Frustration over the Bayonne water contract has reached a boiling point. Can the city find a way out?
When Almi Esteves received her first water bill in 2020, it was so high that she thought there had been a mistake.
Although the pandemic has forced people to spend more time at home, the quarterly bill of around $ 900 – an increase of almost $ 300 from last year, she said – seemed to indicate a problem. . But after three back-to-back plumbers found no leaks, Esteves said, she realized the bill was accurate.
“We don’t have a backyard, we don’t have a garden,” Esteves said. “So there is no water used other than our taps and our toilets and our shower.”
“I don’t know how to handle this,” she added.
Esteves is not alone. During the pandemic, frustration over Bayonne’s water tariffs began to boil over, drawing attention to the city’s water contract: an unusual deal with a private equity firm and the company of Suez water.
Two online petitions aimed at lowering the price of water in the city, including one titled “Suez nous drownie !!!!! have collected hundreds of signatures since their inception earlier this year.
Jodi Casais, a school counselor for Bayonne and creator of the petitions, said her water bills had increased by around $ 300 since the start of the pandemic.
“The people who live here, who make Bayonne what it is, they won’t be able to afford to stay here,” Casais said.
Bayonne City Council President Sharon Ashe-Nadrowski said complaints about water bills have “escalated” amid the pandemic and the rising cost of household items.
“I think when people’s water bills go up, it’s just another thing on top of the fact that people are already stretched,” Ashe-Nadrowski said. “But during this time, people’s paychecks are not increasing because some people were not working, (or) their hours were reduced.”
The peninsula city’s high water prices defy easy solutions. In 2012, under Mayor Mark Smith, the city was strapped for cash and struggled with crumbling water and sewer infrastructure. Local politicians have artificially maintained water prices for years, city officials said.
Seeking help, Bayonne struck a deal with United Water (now Suez) and private equity firm Kohlberg, Kravis, Roberts & Co. (KKR) to resume water-related activities for 40 years. . In return for a guaranteed income stream for 40 years, United and KKR paid $ 150 million upfront and agreed to contribute $ 2.5 million for investment projects and a combined $ 1 million for repairs and operations every year. In 2018, KKR sold its stake in private equity fund Argo Infrastructure Partners.
Ghilianie Soto, spokesperson for Suez, said the water company “looks forward” to working with city officials “to address concerns and educate residents.”
“Our deal with the city has paved the way for Bayonne’s growth and prosperity and has saved residents thousands of dollars every year since 2013,” Soto said.
But, because the deal put residents on the hook for Suez and KKR’s guaranteed income stream, rate increases fluctuate from year to year. Major repairs, or the departure of a large company, can drive up prices; paradoxically, the less water the inhabitants consume, the more their water bill increases.
After the agreement took effect, water prices jumped 8.5%. A four-year rate freeze promised by the city never materialized: rates remained stable in 2014, but increased another 4% in 2015. In 2016, rates jumped 13.25%, followed an increase of 3.5% in 2017, 4.5% in 2018, 9.1% in 2019, 4.1% in 2020 and 4% this year.
The cumulative effect of all rate increases means that a quarterly bill of $ 200 in 2012 now costs Bayonne residents $ 326.68 every three months.
Bayonne Mayor Jimmy Davis did not respond to requests for comment.
Tim Boyle, the city’s director of municipal services and former head of the now defunct Municipal Utilities Authority, attributed the complaints about the water rate hikes to “gas lighting and the movement of two or three people.” The rate hikes were in line with national averages, he said, and well below the increases Bayonne had seen before the deal.
The only possible ways out of the deal, he said, were to “get out” or buy out Argo and Suez.
“Now if we want to get out of it, we want them out of our lives, we have to give them the contract value,” he said.
It will come at a high price. Earlier this month, in a meeting with representatives from Suez and Argo, city council members asked how much such a buyout would cost, Ashe-Nadrowski said.
The answer? Over $ 300 million, she said. A legal opinion issued a few days ago by a law firm under contract with the city gave a similar figure, according to city officials.
“Unfortunately, there is no silver bullet to fix it,” Ashe-Nadrowski said, adding, “But that doesn’t mean that we shouldn’t investigate and try to see and verify every possible way to. lighten the burden on the inhabitants of Bayonne.
Meanwhile, Esteves said she could ‘100%’ see a point where she might have to leave Bayonne. The city is currently in the ninth year of its 40-year contract, which means residents could have to pay an additional 31 years of rate increases.
“If they have to send every three months (a bill for) an extra hundred dollars, that will prevent us from paying for our utilities,” she said. “And we can’t afford a house.”