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RVSA Discusses Progress at Scotch Plains Council Meeting

Members of Rahway Valley Sewage Authority answer questions at last night's council meeting.


While the Rahway Valley Sewage Authority(RVSA) takes further steps in the litigation process, Scotch Plains commissioner to the RVSA, Bob LaCosta, brought in Jim Meehan, Executive Director and Robert Materna, Secretary Treasurer, of the RVSA to last evening's Council Meeting.

Each council member was able to ask any questions on the progress that the RVSA is making.

Councilman Glover asked Meehan and Materna to summarize their expectations of what Scotch Plains, along with the ten other municipalities involved, should expect.

Meehan explained that he is very optimistic that all towns will see a significant return.

The route the RVSA chose to go was to form a public/private partnership with the use of the sludge dryer and co-generator, both which were part of the 225 million dollar improvements made by the RVSA, 95% of which was mandated by the Judicial Consent Order (JCO).

When the RVSA visited the council last year, Councilman Glover suggested that with the costs of litigation, an option might be to just walk away and scrap the equipment.

Meehan noted that after hearing this suggestion from Glover and it also being mentioned by other councils, they did look into this option but felt they would make at most one million dollars, if that.

Councilman Vastine asked for a clarification that no one town's input was greater than the other's, which Meehan replied that everyone had equal say.

Vastine also asked if the decision was of the majority on moving forward. 

After carefully looking at the numbers, Meehan and Materna presented the idea for a Request for Proposal (RFP) for a public/private partnership to the 11 member board, who voted 10 to one in favor of it.

Meehan noted "I would like to use the equipment." 

They are currently pursuing RFP's for the sludge dryer and the co-generator.

According the Meehan, the RVSA is trying to mitigate their damages by getting use out of the equipment, which will lessen the amount they will seek in court.

What Meehan and Materna estimate, which Meehan is very optimistic about, is that over the course of the next 20 years they will generate 10 to 15 million dollars. 

Scotch Plains, being 6.62 percent of the overall 11 members, is looking at roughly $500,000.

As Councilman Saridaki pointed out, worst case scenario would be that Scotch Plains will receive $30,000 a year for the next twenty years. Meehan agreed.

RVSA, with help of the New Jersey Environmental Infrastructure Trust (NJEIT), also refinanced their bonds, including a 20 year bond, which brought in 6.5 million dollars over the next 11 years. 

Scotch Plains' share of that bond will be $430,000 spread out from 2013-2035.

Materna noted that the public/private partnership is a fairly new concept that the State of New Jersey is encouraging and further looking into for waste/water treatment facilities. 

Meehan added that the public/private partnership is only for a small portion of the facility, the sludge dryer and the co-generator, and that they will not be seeking any further steps towards privatization. 

 

If you would like more information, The Scotch Plains Fanwood-Times covered the issue of Rahway Valley Sewage Authority and the 11 towns affected by the debt.

http://www.goleader.com/11jun02/11jun02.pdf - June 2, 2011. Article is located under the picture in the right corner.

http://www.goleader.com/12sep27/12sep27.pdf - Sept. 27, 2012. Article also located under the picture in the right corner.

Nicole Bitette October 02, 2012 at 08:55 PM
Hi Holden and Jenni: I'm sorry you guys are confused, I thought this was an ongoing issue in SP for readers that is why I posted it. I'll add more of the background information I have (to my knowledge) to the full article but for now here's more info... Scotch Plains and 10 other towns use Rahway Valley Sewage for their waste... Rahway Valley Sewage Authority (RVSA) has 225 million dollars of debt due the upgrades the Judicial Consent Order required of the facility. Scotch Plains' percent out of the 11 members is 6.62 percent of that debt. In order to see a return of money, to lessen all of the towns debt the RVSA is implementing the above in the article, such as the Request for Proposals (RFP) on use of their equipment such as the Sludge Dryer and Co-Generator, as well as the selling of the bond for a return of 6.5 million over 11 years, which is 430,000 from 2013-2035.
Michael Lewis October 02, 2012 at 09:00 PM
If one reads last week's SP Times (9/27), a certain amount of money associated with the refinancing is being allocated to the cogeneration partership. How much and why - given that the RVSA already owns the facility for better or worse? And do the bonds associated with the refinancing have a significant back-ended balloon payment (ie, is any current stability in cost flow-through artificial in nature)? Or am I simply reading the article wrong (a distinct possibility)? By the way, burying the costs of the cogen facility (roughly 25 million although I have seen higher figures) into overall debt levels carried by the RVSA was a nice bit of sleight-of-hand.
Nicole Bitette October 02, 2012 at 09:12 PM
Hi Michael: They did address the costs of the dryer and cogen they said the dryer was roughly 5 million and cogen roughly 20 million so you are right with that number. In the SP Times article, what do they say about the refinancing being allocated to the cogeneration partnership? I don't see it, well can't find that.
Nicole Bitette October 02, 2012 at 09:16 PM
If you would like to scroll the past SP Times articles on the RVSA. Here are the ones Michael kindly posted on another Patch article. http://www.goleader.com/11jun02/11jun02.pdf - Back from 2011 - article under right corner picture http://www.goleader.com/12sep27/12sep27.pdf - Sept 27 article Michael is referencing, also under right corner picture.
Nicole Bitette October 02, 2012 at 09:32 PM
Holden, Jenni and Michael: Please let me know what numbers you are confused on and I can see if I can reach out again for a better explanation. Basically all of these numbers are the projected amount of money the RVSA is hoping and calculated to get back to all 11 towns (and then broken down to what Scotch Plains share would be) by looking for private companies to use the Sludge Dryer and Co-Generator for the next 20 years. Except for the bond, which has already been refinanced for 6.5 million dollars for the next 11 years between the 11 towns.

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