The Town of Milton has reached a memorandum of understanding with Artesian Wastewater that will allow Artesian to move forward with its $6.4 million purchase of Tidewater Environmental Services, Milton’s wastewater provider.
Under terms of the memorandum, Milton will drop its Superior Court case opposing the sale, which the town filed in December after it was approved by the Delaware Public Service Commission, on the grounds that the sale was not in the public interest because it was unclear whether certain contractual obligations, previously agreed to by Tidewater Environmental Services, also known as TESI, would be met. Those obligations had primarily to do with where Milton’s wastewater would be treated and what the rate structure would be.
Mayor Ted Kanakos said, “This is a good day for the residents of Milton, and hopefully the start of a good relationship between the town and Artesian.”
So what does the town get out of the memorandum?
First, and for town officials most importantly, customers will continue to be billed on a quarterly basis based on usage, rather than a flat rate, as Artesian typically charges. This arrangement will last for at least seven years.
As part of the deal, instead of building a new treatment plant on Sam Lucas Road, as Tidewater had planned, Milton’s wastewater will be sent to Artesian’s Sussex Regional Recharge Facility, a 1,700-acre network of spray irrigation fields off Route 30. Artesian is planning to build a wastewater treatment plant on part of that land that would serve developments in the Milton area.
Once that facility is online, Artesian will dismantle the town’s old wastewater plant on Front Street and rededicate the land to the town. In addition, Artesian will not be allowed to use the existing effluent pipes that run into the Broadkill River. Prior to the Artesian deal, Tidewater, which bought Milton’s wastewater system in 2007, had planned on building a new facility on Sam Lucas Road but still using the existing effluent pipes.
To build that plant, Milton had been given 10 acres of land by Loblolly LLC, the property management arm of Draper Holdings, with five being given to Tidewater and the other five remaining with the town. The five acres of land that would have been used for a new treatment plant will instead be reconveyed to the town, which is planning to build a new public works facility on that site. Artesian has agreed to provide sewer service to the new public works building at no cost to the town. Artesian will also install a new water main near Sam Lucas Road that will serve the Cannery Village Phase IV development, which will be built at the confluence of Front Street, Cave Neck Road and Sam Lucas Road.
Kanakos said, “We took necessary measures to protect the town’s interests by challenging the Public Service Commission’s decision and pushing back on one of the largest utility companies in the state. In the end, Artesian adjusted to meet our needs, and we look forward to forging a solid partnership with Artesian moving forward.”
For Artesian, the sale nets the company 3,600 new wastewater customers, seven wastewater facilities and 13,000 acres of exclusive franchise territory in Sussex County.
Artesian CEO Dian Taylor said, “This transaction is in the best long-term interest of the TESI customers and our shareholders. Artesian is committed to serving its new and existing customers with integrity and reliability, and in a manner that respects the environment and preserves the water cycle.”
Artesian plans to reach out to its new customers with information sessions and welcome packets.
Dave Spacht, Artesian Wastewater president, said, “I am confident that our operations will play a critical role in creating lasting solutions for wastewater management in an environmentally responsible way.”