Town Center property owners struggling with sewer fees
About 400 users bearing brunt of high debt
How we got here
More than a decade ago the Town Center was conceived as a way for the township to benefit from the tourism and leisure industry developing in Vernon because of Mountain Creek resort's skiing, golf courses and water park. Mountain Creek officials envisioned a thriving pedestrian-friendly downtown that would be home to restaurants, boutiques, flower shops and retailers that would attract tourists and invigorate the local economy.
To help facilitate that development and the future growth of Mountain Creek, the township planned a new water and sewer system. Vernon funded a $27 million dollar expansion of the Sussex County Municipal Utility Authority sewer — the state’s department of Environmental Protection would not have approved a separate sewer for Vernon, Mayor Victor Marotta said — and over the years took on another $6.6 million in debt for the sewer system.
But the planned development never happened. When the recession hit, Intrawest, the Canadian firm that owned Mountain Creek, filed for bankruptcy, and then sold to investors headed by Eugene Mulvihill who had owned the property in the 1980s and 1990s.
Vernon officials had told residents the Town Center would be ready by 2010 and hookup to the sewer system was optional. But four years later, the boutiques and fancy restaurants are nowhere to be seen. Sewer hookup in the Town Center is now mandatory.
Mountain Creek agreed to pay for about 1,800 feet of sewer lines that were needed to link two sections of existing sewer and water lines in Vernon. And in 2011, Vernon's Municipal Utilities Authority bought out United Water’s sewage customers and brought about 1,400 customers into Vernon's sewer system.
The township has more than $33 million in sewer debt but limited means to pay it off. Hookup fees are a way to have users share the cost of capital investment, Vincent Zinno, chairman of the township Municipal Utilities Authority acknowledged. However, there are very few customers in the Town Center to pay for the investment; the expected downtown never developed.
Mountain Creek does not currently pay hookup fees because it paid nearly $7.5 million for the 1,800 feet of sewer lines. The Great Gorge condominium complex, which accounts for 1,400 of the MUA’s 1,800 customers does not pay hookup fees because they were already hooked to the sewer through United Water.
That leaves the approximately 400 property owners in the Town Center responsible for meeting most of the cost of the sewer system. Future businesses, like the new indoor water park proposed by Mountain Creek, would pay hookup fees, according to Andrew Mulvihill, thereby easing some of the burden on Town Center property owners.
Zinno agrees that the cost of laying the sewer lines in Vernon is a lot more than other municipalities have paid for similar systems. However, he said the Municipal Utilities Authority and the current administration inherited the problem and he blamed previous administrations for making a bad deal.
For how we got here, see the sidebar.
THE MIXING BOWL
The Mixing Bowl has been serving breakfast and lunch in Vernon's Town Center for nearly five decades. Its quaint purple and yellow clapboard exterior is immediately recognizable and it’s rated the best restaurant in Vernon on TripAdvisor.
Despite the rave reviews its pancake and eggs get, the restaurant almost closed last year after its owner, Ken Ascheson, faced a bill of about $70,000 to hook up to the town sewer. That cost, and the additional $6,000 in annual sewer fees was more than this 16-table mom-and-pop restaurant could afford.
“That’s a lot of pancake and eggs,” Ascheson said. “I don’t have $70,000.”
Acheson considered selling the restaurant, but realized the business wouldn’t be attractive when buyers realized they’d have to pay the exorbitant hookup fees. He decided to keep running Mixing Bowl, and eventually took out a second mortgage to pay for the hookup. The expense almost shut him down.
The township offered him a loan, but Acheson declined. At 8 percent interest, the proposition wasn’t attractive.
“People say the township is running all the businesses out of town,” Acheson said with a shrug. He declined to say whether he personally thought that was true.
Acheson has approached the town for a reduction in his annual sewer fee, which he believes does not reflect his actual output. The township charges people based on an estimate because businesses are not hooked up with meters, which the township deems too expensive.
But Acheson has a meter for water, and he knows he uses 25,000 gallons a month. However, the township charges him for 60,000 gallons of sewage. How can he produce that much sewage when his water consumption is less than half, he wonders.
