News Feature | October 27, 2016

Atlantic City's Hail Mary Plan To Preserve Water Independence

Sara Jerome

By Sara Jerome,

Atlantic City’s water provider is at the center of an unconventional plan designed to shore up the city’s struggling financial position and prevent private entities from taking over its water services.

“The centerpiece of the city’s plan is a proposal to sell Bader Field, a 142-acre tract of city-owned land that once served as the municipal airport. The local water utility has agreed to borrow $110 million to buy the land, with the proceeds of the sale going toward paying down the city’s $500 million in debt,” The Wall Street Journal reported, citing Atlantic City Mayor Don Guardian.

Guardian framed the decision to buy up the land as a “poison pill” that will scare off private companies who want to buy the water system, since they would have to absorb the debt from the land buy, The Press of Atlantic City reported.

“The water utility, which operates as an independent government authority funded by ratepayers, is one of the city’s most valuable assets. State officials have urged the city to monetize it, either through selling it, or by boosting revenue by having the city or county run it and implement budget cuts and rate increases,” the report said.

The city announced that Municipal Utilities Authority (MUA), which manages the city’s water services, will buy up the 142-acre patch of land, according to NJ Spotlight.

“Officials didn't say exactly what the field would be used for, but the authority has expressed interest in using the land and neighboring Duck Island for solar and wind projects,” the report said.

“City officials hope the deal — a Monopoly-esque scenario wherein the Water Works buys property with help from the banker — will give the city a desperately needed influx of cash and help stave off a state takeover,” The Philadelphia Inquirer reported.

The backdrop is that private entities want to take over water service in the financially struggling city.

“At least two water companies ... have expressed interest in buying the MUA, which supplies the city's drinking water and controls large water sources,” the Inquirer reported.

The city council “has pulled or voted down measures to dissolve the authority five times amid pressure from residents to keep the authority independent,” The Press of Atlantic City reported.

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