ATLANTIC CITY - On again, off again, on again, kind of like a faucet. That would be an apt way to describe Atlantic City's actions to protect its water utility from takeover by either a corporate water company or the county's utility authority.
On Tuesday, City Council President Marty Small once again embraced the strategy of making the Municipal Utility Authority (MUA) a city department - an action supported by both the state-appointed emergency manager and Mayor Don Guardian, but at which council has balked twice in recent months.
"The last thing we want to do is privatize the MUA," Small said. "It is in the residents' best interest that the MUA become a city department to avoid privatizing and raising the rates. This is something we can control."
At least two water companies have expressed interest in Atlantic City's water asset, valued at $100 million, including United Water and New Jersey American Water - the latter represented by a brother of George E. Norcross III, the South Jersey power broker, who has taken a relatively recent interest in the future of Atlantic City. Selling the utility is a way to get Atlantic City needed cash up front, but such a move is typically followed by rate increases.
A second option, to have the Atlantic County Utilities Authority take control of the city's authority, has been pushed by State Senate President Stephen Sweeney, who is also lobbying for a full state takeover of the nearly bankrupt city. The ACUA provides trash and recycling services for towns in the county, though not Atlantic City.
Atlantic City's council was supposed to vote Feb. 17 to dissolve the authority and make the utility a city department, but instead voted to delay any action for 90 days. At that meeting, Bruce Ward, executive director of the MUA, said he was planning to seek bids for a "partnership" with a water company, which he predicted would pay $100 million for that status.
Guardian said after the meeting that entering a partnership on those terms would be tantamount to selling to a private interest, and would leave residents vulnerable to rate hikes. He has urged the city to take the utility back as a department, a move he and others have predicted could net $4 million a year.
Small said council members have since expressed concern with leaving the utility vulnerable to a partnership or sale.
"The consensus is to bring it under the city," Small said. "When citizens have spoken, 100 percent of the time they say, don't privatize the MUA. With all due respect, the private-public partnership would lead to privatizing it."
Small said he hoped retirements would reduce the utility's 81-member staff. "A lot of people are going to be skeptical either way," he said.
County Executive Dennis Levinson, who was initially against any county involvement, has said in recent interviews that he would consider a county takeover of the authority if it were in the best interests of the county.
A 10-year aid package stalled in the legislature includes $4 million in annual incentives to the county, drawn from a new Payment in Lieu of Taxes (PILOT) for casinos, if the county provides assistance of some sort to Atlantic City. There have also been calls for the county to bond for the city to pay back more than $170 million in tax appeals owed to the Borgata, but Levinson has refused.
Atlantic City's state-appointed emergency manager, Kevin Lavin, recommended that the city take control of the utility and squeeze between $4 million and $9 million a year out of it by streamlining operations and otherwise monetizing the asset, short of selling. City residents have described it as a longtime source of jobs for locals, particularly in the black community.
The specter of Flint, Mich., where state control led to lead-tainted water, has hung over the debate in Atlantic City; the latest state takeover legislation prohibits sale of the utility for one year. A year ago, Gov. Christie signed legislation that streamlines the process of privatizing public water utilities.
Lena Smith, regional organizer with Food and Water Watch, said she was wary of any action involving the city's water source taken for the purpose of helping Atlantic City finances.
"Dissolving the MUA is a risky move that could begin a slippery slope towards water privatization," she said in an email. "Atlantic City's water is not a cash cow to pay off the city's debt."
Small said the council would vote on the matter at its meeting next Wednesday.