LAWRENCE: Residents oppose sale of Trenton Water Works

By Lea Kahn, Staff Writer
Municipal officials should take advantage of President Barack Obama’s recently passed economic stimulus bill and construct a state-of-the-art and publicly owned water system.
    That’s what Pin Oak Drive resident Robin Williams told Township Council at its March 3 meeting. She said she is concerned about the pending sale of the Trenton Water Works’ outside water utility system to the New Jersey American Water Co.
    The Trenton City Council has agreed to sell the outside water utility system — which serves Lawrence, Hamilton, Hopewell and Ewing townships — to the privately owned water company for $75 million. Lawrence Township Council approved the sale last month.
    Hopewell Township also approved the sale last month. Once Ewing and Hamilton townships approve of the deal, it will be sent to an Office of Administrative Law judge and then to the state Board of Public Utilities for final approval.
    “I, along with a lot of Trenton residents, think (the sale) should be put to a citizens’ vote,” Ms. Williams said. “The Trenton Water Works has been around for a long time. You see all around the world (that) water is a basic human right. We need to have it (owned) in the public sector.”
    Ms. Williams also objected to the 40 percent rate hike approved by the Trenton City Council last year. There is a need to better regulate water rate increases, she said, adding “we need to oppose” the sale of the Trenton Water Works.
    The sale, however, is pending approval by the BPU. In the meantime, a group of Trenton residents filed a petition seeking a public vote on the sale of the Trenton Water Works, according to published reports.
    Municipal Manager Richard Krawczun said after the meeting that “certainly” the petition could have an effect on the process, but “it would be speculation on my part” as to what that effect could be.
    Allowing the sale of the outside water utility lines to another owner would be less costly than creating a new agency of government, Mr. Krawczun said, referring to the suggestion to create a public water utility.
    “I think what everyone has to understand is that with the sale of the outside water utility system, there will be increased regulation (on water rate hikes),” he said. “The Trenton City Council has the authority to set rates by ordinance, with no requirement for the rates to be approved by the BPU.”
    “The inequity in that process is that the suburban customers have no voice in that rate setting (by the Trenton City Council), nor do they have any ability to participate in the election of representatives to Trenton City Council. The suburban customers can only watch from the outside what is happening,” Mr. Krawczun said.
    The manager expressed confidence that the BPU would listen to municipal officials when rate increases are requested, pointing to the fact that the state agency listened to representatives from the four townships after they objected to the pending Trenton Water Works sale.
    The City of Trenton had reached an agreement to sell the suburban water lines to the New Jersey American Water Co. for $100 million last year, but the four townships challenged the sale and took the issue to the BPU. The state Division of Rate Counsel in the Public Advocate’s Office placed the value at $54 million.
    After several months of wrangling, Trenton officials and the four townships negotiated a settlement that calls for the suburban water lines to be sold to NJAWC for $75 million.
    NJAWC also will pay $5 million to Trenton in consideration for advisory and consulting services after the transfer of ownership. The deal also calls for the water company to buy water from the Trenton Water Works for the next 20 years.
    The agreement also calls for the 40 percent rate hike enacted by the Trenton City Council last year to be rolled back to 30 percent when NJAWC takes over. Suburban customers would pay $32.70 per 7,000 gallons of water, as compared to $35.21 per 7,000 gallons under the water rate hike approved by the Trenton City Council.
    Over time, the rates will be adjusted to a point where they would be equalized with the statewide rate charged by NJAWC, Mr. Krawczun said. The water company files for a rate increase about every two years, he added.
    The Trenton City Council sets rate hikes for the Trenton Water Works customers without oversight by the BPU, because the rates for the city water lines and the suburban water lines have been equalized.
    The four affected townships challenged the Trenton City Council’s 40 percent rate hike, alleging that the city transferred money from the dedicated funds of the Trenton Water Works to the City of Trenton’s operating budget. The city transferred $7.2 million from the water utility accounts to its own budget between 2004 and 2007.