By: Reney Waters, Follow South Jersey Bridgeton City Intern
BRIDGETON, N.J. — Mayor Albert B. Kelly revealed he was unaware leadership at Cumberland County Utilities Authority (CCUA) were exploring alternatives with private equity firms interested in a deal to earn revenue for the authority’s physical assets.
Mayor Kelly discussed the issue at length in his latest column for NJ.com. He authors a weekly column for the news website and discusses local, state, and national issues.
According to a report from the Vineland Daily Journal, the CCUA Board of Commissioners heard a presentation from Bernhard Capital Partners, a private equity firm headquartered in Baton Rouge, Louisiana. The firm reportedly wants the right to collect revenue from the CCUA in exchange for a “significant advance payment” and “meeting regular authority expenses.”
“If I understood a presentation that was made by Bernhard Capital, this private equity firm would not own the physical assets of the authority,” Mayor Kelly wrote in his column. “In providing the CCUA with a chunk of capital now, Bernhard Capital’s investors would be making a claim on its future revenue.”
Mayor Kelly also addressed the common skepticism seen in any case involving the crossover of the private sector and public utilities in his column. This skepticism comes from the fact that attorneys and financial consultants would potentially make money off a deal and earn fees.
Although the utilities would continue to be publicly owned, who exactly would profit off of this deal would be unclear, according to Mayor Kelly.
“I don’t know how much money we’re talking about when it comes to monetizing the CCUA’s physical assets but it will likely be tens and millions of dollars,” he said in his column. “The idea is that accessing this chunk of capital now will allow the authority to make infrastructure investments on behalf of its customers.”
Seventy percent of CCUA ratepayers live in the City of Bridgeton, and the remaining 30% live in Upper Deerfield, Hopewell, and Fairfield Township, according to Mayor Kelly. These communities weren’t consulted about a potential deal between the CCUA and Bernhard Capital, but decision makers plan to meet with those townships’ mayors to discuss the possibilities of monetization.
“[Consulting townships’ mayors] is a good thing, since it will allow us to explore future needs and plans, or anything else related to sewage collection and treatment systems, whether for residential, commercial or industrial growth,” Mayor Kelly wrote. “It’s a start, and there is certainly merit to the idea of accessing capital — in addition to ARPA funds — that can allow the communities involved to upgrade existing infrastructure for current customers and expand service to new ones.”
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This article was produced by a Follow South Jersey news intern thanks to a grant provided by the Robert Wood Johnson Foundation through the New Jersey Health Initiatives program to create hyper-local news to meet the informational and health needs of the City of Bridgeton, N.J.