City residents who seek to block the $80 million sale of Trenton Water Works infrastructure to New Jersey American Water Co. announced the start of their “Don’t Sell The Cow” campaign Tuesday, one day before petitioner Michael McGrath will meet with Mayor Doug Palmer to discuss the petition and the city’s perilous finances.
The “Don’t Sell The Cow” campaign will see petitioners and city residents renew their drive to defeat the Trenton Water Works sale in a special election later this year through more petitioning and an effort to inform the public about this shortsighted plan.
Mr. McGrath said he is pleased to see the city administration finally open up channels of communication with the petitioners as they ramp up their efforts to stop this deal, which will eliminate the Trenton Water Works’ perpetual ability to generate extra cash to keep taxes low and plug budget deficits.
Lately city officials have refused to communicate with petitioners who said they plan on continuing the petition regardless of what happens at the meeting with the mayor, for the following reasons:
With current rates, the suburban system would generate $25.2 million a year or 60 percent of the utility’s $42 million projected in total annual revenue.
The deal seeks to replace that $25.2 million with a contract to sell water to New Jersey American Water worth only $9.6 million, eliminating the city’s ability to take surplus cash from the utility to plug the budget and keep our taxes low.
With only $4 million or so in savings from the deal, as cited by Business Administrator Dennis Gonzalez, the post-sale utility will be left with a deficit of as much as $7 million, which will have to be realized through rate hikes hitting the wallets of Trenton taxpayers.
Mr. Gonzalez has said the utility’s total 2008 budget was $38 million, during a partial year of the higher rates.
The Trenton Water Works is the city’s last remaining cash cow and selling it will do nothing to address the city’s underlying budget problems, according to petitioners who see the deal as a one-shot budget gimmick.
Selling the suburban system will put city taxpayers in an even worse position in 2010, when the city will face a similar budget shortfall to this year’s $20 million without the use of extra water utility-generated cash to plug them.
City officials admit they have no plan to address such an event.
The residents who want to stop the sale cannot support a plan that would have the city trade an asset that generates millions in extra cash every year for a one-time infusion of just $80 million that will be exhausted in less than 16 months, when Mayor Palmer may very well have left office.