Is The MUA Proposal Good for Newark?
NEWARK - After a consistent economic downturn and budget cuts by Governor Christie, Newark's Mayor has to work to balance the budget. The gap was $180 million as stated by the business administrator. But due to added revenue, the Mayor estimates it to be around $150 million.
Mayor Cory A. Booker proposed a budget on Wednesday, July 14 to the city council. Included in the proposal is a 7 percent tax hike and layoffs of 650 employees.
For the Municipal Utilities Authority proposal, there are five board members, which will be appointed by the council. A maximum of two council members can be appointed to that board. There will not be any control from the mayor or administration, but it will be controlled by the city council.
Mayor Booker said that, to avoid a 22% additional tax hike to balance the budget, this is the best proposal. Booker is hoping to take advantage of a Newark asset - water - in revenue generating enterprises like water distribution and selling water to neighboring cities. This would create jobs, while still keeping the leadership and authority in the public domain.
With this arrangement, the city will get $100 million in upfront money as a lease payment, and an additional $5 million in reoccurring annual lease payments.
Councilman-at-large Carlos Gonzalez spoke about the possibility of having to raise $70 million, which would be encompassed by an increase of 22% in addition to the 7% hike for an overall 29% hike.
"I am a city resident," said Gonzalez, "and residents cannot afford to pay the tax hike. We have to creating the legislation, and approve the final legislation. We have to establish a relationship with the city and MUA."
Councilman Luis Quintana said he will say no to proposal, commenting that there was not enough time to properly overview it.
"I have to go to the community, and if the community decides, then it's okay with me," said Quintana.
East Ward Councilman Augusto Amador said, "I objected the proposal by former Mayor Sharpe James six years ago. James' proposal was to privatize the water and utilities. By privatizing the utilities, we are selling and losing control of the utilities. Mayor Booker's proposal is to make it like a housing authority or a parking authority, where the city council has control. The council can amend the contract, or even reverse the public agency."
Amador further added, "This is a financial transaction, and it must be approved by six councilpersons. I think it will pass tomorrow by 6-3 or 7-2."
Central Ward Councilman Darrin Sharif opposed the proposal, and said that he received the information on Tuesday night at the executive council meeting.
"It is not enough time to review the proposal and call the community meeting," said Sharif. He further added, "We have experts; even Rutgers students have research. With the position I am in, they may not want to hear it, but I say no."
In reply to my question, Sharif said that he will look into the MUA proposal and if the proposal is right, he may approve it, but felt that there should be at least a month's time.
South Ward Councilman Ras Baraka was furious, and said that two weeks are not enough to review and go to the citizens.
There were different studies which supported the project: "Newark's Water and Sewer project," by Rutgers Business Policy and Strategy Class December 2006, "Tapping into the Newark Water and Wastewater System" produced by Milano, The New School for Management and Urban Policy, Spring 2007, "Newark Water Project," produced by the Rutgers Business School June 2007, Evaluation of the Newark Municipal Utilities Authority Proposal" produced by Keigh S. Mella on behalf of the Newark Municipal Council, November 2008, Forensic Audit produced by Carr, Daley, Sullivan and Weir, PC December 2006.
The city needs to fill the gap in the budget badly, and on July 15th, there will be a special council meeting for the first reading of the proposal for a very crucial amendment after the Prudential Center. The experts will continue analyzing this project in next two to four weeks.
According to Booker, there is urgency to propose the budget, as pressurized by the state. The first reading will be on July 15th, and the final reading will be on July 28th, the first meeting between the council and, if approved, newly appointed MUA board will be on August 1st, and the final approval will be on August 18th, 2010.
Booker said, "Our belief is, in future years, if the legislature gives us a tool kit with which to restrain certain personnel costs, Newark's future tax increase will be within that 2.5 percent cap, which we support."
The July 15th meeting will be very interesting, as the future of Newarkers will be in the hands of the City Council. If the MUA is approved, then the tax increase will be 7% or about $290 a year for residents. The Newark Public Library and Newark Museum will see a budget cut from the city.
Booker said that the council should go to the public and ask their opinion. He and his administration are ready to attend those meetings any day or night, including Saturdays and Sundays. Booker said so far, no councilperson has organized any meeting. However, Councilman Amador has already organized the only community meeting in the East Ward on July 23, 2010. The details of the meeting will be announced later by the councilman.
The final line is: Will the MUA help Newark? Time will decide. and hopefully the representatives will make the best decision for Newark.
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