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Council Asks for State Investigation of Water-Sewer Utility

'Insiders Have Benefited,' Amador says

The Newark Municipal Council will ask the state Attorney General’s office to investigate the operations of the city’s water and sewer utility, council members announced at a press conference today.

East Ward Councilman Augusto Amador, North Ward Councilman Anibal Ramos and South Ward Councilman Ras Baraka stood in council chambers today to announce that a council committee set up to investigate the utility has been disbanded due to the high cost of an investigation and because officials have ignored its subpoenas, Amador said. Instead, the council is now asking the state to take over.

An attorney hired by the committee said it would cost at least $300,000 to “get to the bottom of this. We want to spare the city that expense,” Amador said.

“Today Newark’s water and sewer system faces major challenges. Through some of our findings we have learned that some of the principles that Newark voters chose in 1954 have been cast aside without public knowledge and without formal municipal council action,” Amador said. “In place of accountability, checks and balances, a new structure has been set up that avoids the strictures under which government normally operates.”

Control of the city’s water and sewer system has been a point of contention between the municipal council and the administration of Mayor Cory Booker, who in 2010 proposed creating a separate, autonomous authority to replace the city’s management of the utility.

Among those who have opposed the move is an ad hoc citizens organization, the Newark Water Group, which is working to ensure the city’s “water and sewer system and watershed property [remain] under direct control of our elected officials and accountable to the voters of Newark,” according to the group’s mission statement.

According to Amador, however, the city’s water and sewer system is effectively controlled by a separate agency, the Newark Watershed Conservation and Development Corporation, whose formal responsibility is the management of the city’s watershed land and a water treatment plant.

Amador, however, contends that a Newark Watershed consultant actually runs the city’s water and sewer utility as well, despite city regulations requiring that the utility have its own director appointed by the mayor and approved by the municipal council.

“[The watershed corporation] has morphed into a junior utility, although the Newark Municipal Council never authorized it to do so,” Amador said. “In fact, on two occasions, in 2003 and 2010, the council said ‘no’ when the Newark Watershed Corporation tried to take over that power.”

Amador said that under the current arrangement, “insiders have benefitted,” noting that spending on consultants by the watershed corporation has risen greatly, from a $265,000 to $1.5 million in hte last few years. Overall, according to Amador, spending has risen from $6.8 million to $10.2 million between 2004 and 2009.

Amador also said there have been changes to the utility’s pension system "which awarded a lot of money for certain individuals."

The  council members today stopped short of accusing anyone of illegal or improper activity, however, instead emphasizing their interest in retaining oversight of the utility.

“I’m not a lawyer. I can’t attest to any wrongdoing by the watershed group,” Ramos said, but “we need to regularly review every authority the city has a vested interest in,” he added. 

“I personally have had issues with the entanglement between the watershed and the water and sewer department,” Baraka said, expressing concern that a hired consultant, and not an official accountable to the municipal government, was managing the city’s utility.

“Not only that,  but he signs documents that put the city on the hook for legal and fiduciary matters,”  Baraka said.

Elnardo Webster, an attorney with Genova, Burns and Giantomasi, which represents the nonprofit watershed corporation, took issue with many of the points raised today.

He disputed Amador’s contention that the council has only approved $6 million for the watershed corporation’s budget, even though the agency actually spends $10 million annually.

“I don’t know where he’s getting $6 million from,” said Webster, who said the budget of $10 million is split roughly evenly between the operations of the  treatment plant and for property taxes paid to the towns where the watershed land is located.

Webster also said the watershed corporation has provided Amador’s committee with “boxes” of information at the committee’s request. He admitted that a watershed representative did ask that an April 11 meeting with Amador’s committee be rescheduled, but also said the representative had been prepared to meet with the committee later this month.

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