Wednesday, October 17, 2007

Fuzzy Math at the Matawan Water Plant

Matawan’s municipal water plant is reaching the point beyond repair and needs to be rebuilt. Two months ago, Councilman Michael Cannon offered several cost alternatives that strongly suggested we should shutter the water plant and purchase our water from an alternative source. But Councilman Cannon’s numbers don’t add up. Our best option is to rebuild the water plant and sell the excess water.

According to Cannon, the cost of rebuilding the water plant would be $4-$5 million or paid in installments of $692,000 over twenty years. But assuming the plant costs $5 million and is paid through 20-year tax free municipal bonds, the annual cost would only be $390,000. If we include the income from selling the excess water, the annual cost drops to $320,000.

Yet, Cannon seems to prefer we close the plant and purchase our water from the Marlboro Township Municipal Utilities Authority for an annual cost of $560,000.

Not only would purchasing our water from another town cost over 40% more, we’d be at risk of having our water supply rationed during times of drought or seeing price hikes after a certain number of years.

Interest rates are still at historical lows and we can always refinance should the rates drop significantly. We should take immediate steps to secure the financing and rebuild the water plant. As for Cannon’s fuzzy math, it’s curious that no one on the council bothered to correct him.
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