It’s all in the timing.
At their Nov. 28 board meeting, the directors of Atlantic City’s water utility bumped up the rate increase for city residents to 10 percent and then gave themselves a “gift” of $3,000 each.
In the authorizing resolution, the cash was called a December 2016 gift, but a director said it wasn’t intended to be a Christmas gift, just a traditional parting gift that directors get when they leave the board. In this case, the board might leave them, since the state might dissolve it as part of its mission to restore financial responsibility to Atlantic City local government.
Whatever kind of $3,000 gift the Municipal Utilities Authority board members were giving themselves, the optics could hardly have been worse — squeezing money out of already struggling city residents and putting some of it into their own pockets.
The gift grab didn’t only look bad to city residents. On Tuesday, the very day the story of the water rate hike and gift for directors was published in The Press, the state Division of Local Government Services announced that A.C. takeover chief Jeffrey Chiesa would reject the directors’ effort to reward themselves.
In early November, the division took control of Atlantic City’s finances as part of a bipartisan state plan to stabilize casino property-tax revenue, reduce the city’s massive debt and bring the city budget in line with its reduced but still very large revenue stream. The division soon offset the reduction in city property values with a tax-rate increase sufficient to keep residents and businesses paying the same overall amount in taxes.
Then the division appointed Chiesa, a former U.S. senator, to manage the state takeover and he started studying the city’s essentially bankrupt condition.
The water utility directors provided Chiesa with an easy first action to take and an obvious example of why the city’s finances could no longer be left in the hands of city officials. The division called it “further evidence of the MUA’s disregard for the ratepayers they serve and clearly demonstrates the authority does not understand the severity of the city’s financial condition.”
The actions by the MUA directors shocked many Atlantic City observers — not for trying to give themselves $3,000 but because they hadn’t realized they’d have to do it before the state takeover to get away with it. Inexplicably poor timing.
This easy, beneficial reversal of wasteful spending is a promising start to the state’s reform of Atlantic City, but there’s a very long way to go.