Hundreds at risk of water shutoffs in Camden’s semi-privatized water system

Jasmine Walker's brick-face home in Camden's Waterfront South section appeared ordinary at first: A purple cutout of the alphabet was pasted to the wall, and a television set rested in the living room, which was cluttered with her kids' toys. But in the next room, dirty laundry lay in piles, the defunct sink overflowed with dishes, water containers of every size littered the tables and floor, and a putrid smell permeated the air.

"I just feel hopeless," Walker said as she sat in her home, anxiously bouncing her 7-month-old daughter, Elaya, on her knee. "I can't seem to win."

In July, American Water, the for-profit company that leases Camden's water system, stopped service to her home due to failure to pay, leaving Walker, 25, and her two daughters, newborn Elaya and 6-year-old Naja, without running water for months. That finally changed on Wednesday, Walker said, after she submitted a form detailing the symptoms of her severe epilepsy and American Water reestablished her water service.

Throughout the city, there are more than 400 homes at risk of having their water shut off like Walker's under Camden's privatized water contract, according to a report acquired by the Inquirer and Daily News through the state's Open Public Records Act.

American Water's records show that it halted service to 59 properties in 2018 — nearly double the number of shutoffs in Camden in 2016 and 2017 combined. Of those properties, 36, including Walker's, were still without water on Aug. 10, according to American Water's data.

Walker said she left her job as a cardiac monitor technician at Philadelphia's CardioNet in August 2017, although her former employer said records show she worked until May 2018. She's suffered from severe epilepsy her whole life, Walker said, and it caused her to have dangerous seizures at work. She said her doctor recommended that she leave work and apply for short-term disability benefits, "at least until I gave birth."

"That's when everything started piling up," she said. "I paid what I could: a little here, a little there. I was just living like that until…" she said, drifting off.

Walker knew she was behind on her water bill, but chose to prioritize other costs like her daughter's tuition at Camden's prestigious private school, UrbanPromise, and her car payments.

"What would you pay last?" she asked.

Walker said she was in the hole with American Water by about $450 when they shut her service off. American Water charges residents $40 for a shutoff and another $40 to reestablish connection, according to American Water's website.

American Water said they strictly adhere to the shutoff protocol established by the city. If payment has not been received within 33 days, the company issues a "reminder notice," according to city ordinance. Ten days later, if payment still has not been made, a shutoff notice is generated. Fifty-three days after the original bill, an employee will post a physical notice at the property, and 24 hours later, water is shut off.

Walker said she never received any notice until American Water employees at her curb warned her days before the shutoff. She said she called American Water to try to negotiate a payment plan, but eventually realized she had been calling New Jersey American Water, which is a separate operation from American Water's service in Camden.

"Well, how the hell was I supposed to know that?" Walker asked.

Walker said she knows plenty of Camden residents who have higher outstanding bills than hers, but still have running water, so she didn't expect her water to be shut off. But on July 19, Walker said, she lost access to running water.

"I try to make it so it doesn't affect my kids," she said. "Thank God I have friends and family right here."

On Aug. 10, a notice of foreclosure from the Sheriff's Office was seen posted on her front door. It said Walker was $59,172.99 behind on her mortgage. Also posted was a bill of rights during foreclosure, which stated: "It is unlawful for anyone to try to force you to leave your home outside the court process, including by shutting off utilities."

Camden city officials initially failed to produce water shutoff data despite formal inquiries by Food and Water Watch, a Washington-based nongovernmental organization. Instead, officials passed the questions on to American Water, the country's largest water utility company, according to the Wall Street Journal, but American Water, too, failed to respond.

"The city was using their contract with a private entity to hide information that should have been public," said Food and Water Watch's senior New Jersey organizer, Lena Smith, who led the push to make Camden's water shutoff data public. "This just shows how residents lose out when municipalities privatize their water systems."

Most of Camden's water system is owned by the city, but it's been run for decades by various for-profit utility companies that operate and maintain the infrastructure in exchange for a regular payout from the city.

Against a backdrop of concerns from Food and Water Watch and other public advocates regarding accountability, City Council voted unanimously in December 2015 to hand over operations to American Water's Contract Services Group in a 10-year, $125-million contract. The contract was signed soon after American Water announced its plans to move its corporate headquarters to Camden's waterfront and received $164 million in tax incentives from the state.

"Due to the collaborative efforts of American Water and the City of Camden, the number of shutoffs are very low," American Water spokesperson Joseph Szafran said. In 2016 and 2017, 33 households were shut off for nonpayment, according to American Water's data. "This represents a less than 0.2 percent shutoff rate."

This year has seen an increase in shutoffs, 59 since January, according to the company's data. The city, however, produced data that showed 429 properties recently received a shutoff notice and are "at risk" of shutoff, according to assistant city attorney Ilene Lampitt.

City spokesperson Vincent Basara declined to comment on the city's shutoffs, but added that "American Water has been a great community partner."

American Water is New Jersey's largest water utility company. It owns a network of systems across 18 counties, the company says, and includes the Cramer Hill neighborhood of Camden, which it has served since the 1880s.

In exchange for monopoly power in areas where American Water owns the facilities, such as Cramer Hill, the company's prices and operations are regulated by the state. But American Water's contract to run the rest of Camden's publicly owned system is a "market-based contract" not subject to state economic oversight.

"Our partnership with the City of Camden is a competitive business like anything else," said American Water CEO Susan Story.

The city's two systems are divided by the Cooper River; residents south of the river pay lower rates, but are not eligible for financial assistance from American Water.

"We put a huge focus on reducing operation and maintenance costs, which has been very successful in Camden," Story said.

But American Water's interest in its market-based contracts appears to have wavered — except in New Jersey. American Water announced its intent to sell off or let terminate all of its market-based contracts except for four, three of which are in New Jersey: Camden, North Brunswick, and South Orange.

Story said the decision was made to keep contracts only in areas familiar to American Water.

In last year's annual report to shareholders, American Water explained that when it comes to market-based contracts like that of Camden, "historically, we have made minimal long-term capital investment under these contracts; instead, we perform our services for a fee."

In Camden, the city pays American Water roughly $12.6 million per year to deliver drinking water and sewer services to residents, according to the contract. Revenue is collected and payment is enforced by American Water, according to city officials, but kicked back to the city, which retains ownership of the facilities and is responsible for upgrading them if necessary.

"Municipalities may contract out because they lack sufficient scale to hire necessary expertise," said Daniel Van Abs, associate professor of practice for water, society and environment at Rutgers University, or "because they want to outsource headaches."

Van Abs said that too often, municipalities like Camden sign operations of their water system over to a private company, but fail to monitor adherence to the contract.

"Municipalities assume that they don't need expertise now, because the private partner has it," he said. "I see this as a problem waiting to turn into a fight."