NJ American Water finalizes $18M Salem system acquisition

Salem City Mayor Jody Veler (left) and New Jersey American Water Vice President of Business Development Chris Abruzzo shake hands at the financial closing of the company’s acquisition of the Salem City water and sewer systems. - PROVIDED BY NJ AMERICAN WATER

Dawn Furnas//June 26, 2024//

Listen to this article

New Jersey American Water on June 25 completed its $18 million acquisition of the City of Salem’s water and wastewater systems.

The move adds 2,300 customers to the Camden-based utility company’s service area.

More than 60% of voters approved the move in a referendum on the Nov. 7, 2023, ballot. The New Jersey Board of Public Utilities gave the deal the green light May 22.

“We are honored and grateful to the residents and elected officials of Salem City, who are entrusting us with the ownership, improvement and operation of their water and wastewater systems, beginning today. We are ready to start delivering on our commitment to making the necessary investments in these systems to help ensure clean, safe, reliable and affordable service for all residents,” NJ American Water President Mark McDonough said in a statement.

McDonough added that six Salem City utility employees have now joined American Water’s South Operations team and Water Workers Local 99.

New Jersey American Water's new Salem operations team celebrates the closing of the acquisition. The Salem City team joins NJ American water from the former water and wastewater utility as part of the deal. Back row, from left: Senior Superintendent Mike Gonserkevis, Senior Supervisor of Operations Jared Bacon, Sewer Operator Mechanics Harron Jefferies and Ivan Porter (position not specified); front row, from left: Operations Specialist Pam Rushing, Sewer Operator Mechanic William “Curt” Hunter II, Mechanic Juan Stevenson and Sewer Operator Mechanic Cameron Cagle. — New Jersey American Water‘s new Salem operations team celebrates the closing of the acquisition. Back row, from left: Senior Superintendent Mike Gonserkevis, Senior Supervisor of Operations Jared Bacon, Sewer Operator Mechanics Harron Jefferies and Ivan Porter; front row, from left: Operations Specialist Pam Rushing, Sewer Operator Mechanic William “Curt” Hunter II, Mechanic Juan Stevenson and Sewer Operator Mechanic Cameron Cagle. Bacon and the five mechanics join the company from Salem City’s former water and wastewater utility as part of the acquisition. Gonserkevis joined the company from another municipal utility, and Rushing transferred from the company’s Southwest Production. – PROVIDED BY NJ AMERICAN WATER

As part of the agreement, the company committed to invest more than $50 million in improvements in the first 10 years of system ownership. This includes system upgrades, implementation of PFNA treatment and repairing the city’s aging water and wastewater infrastructure.

Calling the transition “the right decision for our community,” Salem City Mayor Jody Veler said the sale will eliminate $11 million in utility debt, pay off a portion of the municipal debt and will enable the city to put over $1 million back into the budget annually.

Residents will receive additional information in the mail from NJ American Water and the company will host a community open house on July 13 from noon to 3 p.m. at the Amy “Hetty” Reckless Center, 116 West Broadway.

Making moves

The Salem purchase follows several other acquisitions in the past few years:

October 2023: Borough of Somerville‘s wastewater collection system ($7 million)
June 2023: Egg Harbor City’s water and sewer system ($21.8 million, via the state’s Water Infrastructure Protection Act)
February 2022: Bound Brook’s wastewater collection system ($5 million)
October 2020: Long Hill Township’s sewage and water treatment system ($12.7 million)
January 2019: Mount Ephraim’s wastewater assets ($1.4 million)

Additionally, NJ American Water signed an agreement earlier this year to acquire the Manville wastewater system with 3,700 customers. In November 2023, residents there approved the sale with more than 80% of the vote. The company said it expects to close that deal in the second half of 2024, pending approval from the NJBPU.