What is WIPA?
WIPA stands for the Water Infrastructure Protection Act (Act). In 2015, the New Jersey Legislature enacted WIPA, which allows most municipalities to sell or long-term-lease their water systems without the need for approval through a public referendum if certain emergent conditions exist.
What is a water system?
Many municipalities in the State own water treatment plants and pipes that provide drinking water to homes and businesses in their town. Many municipalities also own and operate a wastewater collection and treatment system that collects sewage and wastewater from homes and businesses for treatment. Under WIPA, a system includes the treatment plants, pumps, pipes, buildings and associated components for drinking water systems and/or wastewater systems.
How is it that my municipality is allowed to sell our public water system?
Municipalities are authorized to sell or lease their drinking water or wastewater systems upon approval of a ballot question in a municipal general election (public referendum). In 2015, the New Jersey Legislature provided an alternative to public referendum by enacting WIPA. WIPA identifies five (5) emergent conditions that qualify a municipality to sell or long-term lease their systems.
What is an Emergent Condition?
WIPA identifies five conditions:
- Emergent Condition #1 – the system is located in an Area of Critical Water Supply Concern I or II, An "area of critical water supply concern" or "critical area" is defined in N.J.A.C. 7:19-1.3 as “a region of the State where excessive water usage or diversion presents undue stress, or wherein conditions pose a significant threat to the long-term integrity of a water supply source, including a diminution of surface water due to excess groundwater diversion.” A critical area is designated in accordance with N.J.A.C. 7:19-8.2. or any future designation or newly added area of critical water supply concern;
- Emergent Condition #2 – the owner of the system is a significant noncomplier, as defined pursuant to the Water Pollution Control Act; the system has been the subject of a formal enforcement action initiated by DEP or is substantially out of compliance with an administra
- tive consent order, settlement agreement, or stipulation of settlement or judicial consent order entered into with the Department;
- Emergent Condition #3 – there is a present deficiency or violation of maximum contaminant levels established pursuant to the New Jersey Safe Drinking Water Act, concerning the availability or potability of water, or concerning the provision of water at adequate volume or pressure, or distribution or treatment of wastewater;
- Emergent Condition #4 – there is a demonstrated lack of historical investment, repair, or sustainable maintenance as determined by the Department, or material damage to the infrastructure of the system; or
- Emergent Conditions #5 – the system owner lacks the financial, technical, or managerial capacity to adequately address any of the foregoing on a sustainable basis or own and operate the system in a way that supports economic activity in the municipality on a sustainable basis.
What is DEP’s role associated with WIPA?
DEP’s role in the WIPA process is limited. Under WIPA, the municipality must satisfy local notice and action requirements, including preparation of an analysis by an independent financial advisor, in order to seek DEP’s review of the municipal determination that one or more emergent conditions exist. DEP is responsible for reviewing and either approving or rejecting the municipality’s determination. DEP has developed a guidance document that explains what the emergent conditions mean and how a municipality can demonstrate the existence of an emergent condition. A municipality must demonstrate to DEP’s satisfaction that at least one emergent condition exists to proceed with the process.
Immediately following DEP’s approval of the emergent condition determination, the municipality must publish notice of the DEP’s approval. A public petition may be filed within 45 days of the publication of DEP’s approval and, if filed in accordance with the provisions of WIPA (sufficient number of signatures), may result in a required public referendum of the resolution authorizing the lease or sale of the water system. If a public petition is not filed in accordance with WIPA, the municipality may proceed with the advertisement, selection of buyer, and negotiations of sale (approved by two-thirds of the municipal board). The municipal resolution must include a summary of how the chosen buyer’s proposal is most advantageous to the public. The proposed contract must be approved by the Board of Public Utilities (BPU) and the municipal use of the sale proceeds must be approved by the Division of Local Government Services at the Department of Community Affairs (DCA).
Where can I find more information about WIPA?
More detailed information can be found at: www.nj.gov/dep/wipa
For any questions relating to the review of the emergent condition certification, please contact: WIPA@dep.nj.gov
Please contact your municipality should you have any questions not related to the emergent condition certification review.