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Reasonable Rates —


Rates have increased in many neighboring communities where water has been privatized or taken over by their local town councils, disproportionately affecting low–income families and small business owners.

Rate Stabilization vs. Pay–For–What–You–Use:

In an article in the Suburban [October 22, 2009], residents expressed concerns regarding "rate gouging." These residents claimed that they were being billed for water that they did not use a "minimum bill" ($70.00 for first 10,000 gals.).

Water utilities use different methods of billing their customers. The two most common are rate stabilization and pay–for–what–you–use. In the very same article, Hazlet was mentioned as a town that absorbed its water utility. Hazlet also uses the pay-for-what-you-use rate billing practice.

Side–by–Side Comparison:
OBMUA

$70.20 for 6,000 gals.
(minimum bill)
Hazlet

$2.00/1,000 gals. [1st 10,000 gals.]
$100.00 delivery fee

In Hazlet, before a customer fills their first glass of water, they are billed $100. If they use 5,000 gallons of water, their bill is $110, an increase of more than 50% compared to the Old Bridge MUA.

Typically towns that utilize "pay–for–what–you–use" have a delivery charge that ranges from $75 to $125 and rates range from $2.00 to $4.00 per 1000 gallons for the first 10,000 gallons of water used. These rates then increase 25% to 50% for every 10,000 gallons of water thereafter.

The Old Bridge MUA commissioned a study to compare what would be better, the current practice of rate stabilization or "pay–for–what–you–use." The study concluded that residents paying the "minimum bill" would see a significant increase in their water rates if the billing schedule was changed to "pay–for–what–you–use."

Those residents that voiced concerns about their rates are not the victims of "rate gouging," but rather the beneficiaries of rate stabilization. The Old Bridge MUA also offers a discount for seniors who apply and qualify for such a discount.

Sayreville, another town that assumed control over its water utility is now considering increasing water rates 13%; all because they suffered a "decline in consumption" from 2008 to 2009. Old Bridge suffered the same "decline in consumption" as Sayreville, and is not seeking a rate increase.

Back in November 2009, Sayreville originally proposed a 40% increase in water rates. Why the disparity? Simple. Sayreville will wind up splitting the difference between water rates and property taxes. Either way, the property owner will pay in the end!

In the past three years, the Old Bridge MUA has not increased its base rate. How could this be? The MUA uses rate stabilization to keep rate increases in check.

If the residents of Old Bridge allow the mayor and council majority to take control of the Old Bridge MUA, they will suffer the same fate as Sayreville. If they adopt the same billing practice as Hazlet, residents will see an immediate increase in their bill. This is bad business, it's bad politics and most of all it is bad for the residents and small business owners, saddled with increasing rates.

Wastewater Rates:

When discussing wastewater, we first have to define what wastewater is. Wastewater or sewerage not only refers to what is flushed or goes down the drain, it also refers to rainwater and snowmelt.

The Old Bridge MUA is not a wastewater treatment system, but rather a wastewater collection system. This saves on treatment costs. Wastewater rates that the MUA charges are determined by the Middlesex County Utilities Authority (MCUA) and takes into consideration the wastewater collected by the sanitary and storm sewer system.

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