Under Sen. Nilsa Cruz-Perez’s bill, water companies that don’t participate in the program would be prohibited from shutting off service or placing liens on the properties of low-income customers for nonpayment. (Photo by New Jersey Monitor)
New Jersey stands to lose up to $22 million in federal funds meant to help low-income residents pay overdue water and sewer bills because so many utilities haven’t signed on to the program that administers the aid.
Sen. Nilsa Cruz-Perez (D-Camden), the bill’s sponsor, chairs the Senate economic growth committee, where it had been scheduled for a vote Thursday. She said various utilities objected to the measure, so she opted for a discussion only so legislators could understand critics’ concerns before voting on it next month.
“The money has to be distributed. I don’t understand when we have so many families actually going through a lot of hardship — and this will actually benefit the water company — how come they’re not signing into the program,” Cruz-Perez said.
The feds distributed more than $1.1 billion in federal American Rescue Plan dollars in 2021 to states to create a Low Income Household Water Assistance program to help struggling residents pay their bills, avoid shutoffs, and restore terminated service.
New Jersey got $24 million — but has distributed just $1.7 million to under 2,000 households as of last month, said Larry Levine, a senior attorney with the Natural Resources Defense Council, which has lobbied legislators to create a permanent water assistance program for low-income residents.
The state has to return funds not spent by September to the federal government.
Besides a slow program rollout, low buy-in has hampered aid distribution. Just 126 of about 600 water and sewer utilities participate, Cruz-Perez said.
Households can get up to $5,000 in assistance — but only if their utility participates in the program. Fifty-three of the utilities that weren’t participating, as of mid-December, are some of the state’s largest, with more than 11,000 residential customers. Some also serve the state’s poorest communities, including the Camden County Municipal Utilities Authority, the East Orange Water Commission, and the New Brunswick Water Utility, Levine added.
“It’s frankly unconscionable that many publicly owned water and sewer systems are not helping — and in some cases, not even allowing — people to get state assistance that will make the utility financially whole and avoid any water shutoff or tax lien sale for the people who are in debt,” Levine said.
Under Cruz-Perez’s bill, water companies that don’t participate in the program would be prohibited from shutting off service or placing liens on the properties of low-income customers for nonpayment. Utilities also would be required to inform customers of the program on water bills and their websites.
Violators would face fines of $500 for every day an overdue customer’s service is shut off and $100 for every time they fail to communicate the customer’s eligibility for the program.
The assistance is sorely needed, data shows.
Nearly 144,000 households served by privately owned utilities owe almost $45 million in arrearages, according to September data, the most recent available. Extrapolating those figures to include the public utilities that serve about 60% of the state, Levine told legislators nearly a million people in more than 360,000 households could owe as much as $200 million in water and sewer arrearages.
Frank Marshall, an attorney with the New Jersey League of Municipalities, said utilities support the spirit of the program but have hesitated to join because it has “a lot of flaws.”
He called the application process “pretty onerous and confusing.” The program also requires utilities to regularly remind utility customers about the aid, which is problematic for utilities that bill quarterly, he said.
Legal concerns also discourage participation, he added.
“They are getting legal advice from their attorneys that say the current vendor agreement might violate their bond covenants, and it also might violate other service agreements they have with some of their other vendors,” Marshall said.
Cruz-Perez pushed back, telling Marshall utilities had a chance to voice their concerns to the state Department of Community Affairs when officials there were drafting the program.
“To this day, I still don’t understand what the opposition and what the challenges are,” she said. “I want to know what it is so I can fix it. So if we can work in the next two weeks, because I’m not planning to procrastinate on this because our customers are the ones who are paying the consequences.”
Cruz-Perez said she would list the bill for a vote at the committee’s next meeting, which is now scheduled for Feb. 16.
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