NJ families behind on water bills can't get help because utilities won't take federal aid

Nearly 144,000 New Jersey families are behind a combined $44.5 million on their water and sewer bills — risking shutoffs or tax lien foreclosure — and yet many households can't access millions of dollars in federal funding to help because a majority of water utilities in the Garden State aren't participating in a relief program.

Low- and middle-income families in New Jersey that need help with water and sewer bills are eligible for up to $5,000 to prevent their water service from being disconnected or to avoid a tax lien sale, under the Low Income Household Water Assistance Program, launched last March with federal stimulus funds.

But fewer than 2,000 families had received benefits through December, according to Department of Community Affairs data.

That's in part because only 120 drinking water utilities out of more than 600 water systems currently participate in the program, according to an analysis by the environmental advocacy nonprofit Natural Resources Defense Council. More than 50 large drinking water utilities — those that serve at least 11,000 people, often in New Jersey's poorest communities — have not signed on, the nonprofit found.

“It’s frankly unconscionable that many publicly owned water and sewer systems are not helping, and in some cases not even allowing, to have state assistance that will make the utility financially whole and avoid any water shut-off or tax lien sale,” Lawrence Levine, senior attorney at the NRDC, said during a state Senate committee hearing Thursday. "We're leaving money on the table and leaving people hurting."

As of Dec. 8, the program had passed out $1.7 million in benefits and had $17.8 million unspent, which the federal government will take back if it is not distributed by the fall. Neighboring Pennsylvania closed its application period last October.

Frank Marshall, associate general counsel with the New Jersey League of Municipalities, said his association is hearing that the program has "a lot of flaws," such as a vendor agreement with the DCA that may violate bond covenants and other service agreements towns have with other vendors. Marshall said amending the current vendor contract, as well as making the application less onerous for families and doing a better job of advertising the program, could lead to more money getting out the door.

Sen. Nilsa Cruz-Perez, D-Camden, who sponsored a bill intended to incentivize utilities to participate in the program, pushed back, saying New Jersey's contract is based on language provided by the U.S. Department of Health and Human Services and used by other states that have successfully passed out their funds.

Speaking of the utilities, Cruz-Perez said, "I hear from many of them, 'The language gives us some trouble over here, and some legal authority over here'... I want to know what it is so I can fix it."

"Our customers are the ones who are paying the consequences," she added.

The number in need is inevitably higher than data posted by the state: As of September 2022, nearly 144,000 households or an estimated 383,000 people owe $44.5 million to investor-owned water utilities, which serve 40% of the state. The other 60% are publicly owned systems that don't report customer debt data. The NRDC estimated that 360,000 families could owe $200 million in water and sewer debt.

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Under Cruz-Perez's bill, S3333, water companies that don’t participate in the program or advertise it to their customers would not be allowed to shut off service or place liens on families' properties. Utilities that don't comply would face a fine of $500 each day a customer's service is shut off and a $100 fine each time they fail to tell a customer he or she is eligible for the program.

The Senate Economic Growth Committee discussed the legislation Thursday without voting to advance it, and Cruz-Perez said she planned to put it up for a vote during the next committee hearing. The bill would need to move out of its Senate and Assembly committees, win a majority vote in both full chambers and be signed by Gov. Phil Murphy to become law.

This article originally appeared on NorthJersey.com: NJ residents behind on water bills blocked from federal aid