RVE Recognized for Historic Egg Harbor City WIPA Utility System Sale Project

RVE provided engineering services to the City of Egg Harbor for the evaluation and the sale of its utility system. The efforts, led by RVE's Ryan McGowan, PE, PP, CME, CFM, resulted in the sale of the system through the Water Infrastructure Protection Act (WIPA), the first completed through this act in the State of New Jersey. This historic sale was recently featured in NJ Municipalities Magazine.

Initially, RVE was tasked with examining the potential sale of the system. The City had completed major improvements to their system, but increasing debt service along with reduced revenue and increased regulatory requirements were making ownership of the utility difficult for the City. The City was unsure of their need to sell the system or how the resultant sale would impact the utility. The City authorized RVE to complete studies of the system including a Water and Sanitary Utility Asset Assessment, a Water and Sanitary Utility Rate Study and a Water and Sanitary Utility Valuation. The analysis indicated that while the City had completed upgrades, the age of the system along with operational issues, would require additional improvements and subsequent rate increases over the next 20 years. In addition, the valuation by the Original Cost Less Depreciation (OCLD) method indicated that the value of the system would not defease the current debt service of the utility.

RVE presented the WIPA option for sale to the City. This method of sale had not been attempted/approved by the NJDEP; however, the methods of valuation allowed under the WIPA process would result in higher value of the system that may cover the debt service of the City. Accordingly, RVE completed the valuation, which resulted in a utility system value greater than the debt service for the utility. Accordingly, the City authorized RVE to submit for an Emergent Condition determination from the NJDEP.

The sale through the WIPA process and Emergent Condition determination has stipulated deadlines and timeframes which must be followed. These deadlines and regulatory requirements were outlined for the City, and the required resolutions, regulatory public participation and NJDEP WIPA documents were prepared and submitted. During the NJDEP review of the Emergent Condition Documents, RVE answered questions and provided any additional clarification. The City was the first utility to receive approval to sell the system via the WIPA process. Since the approval, RVE has assisted the City with the remainder of the regulatory requirements for sale of a system under the WIPA process including, RFQ, RFPs, bidder interviews, contract negotiations and contract development.

Check out the recent article in NJ Municipalities Magazine to learn more about the sale process.