Middlesex water system costs soar

by Tom Chillemi – 

The Middlesex Water Authority (MWA), which is about to break ground on a water system for central and eastern Middlesex County, is like a new business and the lender wants to be sure its loan will be repaid.

The lender is the U.S. Department of Agriculture (USDA) and as a condition of the $12 million loan recently required the Middlesex County Board of Supervisors to enter into an “availability agreement” whereby the county agrees to pay, if necessary, up to $275,000 per year for 40 years, which is the life of the loan. “This agreement is pledged to USDA as additional security for its loan,” states the agreement.

Spiraling costs 

This USDA condition comes as construction bids received recently exceed the original estimated costs by more than 80%.

On Sept. 1, the Middlesex Board of Supervisors voted to approve an “availability agreement” between the county and the MWA. Part of the agreement reads, “ . . . the [Middlesex Water] Authority shall hold and reserve for the sole benefit of the county, or its designee, for the purpose of ensuring there is sufficient water capacity for fire protection and for future residential, commercial and industrial growth in Middlesex County, 100,000 gallons per day capacity.” For this “reserve capacity,” the county agrees to pay up to $275,000 per year for 40 years, which is the life of the loan. 

“This agreement is pledged…