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City Council Votes on $868K Water Privatization Agreement Negotiated by Mayor

Controversial Deal Revisited For First Time Since Council Cut Short Public Comments, Approved "Temporary" 45-Day Privatization That Has Been Effect For Last 72 Days
Charlie Kratovil

UPDATE: The City Council voted 4-0 to approve the water privatization deal with NJ American Water, with Council President Rebecca Escobar abstaining because she was not aware that a vote would be held.

NEW BRUNSWICK, NJ—The City Council will again revisit a controversial deal made by Mayor James Cahill to privatize the management and day-to-day operations of the city's embattled Water Utility.

The vote will come just over 48 hours after the details of it were made public on Monday night.  Tonight's City Council meeting is open to the public and will be held on the top floor of City Hall at 78 Bayard Street.

In total, the deal would cost taxpayers a whopping $867,880 and last just over a year.  It would ensure the city has licensed professionals to operate its massive water utility, which came under fire last year after it was caught falsifying records and covering up problems with water quality.

Notably, it was also negotiated without a permanent Water Director in place.  The Mayor made himself the Water Director after Frank Marascia quit to take a job with NJ American Water this summer.

Before Marascia was hired, the city went over five years without a permanent Water Director, and during that time period failed to notify the public of potentially dangerous water at least six times.  Business Administrator Thomas Loughlin was left in charge of the utility during that period of time.

Officials said the departures of Marascia and another licensed employee in quick succession left them with no choice but to hire NJ American Water to provide licensed operators.  NJ American Water is the same company that hired away the city's Water Director Frank Marascia, creating what Business Administrator Thomas Loughlin to declare the situation an "emergency."

With licensed operators on the way out in June, the city did not alert the public to the emergency and instead quietly worked out a no-bid contract with the Voorhees-based company.

A public hearing will be held before tonight's vote, but if things go like they did last time, citizens may not get the chance to speak until after the vote is taken.

Citizens were shocked when the five-member City Council voted to approve the 45-day water privatization deal, which has been in effect for 72 days now, before hearing from the vast majority of those who wished to speak against the deal.

After just three public speakers, including the author of this article, city-based folk musician Spook Handy took to the microphone.

But Council President Rebecca Escobar pressed him to ask a question and said he was not permitted to give testimony about the privatization deal through song.

"Everybody gets five minutes," yelled out Amy Braunstein, a Food & Water Watch organizer who felt the singer was getting a raw deal.

Then, as members of the audience began to clap in support of the signer, Council members abruptly voted to pass the controversial resolution, their voices barely audible over the clapping.

"Maybe we acted in the wrong manner, maybe we didn't," said City Council Vice President Kevin Egan, when pressed about the decision earlier this month.

But now officials will have a second chance to hear the public out, but they probably won't like what they have to say.

"The privatization of the New Brunswick Water Utility raises serious questions about accountability and oversight of one of the City's most valuable assets, a deal that is costing ratepayers hundreds of thousands of dollars a year," said Jim Walsh, a city resident who is the State Director of Food & Water Watch, a consumer advocacy group.

City officials say they negotiated the best deal they could under the cirumstances, and are hesitant to use the word "privatization" because they will still maintain control over many functions of the utilty.

"The City of New Brunswick will maintain control of the New Brunswick Water Utility and continue to oversee its operations, including maintenance, capital improvements and construction, purchasing, water distribution, billing and customer service," reads a statement announcing the proposed agreement.

But critics say that the deal still costs twice as much as hiring licensed operators, and that it could be worse than the current temporary arrangement because the 12-month deal forces the city to keep American Water on the payroll through September 2015, even if the utility ends up directly ends up hiring someone with the credentials required to operate the utility.

"The City Council needs to protect the pocketbooks and health of New Brunswick residents by ensuring there is an independent investigation into the failures that lead to the water privatization deal in the first place, and by holding the administration accountable to a plan that will quickly resume public operation and management of the City's water utility," said Walsh.

Walsh said he expects many other members of the public to voice opposition to the deal at tonight's meeting, maybe even Spook Handy.

Editor's Note: The author of this article previously worked on a Food & Water Watch campaign that successfully stopped the sale of Trenton's water system to NJ American Water in 2010.