3/9/18 Caucus

Former B.A.
Greg Fehrenbach

PERTH AMBOY – Former Business Administrator Greg Fehrenbach returned to Perth Amboy to help the City with the Water/Wastewater contracts. He appeared before the Council and gave a status report on the what has occurred so far. Fehrenbach stated, “There are multiple interested parties that I cannot yet divulge. The deadline for the RFP’s was extended to May 4, 2018. There were complications because you are looking at a possible $10 million or more over the life of the contract. The State Contractor reviews all RFP’s. They took longer than anticipated. On February 12, 2018 we conducted one interview. There were over 200 questions that were asked from interested parties. Some of those questions were answered. There’s a high level of interest.”

Fehrenbach then gave the time line of the RFP’s. “On May 4, 2018 evaluations will be done by the Attorney, Purchasing, Finance, the Accountant, and myself. On May 18, 2018, there will be a meeting of the Advisory Committee for review by the Council. We hope by May 23, 2018 you can decide which bidder to accept. You (the Council) already approved the contract (Edmund’s Company) to help set up the in-house work such as shutoffs, payment plans, etc. Work done for property taxes will be excluded.”

Councilman Fernando Gonzalez then requested that the Attorney review the documents for any typos. 

Fehrenbach then continued, “This is a $22 million operation. There’s going to be a rate schedule and calculations of functions of meters. There will be a clear explanation of items that are on the bills to customers. This utility must remain solvent. It is our most important business function. You need someone with experience and competency. You may need a residence waiver. There was a 46% increase in residences and 70% increase for commercial under the old contract. You must identify people who qualify. There will be a transfer of data of the billing process which Middlesex Water Company will give us information for. By October 2018, a plan will be up and running for any glitches to be ironed out by the January 2019 transition.”

Gonzalez then questioned the number of people which would be needed.

“Two more additional personnel,” Fehrenbach answered. “You need three people because someone in the tax department is retiring.”

Gonzalez then asked, “Could we have some audit of services or expected savings?”

Fehrenbach stated there is a projected savings of $40,000 to $50,000 a year. “A new system will make the tax sale process easier. With the old system that we had, 10 screens had to be accessed. Under the system provided by the Edmund Group, a person will only have to access one screen. I don’t know with the RFP’s responses if there will be more (savings). This is my best guess estimate.”

Fehrenbach then talked about the Capital Improvements and the budget for the Water/Wastewater. “When I was here, there was a resolution and an adoption. The budget for this year is a 3% rate increase. For every 1% rate increase, translates to $200,000 in revenue. Repairs to the water/wastewater is due to why we’ve had rate increases. There’s a need to increase revenue to the water/wastewater.”

Gonzalez then questioned, “If we don’t have enough staff now, will we have subcontractors?”

Fehrenbach responded, “No.”

Gonzalez then stated, “We still have debt from the old contract. The utility should never have that debt.”

Fehrenbach then explained, “I don’t like counting chickens before they’re hatched. We’ve got to see what comes down the road. This is for Capital Improvements alone.”

Gonzalez then asked, “Can we expand to sell additional water?”

Fehrenbach then explained, “I’ve been away 3 years. 8 million gallons of water can be produced now (the capability). There is now 5 to 6 million gallons of water to date now. We lost South Amboy as a customer. It depends on the City’s development. A hydraulic analysis needs to be done for the City’s uses. The DEP uses a withdrawal permit standard. We have to follow the DEP withdrawal permit standards.”

Gonzalez then stated, “The quality of water and materials used is very important.”

Councilman Fernando Irizarry then asked, “What happens to the USPA Employees that used to be employed by the City? We need to keep some of them.”

Fehrenbach responded, “It depends on what happens on May 4, 2018 and the proposals. They have to be evaluated.”