For Immediate Release
July 14, 2010 Contact Jeff Tittel, 609-558-9100
Don't Let Newark's Water Go Down the Drain
Trenton -- The City of Newark is proposing to eliminate its water department and set up a municipal utility authority. The Sierra Club is strongly opposed to this concept as a way of undermining the water supply for the people of Newark. This proposal is a financial gimmick to get around local finance laws, bonding authority, public scrutiny and the recently enacted 2% property tax cap.
Municipal utility authorities and other independent agencies for years have been a dumping ground for patronage and political appointees with many wasteful spending practices. Under these authorities rates go up and services and water quality go down. The city of Newark is doing this as a way to get money for the city's budget, not as way to improve water service and quality for the people of Newark.
"This is nothing more than a Ponzi scheme that will make rates go up and service and water quality go down for the people of Newark," said Jeff Tittel, New Jersey Sierra Club Director
The Sierra Club is concerned that this will lead to even more problems as the City of Newark will later decide to privatize the water and sell it to some foreign multinational conglomerate.
Part of this proposal is to bond an additional $223 million of the water utility. Of that, $127 million will go to balance this year's budget and only $28 million will go to fix the water pipes. This is a shameful abuse of government power and a waste of money.
The state is looking to borrow from the Environmental Infrastructure Trust. This could be the biggest use of the EIT since Encap.
The Sierra Club is also concerned that the City of Newark will use the water authority as a way to get around the recently enacted property tax cap law. The city will use the water authority to balance its budget. Instead of the City of Newark buying a new water truck, it will have the water department buy a new truck. Instead of the city hiring new staff, it will have the water authority hire staff.
"The ink isn't even dry on the cap law and Newark is already trying to get around it," Tittel said.
Instead of the city attorney covering meetings with a water company or doing the legal work, the City of Newark will pay an outside legal firm $500 per hour and a half a million dollars a year to do the same work. The city will hire out consulting engineers and others, and this will all lead to pay to play. City attorneys and engineers don't give five-figure contributions, but utility authority consultants do. This authority will end up being staffed by relatives of elected officials and politically-connected others.
The Passaic Valley Sewage Authority has been the subject of recent scandals with overpaid executives and money wasted. There have been continuous problems with waste and accountability in the Delaware River Port Authority, the Essex County Improvement Authority, the Bergen County Utility Authority, the Monmouth County Sewage Authority, and the list goes on and on. Now the City of Newark wants to head down the same path.
"These utility authorities have been one scandal after another and we believe that this proposal will turn Newark water into a pay-to-play pit and a patronage drain that will put Newark's water at risk," Tittel said.
A serious concern is that this proposal will lead to Newark selling its water to the suburbs, taking water needed for redevelopment of the city. Water lines will be put in environmentally sensitive areas and cause more pollution in the regions own waterways. Jersey City has already done this and Trenton attempted to.
The water company will be raising fees on its consumers to help balance the budget for the City of Newark. Utility fees are not tax deductible but property taxes are. By shifting utilities, the people of Newark will be paying more but they won't be able to deduct it from their taxes. This is a bad deal for the people of the City of Newark.
The Sierra Club is also concerned about the 38,000 acres the City of Newark owns in the Pequannock watershed. This is one of the most environmentally important areas in New Jersey. It is the largest piece of intact hardwood forest in the state. Under the guise of a utility authority, this land could be leased for development or timber extraction, putting this critical watershed in jeopardy.
"This is nothing but a financial gimmick that will put the drinking water for the people of Newark at risk and potentially jeopardize the Pequannock watershed, one of the gems of New Jersey," said Tittel.
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Christine Guhl Program Assistant New Jersey Sierra Club
145 W. Hanover Street Trenton, NJ 08618 Tel: (609) 656-7612 Fax: (609) 656-7618 christine.guhl_at_sierraclub.org
Received on 2010-07-14 10:04:53