Guidance has been prepared to provide municipalities and their advisors with guidance on the information the New Jersey Department of Environmental Protection (Department) recommends be provided in order to perform its duties under the Water Infrastructure Protection Act (WIPA or the Act) in reviewing a Municipal Certification of Emergent Conditions. The Act requires the submission of a copy of the resolution certifying an Emergent Condition and this document identifies the recommended supporting information that will aid the Department in rendering a timely decision.
If an owner determines that one or more Emergent Conditions exists and that it is necessary to take steps to sell or long-term lease its water or wastewater assets to a capable public or private entity, the owner is required to retain the services of an independent financial advisor to review, analyze, and report on the value of the system, the short- and long-term impact to rate-payers of the cash-flow structure of the proposed transaction, and provide an estimate of any financial requirements necessary to address the Emergent Conditions and to operate and maintain the system. Upon completion, the independent financial advisor’s analysis and review would be transmitted to the owner. Within 10 days of the approval of the report by the owner, the owner shall transmit copies of the report to the Board of Public Utilities (BPU), Department of Community Affairs (DCA)’s Director of the Division of Local Government Services (DLGS), and the Department, and shall make the report available for public review. (See N.J.S.A. 58:30-5.c.)
After the independent financial advisor has completed its analysis, and presented its report to the owner, a public hearing on the proposed Emergent Condition Certification must be held. The owner must provide notice of the public hearing no less than 30 days prior to the date of the hearing. The notice is required to prominently state the findings upon which the certification is based, a summary of the findings by the independent financial advisor, and that the certification is in anticipation of a proposed long-term lease or sale of water or wastewater assets to a capable private or public entity. (See N.J.S.A. 58:30-5.d.)
After the public hearing, and after giving due consideration to the findings of the independent financial advisor, the governing body of the municipality shall, by resolution adopted by at least two-thirds of its authorized membership, certify that one or more Emergent Conditions exist and that the owner intends to sell or long-term lease its water or wastewater assets to a capable public or private entity to address the Emergent Conditions and to operate and maintain the system. A copy of the resolution must be transmitted to the board, director, and Department within five days of adoption. (See N.J.S.A. 58:30-5.e.)
Department Role: The Department plays a limited but important role under WIPA. Within 30 calendar days of receipt of the resolution, the Department must either approve or reject the owner’s Emergent Condition Certification (See N.J.S.A. 58:30-5.e.). Therefore, the submission of supporting information with the Emergent Condition Certification is recommended and will ultimately allow the Department to make an appropriate determination. The 30 day review period will begin when the Department confirms that it is in receipt of the Municipal Resolution Certifying Emergent Condition(s), including certification of Mayor, the Mayor’s designee of the municipality, and a licensed engineer.