EAST ORANGE, NJ — Now that he’s officially retired and residing in the Washington, D.C., area, former East Orange 5th Ward Councilman Lonnie P. Hughes said he doesn’t want to be the kind of former elected official that tries to advise his successors on the East Orange City Council.
But when attorney Ashton Thomas of Elizabeth recently revealed the existence of an internal East Orange Water Commission memo dated July 2, 2015, that he claimed explained the decision by the EOWC Board to retroactively impose an “emergency temporary” water rate increase by as much as 81.29 percent on customers in 2015, Hughes said he felt obliged to set the record straight, and he confirmed the memo was authentic and explained its significance.
Hughes said the memorandum was part of the 2015 Calendar Year City Budget review and revision process in which he participated as chairman of the City Council’s finance committee. He said that after Mayor Lester Taylor submitted the 2015 budget to the council, the EOWC, which is an autonomous agency, submitted its own budget and that’s where the memo came in.
Hughes said when the finance committee ran the EOWC’s numbers, it found the utility was coming up short, with a projected $1 million-plus deficit. He said the council and its budget advisor told the EOWC commissioners the state Department of Community Affairs would not approve the submitted budget with a deficit.
According to Hughes, the EOWC asked the city to absorb the deficit, but the city refused. He said the commissioners then tried to get the Department of Community Affairs to amortize the debt for three years, but the state said this could not be done unless there was some agreement for state oversight of the utility’s finances, in the event it failed to close the budget gap.
Hughes said the EOWC commissioners rejected that deal, so he said that meant the only option left to close the $1 million-plus deficit in the utility’s 2015 budget was to do an “emergency temporary” water rate increase to make up the revenue from customers. But Hughes said the plan the EOWC submitted to the council did not include a retroactive water rate increase. He said the increase was approved based on the belief it would go into effect as of the August billing cycle, and no earlier.
According to Hughes, the EOWC originally proposed a 25-percent water rate increase, but that was insufficient to cover the $1 million-plus deficit. On Sunday, Jan. 31, the utility announced the end of the emergency temporary rate increase, presumably because it had taken care of the deficit that made it necessary in the first place. However the July 2, 2015, memorandum led some in the city, such as former EOWC commissioner R. Greg Ward, to speculate about what comes next for the utility’s customers. Ward and Thomas have maintained the water rate would never go back to what it was prior to the emergency temporary rate increase.
Hughes said that he and other council members involved in the Calendar Year 2015 Budget process, including former City Council Chairwoman Alicia Holman and 3rd Ward Councilwoman Quilla Talmadge, were told the water rate would go back to what it was before the emergency temporary increase, “plus 25 percent.”
Holman said at the 5th Ward community meeting on Wednesday, Feb. 3, that EOWC Executive Director Chris Coke informed the audience at that meeting about the end of the rate increase and about the overall increase going forward, but said he did not give any specific numbers about the increase at the meeting. As the Record-Transcript went to press this week, Talmadge also said the exact amount of the permanent rate increase going forward is still unknown. But she said the good news is the emergency temporary increase is finished and the 2015 budget deficit had been filled.
“They did that; they raised the rate for two quarters and it’s done now,” Talmadge said Tuesday, Feb. 9. “They have covered the deficit that they were looking to cover. It was only for two quarters. They told us it’s not going to be as high as they had it. It was going to be a slight increase. I don’t have the numbers in front of me, but it’s not going to be anywhere near what it was.”
EOWC Board President Michele Antley, said Sunday, Jan. 31, “I want to thank all of our valued customers for their patience as we transition the EOWC into becoming a system where quality, cost efficiency, and environmental compliance are top priorities. Our current course of action will allow us to bring the East Orange Water Commission to a point of full efficiency and self-sustainability.”
Tom Puryear, the Oranges and Maplewood NAACP President, resides in the Presidential Heights section of East Orange. The homeowner and EOWC customer said he was adversely affected by the recent water rate hike. “The commissioners who were members of the EO Water Commission in July of last year used the July communication from the city’s (chief financial officer) to change their announced plans to increase water rates as of Aug. 1,” Puryear said Monday, Feb. 8.
“The now transparent actions of the EO Water commissioners, led to the imposition of very significant increases and outrageous water rates 81.29 percent, retroactive to the spring of last year. By their actions, the EOWC’s commissioners have illustrated insensitivity to the needs of East Orange residents and have demonstrated an allegiance to poor fiscal management. East Orange consumers were made to walk the plank while the water commissioners withheld significant information from residents about the poor management of the EOWC. The EOWC’s commissioners who voted to mislead the East Orange consumers need to learn that the public’s needs must be elevated about the needs of the bureaucracy.”
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