A year after Kearny signed up Suez to take over the town’s water utility, town officials think they may be leaking money from the deal.
At its meeting on June 27, the municipal governing body grilled Suez Water project manager Steven Houst on various aspects of the company’s service contract for which Kearny is paying about $1.8 million annually — but that figure could rise if labor costs go up.
Suez was awarded a 5-year contract that began July 1, 2016 and that runs through June 30, 2021.
Additionally, Suez pockets $344,000 a year to handle water billings and collections.
From its annual service fee, Suez is obliged to set aside an “annual maintenance cap” of at least $550,000, “to provide for necessary predictive, preventative, routine and minor corrective maintenance and repairs.”
Asked to elaborate on the nature of the town’s fiscal concerns, Mayor Alberto Santos emailed The Observer a response saying, “It’s a calculation issue on how repair costs are allocated.” He referred a reporter to town CFO Shuaib Firozvi for more details but, as of press time, Firozvi couldn’t be reached.
The agenda for last week’s meeting listed a resolution “authorizing the execution of an amendment to the agreement with Suez Water Environmental Services, Inc.” to have been introduced by Second Ward Councilman Richard Konopka, who sits on the council Water Committee.
Later, however, the resolution was pulled — for now at least — for further review by the mayor and council in consultation with its professional experts.
At the meeting, Houst – who apparently came prepared to deal with issues previously raised by the town — said that since the utility’s takeover by Suez, “overall, things are going well,” but he acknowledged that the Gate House — a vault off the Belleville Turnpike that houses key water line connections to the area — is “an area of concern” due to its age.
Michael Neglia, the town’s engineer, maintained that the Gate House should be Suez’s “highest priority” in Kearny. “It needs to be repaired,” Neglia said, and he estimated it would take $1.5 million to do the job.
Another concern voiced by Mayor Santos was whether “some industrial [water] meters should be replaced.”
Santos also wanted to know why the company wasn’t coordinating with PSE&G before tearing up “newly-paved” streets to re-set a water valve or fix a hydrant and whether it had restored customer service in the old Kearny Water Dept. office on Elm St. at Laurel Ave.
Houst said the company was taking care to see that there was staffing in place to handle billings at the site instead of referring customers to an out-of-town location and he said that Suez personnel have been instructed to call him before opening a newly paved street to get an OK.
Houst said Suez’s contract calls for the company to routinely check water valves around town and that, to date, 43 — of a total of 500 — have been eyeballed by Suez crews.
A problem that has come up, Houst said, is that when a street is paved, some of the asphalt goes into the boxes that house the water values, “so we go in and clean them.”
Meanwhile, in another infrastructure matter, the council was slated to vote on a final design concept for the turf remake of the Gunnell Oval but Santos said the governing body “needs a little more time to research the portable fence issue” and preferred to have all council members in attendance for the vote. (Second Ward Councilman Peter Santana was absent due to a scheduling conflict.)
The mayor said it’s likely a full council will be possible for a vote on the design on July 11.
Once that decision is made, Neglia said he’ll need “eight to 10 weeks” to finalize specifications so that the town can solicit proposals by the end of September and award a contract to fill in the site above the flood plain, install a pump and drainage system and install turf fields and other improvements by November.
If that scenario is met, Neglia said that work could start sometime “between Thanksgiving and Christmas” and that the project could be completed within one and a half to two years, which would mean that the Oval would be out of service for “two springs, two summers and two falls.”
To fill the playing space gap, Santos said town officials would “see if we can do improvements at other [municipal recreation] facilities to expand our capacity or use other towns’ facilities.”
Neglia said he’d “guard against taking on another turf project” at any other available town fields due to time factors. But the engineer suggested lighting the back of Harvey Field as an alternative at a cost he projected at between $400,000 and $500,000. “That shouldn’t be time-consuming or overly difficult to achieve,” he said.
In other business, the governing body voted to:
• Extend its contract for the collection of trash and recyclables with Cali Carting Inc. for one year, from July 1, 2017, to June 30, 2018, at an annual cost of $1,460,000 – an increase of about $50,000 from the current contract, according to CFO Firozvi.
• Contract with D & L Paving Contractors of Nutley to repave the length of Peden Terrace and a section of Davis Ave., between Wilson Ave. and Dukes St., for $553,842 as part of the 2016-2017 Phase B road program funded by N.J. Department of Transportation. Neglia said the Peden Terrace job would include striping, handicap ramps, work on a blinking light and “a little bit of road reconfiguration.”
• Issue up to $10 million in tax anticipation notes of 2017 to tide over the town while preparing and sending out estimated third quarter tax bills, pending a resolution of the town’s litigation with the state over unfunded meadows tax sharing revenues.