May 27: That’s the date the state’s designated overseer can start dissolving and “monetizing” Atlantic City’s water system by leasing it or selling it outright to a private corporation. In a speech in April, the executive director of the system, Bruce Ward, who is trying to keep the Municipal Utilities Authority under city control, talked about his hometown (he was born in Stanley Holmes Village) and the many assets he has seen slip away during his lifetime. Above Convention Hall, etched into the stone, was a declaration: The building was conceived as a “permanent monument” to the “ideals of Atlantic City—built by its citizens.” “But we don’t own it anymore,” Ward said. “The state does.” Ditto the city’s parking authority, airport, etc., and so on down the line. Water is the last asset the city has control over and the state’s circling that too. If they get it, “We have nothing else.
“The Queen will have nothing left to plunder.”
The ACMUA’s water treatment center is in Pleasantville, just off California Avenue. There are deer there. Last week, on a tour of the facility with Ward, I counted seven Pleasantville deer. They lead a charmed life, munching grass in an inner-ring suburb.
Etched into the cornerstone of the water treatment center is the name Louis Kuehnle, the hotelier and first political boss of Atlantic City, who was president of the Board of Water Commissioners in 1910, when this charming brick structure was built. Nelson Johnson, in his chronicle of regional bossism Boardwalk Empire, credited Kuehnle for anticipating the problem Atlantic City—an exploding resort town, sat atop a sand dune—would soon face. “Without a secure source of fresh water,” Johnson wrote, “this island community would never become a true city.” The Commodore, he wrote, became the “driving force behind the purchase of several large tracts on the mainland that were used as sites for wells for Atlantic City’s water system.”
The MUA still draws water from wells and reservoirs on the mainland (one reservoir is called Kuehnle Pond) and pipes it 5.5 miles across the marshes to supply 39,000 Atlantic City residents and the millions of tourists who visit annually. Ward said MUA technicians know when the showers are taken in taken in Atlantic City. They peak Sunday mornings, checkout time for the casinos.
In January 2016, Senate President Steve Sweeney, in an op-ed in the Star-Ledger, called for a state takeover of Atlantic City that would lead to, among other things, a deal to “monetize” the water system. Kevin Lavin, the state-appointed emergency manager, had just released his report on the city’s financial situation (dire). Awkwardly, Lavin, whom the state had paid $2.6 million to study the matter, failed to recommend trading the water for cash Sweeney wanted. Local officials, who agreed with Lavin, said the price would be too low. That, of course, was the point.
A month earlier representatives from Atlantic County had been summoned to a meeting at Drumthwacket, the governor’s residence, to discuss the AC takeover. When it emerged that the discussion involved the sale of city assets, Mayor Don Guardian, who had not been invited, threatened bankruptcy, noting that “some people in Trenton” wanted the water system.
Big Water executives have seen the national financial crisis, and its repercussions around small-town America, as an opportunity to increase profits, and they have been un-shy about admitting this. For-profit water corporations grow through acquisition. They want to grow to keep shareholders happy. In 2010, the CEO of American Water, Don Correll, told investors the financial crisis, combined with the need for upgrades, had created a wealth of new “opportunities” for the company. “Something that was almost heresy some time ago” (privatization) “is something we’re seeing far more receptivity to today.” Financial crises, like the one hitting Atlantic City, were a chance for Big Water to fish for bargains.
When a public water system is purchased or taken over by a private corporation, typically, the water bill goes up. Food & Water Watch, an advocacy group that fights for public water rights, said it surveyed 500 municipal water systems and found the private water companies charged more by an average of 59%. When the proceeds from such cost increases are directed into public coffers, the process is known, colloquially, as a “tax hike” but when they go to a private corporation it is good old-fashioned American capitalism.
Around this time, State Senator Jim Whelan sought to assure his constituents a sale of the water system could go through a public process (“There’s nothing nefarious going on,” he told reporters. “That’s insulting”), but people familiar with the water business in South Jersey say there’s only one logical buyer for the MUA—New Jersey American Water, whose lobbyist, Philip Norcross, offers convenient entrée to the biggest shot-caller in South Jersey, his brother George. American Water, NJ American’s parent company, has taken $164 million in state money to relocate its headquarters from one side of Camden County to the other. American Water had revenues of $3.3 billion in 2016.
In response to all this, two petitions are circulating in Atlantic City. The first would “initiate an ordinance” that would go before the city council. Under state law, the organizers say, when a municipality sells a water system to a private company, its citizens have an automatic right to repeal that decision in a referendum. However, the state, under the takeover law, can avoid the inconvenience of a vote if it decides it would not be “practical.” The petitioners want their right. If city council adopts the ordinance and then the state overseer ignores, or vetoes, it, the NAACP has pledged to lend its resources to a legal challenge of the takeover. Watch your ward councilman. Some of them are running for reelection. Who knows, maybe your voice will even matter.