LETTER: Bayonne’s deal with United Water/KKR wasn’t done in a backroom & was necessary


In a letter to the editor, former Bayonne Mayor Mark Smith says the city’s deal with United Water (now Suez Water) and KKR wasn’t done in a backroom and was necessary, also hinging on continued municipal government oversight.

Former Bayonne Mayor Mark Smith. Screenshot via YouTube.

Dear Hudson County View,

I read with great interest, the recent statements by Bayonne School Board Trustee Jodi Casais about the decade old contract with KKR and United Water, to manage and operate the City of Bayonne’s Water and Sewer Utilities.

Mrs. Casais should first be aware that the entire transaction was reviewed and approved by the New Jersey Board of Public Utilities on October 23, 2012 under Docket # WM12080777.

Mrs. Casais would do well to educate herself about the facts surrounding the necessity of the transaction. At that time, the Bayonne Water Utility had been saddled with heavy debt from past attempts to deal with Bayonne’s huge structural tax deficit.

By pursuing this contract with KKR/United Water, we were able to ensure continuing professional management of our water and sewer utilities and most importantly, we were able to pay off almost 50% of ALL the combined Municipal Utility Authority (MUA), City and Local Redevelopment Authority (BLRA) debt.

When I left office in 2014, the Bayonne Municipal Utility Authority had a $25,000,000 SURPLUS.

The joint venture also included an escalating fund to ensure for proper oversight of the operations of the utility by experienced appropriate officials, resulting in competency and efficiency.

The joint venture relied on several key revenue streams to maintain rate stability for Bayonne citizens.

First, the city had contracted with the North Jersey District Water Supply Commission to market and sell excess water annually, thus providing a steady revenue stream to Bayonne.

It is unclear if this has ever been done under the present Mayor and Council. Secondly, Bayonne has had both water and sewer connection fees in place for many years prior to my administration.

These are fees paid by developers, which are substantial and collectible for each and every new dwelling unit constructed.

With the number of units approved for construction since I left office, the utility should be awash in millions of dollars in connection fees to mitigate any impact of any proposed rate increase.

It should be confirmed that these fees are, and have been collected since my leaving office in 2014, and if so, where has that money been spent.

The KKR/United Water joint venture, an internationally recognized public private partnership by the Clinton Global Initiative was not a perfect solution when executed. The joint venture was however necessary.

It relied on upon careful, thoughtful and continuing oversight by municipal government to ensure each of the parties was holding up to their end of the agreement.

Today, we as a city should be focused on renewing that oversight to ensure 100% compliance, and on maintain our revenue from water/sewer connection fees.

I take umbrage that Mrs. Casais stated this deal was done “in some backroom.” The fact of the matter is that this transaction was spoken about by myself at numerous governmental and community events. It was discussed in open public forums and open public meetings.

Perhaps there are boards serving our city today that comport business in that fashion, “the backroom.” My administration was honest, open and forthcoming, and decisions were made with one goal in mind, making our city a better one for our future.

I believe, now that Mrs. Casais has the facts of the issue, she should ask our present Mayor, James Davis, and our City Council President, Sharon Ashe-Nadrowski, to show us the money.

Mark A. Smith
Former Bayonne mayor

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