Water is the new snake oil

The best way to repel lying politicians and their initiatives is to publicly confront them with the truth, and Mike McGrath, president of the Trenton Council of Civic Associations, did a good job of that in The Times of Trenton Thursday.

The Times, which has not done much reporting on Mr. McGrath’s push to kill the Trenton Water Works deal through a petition drive, sought to play catch up today with an article on the drive.  Petitioners seek to halt a scheme to sell water infrastructure and customers to New Jersey American Water Co. for $80 million.

The paper did an admirable job, publishing an even-handed piece that gave equal time to Mr. McGrath and Trenton Mayor Douglas H. Palmer.

 Mr. McGrath seemed cool as a cucumber, succinctly rattling off a variety of objections to the plan, while the mayor repeated his rhetoric that stopping the sale is what will automatically cause a catastrophic tax increase.  He has yet to admit the only possible cause of such an event would be his mismanagement of city finances.

Mr. McGrath noted that the city plans to use revenue from the sale to retire water debt rather than city debt, meaning little change to the city’s annual debt service load.  City Council members might pass a resolution requesting sale revenue to be used to retire city debt, but given their history of standing up to the administration, few believe that will actually happen.

Also, the contract means the city will get diminishing returns from selling water to the company purchasing the infrastructure, according to Mr. McGrath, who said it seems to contain convenient outs for the water company if it wants to get out its relationship with the city.

His words echo those who reject the stance of some city officials that water is “the new oil.”  Truly, it seems that most residents believe a deal to sell the liquid to a private water company is not worth the sale of more than half of a revenue-generating asset.

Mr. McGrath’s Times quotes also responded to unsubstantiated claims that those circulating petitions told signers that water rates would increase.  He noted that decreased revenue following the sale does point to eventual rate hikes for city customers.

Mayor Palmer didn’t say much of anything of substance in the piece, authored by Times reporters Ryan Tracy and Meir Rinde, perhaps because he doesn’t have anything of substance to say.

To most, this deal looks like a stop-gap measure that will plug budget holes for a year or two. 

After that, the city will deal with larger budget shortfalls with less ability to plug them because of reduced revenue following the sale, spawning even larger catastrophic tax increases.

Of course, Mayor Palmer may not even be in Trenton anymore, so it could be that this water deal is meant to do little else but pave the way out of New Jersey’s capital with money from the sale on the backs of those remaining in the city.

It would allow Mayor Palmer and his other cronies – all likely to be out of a job following the 2010 election – to safely escape the debris generated by the collapsing edifice of Trenton’s finances, as the rest of town is crushed under inconceivable tax loads and falling quality of life.

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