The office of the state comptroller (OSC) released a public letter today noting its concerns with Egg Harbor City’s plan to sell its water and wastewater systems under the Water and Infrastructure Protection Act (WIPA).
Specifically, OSC highlighted the city’s failure to disclose its contract and noted the potential conflict of interest present in the city’s chosen financial advisor.
Using WIPA, which was passed by the legislature in 2015, municipalities can bypass public referenda and sell their water systems if emergent conditions, such as disrepair or contamination, are present. Egg Harbor City Mayor Lisa Jiampetti, who is currently the Democratic nominee for Atlantic County Clerk, announced the city’s intention to sell its water system in January 2020, becoming the first city to do so under the bill.
In April 2021, a buyer agreed to purchase the city’s water system for $21.8 million. As OSC noted in a press release, “public entities in New Jersey are required to submit all contracts above $12.5 million to OSC before issuing requests for qualifications and proposals,” but Egg Harbor City did not do so.
Furthermore, the city’s municipal engineer both certified the existence of emergent conditions and acted as the city’s financial advisor, a pair of roles that OSC said should have remained independent of one another under WIPA guidelines.
“Due to the permanence of a sale of municipal water systems and the potential impact on residents, OSC believes that a review of the process for a WIPA sale at the state level may be appropriate,” the office said.