Review of NJ Senate Bill S72 Regarding State Oversight of Budgets of Regional Sewerage Authorities
- On November 23, 2015
The pending bill, which addresses State oversight of regional sewerage authorities, is intended to cap the budgets of authorities by limiting budget increases, overall and to local units (municipalities), to a 2% cap. The only exception to the 2% would be costs “directly related to a declared emergency, as defined by regulation promulgated by the Commissioner of the Department of Community Affairs.” Unfortunately, the bill reflects a lack of understanding of how sewerage authorities work and could have significant unintended negative consequences for local units. Two examples:
- The bill fails to address increased use by a local unit. If a local unit’s flow increased by more than 2% the authority would be unable to recapture its costs resulting from the increase.
- An unintended consequence of the flow increase issue could be the stifling of growth in local units. Large subdivisions or industrial development would be problematic because the authority would have to deny service to new additions which would create an increase in use greater than 2% or face financial disaster.
The bill, though well intentioned, needs significant revisions to address issues such as those set forth above before it should move forward.