Remarks of Mayor Dawn Zimmer – As Prepared for Delivery
Press Conference on Water Supply Infrastructure, April 3, 2013
During the last week as we’ve had a series of water main breaks, lots of questions have been raised.
Members of the public and the press are rightly asking why we have so many water main breaks. Where are the investments in our infrastructure? What’s the plan moving forward?
I want to talk about all of those things, but first I want to address some of the immediate issues I just discussed this morning with United Water.
Last week’s 30 inch main break was caused by a contractor at a construction site who hit a main that was not marked properly. The Board of Public Utilities is conducting a markout investigation to understand what happened.
Any resident or business who suffered a loss as a result of the 30 inch break on Thursday, March 28th can submit a claim directly to United Water. They can call Debra Hummel at 201-750-3408. The City will also be submitting a claim for our expenses on that day.
Going forward, we also want residents to know that if they see water in the street, the quickest way to get it repaired is to call United Water directly at 201-487-0011. That will immediately begin the process of getting an inspector sent to the location.
Now I want to talk about why we have this situation. The fact is that today we are paying the price for investments that should have been made long ago. My Administration has done some research to understand why we’re in the situation we’re in, and I first want to provide some of that background information that sets the context to plan for moving forward.
Parts of our water system are cast iron pipes that are more than 100 years old. In the 1990’s, Hoboken faced budget deficits. Rather than balance the budget by cutting costs or raising revenues, Mayor Anthony Russo sold the future profits to our water system and used those one-time payments to plug budget holes instead of fixing our infrastructure.
Through a series of agreements, the city sold the rights to our water system in 1994 until 2024. There are 11 years left in that agreement.
Payments made by United Water to City of Hoboken
July 1994 - $5,500,000
June 1996 - $3,000,000
June 1997 - $2,000,000
June 2001 - $2,700,000
Total - $13,200,000
Mayor Russo sold a 30 year revenue stream of $240 million and estimated $100 million in profit for $13.2 million in one-time payments.
Let me say that again. We sold $240 million in revenue and $100 million in profit for $13.2 million.
But it gets worse. That money, as little as it was, should have been invested in our infrastructure. Instead, it was used for the general budget.
Our agreements with United Water do require that they spend a small amount annually in capital expenditures or repairs -- $350,000 per year. About 80% of that is spent just repairing our broken mains, and there is little left over for infrastructure improvements.
What’s important to understand is that our problem stems from a past Administration entering into unbelievably short-sighted agreements, not United Water’s failure to live up to those agreements.
This is important because we can’t move forward if we don’t understand where we are and how we got here.
So I want to talk about how we move forward from here.
Earlier today, I met with United Water to discuss our serious challenges and how we can solve them.
Most importantly, just as we are developing a stormwater master plan to address our flooding, the city needs to have a 10 or 20 year master plan for upgrading our water distribution system and meeting the future needs of our city. And I thank United Water for agreeing to share information that will help us develop that plan.
We will also look to establish an infrastructure trust fund to ensure that revenue that should be dedicated to infrastructure investments, like the funds received in the 1990’s from our agreements with United Water, are not diverted to operating expenses or other purposes.
Finally, the contracts we signed with United Water do have a termination cost. Earlier today I informed United Water that I am evaluating all options, including paying the buyout cost, terminating the contract, and renegotiating a new agreement that provides for extensive investment in infrastructure. We will be pursuing a process to evaluate all our options to determine which makes the most sense, but one thing is for sure: we cannot be stuck with the current system through 2024.
Talking Ed Note: Michael Russo complains that when the past is illuminated and the truth comes out it "looks bad" for Hoboken. This has been a familiar refrain by Russo whenever the truth in Hoboken comes to light, whether it's Cammarano caught taking bribes or his father once again doing Hoboken so wrong, it's costing the town to this day - whether it's Sinatra Park and the pain felt there or the Union Water contract.
When Sinatra Park fell apart, Michael Russo tried to pin or "finger point" at the mayor. "What did the mayor know and when did she know it," were his exact words in a council meeting. Then when the truth came out engineers had advised against using timber pilings as his father Anthony Russo decided, he doesn't want to talk about it anymore. Then it "looks bad" and finger pointing re: accountability needs to stop.
Here's MSV's 2009 satirical piece on Michael Russo:
For someone who sits with allies like the incoherent ethically challenged Beth Mason arguing over a $10 NJ Transit ticket reimbursement in the very same meeting last night to complain about the truth surfacing what Hoboken is suffering in infrastructure losses in the tens of millions of dollars is nothing short of a farce.
We're all paying the price for the ripoffs, scams and scandals of the Russo clan and the Hoboken Sopranos - past and present.
Michael Russo decided it was too painful to hear the truth on Hoboken's infrastructure problems
and a disastrous contract executed in the 1990s by his father. That's too bad.