Remember when Atlantic City needed to borrow $73 million from the state to pay its bills? Well, the Queen of Resorts got her money, but it came with a few strings attached. One involves Atlantic City’s Municipal Utilities Authority, which provides water to more than 8,000 residents, businesses and vacation-home owners.
An infographic looking at Atlantic City’s Municipal Utilities Authority.
The small print of the loan creates a Catch-22 situation for the city and the water authority. The loan says Atlantic City’s Council must agree by September 15 to an ordinance that would hand over the water authority, in the event the city is unable to pay back the loan. But the loan also says that if City Council can’t agree on that ordinance before September 15, it could wind up handing over the water authority’s assets anyway, since it would be violating its borrowing terms. And some people worry that if the city agrees to the ordinance, it will give the state a chance to seize the water authority assets anyway, even if the city follows the terms of the agreement.
But lets take a step back. Why should anyone in the area care who is in charge of their water? Well, the Municipal Utilities Authority (MUA) has been valued at $100 million. It handed over almost $700,000 in revenue to the city last year. It reported revenues of $15.6 million. Even though its customers have been declining and casinos have been closing, its revenue has been going up in the last few years (partly because of rate increases). And yet, even after recent rate increases, it provides far cheaper water than the Voorhees-based behemoth American Water, which currently services most of the rest of Atlantic County. Also, it employs 78 people.
While City Council can’t agree on whether or not to sign the ordinance, they mostly seem to agree that the water authority is valuable and that there are ways it could be contributing a whole lot more money to the city. There also seems to be general agreement that people outside of the city would be interested in controlling the water authority and that would – most likely – be a bad thing for residents since it could lead to less control over water-rate increases in the future. Atlantic County has expressed interested in the authority in the past. And the authority says in its annual report that it has had talks with a private company that would run it as a concession.
You can read more about the city council’s disagreement over the MUA here and here, via The Atlantic City Press’ Christian Hetrick.
You can find out more about the MUA itself in its annual report here.