The City of Trenton received state backing today when Department of Community Affairs officials told the Times of Trenton that the city was within its legal rights to transfer $9 million from the Trenton Water Works’ revenue into various areas of the city’s general budget, in what amounts to taxing people living outside of Trenton to pay for city services.
The flap, which has emerged several times over the past several years, comes as Trenton is attempting to sell all of its outside water infrastructure to New Jersey American Water for a reported $100 million. Township officials and residents from Ewing, Hopewell, Lawrence, and Hamilton are screaming bloody murder as they face a 36 percent rate hike with the sale, and the prospect of having their water bill money used to help the private water company pay for the cost of Trenton’s outside infrastructure.
A DCA spokesman backed up the city’s position that in equalizing pay rates in 2006, the city became exempt from Board of Public Utilities oversight, allowing it to raise rates at will and transfer water revenue as city officials saw fit.
Mayor Douglas Palmer, of course, took some jabs at officials from the outside townships, telling the Times of Trenton that he was “offended” by the accusations leveled by the outside townships of impropriety on the part of the city, in transferring the $9 million.
Despite today’s reports, the City of Trenton should not be viewed as being exonerated quite yet. Remember that the city only equalized rates in 2006, meaning the numerous questionable transfers prior to that event could be illegal, under state law governing water utilities.
Also, water works employees this week said that the city did not actually equalize the rates, pointing to discounts and other measures that effectively make the rate paid by some city residents lower than those paid by residents living outside the city. These matters certainly needs to be looked into.