Things aren’t looking good for Trenton, but that’s probably not news to anyone living within the city.
Fiscal data released by South Ward Councilman Jim Coston on Friday confirms that most of the benefit of selling off outlying Trenton Water Works infrastructure will be exhausted within two years, after which Trenton will suffer ever-larger budget shortfalls with a more limited capacity to plug the gaps.
The water deal, which will net Trenton approximately $80 million after it is consecrated in the coming weeks, actually provides only $39 million that can be thrown towards satisfying some of the city’s outstanding debt. In being split evenly between the debt service load in fiscal years 2009 and 2010 at $19 million each, this money seems to provide very short-term relief of some of the fiscal crunch the city has suffered recently.
After that, things just get worse.
A fiscal year 2009 budget deficit of around $21 million – reduced from $28 million through uneven layoffs and other policies – grows to $29 million in 2011, then $31 million in 2012, without the presence of a large and valuable water utility that can be sold off to patch the holes.
Compounding that worrisome arrangement is that local revenues fall by around $2 million a year, according to the budget documents, presumably from the reduction in the number of customers buying Trenton water due to the sale of the water utility.
These documents, if this rather basic analysis is correct, confirm everyone’s worst fears about this sale, in that they show it is nothing more than a short-term gimmick that will provide fleeting relief to the city’s fiscal situation.
Can you guess who will be left holding the bag?