Acting state Comptroller Kevin Walsh is trying to put the brakes on the first sale of a public water system under a 2015 law, citing problems in Egg Harbor City’s review of the water system it plans to sell to New Jersey American Water for nearly $22 million.

According to the comptroller’s office, Egg Harbor City is the first municipality to use the New Jersey Water Infrastructure Protection Act to try to sell its water supply system. The law allows municipalities to sell off or lease their water systems more easily and without a public referendum — if emergent conditions such as high contaminant levels or the need for repairs exist.

Walsh’s office found that Egg Harbor City, in Atlantic County, hired an engineering firm to act as an independent financial adviser, even though the same firm had certified the existence of the conditions necessary for the sale to proceed without public referendum in the first place.

In press release,the comptroller‘s office said it “finds that allowing a municipal engineering firm to ‘wear both hats’ negates the independence expected” by law and “also denies the governing body and the public at large the opportunity to review a report from an expert in financial matters who is detached from the proposed sale of important public infrastructure.”

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