Hopewell Borough Council members have advanced terms of a contract proposal with New Jersey American Water (NJAW) on the potential sale of the borough water system.
The Council’s unanimous vote on March 20 to approve the proposed contract starts the next stage of the process on the potential sale as the state Board of Public Utilities (BPU) will now review the proposed contract and determine if they grant approval.
Additionally, the Division of Local Government Services in the New Jersey Department of Community Affairs (NJDCA) must also review and approve the contract.
Should the BPU and NJDCA’s Division of Local Government Services give its approval on the contract, Hopewell Borough voters will have the ultimate say on whether a potential sale of the water system goes through with a referendum ballot question in the November 2025 general election.
Mayor Ryan Kennedy said with the Council advancing the contract terms, it starts the education and discussion process in the community over the next couple months until November.
Since the process began in 2024, borough officials have held an open slot each regular council meeting for updates and discussions on the agenda regarding the water system and has held special meetings.
Hopewell Borough’s water system has 763 connections, serves about 2,000 people, and has 10.5 miles of water mains. Between 38 to 40 million gallons of water are used annually from the system, which serves an area of about one square mile in the borough.
The current source of water from the borough’s water system comes from well No. 4 and an existing interconnection with NJAW. Well No. 6 in the system has not been operating in the borough since 2000 because of naturally occurring arsenic that was above the New Jersey Department of Enviornmental Protection (NJDEP)’s maximum containment level.
Hopewell Borough sealed Well No. 1, No. 2, No. 3 and No. 5.
In the contract, NJAW would pay the borough $6.4 million for the water system upon closing. However, the borough would first have to use the money from the sale to pay down debt brought on by the water system.
The remaining funds would then be put towards paying down the borough’s municipal debt of $7.2 million.
The water company would also refund the borough up to $150,000 in transaction costs such as engineering and legal consultant costs.
NJAW within five years of the closing commits to executing $7 million in capital improvements to the system, which include improvements to the system’s distribution and storage system. They will also transition the borough’s current customers to the NJAW rate system.
In 2024, the NJDEP determined that the borough qualified for the WIPA (Water Infrastructure Protection Act) process with emergent condition No. 3, which states “the present deficiency or violation of the maximum containment levels established pursuant to the Safe Water Drinking Act concerning the availability or potability of water, or concerning provision of water at adequate volume of pressure.”
The WIPA process, which the borough is currently under, authorizes certain owners or wastewater systems to enter into long-term lease contracts or sell their water or wastewater assets to a private or public entity.
To address emergent condition No. 3 and remediate polyfluoroalkyl substances (PFAS), man-made chemicals in the system, NJAW would disconnect Well No. 4 and associated water treatment facilities from the borough’s water system, according to the contract.
“NJAW has agreed upon closing to disconnect Well No. 4 and bring the borough’s water supply immediately into compliance with NJDEP standards for PFAS, which satisfies the emergent condition that we had with our water system,” Kennedy said.
The company would increase flow and supply of water from NJAW’s existing interconnection with the borough to meet the supply needs and maintain fire suppressant pressures and supply.
NJAW would assess the need for Well No. 4 and No. 6, should they determine no need the well-house structures and well assets will be transferred back to the borough.
New Jersey American Water has agreed to – on closing – implement water rate schedule A, which will provide for significant rate relief, said Kennedy noting it is a schedule Princeton and Montgomery residents pay.
The company would also replace lead service lines by July 2031.
“They have to comply with requirements to remove all lead goosenecks and galvanized water lines,” Kennedy said.
The potential sale of the water system is not without opposition.
David Waldman, a borough resident, speaking on behalf of Hopewell Borough Public Water Alliance (a newly formed group of borough residents), stressed that the water system once privatized can never be reclaimed.
“We believe that our shared resource should remain public now and for future generations and not belong to a for-profit entity,” he said. “Last summer, 230 more or less residents signed a petition requesting a referendum demonstrating clearly that our community values transparency and informed decision making.”
Waldman noted that they wondered how residents can responsibly vote on the critical issue without first understanding and considering all viable alternatives.
“We are here tonight because we are deeply concerned that the borough council is committed exclusively to selling our water system to New Jersey American Water because it may be an easier option without fully exploring or presenting alternative solutions,” he added, citing that not only will they forever lose control of an invaluable asset resource, they will suffer all the known disadvantages of privatized for-profit water.
“With this in mind we respectfully urge the council to work collaboratively with the community to actively pursue available grants and alternative funding sources to make our water system whole.”
Additionally, Waldman urged borough officials engage with grant writing professionals to secure infrastructure grant funds as communities such as Rocky Hill have done.
Council President David Mackie noted the borough is going to be adding information to the website in the next few months about the potential sale of the water system, the contract, and other additional information.
“We are going to be having public outreach sessions, there are going to be various presentations, copies of those presentations on the website,” he said. “We are going to have plenty of opportunities for public discussion and [we will] keep adding information to the website.”
