Common questions/direct answers

Are the entire Trenton Water Works being sold?


NO. The only thing being sold would be water pipes in Ewing, Hamilton, Hopewell and Lawrence Townships along with some water towers and pumping stations.

Is the buyer a foreign company?

NO. New Jersey American Water Company (NJAWC), a subsidiary of American Water Works Company is the proposed buyer. American Water Works Company is the largest public water utility in America. It was at one time a subsidiary of RWE, a German Company, but was spun off in 2008.

Is it true that, as part of the sale, NJAWC will pay 60% of cost for water facility improvements in Trenton that benefit the outside system?

NO. According to the sales agreement between NJAWC and the City of Trenton Exhibit C includes the terms for a Capital Improvements Surcharge calculation.

The section establishes two factors that would be applied to the cost of capital improvements that benefit the townships.

The first factor would be based upon an agreed percentage assigned to the City and to the townships. This could be a 40% allocation for the City and a corresponding 60% allocation for the townships (NJAWC).

The second factor is based upon the amount of water the City customers use and the amount of water that township customers use (Demand Share Factor or DSF). Those percentages could also be 40% for the City and 60% for the townships.

To determine the amount that NJAWC would pay the City, the cost of the project, say $70 million dollars (the cost of the Filtration Plant project), would be multiplied by each factor. Applying the first factor of say 60% would give $42 million. Then applying the second factor would give $25.2 million. The $25.2 million would then be divided into annual payments that would also include the interest that the City is paying on the money it borrowed to finance the project. The annual payment would then be converted to a per thousand gallon surcharge to add to the base water rate. The figures would be recalculated every three years.

What this means is that NJAWC would pay $25.2 million for a benefit that is worth at least $42 million dollars. What that also means is that the City, actually its water customers, would have to make up the difference of $16.8 million over the life of the loan. (The actual amounts would be more over the life of the loan due to the interest charges.)

Applying the provisions of Exhibit C of the pending contract reveals that NJAWC will not pay 60% of the cost but only about 36% of the cost or less depending upon the factors.

VOTE NO on June 15th!

They're all wet

General Superintendent for Water and Sewer Joe McIntyre was featured in an ad this morning paid for by Trenton Yes. The ad, the latest in a series aimed at convincing voters to approve the sale of the outlaying water system to New Jersey American Water (NJAW) shows, McIntyre posing at what we presume to be one of the water works facilities.

If you don’t already know it, Trenton YES is completely funded and managed by NJAW. And the photo was quite probably taken during a recent visit to Water Utility facilities by NJAW staff as outlined in this article from the Trentonian.

The headline of the ad is intended to look like a quote from Mr. McIntyre.

“People think we’re selling Trenton Water Works. That is simply not true. Everything in the city stays the same.”

Really? Reducing the utility’s customer base by over 60% is equivalent to staying “the same?” How many businesses do you know that can lose more than half of their customers and stay solvent without raising rates for the remaining clientele?

The ad continues with another quote.

“We’re just selling township assets. We’re selling a bunch of old pipe. We’re selling some water towers…and two small booster stations. That’s it.”

Since the Trenton YES people like to play semantics police, what would be sold if the plan is approved is not “township assets.” It is, in fact, assets belonging to the people of Trenton that are located in the neighboring townships that would be sold. So Trenton assets, not township assets, would be sold. Mr. McIntyre…if he actually made these statements, should know better.

“We’re selling a bunch of old pipe” is not exactly accurate either. The suburban infrastructure is newer than the system that serves the city of Trenton. We are keeping the “old pipe” and selling off the newer stuff.


And about those water towers…engineering studies have indicated that without those towers, water pressure in certain areas of the city could experience dangerously low water pressures in times of emergency.

To be sure there is a lot to consider when looking at this proposed water deal. But it really comes down to a a couple of basic facts:

The outside water system is a major part of the value of the entire Trenton Water Utility. Without that (growing) customer base the utility will have a hard time remaining solvent based solely on servicing the Trenton customers…even after water rate increases.

IF the deal is so good for Trenton, why has NJAW spent more than $178,000 from May 4 to May 17 (and a whole lot more since judging from the mailings and ads we’ve seen) to convince the voters approve the sale?

IF the deal is so good for Trenton, why did NJAW spend an estimated $175,000 (based upon the legal fees paid by the City of Trenton in the same fight) to prevent the voters from having a say on the sale?
We can not accept or believe anything NJAW/Trenton Yes has to say to us about this deal.

Nor can we accept or believe anything that Mr. McIntyre purports to say in these advertisements. After all, it was Mr. McIntyre who had yet to complete a cost savings analysis on the sell off of the suburban system on January 22, 2009. That was the very day that Mayor Palmer addressed council and told them he had been working on this for nearly a decade. The very day that Mayor Palmer stated that the city had “held out” for the $80 million sale price.*

Neither one of these gentlemen appear to know what they are talking about.

Just vote NO!
*Public records indicate that NJAW was willing to pay $100 million for the outside system but the NJ Board of Public Utilities actually reduced the sale price to $75 million + $5 million for "consultative services" to be provided by Mr. McIntyre and his staff.

The people will have a say in Trenton water deal

The New Jersey Supreme Court published it's ruling today in the case regarding the proposed sell off of the outlaying portion of the city owned water utility.  The court voted 5 - 1 to reverse the Appellate Courts ruling that the right to referendum was not applicable in this case.

This is the second time in recent years that the Palmer administration has fought, at considerable cost to the taxpayers of the cash strapped city, to prevent the public from having it's say on an ordinance passed by city council. 

And it is the second time that the Palmer administration has failed in its attempt to circumvent the public's right to referendum.

It is not known at this point what this actually means for the proposed separation of the existing Trenton Water Works (TWW) into two parts, one serving customers within the city of Trenton and the other, larger portion, serving customers in the adjacent suburbs.  The "outside" portion was slated to be sold to New Jersey American Water Company (NJAW), a devision of a large, international, private water company.

It is possible that the lame duck city council could seek to rescind the ordinance approving the sale.  More than likely, if either side terminates the agreement, it would be NJAW.

Should the ordinance go to referendum, the vote probably will not occur until November's general election.