“We’ve all pleaded our cases but we’ve been told there’s nothing they can do,” said Acheson.
VETERANS OF FOREIGN WARS
Walk into the VFW on any given day and you’ll find a handful of veterans sitting at the musty bar sipping beer. Food is served only on Saturdays, but members love to hang out, shoot pool and drink as they reminisce about their shared experience of wars abroad.
“It’s a camaraderie thing,” says Dennis Howard, who took part in the 1983 invasion of Grenada and is now both the bartender and the manager of the VFW. “You’ve got a place to come to talk to people, and they would understand.”
But that may soon end. The VFW membership voted recently to sell the building because it cannot afford to connect to the township’s new sewer system.
The VFW would have to pay a $20,000 hookup fee, plus $4,000 in annual sewer fees, and unspecified dollars to have a contractor physically connect it to the sewer, according to Bob Constantine, chairman of the VFW. Constantine said on Monday he recently learned VFW's hookup fee is actually $35,000 because the Vernon Municipal Utilities Authority didn't factor in the county Municipal Utility Authority's portion in.
“We had no choice. We can’t come up with the money,” Constantine said of the impending sale. “In a way they are forcing us to close.”
Vernon residents have rallied around the VFW in recent weeks and Constantine said various townspeople are starting fundraisers to help save the post. Constantine said he expects to meet with the MUA again soon.
The VFW’s financial troubles didn’t begin with the sewer hookup fees. Five years ago, a treasurer for the veteran’s group embezzled about $40,000. He eventually returned $10,000 as part of a deal to avoid prison, and still makes $300 monthly payments. But that adds only a little to the VFWs bottom line because it barely makes enough from its bar, once-a-week kitchen, and a banquet hall that is rented out sporadically.
Water damage during Hurricane Irene made its financial situation worse. But the sewer hookup may be the final straw.
VERNON UNITED METHODIST CHURCH
As a small nonprofit that meets once a week, the United Methodist Church on Route 94 had not expected to pay a large sewer hookup fee like its neighbor, The Mixing Bowl. So when Lisa Border, the chairwoman of the Board of Trustees of the church, was told how much it would cost, she almost broke into tears.
At about $17,000 (of $5,000 was paid to a contractor to connect to the sewer), it was too much for the church to pay. The annual sewer charges were $1,470. In the end the church had to take out a collection.
“We barely make our dues every year, it may as well have been $60,000,” Border, who negotiated with the township over hookup fees, said, referring to the amount Mixing Bowl had to pay. “It was definitely a lot of money for a small, struggling church. It was terrible.”
Border, and some other members of the church’s leadership spent months trying to persuade the township the cost of hookup was too high and that it did not reflect the township’s own formula to calculate fees. For example, Border said, the chart prepared by the township clearly showed that church’s fees would be based on the number of seats in their sanctuary. But in the end the township included the square footage of the church.
When the Sussex County MUA, to which Town Center property owners also owe hookup fees, did not take the church's square-footage into account, Border approached the town to reconsider. But it declined, she said.
Border also argued that while the township calculated its fee based on the number of seats (and therefore an estimation of how much sewage would be produced), the church membership met only on Sundays and held a monthly free dinner for the community. Surely that couldn’t account for as much sewage as they were being asked to pay.
“It was falling on deaf ears,” said Border. “They have a lot of control over what we have to pay.”
The township Municipal Utilities Authority assigned 1.75 Estimated Daily Use to the church, which according to its website translates to 437.5 gallons a day. Border said their average monthly consumption of water in 2011 and 2012, based on the United Water bills, was 440 gallons per month.
While another church in the area handed off their dispute with the township to a lawyer, Vernon United Methodist Church decided that the cost of an attorney would be too much. They decided not to fight it anymore.
The township Municipal Utilities Authority provided the church minor concessions. And it benefited from a discount because it paid before a specified deadline.
The experience has left a bitter taste, but Border said she understood the township’s compulsion. It had incurred huge debt in setting up the sewer, which it expected to pay off when businesses flocked to the Town Center, she said. That never happened.
“They need to make up that money from the people who are hooked to the sewer,” she said.
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