Newark council embraces $120M loan to replace lead service pipes

Amid residents’ questions about costs and process, the Newark City Council on Tuesday preliminary approved a plan that would provide $120 million for fast-tracking a permanent solution to the city’s drinking-water crisis.

The plan, unveiled Monday by Essex County Executive Joseph DiVincenzo, allows the city to tap a loan backed by the county to boost funding for the ongoing replacement of service lines to 18,000 homes in the city, identified as the source of lead leaching into drinking water.

The extra capital would cut the time needed to make the fix from a decade to 24 to 36 months, and will obviate the need for residents to pay part of the cost of installing the new pipes leading to their homes.

Thousands of residents of the state’s largest city have been drinking bottled water for two weeks, after federal officials said tests showed lead levels that remained elevated despite tap filters provided by the city to residents with known contamination. Testing has now been expanded to 225 residences.

The city’s handling of the water crisis was the focus of protests by a couple of hundred people from several groups who rallied Monday night outside Prudential Center where the MTV Video Music Awards were being held.

Residents and others who attended the Tuesday morning council meeting wanted details about the loan proposal, including its possible impact on city taxes. Paying the loan back will cost Newark $6.2 million a year over 30 years. 

“As a homeowner, our real-estate taxes are rising. They’ve already started rising. So we need to be very, very clear about what the terms and conditions are for this loan,” said Deborah Smith-Gregory, the president of the Newark NAACP.

Questions were also asked about who’ll ensure the money’s properly spent.

“Oversight has become a critical issue in our city,” said John Goldstein, a resident and member of the Homes For All Newark advocacy group. “Obviously, in the water crisis there’s been a failure — a total failure — of government oversight for a long period of time. We as residents look to you, the council, to oversee policies and make sure they’re enforced.”

The council, which voted unanimously in favor of the loan plan, is scheduled to finalize its approval on Sept. 10, when it will hold a public hearing to address questions about costs and implementation of the expedited program.

The Essex Freeholders also voted Tuesday in favor of the deal, and the county Improvement Authority, which would issue the loan, followed suit later in the day.

The loan also requires a signoff by the state Local Finance Board.

If all goes smoothly, the money could start flowing by the end of October.

“We all recognize this is important for the residents and that’s why we’re moving so fast and so swiftly,” said Kenyatta Stewart, Newark’s corporate counsel.

The city is calling for volunteers who’ll fan out with consent forms for homeowners to sign, letting the construction crews access private property to replace the water lines. During Monday’s announcement of the loan, Mayor Ras Baraka hinted he’s working on finding a way to spare taxpayers any hikes.

City officials said Tuesday’s vote on the loan was a big step in the right direction. “We’re not called the Brick City for nothing” said Mildred Crump, president of the City Council. “And we’re going to get through this crisis.”

We’re in this together
For a better-informed future. Support our nonprofit newsroom.
Donate to NJ Spotlight