News Feature | May 4, 2017

Fight Over Atlantic City Water Privatization Intensifies

Sara Jerome

By Sara Jerome,

Atlantic City, NJ, is embroiled in a heated debate over ownership of the city’s water utility.

“People of Atlantic City are boiling mad about the prospect of the city’s Municipal Utility Authority being sold,” CBS Philly reported.

Financial difficulties are at the heart of the matter. CBS Philly described it like this: “As is often the case in Atlantic City, money is a central theme.” Under Governor Chris Christie, the state took over operation of much of the cash-strapped city. Now, the state may sell off the Municipal Utility Authority (MUA), the city’s water provider, to private companies.

“The state took over the city’s finances in November, but the city still has until May 27 to ‘maximize the value’ of the Municipal Utilities Authority, according to the state takeover law,” The Press of Atlantic City reported.

“After that, the state can dissolve, sell or lease the waterworks, possibly to a private company, to raise money for the cash-strapped city. Local leaders have been against any form of privatization of the water system, fearing rate hikes and a loss of local control,” the report said.

The National Association for the Advancement of Colored People (NAACP) is among the opponents of privatization. President Cornell William Brooks said he is concerned the price of water will rise for low-income ratepayers if a for-profit company operates the utility.

“We are encouraging people to sign petitions to put this to a referendum so that the voice of democracy might be heard in the context of people literally holding on to their water. We understand fundamentally that water rights are civil rights, and civil rights are human rights,” Brooks said, per the report.

Neighborhood associations are working to fight privatization. Members of the Venice Park Civic Association and the Chelsea Neighborhood Association explained their efforts in a recent Press of Atlantic City editorial.

“A new coalition including the association called AC Citizens Against the State Takeover is going door-to-door, neighbor-to-neighbor to build community support to challenge the state’s plan to grab the city water system. We want to put Trenton on notice: It can’t rob Atlantic City residents of their democratic rights in order to serve private interests who will profit from the city’s budget woes,” the editorial said.

Some members of the city council are pushing for the county to lease or buy the water utility as an alternative to privatization, according to The Press of Atlantic City.

Supporters of public-private partnerships say there are strong arguments in favor of investing private money in tap water. They cite recent studies in Canada and Europe, arguing “that private businesses operate more efficiently than governments do and that this translates into cost savings for citizens,” The New York Times reported.

“Supporters also say that the deals require private equity to spend millions of dollars a year to fix things (money that towns may not spend on their own),” it continued.

To read more about how utility’s manage their finances visit Water Online’s Funding Solutions Center.