Ordinance No. 11-05

Introduced: February 28, 2011
Public Hearing: March 14, 2011
Status: Adopted

An ordinance of the Township of Vernon, Sussex County, State of New Jersey, authorizing the execution of a contract to purchase sewer transmission assets and capital improvements from United Water Mid-Atlantic Utilities Corporation

WHEREAS, the Township of Vernon entered into a contract in 2005 for the allocation of a right to transmit and discharge waste water to the SCMUA plant;

WHEREAS, the Township of Vernon entered into a related contract with Mountain Creek relating to the division of the allocation from SCMUA and the responsibility for the cost of the related improvements and operation of the sewer system;

WHEREAS, the Township of Vernon has been considering the purchase of certain sewer assets from United Water;

WHEREAS, the Mayor and Council have been diligently researching all of the available options to make the proposed Vernon sewer system more efficient and reduce the costs to residents who will be required to connect and to pay future sewer rates;

WHEREAS, the governing body has been in consultation with its professionals regarding the purchase of the United Water Sewage System for nearly a year;

WHEREAS, a public presentation has been made regarding the advantages and disadvantages of purchasing the system;

WHEREAS, the governing body of the Township of Vernon has concluded that the purchase of the United Water Sewage System is in the best interests of the Township of Vernon based on the acquisition of a significant number of rate payers, the ability to control the entire sewer system in Vernon Township, the significant reduction in tariffs that would have to be paid to United Water as a bulk customer and the potential for excess and transferrable allocations;

WHEREAS, the potential purchase of the United Water Sewage System is being coordinated with the creation of a Municipal Utility Authority in the Township of Vernon;

WHEREAS, the creation of a Municipal Utility Authority would separate future utility related costs, including the cost of the acquisition of the United Water Sewage System, from the general tax base;

WHEREAS, the governing body of the Township of Vernon authorized the filing of an application to the Local Finance Board for the creation of a Municipal Utility Authority on February 14, 2011;

WHEREAS, the Township Attorney has advised that the United Water Asset Purchase Agreement would have certain contingencies.

NOW THEREFORE IT BE ORDAINED by the governing body of the Township of Vernon that the Mayor is authorized to enter into an Asset Purchase Agreement with United Water MidAtlantic Utilities Corporation for the purchase of a portion of the assets of the United Water Vernon Sewage Transmission Company and all of the assets of the United Water Great Gorge Inc. for a purchase price of Three Million Seven Hundred Fifty Thousand ($3,750,000.00) Dollars;

NOW THEREFORE IT BE FURTHER ORDAINED that this contract shall be contingent upon:

  1. A forty-five (45) day due diligence.
  2. Certification by the Chief Financial Officer that the funds are available, which will require the issuance of a bond sufficient to pay the purchase price.
  3. The approval of the Local Finance Board for the creation of a Municipal Utility Authority.

Effective Date. This Ordinance shall take effect upon final passage and publication as provided by law.