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After 15 Months, City Will End Controversial Private Water Deal

In Victory For Activists, Mayor Cahill's Administration Decides Not to Renew Contract With NJ American Water When It Expires on September 30
American Water Protestors
An American Water employee sits behind anti-privatization activists at a City Council meeting one year ago. Charlie Kratovil

NEW BRUNSWICK, NJ—After 15 months under private control, the city's embattled Water Utility will soon end its relationship with NJ American Water, officials announced on September 16.

New Brunswick Water Utility provides drinking water to residents and businesses in New Brunswick, Milltown, and parts of Franklin Township.

The decision marks a big win for water rights activists and local community organizations that opposed any renewal of the privatization deal, which is set to expire on September 30.

"I received a call today that the administration is going to recommend to the Council not renewing the contract with American Water," Egan said, crediting the national consumer advocacy group Food & Water Watch.

"We're hoping that you will guys will, you know, appreciate what we've done here," said Egan.

Previously, Egan had said he would not be involved in the decision of whether or not to continue the privatization.  That choice he said would be left up to the city's Mayor, Business Adminsitrator, and Water Utility Director.

The partial privatization first began after the city kept quiet several key problems at the utility, as Mayor James Cahill took over the Water Utility, naming himself its Acting Director in July 2014.

Cahill's Water Director Frank Marascia had left for a job with American Water, the country's largest private water company.

Officials described the situation as an emergency but did not tell the public about the moves they were making in response.

The arrangement with American Water was not publicized, but New Brunswick Today learned about the secretive privatization and asked about it at the July 2, 2014 meeting.

Although the Mayor had signed the agreement, the City Council did not discuss it until NBToday asked the whereabouts of Marascia, who regularly attended the government meetings.

The City Council was asked to approve the "emergency" water privatization agreement after the fact, or "nunc pro tunc," on July 16, 2014.

In September 2014, the Council and Mayor decided to pass a new one-year contract with the private company worth $868,000, over the objections of residents.

The City Council denied many members of the public the right to speak about that deal before they voted unanimously in favor of it.

During the past year, the city has had three different Water Directors.  After bringing Alexei Walus on board, Mayor Cahill demoted him and again assumed the title of Acting Water Director, after Walus allegedly made a racist remark on the job. 

Business Administrator Thomas Loughlin actually has the longest tenure as Water Director in recent memory, despite having "not one minute" of water treatment training or experience.

Loughlin served as Acting Water Director for more than five years after the utility's former Director committed suicide.

Loughlin was the one who contacted the City Council President Egan to tell him the news, he confirmed.

"I called you earlier to tell you that we find no reason to extend the contract beyond September 30," said Loughlin.

"We think we've put together a team of professionals with the adequate licenses under Mark Lavenberg's leadership to go forward without the help of an American Water," said Loughlin.

"That's great news.  Good to hear," responded Council President Egan.

Rita Yelda, a Food & Water Watch organizer who recently moved from Buffalo, New York to Brookside Avenue has become the main voice against privatization at the City Council meetings.

"Thank you for that wonderful announcement... I think that was the best of updates," Yelda said.

Yelda said that, under American Water's management, the utility failed to properly treat the water on eleven different days, giving copies of a letter to the Council, and read it aloud during the public comment portion of the meeting.

The letter was signed by a number of city-based organizations, including a small business and two government bodies:

  • Food & Water Watch
  • Lower Raritan Watershed Partnership
  • Second Ward Block Club
  • Hidden Grounds Coffee Shop
  • Fifth and Sixth Ward Neighborhood Association
  • Raices Cultural Center
  • New Brunswick Environmental Commission

"American Water really is an atrocious company," Yelda said, echoing a talking point she had been repeating at the Council's public meetings  "They prey on communities that are really hard up for cash and can't afford their water utility." 

"What we see in community after community is the rates get hiked up when they are brought into the mix."

Just months after approving the 1-year deal with American Water, the City Council voted to increase the rates 5% each year over the next three years.

"People that I know that live in other parts of the state that have that company... most of the people that I've talked to have been extremely unhappy," said Loretto Street resident Joyce Browning, who said she was "very proud" of the city's decision to allow the agreement to expire.

"Like myself, their bills have gone up... I have to admit I was kind of embarrassed that, you know, you guys did that."

 

For more information on the city's failed attempt at water privatization, check out the Hub City Water Privatization Timeline.

 

Editor's Note: The author of this article previously worked for Food & Water Watch, including a successful campaign to prevent the sale of Trenton's water system to NJ American Water, and was a vocal opponent of the company's involvement in New Brunswick.