Town attorney Keith W. Davis and Mayor David Cheifetz congratulate
newly appointed commissioner Keith Waters (center).
Jerry Lower/The Coastal Star
By Dan Moffett
Manalapan Mayor David Cheifetz says he’s “done a 180” on a proposal to sell the town’s water utility system to Boynton Beach after hearing some surprisingly good news from a hired consultant.
Kevin O’Donnell of Nova Energy Consultants, of Cary, N.C., took a close look at the utility’s numbers and told town commissioners that it makes sense for them to stay in the water business. The town’s utility is profitable and is likely to stay profitable for years to come.
Cheifetz says O’Donnell’s optimistic report is a compelling reason to abandon the proposed sale to Boynton Beach and take two steps necessary for ensuring the utility’s long-term stability: getting a finance plan in place to pay for roughly $4.75 million in infrastructure replacement and repair to aging pipes; and beginning talks with Hypoluxo to make sure that 600 customers from the town continue to get their water from Manalapan for decades to come.
“Your net income after debt expense is roughly $750,000 to $800,000 for 2016,” O’Donnell told the commission. “In other words, you’re doing really good, bottom line. You’re looking at roughly 30 to 35 percent return on sales. In the utility industry — and I do a lot of work with municipalities — we don’t see return on sales that high.”
O’Donnell said the steady income gives the town financial flexibility moving forward. The utility could transfer its debt to the town, and the town could be confident about getting its money back. The strong bottom line also means rates can hold steady.
Hypoluxo is critical to the utility’s future, however. The water contract with the town ends in September 2020. Hypoluxo accounts for about one-third of the utility’s total water usage but also accounts for roughly one-half of the utility’s total revenues.
O’Donnell recommends offering Hypoluxo customers a 20 percent rate cut in return for locking them into a 30-year contract. If Manalapan doesn’t offer them lower rates, they’re likely to buy water from another supplier when the agreement expires, O’Donnell said.
“The biggest risk here is losing Hypoluxo,” he said. “The value of your system hinges on Hypoluxo.”
In other business:
• At the June meeting, the commission unanimously approved appointing Keith Waters to fill the Point seat that opened with the death of Ronald Barsanti last month.
Waters, 57, is the chairman of the town’s zoning commission and has chaired the architectural commission. He has been an opponent of easing the town’s restrictions on the size of residences that can be built relative to lot dimensions.
Professionally, Waters is chief executive officer of WPO Development, a national planning and campaign management firm that offers development services to nonprofit groups. Originally from Kentucky, Waters worked in broadcasting with CBS Sports in the 1980s.
“Keith has lived in the town for about 10 years,” Cheifetz said. “He has really served the town well. He’s a friend, he’s smart, he’s articulate and I think he’ll be a positive addition.”
Waters’ term expires in March 2018.
• The Audubon Causeway bridge project has fallen behind schedule again, according to Town Manager Linda Stumpf. The south side of the new span was to have opened June 1 but now is expected to be completed by early July, allowing the removal of weight restrictions.
Stumpf said the contractor still believes the project can be finished before the end of the year and come in near the budgeted price of roughly $990,000.
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