Atlantic City's Water Utility At Center Of Takeover Talk
TRENTON, N.J. (AP) — New Jersey lawmakers, Atlantic City officials and local advocates are injecting venomous language into the debate over how to help the struggling resort town — including comparisons to the Flint, Michigan, crisis — as talks center on wringing cash from its water utility.
The head of the local chapter of the NAACP said this week the city couldn't afford to become Flint, where lead contaminated the water supply after the city switched sources to save money.
Democratic Senate President Steve Sweeney, who is advocating for Atlantic County to take over the city's water utility, countered that those claims are bogus and a scare tactic to criticize his plan to get the city's finances in order.
At the same time, potential buyers or business partners with an interest in the utility would come to the table with deep political connections.
A closer look at the water utility at the center of debate in Atlantic City:
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WHAT IS HAPPENING WITH ATLANTIC CITY'S WATER UTILITY?
The Municipal Utilities Authority is one of a few properties the struggling city could leverage to meet its financial obligations, with assets of about $65 million. The Democrat-led Legislature, which is pushing a bill to give the state control over the city's finances for five years, recognizes the public water utility's value and is proposing giving the city one year to decide how to monetize it.
Atlantic City Mayor Don Guardian, a Republican, has called the plan "fascist." Local NAACP president Betty Lewis said the city couldn't afford to become Flint.
Sweeney dismissed those claims as "hysterical."
"Who's talking about going into a different water source? We're not talking about that here," he said.
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HOW ARE POLITICALLY CONNECTED FIRMS INVOLVED?
The prospect of putting a for-sale sign on the utility has touched off meetings between stakeholders and representatives affiliated with prospective buyers.
One of those companies is American Water, which recently got approved for $164 million in state tax credits and whose lobbyist in Trenton is Philip Norcross, the brother of southern New Jersey political boss George Norcross. United Water, who is represented in Trenton by the lobbying firm of former Democratic Gov. Jim Florio and which got $5.5 million in tax credits, has also been the subject of meetings between lawmakers and other stakeholders, Florio says.
Florio declined to discuss the details of those talks. American Water also declined to comment. Neither Philip Norcross, nor United returned messages seeking comment.
Democratic state Sen. Jim Whelan, who represents Atlantic City, said whatever happens with the utility would go through a public process. "There's nothing nefarious going on," he said. "That's insulting."
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IF IT'S NOT SOLD, WHAT ELSE COULD HAPPEN TO THE UTILITY?
Sweeney has called on Atlantic County to take over the utility as a way for the city to bring in more cash. At the direction of the city council, Bruce Ward, the utility's executive director, says he is writing a request for proposals to seek out a business partnership — not a sale — and that a requirement is for the business to pay $110 million at minimum to the city.
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WHAT'S AT STAKE FOR CITY RATEPAYERS?
Atlantic City's residents about $15 a month for water, the lowest rate in Atlantic County, Ward says. He is concerned that a totally privatized system could lead to higher rates. Food and Water Watch, a nonprofit that advocates mostly for public control of water utilities, says residents using privately owned water systems in New Jersey pay about $19 more per month than those with public water.
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WHAT HAPPENS NEXT?
There are a couple of moving parts.
The Legislature has just begun considering the takeover bill. Republican Gov. Chris Christie has supported the idea, appearing at a statehouse news conference to back the plan and say the city should get its finances in order. Meanwhile, City Council is awaiting the results of the utility's request for proposals, which could take until May.
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