By Dan Moffett
A bidding war for water customers has broken out between Manalapan and Boynton Beach, with some 550 Hypoluxo residents likely to benefit with lower monthly bills and perhaps even better service.
For decades, Manalapan has sold water and provided sewer service to residents on the east side of Hypoluxo. The contract between the two municipalities expires in 2020, and Manalapan, to ensure the long-term viability of its plant, wants to lock Hypoluxo into a 30-year deal with an immediate and sizable rate reduction.
“What we’re offering is pretty straightforward — an immediate 35 percent rate cut,” said Manalapan’s consultant, Kevin O’Donnell of Nova Energy Consultants in Cary, N.C. “And that goes straight in the bank.”
Meanwhile, Boynton Beach has a much larger, growing water operation that is hungry for new business. City Utilities Director Colin Groff says if Hypoluxo switches to Boynton’s system, Hypoluxo residents can expect an immediate 25 percent rate cut, besides the stability and service only a large operator can deliver.
“The reason our rates are low is because we have great economies of scale,” Groff said. “We’re able to do things more inexpensively.”
O’Donnell and Groff squared off for an amicable debate over their competing proposals during a workshop before the Hypoluxo Town Council on April 19. After longtime Hypoluxo Mayor Ken Schultz died in November, council members decided to postpone a decision on water until his successor was seated after the March election. New Mayor Michael Brown said he intends to continue soliciting input from residents and bring the issue to the council soon.
“It is a very important decision,” Brown said. “However, I think we know that both water utilities are very good quality water utilities. It’s not like if we choose one or the other the water quality or service is going to change dramatically.”
Groff told the council that size should matter in making the choice. Because it has more than 110,000 customers and dozens of employees, Boynton’s utility can react to emergencies quickly and offer services such as automated metering and online bill paying. He said his utility has an “extremely healthy” balance sheet and a great bond rating that will help deter rate increases.
Groff said he expects customers’ bills to reflect only small upward adjustments for inflation and no large capital projects to force increases for the next 10 years. He said his utility could afford to offer Hypoluxo “inside city rates” that matched the lowest in Boynton.
O’Donnell and Manalapan Town Manager Linda Stumpf told the council that being a small utility was actually an asset. With fewer than 900 total customers and seven full-time employees, the town’s utility is able to deliver more personalized service. O’Donnell said Manalapan’s utility is financially secure and the town has no intention to sell it. In quality, Stumpf said the two systems “are very similar and both meet the same standards.”
Several residents said Manalapan’s sudden ability to make deep cuts to rates now suggests that Hypoluxo customers probably have been overpaying for years. Stumpf said reductions are only possible now because Manalapan has recently improved efficiencies in its system and is willing to accept lower rates in exchange for the stability of a long-term deal. Manalapan officials say they were caught off guard by the latest Boynton proposal, which offers a substantially lower rate structure than earlier ones.
“These rates are something Manalapan can’t compete with,” Stumpf said.
Manalapan Mayor Keith Waters says the town will continue to negotiate with Hypoluxo but also prepare alternative plans for the utility if a deal falls through.
By Dan Moffett