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Audit shows sewer fund stress; Mendham designates New Jersey American Water to advance WIPA sale process
Summary
Tuesday’s audit presentation reported $1.56 million in fund balance but noted sewer utility deficits and repeat internal-control findings; the Committee certified the audit, approved a corrective-action plan, and designated New Jersey American Water as a qualified respondent under WIPA to advance the wastewater sale process.
The Mendham Township Committee on June 22 received an annual audit that described an overall sound fiscal position but identified stresses within the township’s sewer utilities and internal-control weaknesses.
Valarie Dolan of Nisivoccia told the Committee the general fund balance was about $1.56 million and that the township plans a roughly $400,000 drawdown to stabilize taxes. She reported tax collection rates above 99% and recommended closing inactive grant balances and preparing for updated accounting standards. The audit noted two repeat findings related to segregation of duties; administration expects to resolve those issues in the next audit cycle following staff changes.
The auditor flagged deteriorating finances in the sewer utilities, including continued over-expenditures in the Mendham East system. Sewer-related debt figures cited in the presentation included approximately $3.7 million of sewer-utility debt; township-wide obligations included roughly $6.4 million in serial bonds, nearly $6 million in bond anticipation notes and about $3.6 million in New Jersey Infrastructure Bank loans for capital improvements. The auditor said rate increases implemented in 2026 are intended to stabilize operations while longer-term options are evaluated.
Separately, Special Counsel Francie McManimon reported on the Water Infrastructure Protection Act (WIPA) process. The Township issued an RFQ on May 7, received one submission (June 8) from New Jersey American Water (NJAW), and placed a resolution on the June 22 agenda designating NJAW as a qualified respondent. The Committee adopted the resolution to designate NJAW; an RFP and a site visit (scheduled July 7) will follow. Proposals are due July 24, with a potential contract negotiation and Township Committee approval target of September 28, followed by required state reviews by the Board of Public Utilities and the Department of Community Affairs.
On the consent and regular agendas the Committee also adopted resolutions certifying the annual audit (2026-128) and approving a Corrective Action Plan (2026-129) to address audit findings. The minutes record roll-call votes adopting those measures.
