mains.”

But a prospective bidder like New Jersey American Water, which owns and operates the Audubon water service—and which recently finalized its purchase of the water and sewer utilities in Haddonfield—could take ownership of the sewer system from the curb, “which would be a decent plus for the homeowner,” Taraschi said.

Jennifer Dawson. Credit: Borough of Audubon.

Jennifer Dawson. Credit: Borough of Audubon.

‘We don’t need to sell it’

Commissioner Jennifer Dawson said the local government hasn’t made any determination other than to examine the possibilities of a sale.

Taraschi has been authorized to post a request for proposals to purchase and operate the municipal sewer system, but what kinds of revenues such a transaction could bring to the borough, or its impact on staffing and upkeep of the local infrastructure haven’t yet been determined.

Dawson expects a report from the Audubon CFO by the first week of August examining the scope of a sale in terms of “employees, equipment, taxpayers, [and]revenue.”

“The ultimate goal is to have the taxpayers not pay any more money and get the same level of services,” she said. “If we’re going to sell it and their sewer fees are going to triple, we don’t need to sell it.”

Likewise, Dawson said the borough has no specific plans for any potential revenues from the sale of its sewer system, nor any ballpark idea of how much it could generate. She did say those dollars likely could be dedicated to things like refinancing municipal debt or lowering taxes.

“Everything was thrown out,” she said. “We are going to let [the bidders] give us information.”

Dawson also said that if the process returns bids that the commissioners feel are worth considering, the question of a sale could be put to a public vote. New legislation enacted by Gov. Chris Christie this February enables municipalities to fast-track the privatization of their sewer and water service without a voter referendum, but that applies to communities in which the infrastructure is in emergent need of repair. Both Taraschi and Dawson say is not the case in Audubon, where the 2015 municipal budget was kept flat at least in part this year by excluding capital improvement plans.

“We talked and brainstormed a little, but we all thought the referendum would be the way to go,” Dawson said. “But we haven’t made any decisions yet.”

“I certainly think that [referendum]would be the direction,” Taraschi said. “This is a significant decision. I certainly couldn’t sell that [the sewer system is]dilapidated.”

That’s not to say it doesn’t need work. Taraschi identified as specific concerns some of the sizes of the mains in town; a section of West Merchant Street is also near the top of his list of priorities for repair. To give a sense of the scope of its upkeep, the cost to improve “a limited area” came in around $1 million.

“It’s an aging, 75-year-old, predominantly clay sewer system that needs attention,” Taraschi said. “It’s a chore to keep it going in spots.”

Audubon Municipal Building. Credit: Matt Skoufalos.

Audubon Municipal Building. Credit: Matt Skoufalos.

‘I don’t think it would have an impact on staff’

Whether the proposed sewer sale represents a broader trend toward the privatization of municipal services statewide—and what those decisions mean for residents of those communities that do so—is a larger question for the borough to answer.

Taraschi acknowledged that in towns where public infrastructure is sold, usually layoffs of public works staff follows, which can result in manpower shortages when it comes time to plow roads, collect leaves, or deal with storm impact. He doesn’t feel those issues would be of concern in Audubon.

“In Audubon, we provide a tremendous service to our residents,” Taraschi said. “We don’t privatize a lot of things. It’s a small town that we give a great service to. I take pride in that.

“A lot of these communities, everything’s privatized, and the issue is as a taxpayer that you’re out of pocket for everything because you don’t get any service,” he said. “I don’t want to be in a situation where I have to pay somebody to chip brush in front of my house.”

If the sale of the Audubon sewer system affected his staffing needs, workers would most likely be reassigned rather than downsized, Taraschi said.

“We don’t treat the sewage anymore, CCMUA does it; and we’ve had some recent retirements,” he said. “I’m probably the next guy up. We still do collect our own trash and recycling. I don’t think it would have an impact on the staff whatsoever.”

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