Newark and the Port Authority have reached an agreement that will pay the city $155 million, just as it embarks on a multi-million-dollar program to replace thousands of lead service lines at no cost to property owners.
City officials say the proceeds of the agreement — $5 million up front and $5 million in each of the next 30 years — will be used for payments on a $120 million loan from Essex County for the replacement of 18,000 lead lines connecting to individual homes and businesses, which have been identified as the source of lead contamination in Newark’s drinking water.
Work crews for two contractors are at work now digging up and replacing the lines.
“We are ever grateful,” said Mayor Ras Baraka, who noted that the lead crisis did not motivate the city to settle the dispute, which has been the subject of year-long negotiations.
Both sides said the agreement heads off what could have been a protracted court battle. Baraka said the city had claimed it was owed for a number of items relating to Port Authority operations in Newark.
In a statement, the Port Authority said the resolution of several outstanding disputes allows it to advance several critical infrastructure projects.
Two weeks ago, the city began tapping the loan for the line replacement work. The debt service on the loan was $6 million, Baraka said.
Meanwhile, the city continues to hand out tap filters to residents with lead service lines. Follow-up testing showed the filters were 97% effective in reducing lead from tap water below a federal benchmark. Those tests were ordered after a much smaller sample detected elevated lead levels in two of three homes despite the presence of the filters.
News of that discovery sparked the current crisis and prompted officials to hand out bottled water to residents.
Baraka said the city will begin scaling back the water distribution effort.
On Wednesday, Newark is holding a town hall on the state of its water at NJPAC, where Baraka will be joined by a panel of experts. Part of the mission will be showing residents how to properly install the filters.